High-Stakes Executive Career Pivots

When and How to Navigate Strategic Career Changes

For most senior leaders, an executive career pivot is seldom top of their radar. They might be pushed by a redundancy, a restructuring or the slow realisation that the organisation they have given ten years to is no longer the one they joined. By that point, options are typically narrower, and career options are considered under pressure, which can restrict salary negotiations and change the narrative from intention to escape.

While the thought of restarting in an entirely new industry or making an executive career pivot can appear daunting, the risks of failing to acknowledge a rapidly changing market are higher. A planned pivot can also reignite motivation, purpose and satisfaction in ways that staying put cannot.

This matters especially to anyone working in a sector or function undergoing structural, not cyclical, contraction. With the unpredictable advances of AI, all senior leaders should be scanning the near horizon for signs of decline in their own sphere while laying the foundations for a career pivot, as often the time and actions required for this can be underestimated.

This insight considers which leaders need to be moving urgently, which should be building a mid-term plan now and how the transition can be executed in a way that preserves rather than abandons the authority built over a career.

The rewards, the challenges and the cost of staying

A well-executed pivot, made at the right time, can boost careers in several ways: driving salary growth rather than compression, maintaining upward trajectory and reinforcing the psychological security that comes from operating in a market where your skills remain in demand.

However, sector credibility does not transfer automatically. A Chief Commercial Officer who has built their reputation in physical retail will not be viewed as equivalent in B2B fintech on day one. Regulatory frameworks differ, commercial models and vocabulary differ, and the pace and style of decision-making in growth sectors often contrasts sharply with that of large, established organisations. Without at least baseline fluency in the target sector, executives risk a step down in both seniority and compensation. Equally, a pivot that appears reactive rather than intentional weakens the narrative before conversations have even begun.

Against this, the cost of staying continues to compound. According to the CIPD, employer hiring intentions in early 2026 remain at an unparalleled low while the supply of permanent candidates has been growing for three consecutive years. In a softening market, executives in contracting sectors face increasing competition for a shrinking pool of senior roles from peers who have stayed for the same reasons.

A global survey of C-suite executives found that nine out of ten leaders report workforce overcapacity of up to 20% in legacy roles, alongside shortages in AI-critical skills. The executive who waits is accumulating experience that the market is progressively devaluing.

Industries in Decline: Where Executives Should Consider Moving Now

Traditional retail. According to the Centre for Retail Research, the sector shed close to 400,000 jobs in just two years across 2024 and 2025, with 17,349 store closures recorded in 2025 alone. Retail sales volumes still stand more than 2% below pre-pandemic levels, and business rate relief has been abolished entirely from April 2026. Online retail accounts for around a quarter of UK sales and consumer habits shifted structurally during the pandemic in ways that have not reversed. For senior executives who remain in traditional high street retail, the window for a proactive pivot is genuinely narrow.

Legacy financial services. Restructuring is more advanced than many inside it acknowledge. More than 5,000 UK bank branches have closed since 2015, with 432 closures in 2025 alone. Finance job postings dropped 38% in 2025, with AI replacing roles in compliance, reporting and customer service. Salary acceleration is now concentrated almost entirely in professionals who combine finance expertise with digital, automation and risk control capabilities, while traditional operations roles that lack tech capability are experiencing stagnant or declining pay. Decline is most pronounced in branch network management, traditional wealth management and middle-office processing. COOs and CCOs have more transferable authority and more time; branch and processing leaders have less of both.

Legacy media and print. Print circulation has fallen continuously for two decades and the advertising model that sustained broadcast has been structurally disrupted. Executives in traditional media face a specific challenge: the skills they have built – editorial judgement, audience understanding, content commissioning at scale – are genuinely valuable in content-driven technology businesses and brand strategy. But the sector identity requires active management in any pivot narrative.

Sectors in mid-term structural decline: plan now, move by choice

Traditional professional services. Management consulting, legal services and accountancy firms built on time-and-materials billing are not in immediate crisis, but the writing is on the wall. PwC identifies finance, HR, IT and internal audit as areas where AI agents are ripe for automating complex, high-value workflows. The runway is longer than in retail or legacy banking, but it is finite.

Parts of the HR and marketing functions. Chief HR Officers are at a fork: the function weakens as onboarding, learning and screening are automated, or it evolves toward strategic workforce ownership and accountability for human-AI collaboration. Those who have built their careers primarily around operational delivery are at medium-term risk but can reposition within receptive organisations in growth sectors. Marketing directors whose value rests on execution rather than brand strategy or commercial leadership face the same trajectory.

The career growth sectors: where executive demand is running ahead of supply

Fintech. The UK fintech market is estimated at $21.4 billion in 2026, growing toward $43.9 billion by 2031 at a 15.4% annual rate. Lloyds’ Financial Institutions Sentiment Survey, published in September 2025, found that 59% of institutions now see measurable productivity gains from AI, up from 32% a year earlier, with over half planning to increase AI investment in 2026 and nearly half having already established dedicated AI teams. The sector attracted $3.6 billion of UK investment in 2025, second only to the US, and continues to draw executive talent because it is one of the few financial markets actively building rather than rationalising. What it cannot easily manufacture is executives who understand regulated environments, manage complex stakeholder relationships and carry the commercial credibility that the sector requires. That is precisely what two decades in legacy financial services produces.

Sustainability and the green economy. Latest date from the ONS estimates there were 652,100 full-time equivalent employees in UK green jobs in 2024, up 27.8% since 2015. Financial services recorded the highest year-on-year growth in green hires in 2025, up 16.3%, and more than half of green hires now sit in non-green job titles, reflecting how functions such as operations, finance and commercial leadership are being greened rather than replaced. Eighty per cent of sustainability employers plan to hire in the next twelve months and 75% are prepared to hire someone who does not possess all the required skills, intending to upskill them instead.

AI-enabled services and AI governance. LinkedIn data shows AI has already created 1.3 million new roles globally, and the surge in Head of AI positions across the UK reflects a decisive move toward embedded AI strategy and leadership. AI Engineer topped LinkedIn’s 2025 UK Jobs on the Rise list, while more than half of the fastest-growing UK roles did not exist 25 years ago. Executives who can govern AI deployments – who understand accountability, liability and the regulatory frameworks being built around them – command structural premiums that pure technical roles do not.

When to reframe and when to reskill

One of the most common and costly mistakes executives make when planning a career pivot is treating reframing and reskilling as the same thing. Confusing them leads either to unnecessary investment in new credentials, or to relying on narrative alone where real capability gaps exist.

Reframing is required when the underlying capability already exists but its relevance to the new sector is not visible to the hiring market. A retail CCO with twenty years of complex multi-stakeholder commercial experience does not need to learn those skills again in fintech. They need to reframe that experience in the vocabulary of the new context, making the connection explicit and demonstrating why it matters.

