Leaders May Be Overspending on Tech and Underspending on Talent

Why It Matters

Overspending on tech while neglecting talent erodes the expected returns of AI investments, putting competitive advantage at risk. Balancing these expenditures is crucial for sustainable growth and shareholder value.

Key Takeaways

• 57% prioritize performance, <10% prioritize workforce training
• Execs invest twice as much in tech as in employee development
• KPMG warns new tools don’t boost performance without skills
• Continuous learning and structured processes recommended to unlock tech value

Pulse Analysis

C‑suite leaders are feeling the heat of a volatile business climate, and a new KPMG survey shows they are pouring money into technology at a faster clip than into their people. Eighty‑one percent of executives say boards demand rapid adaptation, while 57 % list performance and efficiency as top priorities. Yet less than one in ten cite workforce training as a strategic focus, creating a spending gap that could undermine the promised gains from AI and other digital tools. The survey, which sampled over 1,200 senior leaders across North America, underscores a systemic bias toward hardware over human capital.

The imbalance matters because new tools rarely deliver value without skilled users. KPMG’s analysis found executives are twice as likely to fund a software upgrade as they are to finance a training program, a pattern that leaves employees ill‑prepared for rapid AI adoption. Without change‑management frameworks, organizations risk low utilization rates, sunk costs, and employee frustration. Studies across industries show that firms that pair technology investments with continuous learning see up to 30 % higher productivity gains than those that don’t. Moreover, a Deloitte report links every $1 million spent on employee upskilling to an average $1.5 million increase in revenue.

To close the gap, KPMG recommends embedding continuous learning into corporate DNA, creating centralized decision‑making hubs, and forging strategic partnerships that bring external expertise to internal teams. Companies that adopt disciplined, coordinated execution—aligning processes, people development, and technology—are better positioned to translate AI capabilities into measurable outcomes. As AI becomes a baseline expectation rather than a differentiator, firms that balance tech spend with robust talent programs will likely outpace competitors and sustain long‑term growth. Investors are also taking note, with ESG analysts flagging talent development as a key metric for sustainable tech adoption.