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AI, digitisation, ongoing skills shortages, and employee wellbeing are emerging as the dominant forces reshaping workplaces and employment law globally, a new report from the International Bar Association has found.
The latest annual report from the International Bar Association’s Global Employment Institute (IBA GEI) draws on insights from legal experts across 48 countries to examine key workplace and regulatory developments throughout 2024 and 2025. The report highlighted how governments, employers and regulators are adapting to rapid technological advancement, changing workforce expectations, and increasing compliance obligations. Further, it gave insights into the legal and workplace trends influencing organisations across different regions.
It found, among other things, that AI is playing an increasingly prominent role in workplace operations, from hiring and performance monitoring to automation and data-driven decision making.
As such, growing concerns around privacy, fairness, transparency, and employee rights were emphasised as organisations expand their use of AI technologies.
Global projections suggested that automation may displace around 85 million jobs, while up to 97 million new roles could emerge. This is an indication of workforce transformation rather than mass unemployment.
IBA GEI council member Dr Björn Otto, who took responsibility for drafting the report, said: “What only recently emerged as a developing trend is now influencing how work is organised and decisions are made in a growing number of workplaces.
“This swift uptake of AI is prompting employers and regulators alike to consider its legal and practical consequences, as technology becomes an increasingly normal part of working life.”
This portrayed the growing role of AI in the workplace, with the technology moving beyond experimentation to become an integral part of how organisations manage operations and navigate emerging regulatory and compliance challenges.
The report also identified ongoing skills shortages as a major challenge across global labour markets, driven by demographic shifts and competition for talent. In response, governments and employers are investing in workforce upskilling, reskilling, and targeted migration policies to help address growing demand for skilled workers.
Combined with rising workloads, workforce shortages, and increasingly blurred boundaries between professional and personal life, these factors are placing sustained pressure on employees across many industries.
As a result, several jurisdictions have introduced new measures aimed at managing psychosocial risks, reducing workplace stress and supporting flexible working arrangements.
For example, in parts of Canada, occupational health and safety frameworks have been updated to explicitly recognise psychological wellbeing as a workplace health and safety issue.
Todd A. Solomon, partner at global law firm McDermott Will & Schulte, said: “Questions around mental health are increasingly moving into the core of workplace regulation. What is becoming apparent across countries is not only greater awareness, but a growing expectation that employers actively assess and manage psychosocial risks, even where legal frameworks remain fragmented or still evolving.”
Working-from-home arrangements have become a normality for most businesses post-COVID-19 lockdowns, with almost 40 per cent of office jobs in Australia having adopted a working-from-home option twice a week.
Governments have moved from temporary pandemic measures towards some form of durable legal frameworks or guidelines that recognise flexible working time and formalise rights to request flexible or remote work.
This routine has been found to have many benefits, providing flexibility, improved work/life balance and reducing commuting time.
The report also noted ongoing efforts to modernise labour laws in response to emerging work arrangements, including platform-based employment and evolving contractual models.
Across the European Union, the introduction of the Pay Transparency Directive in 2026 was expected to reshape employer practices, driving greater transparency in remuneration, enhanced reporting requirements and stronger measures to promote workplace equality.
It is clear that some of the most common key challenges shaping global workplaces are in balancing rapid AI adoption with ethical and legal risks, overcoming persistent skills shortages, and adapting to an increasingly complex and fast-evolving regulatory landscape.