Reskilling, in contrast, is required when genuine gaps exist that reframing cannot close. A commercial leader moving into sustainability needs knowledge of frameworks such as the EU Corporate Sustainability Reporting Directive and TCFD. Entry into AI governance demands an understanding of accountability, liability, and emerging regulation. These are not superficial gaps and hiring managers in these fields will identify their absence quickly.

Neither path requires going back to university. Targeted programmes such as Cambridge’s Institute for Sustainability Leadership, the Chartered Financial Analyst Institute’s sustainable finance credentials and the Institute of Environmental Management and Assessment all offer targeted routes. For AI governance, structured programmes at London Business School, INSEAD and several UK universities move a CV from interesting to credible.

Forward-facing companies are looking for leaders with that rare sweet spot of relevant experience, transferable credentials and evidence of prior expertise – or at least active interest – and personal investment in the context, not a generalist who has acquired a certificate or a reputed executive from a FTSE company who lacks, or is unable to demonstrate, such qualities and insight into what matters now.

Deciding on an Executive move: Under pressure, and with time

In both scenarios, developing a coherent, credible narrative is crucial. An executive who can articulate precisely why they are moving, what they have built and what it translates into in the new context will consistently outperform one with a stronger CV but a vague or reactive story.

Under pressure, the priority is to identify and protect transferable authority. Map the three or four capabilities that are genuinely sector-fluid that the target sector demonstrably values. Be visible in the right networks before the formal job search begins. Overall, UK job postings remain 19% below pre-pandemic levels, but demand persists in technology systems and solutions, software development and civil engineering. The executive who targets specific pockets of genuine demand is better placed than one searching broadly. This may require a dispassionate external perspective from a coach or mentor who understands what the market is currently seeking.

With more time, the core strategy is to build genuine presence in the target sector before making any formal move. Take advisory or non-executive roles in relevant organisations or develop a visible point of view through writing, speaking or participation in relevant forums. The most effective networking is built around genuine intellectual engagement with the questions the sector is working through, not simply a presence within it.

How to audit transferable authority ready for an Executive Pivot

Before beginning any serious pivot, separate what you have done from what capability that demonstrates, then test whether that capability has a market in the target sector. For example, a retail CEO who has managed 200 stores and grown market share from 8% to 12% has also built the capability to hold large, complex commercial relationships under cost pressure. Properly articulated, that is exactly what a scale-up technology business needs from its leadership.

The audit has three stages: list significant achievements; translate each into the underlying capability it demonstrates; test whether that capability is valued in the target sector and in what vocabulary. The gap between stages two and three is the reframing task. Genuine absences are the reskilling task. LinkedIn research shows that 56% of UK professionals are open to a role in a new industry, yet 20% worry they lack the skills needed for the future. Self-assessment of transferability is notoriously unreliable. An external perspective from a coach or adviser who understands both the source and destination sectors closes that gap faster and more reliably than internal reflection alone.

Future of Executive Careers: Trends Shaping Career Pivots to 2030

The WEF Future of Jobs Report 2025 estimates that while 92 million roles may be displaced by 2030, 170 million new roles will be created, a net gain of 78 million, with demand concentrating in technology, sustainability, care and human-centred services.

The executives who will command premium compensation in the years ahead are not necessarily the most experienced, or even the most skilled. They are the ones who read the structural signals early, moved with intention rather than under duress, and arrived in growth sectors with a coherent account of what they had built and why it mattered in the new context.

That window remains open but it narrows with each quarter spent waiting for conditions to improve in sectors where they will not. The evidence is consistent: planned pivots preserve authority and trajectory; reactive ones compress both. The market rewards positioning, not hesitation.

The question for every senior leader in a sector facing structural rather than cyclical change is not whether a transition will eventually be required. It is whether, when that moment arrives, they will be choosing from a position of strength or scrambling from one of constraint.

The executives of tomorrow are making that choice today.

UK and Europe Executive Market Trends Amid Economic Uncertainty

As Q2 2026 opens, Rialto analysts examine the UK and European executive landscape against a backdrop that has shifted materially since the start of the year. What had appeared to be a gradual stabilisation with modest growth, easing inflation and a credible path to rate cuts after years of shocks and uncertainty has been disrupted by the outbreak of conflict in the Middle East. The implications for business confidence, hiring sentiment and executive value are already being felt and, whenever it may end, it will undoubtedly have long term implications on the global outlook.

This insight examines the current economic data, the state of the executive market and the capabilities that will determine who stays relevant in what is becoming an increasingly selective environment. It finds that AI competence and success is now the single greatest differentiator for performance and value.

UK Economic Outlook 2026: A Recalculated Picture

The UK economy grew 1.4% in real terms across 2025, its strongest performance since the pandemic but below the OBR’s forecast of 1.5% GDP grew 0.2% in the three months to January 2026, with services up 0.2%, production up 1.3% and construction falling 2.0%. Monthly GDP was flat in January, and the Bank of England estimated underlying quarterly growth for Q1 at around 0.1%.

Conflict in the Middle East and Iran’s effective blockage of the Strait of Hormuz has since triggered a significant spike in global energy and commodity prices that could endure well beyond any ceasefire. Fertiliser prices are potentially doubling, the Food and Drink Federation is projecting 9% food inflation by year-end and central banks will be forced to hold rates higher for longer precisely when economies were counting on cuts. None of these pressures reverse the moment a ceasefire is announced.

The OECD revised its UK inflation forecast for 2026 to 4%, up 1.5%, and cut its growth projection from 1.2% to 0.7%, the steepest downward revision of any major economy in its March interim outlook. GDP growth forecasts have been cut to between 0.4% and 0.7%, below the OBR’s pre-conflict forecast of 1.1%. The EY ITEM Club now expects business investment to contract by 0.2% this year.

Rialto director Richard Chiumento said: “The structural reset we have been tracking for the past twelve months has been overtaken by an acute shock on top of a chronic one. Organisations that were managing cautiously through a tight fiscal environment now face renewed inflation, constrained monetary policy and a further compression of confidence. That combination does not create space for hesitation. Leaders need to move faster, not slower.”

The Executive Market: Cooling Becomes More Acute

The UK unemployment rate stood at 5.2% in November 2025 to January 2026, its highest since 2021, with 1.87 million people out of work, up 323,000 over the year. Total vacancies fell 9.5% compared with a year earlier, declining in 15 of 18 industry sectors, with 2.6 unemployed people per vacancy, up from 1.9 a year ago. Regular pay growth fell to 3.8%, its lowest in over five years. The BDO employment index dropped to 93.30 in February, its weakest reading in nearly 15 years. Recruitment firm Robert Walters’ chief executive Toby Fowlston described the current environment as the longest hiring downturn the industry has ever experienced, worse than both the 2008 financial crisis and the pandemic.

The energy price shock now threatens to intensify these pressures. Higher costs will squeeze margins, reduce hiring budgets and accelerate the turn towards automation and offshore resourcing already trending before the conflict. The April 2026 minimum wage rise to £12.71 per hour, and employer National Insurance increases already in effect, add further to the cost of employment at a moment when businesses are least able to absorb it.

AI Hiring Is Bucking the Trend

Overall UK job postings sit 27% below their pre-pandemic baseline, but postings mentioning AI have climbed to 127% above it. Around 7.5% of UK job postings contained AI mentions in mid-Q1. In several fields with striking declines in overall postings, including marketing, HR and accounting, posts mentioning AI have more than doubled. The category with the highest share of AI-related postings is data and analytics at 47%, followed by software development at 41%.

Employers are increasingly expecting workers across a broad range of roles to engage with AI as a routine part of the job. For executives, this is now the baseline of assessment. Boards asking about AI governance, algorithmic accountability and value realisation are looking to leadership, not technology, for answers.

Sectors and Skills in Demand

Engineering was the only sector in the KPMG/REC survey to report stronger demand for permanent staff in February 2026, driven by defence spending, infrastructure investment and the energy transition. The conflict that has complicated the macroeconomic outlook has also reinforced the urgency of energy security investment and the demand for leaders who can deliver complex programmes across contested political and regulatory terrain.

Executives skilled in risk, regulatory change and cost transformation remain in demand in financial services. Cybersecurity and digital infrastructure are still attracting investment regardless of broader hiring freezes. Private equity has sharpened its lens: operating partners and interim executives with restructuring and rapid performance improvement experience are valued.

European Executive Job Market Trends 2026: From Fragmentation to Shared Shock

In our Q1 2026 insight, we noted a Eurozone broadly improving but unevenly, with Germany wrestling with industrial contraction, Spain and Italy seeing executive vacancies well above pre-pandemic levels, and the EU’s regulatory complexity rewarding executives with cross-border fluency. That picture has now been overtaken by a shared external shock.

The OECD cut the Eurozone growth forecast by 0.4% to 0.8%. The ECB projects 0.9% growth, with Q2 activity expected to fall close to zero. Interest rates were held in March, abandoning the cuts markets had anticipated, while the Eurozone inflation forecast was raised by 0.7% to 2.6%.

Germany’s energy-intensive industrial base makes it especially susceptible. The defence spending narrative offers longer-term relief but will not offset the near-term squeeze on chemicals, automotive and manufacturing. Chemical and steel manufacturers across the EU have already imposed surcharges of up to 30% to offset surging costs, with economists warning of the risk of permanent deindustrialisation in some sectors.

Spain and Italy retain structural momentum, but the shared energy shock has compressed the gap between strong and weak performers. Cross-border regulatory fluency, AI governance capability and the judgement to advise boards on which investment programmes to protect and which to defer are all commanding a higher premium than three months ago.

Governance, compliance and sustainability roles are also in demand as the EU Corporate Sustainability Reporting Directive enters full enforcement, affecting approximately 50,000 companies according to the European Parliament.

Compensation: Sophistication Over Scale

The Indeed Wage Tracker recorded 4% year-on-year posted wage growth in February 2026, the lowest level in four years. With inflation expected to exceed 3% through mid-year, real-term gains are likely to remain limited, reinforcing a shift in how organisations structure senior remuneration in a constrained environment.

Rather than increasing base salary, employers are turning to more targeted, performance-linked reward. Signing bonuses, equity participation and long-term incentives are becoming more common, particularly where critical leadership capability must be secured without adding fixed cost.

For executives, this is a more exacting and evidence-based market. Compensation is increasingly tied to demonstrable outcomes relating to value creation, cost optimisation, revenue growth and transformation delivery, making the ability to evidence impact as important as experience.

Career Strategy for Executives in for Q2 2026: How to Stay Competitive

The Middle East conflict has added genuine unpredictability to a market already structurally recalibrating. Where some organisations were tending towards paralysis, they now risk making hasty pressure driven decisions that hollow out long-term capability in pursuit of short-term cost reduction. Executives who can help boards hold the line and make the case for investing in the right capabilities while others retrench will be well positioned when conditions stabilise.

They must also demonstrate credible authority over how AI should be deployed, governed and measured to remain relevant. Executives who cannot show this are already at a structural disadvantage in assessment processes, regardless of sector. (For a deeper examination of what this requires in practice, see our previous insights including What it actually takes to make AI work and AI is changing everything: how to stay ahead.)

The executives who will make ground are those who treat the current environment as a structural context within which to operate, not a minefield to survive.

Four actions define that approach.

Translate volatility into decisions. It is not enough to read the environment accurately. Executives who stand out convert external uncertainty into immediate, organisation-specific choices on capital allocation, workforce shape and operational focus, with the clarity and speed that boards currently lack and urgently need.

Prioritise with precision and reallocate at pace. In a constrained market, breadth is a liability. High-performing executives identify the small number of initiatives that will drive disproportionate value and actively move capital and resource towards them rather than preserving legacy activity out of inertia.

Impose discipline on technology and AI investment. Differentiation comes from linking technology investment to measurable outcomes, challenging weak use cases and ensuring that deployment translates into productivity, cost and/or revenue impact, not just adoption metrics.

Evidence impact in quantified terms. As the market becomes more selective, broad experience carries less weight than demonstrable results. Executives must show consistent, quantified impact, particularly in constrained or volatile conditions.

To read about the US, MENA and Asia regions, all of which are navigating different paths through the challenging economic landscape, click here.

How Executives Can Stay Relevant in a Changing Job Market

As the pace of change accelerates, every executive must think seriously about how to stay relevant, maintain credibility, and secure a strong executive trajectory in today’s market. This requires mastering the fundamentals of leadership while committing to continuous AI learning and digital fluency.

If you are considering how best to position yourself for the next stage of your career or an upcoming executive transition, Rialto can support your journey. You are also invited to join the Rialto AI Business Leaders Circle – a forum enabling members to gain access to the conversations shaping the future of AI, including private briefings in the House of Lords, strategic insights from global AI experts and the chance to influence national policy through the All-Party Parliamentary Group on AI.

To find out more, book an appointment to speak to one of our team today.

Navigating Global Divergence in the Executive Market

Our Q2 2026 Executive Outlook for the UK and Europe highlighted how the fragile return to stability of the first months of the years have now been disrupted by renewed geopolitical shock. In this environment, executive markets are not moving in unison.

Here we turn to the United States, Asia and the Middle East and North Africa, with each responding differently to the same global pressures, creating a more complex and uneven landscape for senior leadership.

The conflict that erupted at the end of February has compounded pressures already building across all three. For the US, it adds an inflationary layer to an economy already slowed by tariffs and federal retrenchment. For Asia, it raises energy costs at precisely the moment US trade friction was beginning to ease. For the Gulf, it has overturned growth forecasts entirely.

Against this backdrop, one structural trend remains constant. AI is reshaping hiring at every level, and the executive talent able to govern and capitalise on that shift remains in scarce supply. As geopolitical and economic conditions diverge, this capability is becoming the defining factor of executive value.

This insight examines how these dynamics are playing out across the US, Asia and MENA, and what they mean for executives navigating career decisions or assessing opportunities across global markets.

US Executive Job Market Trends 2026: Hiring Slowdown, AI Demand and Policy Impact

The US labour market entered Q2 in what JPMorgan’s chief economist described as a “low-hire, low-fire” environment. Average monthly nonfarm payroll gains stood at just 14,000 in the six months to January 2026, far below the 122,000 average recorded in 2024, with the decline in net migration identified as the main cause. Unemployment was forecast to peak at 4.5% in early 2026, with both hiring and layoff rates subdued as businesses hesitated amid erratic trade policy.

Following the Supreme Court ruling against Trump’s selective tariff regime, a blanket 10% global levy was introduced, placing sustained pressure on supply chains across multiple sectors. Transportation and warehousing alone shed 157,000 roles over the past year.

Moody’s forecasts GDP growth of 2.3% for 2026, but the distribution remains uneven. Rising customs duties are feeding through to households, stagflation risks persist and the Iran conflict makes near-term rate cuts unlikely.

At the same time, the federal workforce has been reshaped in the shadow of Trump and Elon Musk’s DOGE (Department of Government Efficiency) cost reduction agenda. More than 386,000 federal employees have left government under the current administration, resulting in a net decrease of over 264,000 positions – a substantial 9% of the civil service. This has had a direct impact on consulting, advisory and government contracting sectors, while parts of the private sector have accelerated workforce optimisation.

The clearest structural signal for the executive market is the divergence between broad hiring weakness and concentrated demand for AI capability. In Q4 2025, job postings referencing AI were 134% above their 2020 baseline. By March 2026, overall postings were just 2% above it, down from 6% at the end of 2025, reflecting continuing cooling.

However, at the same time, technology companies are leading layoffs, particularly in customer service and middle management, citing automation. In 2025, 127,000 roles were cut in the sector, a trend that has continued into 2026. Across the board, 61,000 employees have already been impacted with many CEOs explicitly citing AI efficiencies as a driver, though AI-washing – using tech as a cover for reducing costs to compensate for falling margins – is real.

Whether or not executives based in the UK and Europe have an interest in seeking positions in the US, they must take note of trends over the Atlantic as the same patterns are starting to emerge more widely.  Boards are asking more rigorous questions about AI governance and the pace of automation, at a time when credible leadership capability in this area remains limited.

Asia Executive Job Market Trends 2026: Growth, Risk and Leadership Demand:  

Asia entered 2026 in relatively strong shape, with predicted growth of 5.1%. However, as with other regions, this outlook has weakened under the combined impact of softer global demand and rising energy costs linked to the Iran conflict.

China’s real GDP growth was projected at around 4.3%, with exports having proven resilient to US tariffs. However, as we move through the next quarter, higher energy costs are now feeding into production across steel, chemicals and electronics, compressing margins. Domestically, consumption slowed through 2025, fixed-asset investment contracted, and the property market remains unstable.

India had been the more compelling near-term growth story.  JP Morgan projected 7.5% GDP growth for 2026, supported by rate cuts, tax measures and infrastructure projects nearing completion. However, it now faces the sharpest exposure in the region with thin reserves and heavy reliance on Middle Eastern crude making it more vulnerable to a prolonged disruption. Rising energy prices are contributing to inflationary pressure, currency weakness and downside risk to growth.

Executive demand in India remains genuinely broad-based across technology, financial services, infrastructure and consumer sectors.

Southeast Asia continues to strengthen its position within the global AI investment cycle, particularly in digital infrastructure and hardware, generating new demand for executive leadership talent.

However, it is experiencing acute stress at the most fragile end. Countries such as Vietnam, Bangladesh and Pakistan face severe fuel shortages – the Philippines declared a state of energy emergency.

The World Economic Forum noted that asymmetric energy shocks disproportionately burden import-dependent Asian economies. For executives in the region, the requirement is to navigate multiple, simultaneous pressures – US trade policy, energy volatility, China-specific risk and uneven technology adoption – across highly differentiated markets.

Even at 4.4%–4.6%, developing Asia grows at roughly five to six times the pace of Western Europe. However, the Iran conflict has introduced a meaningful downside risk to a region that was already navigating US tariff headwinds and a patchy Chinese recovery – and the countries least able to absorb an energy price shock are precisely those that had been the growth bright spots.

MENA Executive Job Market Trends 2026: Economic Reset and Talent Shifts

As recently as December 2025, MENA was among the more attractive destinations for executive talent: diversification momentum was building, tourism was growing and GCC economies were expanding trade networks with confidence. That position has changed substantially in the wake of widening conflict in the region.

GCC economies are now expected to contract by a collective 0.2% in 2026, according to ICAEW and Oxford Economics, a dramatic revision from 3.6% growth forecast just three months earlier. The broader Middle East has moved from projected growth of 3.3% to a 2.2% contraction. GCC oil sectors could decline 5.8% this year. The IEA characterised the closure of the Strait of Hormuz as the largest supply disruption in the history of the global oil market. Thousands of flight cancellations followed airspace closures across the Gulf.

The human capital implications are as significant as the economic ones. The Gulf’s status as a destination for international executive talent, built on decades of stability and growth, has been unsettled. Analysts have described the conflict as a potential end to the narrative that the Gulf is a permanently safe destination for expatriates and investors, exposing fragility beneath the rapid transformation of recent years. Tourism arrivals are projected to fall 11–27% against a December baseline of 13% growth. Hospitality, aviation, events and retail are reversing hiring plans that were, until recently, expanding.

The executive capability most valued in MENA right now is crisis-tested operational resilience: the ability to maintain delivery under volatile conditions, manage stakeholder confidence and position organisations for recovery while preserving capital. This represents a marked shift from the transformation and diversification profiles that dominated the regional market in 2024 and early 2025.

Career Strategy for Executives 2026: Global Trends and Leadership Priorities

Several themes are consistent across all three regions. AI governance has moved from a specialist function to a board-level responsibility. In the US, executive orders have required agencies to appoint chief AI officers, creating a template the private sector is mirroring. In Asia, the AI investment cycle is reshaping which markets attract capital. In MENA, diversification projects that survive the disruption will lean more heavily on technology. Executives without credible authority over how AI is deployed, governed and measured are at a structural disadvantage across all three markets.

At the same time, supply chain and geopolitical fluency are no longer niche capabilities. Tariff volatility, energy cost shocks and shifting trade alignments are intersecting in ways that require executive teams to hold complexity across multiple dimensions at once. The premium is on Executives who can make decisions under pressure, communicate them credibly and revise them without losing credibility when conditions change.

Boards are scrutinising succession pipelines, interim leadership arrangements and transformation capability below the C-suite. Executives who can demonstrate quantified delivery in constrained or restructuring are increasingly differentiated from those whose experience is limited to growth cycles.

The outlook for Q2 2026 is one of carefully managed caution, with selective opportunity for executives who have positioned themselves ahead of the structural shifts now accelerating under pressure. Those who will make ground are those who have moved beyond waiting for stability and are operating effectively within current conditions.

How Executives Can Stay Competitive in a Changing Global Market

As the pace of change accelerates, every executive must think seriously about how to stay relevant, maintain credibility and secure a strong executive trajectory in today’s market. This requires both core leadership capability and continued development of AI and digital fluency.

For those assessing their next move or preparing for an executive transition, understanding these global dynamics is critical. Rialto supports senior leaders in navigating these shifts and positioning for long-term success. Executives are also invited to join the Rialto AI Business Leaders Circle, providing access to strategic insights, expert briefings and policy-level discussions shaping the future of AI.

To find out more, book an appointment to speak to one of our team today.

“Harnessing machine learning can be transformational, but for it to be successful, enterprises need leadership from the top. This means understanding that when AI changes one part of the business, other parts must also change.” Erik Brynjolfsson, Stanford Institute for Human-Centered AI

Brynjolfsson is one of the world’s most cited economists on technology and productivity, a Stanford professor who has spent three decades studying what separates the few organisations that extract real value from transformative technology – which we will call the 6% club – from those that do not. He finds it an organisational issue: failure to consider the structural, governance and cultural changes needed to lead through AI transformation inevitably leads to under-achievement and disillusion.

Eighty-eight per cent of organisations globally now use AI in at least one business function, yet only around 6% qualify as genuine AI high performers – businesses attributing more than 5% of EBIT directly to AI and reporting significant value across the enterprise. The remaining 94% are somewhere between enthusiastic experimenter and quietly disillusioned pilot operator. Most have the tools. Very few have the results.

What the 6% are actually doing

These high performers do not have access to better technology. What distinguishes them is organisational. McKinsey found that high performers are 3.6 times more likely to be pursuing transformational, enterprise-level change through AI and nearly three times more likely to have fundamentally redesigned their workflows in the process. Bolting AI onto existing processes is a false economy that leads to wasted resources, lost opportunities and competitive drag. The 6% rebuild those processes around what AI can actually do.

They are also three times more likely to have senior leaders who actively own and champion AI, genuinely modelling its use and driving its integration into strategic decision-making. This is the strongest single predictor of enterprise-level AI impact in the data. When senior leadership treats AI as a technology upgrade, the organisation stalls. When they treat it as a strategic shift that requires them personally to change how they work, the organisation moves.

The high performers apply the same capital discipline to AI investment as they would to a major acquisition: clear strategy aligned with organisational objectives, defined milestones and criteria for adjusting or closing underperforming initiatives. They manage AI investment across three horizons: foundational infrastructure (two to four year payback), near-term productivity (six to twelve months) and longer-term transformation (ongoing). They do not allow short-term return pressure to collapse everything into the second horizon at the expense of the first and third.

The Kyndryl Readiness Report, drawing on 3,700 senior leaders, found that 61% of CEOs now face intensified pressure to demonstrate AI returns compared with the prior year, while 53% of investors expect positive returns within six months or less. Responding to that pressure by sacrificing infrastructure and transformation investment to feed short-term results is one of the primary reasons organisations get trapped in pilot purgatory. Honest, clear communication from the outset – managing expectations, helping stakeholders understand realistic timescales and reimagining how success is measured – is itself a leadership responsibility. Equally, so is recognising when to kill a pilot that is not working, and to explain why.

The governance gap

Two-thirds of organisations remain in experimentation or piloting phase, lacking the operating model maturity to convert deployment into value. The most common single failure is the absence of clearly named executive ownership for AI outcomes across product, legal, risk and compliance. When nobody is explicitly accountable for what AI is doing across the organisation – which McKinsey found to be the norm – innovation slows, risk accumulates and resources are wasted.

Most organisations view governance as a constraint. The 6% experience it as a competitive advantage: the mechanism that builds stakeholder trust, enables faster decision-making within defined boundaries and provides the audit trail that allows boards to demonstrate responsible operation to regulators, investors and customers.

Regional AI regulatory frameworks add further complexity. The EU AI Act is now in phased application, with penalties reaching 7% of global annual turnover for high-risk non-compliance. The UK places the burden of interpretation directly on boards, making personal executive accountability the operative principle. In the US, enforcement is arriving through litigation rather than legislation, making documentation, testing and explainability the primary risk mitigation tools. Working across different regions demands flexible compliance models, but across all three regimes AI governance is a board-level responsibility and the expectation that it can be delegated to IT or legal functions is no longer sustainable.

What boards and leadership teams must actually do

Moving from the 94% to the 6% requires coordinated evolution across five interconnected dimensions. Here are five questions your board should be able to answer:

Who in your organisation is accountable if your AI produces a wrong outcome? In most organisations, nobody can answer that. Executive accountability means designating named individuals responsible for AI outcomes across every relevant function – product, legal, risk, compliance and people – with those owners demonstrating AI literacy in capital allocation decisions.

Are you asking how AI could transform how this work is done, or just how to make existing processes faster? Workflow redesign is the single most powerful lever in the McKinsey data. High performers decompose roles into task sets, identify which activities are best automated, which augmented and which require human judgement, and rebuild performance metrics around value delivered rather than activity completed. (See our previous insight, Redefining Work in an Human/Machine Era.)

Is your AI training a one-off event or embedded into how people work every day? McKinsey’s data shows that high performers embed at least 81 hours of annual AI training per employee into operations. Sixty-three per cent of employers globally identify capability gaps as their primary barrier to AI scaling, yet most continue to look externally for capabilities that reskilling could develop internally at lower cost and with less disruption.

Have you defined what failure looks like before you start? Capital discipline with kill-switch criteria means defining in advance, at the point of approving any AI initiative, when a pilot gets shut down rather than scaled. The organisations accumulating the most expensive AI failures are those that never established what insufficient progress looked like.

Can you explain to every stakeholder – employees, customers, regulators, investors – exactly how AI is influencing decisions that affect them? Stakeholder trust architecture is an operational requirement, not a PR exercise. In an environment where 51% of organisations report AI-related incidents, eroded trust is difficult to rebuild. High performers are more than twice as likely to have defined human-in-the-loop validation processes – 65% versus 23%.

Measuring returns beyond the financial

McKinsey found that function-level returns in software engineering, manufacturing and IT regularly reach 10-20% cost reductions, with marketing and product development seeing revenue uplift above 10% in leading deployments. But the ROI conversation in most boardrooms is still too narrow. Organisations measuring only financial return are missing both the value and the risk.

Two thirds of organisations in McKinsey’s survey report AI-driven improvements in innovation capacity, while 45% report improved customer satisfaction and 36% see strengthened competitive differentiation. These are leading indicators of future financial performance. Organisations tracking only EBIT impact miss the earlier signals that tell them whether their AI investment is building the capabilities that will compound into revenue.

Stakeholder trust is measurable and its erosion is one of the most expensive and least discussed AI risks. Customer trust in AI-mediated decisions, employee confidence in the organisation’s approach to workforce impact and investor trust in governance quality all affect the cost of capital, talent retention and customer lifetime value in ways that do not appear in short-term financial metrics. Regulatory standing carries an implicit financial value that almost no organisation currently quantifies, and boards that require AI investment proposals to include a regulatory exposure assessment alongside the financial case are making a sound capital allocation decision, not an over-cautious one.

Leadership seeking to help their organisations break into the top 6% can learn much from the earlier pioneers — both what to do, and what not to do.

JPMorgan Chase: lessons learned in an $18 billion experiment

JPMorgan Chase is the most thoroughly documented example of an organisation in the 6%. Its AI programme has more than 450 live use cases delivering between $1.5 billion and $2 billion in annual value. More than 200,000 employees use its proprietary LLM Suite platform daily and AI-attributed benefits have grown 30-40% year-on-year. AI coding assistants have lifted developer productivity by 10-20% across a technology workforce of 63,000, its Coach AI advisory tool contributed to a 20% increase in gross sales in asset and wealth management between 2023 and 2024, while fraud prevention and operational efficiencies saved a further $1.5 billion.

What explains it? Not the technology. JPMorgan uses many of the same foundation models available to every competitor. What distinguishes the bank is its governance architecture: a firmwide Chief Data Officer mandate aligning data platforms with model risk management, legal and security functions across every business line; rigorous ROI measurement at the individual initiative level; and a board-level treatment of AI as a core operating function. As JPMorgan’s own Chief Analytics Officer put it: “There is a value gap between what the technology is capable of and the ability to fully capture that in an enterprise.” Their answer to that gap has been structural and the returns reflect it.

The bank also acknowledges the risks candidly: recouping the $18 billion investment will take time, and the technology comes at human cost, with a projected 10% reduction in operations headcount. Organisations carry an ethical and societal responsibility to mitigate those potentially significant losses.

MD Anderson Cancer Center: a $62 million structural failure

In 2012, MD Anderson partnered with IBM to build an AI clinical decision support tool for oncologists. The goal was to democratise world-class cancer care, giving any oncologist anywhere access to the diagnostic intelligence of one of the world’s leading cancer institutions. Five years and $62 million later, the contract expired before the system had been used on a single real patient. Inquests found the failure organisational rather than technological: the system was incompatible with existing platforms, scope had ballooned, the original six-month delivery timeline had been extended twelve times and no one with clear authority had been accountable for keeping the project within workable boundaries. It failed where JPMorgan succeeded – in governance, data foundation, accountability and the integration of human and technical design.

The window is narrowing

The gap between the 6% and the 94% continues to widen because AI advantage compounds. The organisations that have redesigned their workflows, built their people’s capabilities and embedded governance into their operating models are iterating faster and learning more with every cycle. Their data gets richer, their models improve and the distance between them and the organisations still running disconnected pilots increases.

The structural work needed – governance architecture, operating model redesign, talent investment, cross-functional accountability – is neither glamorous nor fast. The 6% understood this earlier than most. They made different choices, at the leadership level, about what kind of organisation they were building. That, ultimately, is the only gap that matters.

This insight is edited from a section of the first Rialto AI Business Leaders Circle Strategic Briefing of 2026, a biannual benefit of membership, which also includes the opportunity to help shape the future of AI in UK business with a seat at the table of the All-Party Parliamentary Group for AI (APPG AI) alongside MPs and other leading figures across government, academia and investment.

You can find out more about joining here

Many senior executives are responding to today’s slowing job market in the same way: stay put, deliver results, avoid unnecessary risk and wait for conditions to improve before making a move.

In a market shaped simultaneously by AI disruption, economic uncertainty and geopolitical volatility, that instinct is understandable. It is also, for many executives, the highest-risk strategy.

In a fast-moving environment, standing still can be the equivalent of moving backwards. While the threat of redundancy weighs heavily on most executives, they miss the more immediate threat of being sidelined: the slow drift from central to peripheral, from sought-after to overlooked.

Some of the questions Rialto consultants are asking of their clients right now are:

• Could a colleague now do your job with Gen-AI assistance?
• What is your unique value to your organisation?
• Would you be missed if you left today?
• Do you have a comprehensive career plan that can keep pace with the changing landscape, and what are you doing to keep it on track?

Given the time and space to reflect, few executives answer these questions with confidence. Most acknowledge they may need to consider reskilling, upskilling – especially in AI-related competencies and governance/soft skills – or repivoting; and that working continuously to ensure their contribution is relevant, visible and aligned with emerging strategic objectives is now essential.

Here, we consider different strategies to help leaders maintain career momentum, whether looking to secure their current position or embark on a new challenge or direction.  For senior leaders considering their next move, the question has become more complex than whether to stay or go; it is about how to maintain relevance and career momentum in an executive job market that is becoming more selective.

Why the Executive Job Market Is Tightening

The executive labour market is entering a more constrained phase. Economic growth across the UK and much of Europe has slowed, organisations are under renewed pressure to improve productivity and many boards are reassessing leadership structures as AI and automation reshape how work is delivered. In parallel, senior leaders are remaining in role longer than in previous cycles, narrowing succession pathways and reducing the number of senior vacancies coming to market.

The result is a structural shift rather than a temporary pause: fewer executive roles are being created at the same time as the pool of experienced leaders competing for them is growing. Waiting for conditions to improve can only serve to undermine and erode the professional growth and dynamics that shaped career progression over the past decade. Maintaining momentum now requires more deliberate and forward-looking career management.

What Executives Can Do to Maintain Career Momentum

The executives managing this environment well are making deliberate choices between distinct paths, each of which demands different preparation and timescale.

Strengthening Your Impact in Your Current Role

For executives who are well-positioned in their organisations and whose sectors are not in structural decline, the most effective near-term strategy may be to expand influence rather than change direction. This requires a different kind of intentionality.

Delivering expected results within a defined remit is the very least required. Leadership must also take visible ownership of the challenges that matter most to the board: AI governance, cost transformation, workforce redesign, international competitive positioning. Executives who lead substantively on the issues that define their organisation’s next three years tend to find that their market visibility improves through word of mouth and evidence of definable, measurable contributions. Thinking of oneself as a product with a market value that can rise and fall depending on ever-changing demands is a discipline that sharpens both performance and positioning.

This path also requires honest assessment of whether the current organisation offers the scope for that kind of contribution. A role that rewards operational continuity but does not create space for strategic evolution carries its own form of career risk, regardless of how well it is performed.

Building a Strategic 3–10 Year Executive Career Plan

Most senior executives operate with an implicit sense of where they are heading. Few have a plan that has been tested against the actual conditions of the market they will be navigating.

A structured career plan at this level requires more than a list of target roles. It needs an honest mapping of where capabilities currently sit relative to where the market is heading; which sectors and functions are likely to grow, contract or transform over the relevant horizon; which credentialling gaps need to be addressed and over what timeframe; and what the realistic lead time is for the types of opportunities being sought.

A three-year horizon focuses on building from a current position of strength. A five-year plan creates room for deliberate capability development and relationship-building that cannot be rushed. A ten-year framework, particularly for executives in their forties or early fifties, opens up the possibility of a more phased non-sequential path: a second significant operational role, a transition into advisory or board work and a portfolio career as a designed endpoint rather than a default. Executives who adopt this kind of longitudinal perspective consistently report that decisions they previously found difficult – whether to move sideways, invest in development, engage with a headhunter – become considerably clearer.  Having this framework provides a lens to evaluate choices and align them with enduring career goals.

This is work that benefits from external challenge. A mentor or coach who understands the executive market deeply, has access to current intelligence on where boards are focusing and what they are looking for, and can provide honest assessment rather than affirmation, materially changes the quality of the planning process.

How to Prepare for an Executive Career Transition

For executives who are within five years of a planned move, or whose sector or organisation is undergoing structural change that will reduce or alter available opportunities, transition preparation needs to start considerably earlier than instinct might suggest.

Executives who secure the best outcomes in constrained markets begin positioning 18 to 24 months before they move. By the time a role is needed, the groundwork – market visibility, refreshed credentials, cultivated relationships with search professionals and board-level decision-makers – needs already to be in place. A significant proportion of senior appointments at the highest levels are made through existing relationships and trusted referrals rather than through formal search processes. Executives who are not already on the radar of relevant decision-makers are, effectively, not in the initial frame of consideration.

Transition preparation in this environment specifically requires demonstrable engagement with the transformation challenges boards are currently navigating: AI deployment, human-machine workflow redesign, organisational cost discipline at scale. Executives whose narrative is built primarily on historical achievement, without evidence of current engagement with where the market is going, will find themselves at a structural disadvantage relative to candidates who can speak to both.

Structured career transition support, whether through a formal career transition programme or targeted coaching, provides the external perspective, market intelligence and preparation rigour that this process requires. The investment is most productive when it begins early, while an executive still has leverage, credibility and time on their side. You can read more about how to time your exit before you are pushed here.

Building toward a fractional or portfolio career

For executives whose sectors or functions face meaningful structural contraction over the next decade, beginning to build deliberately toward a portfolio or fractional career – a combination of non-executive directorships, advisory mandates, interim leadership roles and other income-generating activity – reduces dependency on any single sector or employer in a way that a single operational role cannot.

Executed well, a portfolio career offers greater resilience to sector-level disruption, a wider network of relationships across industries and functions, and often a higher degree of professional fulfilment than a traditional role at a comparable career stage. Many of the most effective senior leaders in the market today have arrived at portfolio careers by design and have found that the transition was significantly smoother because they began building the relevant profile, relationships and board-level credibility while still in a substantive operational role. Read more about how and when to develop a portfolio career in our earlier insight.

Is This the Right Moment to Join or Launch a Start-Up?

The same structural disruption contracting the traditional senior executive market is simultaneously generating genuine opportunity at the earlier stages of the company lifecycle. AI, energy transition, defence technology, health innovation and financial infrastructure are attracting significant capital, and the companies being built in those spaces need experienced leadership that most founding teams cannot supply from within.

At early stage, the attraction is influence: the opportunity to shape culture, strategy and organisational design from the ground up in a way that a corporate role rarely affords. Equity participation, though it requires patience and carries meaningful risk of delivering nothing, can produce returns that no salary progression in a listed company is likely to match. For executives with deep functional expertise in areas that early-stage companies are actively trying to build such as finance, operations, people, technology, regulatory, the entry point is often more accessible than it appears, particularly for those who have invested in visible market presence and a network that extends beyond their current sector.

At growth stage, businesses have typically proved their model and are scaling. The leadership challenges – professionalising processes, building management infrastructure, managing board relationships, preparing for an exit or public market – map closely to what experienced corporate executives have spent careers doing. The equity upside is more modest than at early stage but more reliable. The income expectation is generally closer to corporate norms.

In both cases, the reward-risk profile looks different from what most senior executives are accustomed to evaluating. Base compensation at early-stage ventures is frequently below corporate equivalents, sometimes significantly. Equity vesting schedules designed to release rewards over time to lock-in commitment typically run over four years, with cliff periods that create significant risk if the business deteriorates or the role does not work out. Executives who have operated within established systems often underestimate how much of their effectiveness in a corporate context depended on infrastructure they took for granted.

For executives genuinely drawn to this option, risk mitigation matters as much as due diligence on the business itself. Negotiating a consulting arrangement or advisory mandate before committing to a full-time role provides visibility into the culture and the founding team’s decision-making before the commitment is made. Retaining a portfolio of NED or advisory positions alongside a start-up role maintains an income floor and a professional identity that does not depend entirely on a single venture’s trajectory.

Sector fit matters considerably. Executives who make these transitions most successfully tend to be those joining a venture where their specific experience addresses a problem the business is actively struggling to solve. What the current environment creates, for those with the financial resilience to absorb income variability and a clear sense of what they bring, is a broader range of genuine openings than has existed for several years with the potential to revitalise a career and reignite motivation in ways that a conventional corporate move rarely can.

Maintaining Momentum and Career Relevance

Each of these pathways offers a roadmap to maintain momentum, focus and relevance in a fast-changing landscape, clouded by uncertainty and volatility.

What connects them is the same underlying logic: action taken before it is urgent consistently produces better outcomes than action taken under pressure.

The executives who are sidelined in contracting markets are rarely those who made the wrong move. More often, they are those who made no move at all; who stayed within comfort zones, who delivered results using a playbook while the market moved on – who waited for a conditions to improve then found their leverage and value had diminished.

Relevance decay accumulates quietly across months and years, in the gradually slowing cadence of approaches from search firms, in a peer group that has advanced into board and portfolio roles and in the growing gap between the questions boards are asking of candidates and the answers they know how to give.

Executives who remain alert to the ever-changing risks and opportunities and think ahead in years, not months, are those who will shape the future of their organisations and remain in control of their own career paths, earning potential and, ultimately, life goals and fulfilment.

About Rialto

Rialto partners with executives to protect what they have built and navigate their next critical phase of career transition. Our specialised programmes help leaders map priorities, explore opportunities both within and beyond their current organisation and communicate next steps strategically to secure desired futures. With deep expertise in market intelligence and UK/European executive markets, Rialto delivers boutique, discrete, highly personalised support during critical transitions.

Contact Rialto on +44 (0) 20 3746 2960 to discuss your career development strategy.

The human-machine era marks a shift in how organisations think about work, productivity and capability.

AI is no longer confined to isolated tools or functions; it is becoming embedded across workflows, influencing decisions, coordination and execution at scale.

Today’s leaders face two immediate challenges. First, they must understand how their own role is changing and what they must do to remain relevant and impactful. Second, they must collaborate with boards, partners and executive teams to redesign organisations where humans and machines complement rather than compete.

Here, we examine why organisations must pause and reflect on the structural, governance and workflow redesigns needed to truly harness the power of AI without draining innovation, talent and goodwill.

The insight distils some of the key lessons from just one chapter in the latest in-depth executive briefing offered as part of membership to the AI Business Leaders Circle.

Market Signals and Emerging Concern

The underlying dynamics are more nuanced than alarming headline narratives about mass layoffs suggest.

In the United Kingdom, sustained AI deployment is beginning to translate into measurable organisational restructuring. A 2026 analysis by Morgan Stanley found that UK firms operating AI systems for at least 12 months reported an average 8% net reduction in roles attributable to automation, one of the highest rates observed among developed economies, including the United States, Germany, Japan and Australia.

This suggests that once AI moves beyond experimentation into embedded operational use, structural workforce effects can materialise relatively quickly.

However, the picture in the United States, which leads the world in AI adoption and innovation, indicates a more complex pattern. Broader analysis shows that only around 4% of US layoffs last year were directly connected to AI implementation. In many cases, reductions were anticipatory with organisations “getting lean” ahead of projected efficiency gains rather than responding to proven displacement.

Some companies have also been accused of “AI-washing”: using automation narratives to obscure weaker performance, cost pressures or post-pandemic over-expansion.

At the same time, forward-looking warnings are intensifying. Dario Amodei, CEO of Anthropic, has argued that AI could eliminate up to half of all entry-level white-collar roles within five years. Supporting this concern, data suggests that graduate roles, apprenticeships and junior positions without degree requirements have declined significantly since late 2022.

Entry-level roles are capability incubators. They serve as the training ground where professionals develop judgement, institutional understanding and domain expertise required for future leadership.

If AI disproportionately compresses these early-career pathways, organisations may inadvertently hollow out their own talent pipelines. The result would not be immediate productivity loss but a delayed capability crisis emerging within five to seven years.

AI Job Displacement to Value Creation

According to the World Economic Forum (WEF), by 2030 an estimated 170 million new roles could be created globally (14% of current employment), while 92 million existing roles (8%) may be displaced, resulting in net growth of 78 million roles. However, this headline figure masks a deeper structural tension. Over the same period, global population growth of an estimated 338 million will place additional pressure on employment systems, productivity and social infrastructure.

For senior leaders, the defining issue is not whether AI creates or destroys more jobs in aggregate. It is whether organisations can manage the pace and sequencing of transition.  Organisations that actively redesign work, invest in skills and support effective human-machine collaboration will be the ones better positioned to absorb disruption and realise productivity gains.

The WEF also indicates that while machine-led tasks are growing, the majority of work still requires human-led judgement or structured human-machine collaboration. Rather than whole roles disappearing, jobs are being reconfigured into portfolios of tasks, where routine activities are automated and human effort concentrates on judgement, creativity, emotional intelligence and strategic contribution.

Organisations must examine whether they are redesigning work intentionally, or allowing automation to reshape roles by default?

Evidence suggests that AI generates substantial economic value, but that value is unevenly distributed.

PwC’s 2025 Global AI Jobs Barometer found that AI-skilled workers earned a 56% wage premium in 2024, the most AI-exposed industries achieved 27% growth in revenue per employee (three times that of less exposed sectors), and productivity growth has almost quadrupled in industries most exposed to AI since generative AI’s advent in 2022, rising from 7% to 27%. These figures suggest that AI creates substantial value, but concentrates that value among workers who can effectively leverage the technology.  AI does not automatically create productivity. It rewards preparedness.

Two Strategic Paths: Augmentation vs Displacement

The contrast between BMW and Klarna illustrates how strategic choices determine whether AI augments or erodes organisational capability.

BMW’s Augmentation Approach

In late 2024, BMW launched AIconic, a multi-agent AI system serving its purchasing and supplier network. The system integrates 10 specialised AI agents that streamline tender analysis, supplier data management and quality checks. With over 1,800 active users performing 10,000 searches monthly, the solution demonstrated immediate value.

What differentiates BMW is not the technology itself, but the organisational design accompanying it. Critically, BMW provides digital training and special AI innovation spaces for employees at all levels, enabling them to acquire digital literacy and share new skills throughout the organisation.

The financial results prove substantial: BMW’s AI stud correction laser alone saved over $1 million annually while enabling workforce optimisation and redeployment to higher-value activities. Rather than eliminating roles, BMW redesigned workflows around human-machine collaboration, with AI handling data-intensive tasks while humans focused on strategic supplier relationships and complex negotiations. The company now has hundreds of AI use cases in series production and plans to make every process AI-supported in the foreseeable future. Employees transitioned from routine data processing to relationship management and strategic decision-making, creating genuine career progression rather than displacement.

Klarna’s Displacement Trajectory

Swedish fintech Klarna pursued a dramatically different path. Between 2022 and 2024, the company eliminated approximately 700 positions (40% of its workforce), replacing most of them with AI-powered customer service systems developed with OpenAI. CEO Sebastian Siemiatkowski initially celebrated the transition, proudly announcing the workforce reduction and positioning Klarna as AI’s most aggressive adopter in fintech.

The consequences materialised rapidly. By early 2025, customer service ratings collapsed as users reported generic, repetitive responses inadequate for complex issues. The company’s Glassdoor rating plummeted from 3.8 in 2022 to 3.0, signalling severe damage to employee morale and employer brand. Siemiatkowski was forced to publicly admit: “Cost unfortunately seems to have been a too predominant evaluation factor. We went too far.”

By mid-2025, Klarna began rehiring human customer service agents, implementing what it termed an “Uber-style” flexible workforce model. The CEO acknowledged that AI systems lacked the empathy and nuanced problem-solving essential for customer support. The episode, dubbed “The Klarna Effect” by industry observers, represents a cautionary tale of AI deployment prioritising short-term cost reduction over sustainable capability development.

The differential outcomes between BMW and Klarna stemmed from strategic intent and execution discipline, not technology capability.

Impact on Executives

In the AI era, executives are increasingly responsible for leading human-machine systems rather than purely human ones. This requires fluency in AI and data capability, understanding of workflow architecture, governance literacy and organisational redesign competence.  The leadership role shifts from command and control towards capability curation: setting direction, defining guardrails and ensuring alignment between strategy, systems and people.

When speaking to Rialto consultants, many leaders report limited confidence in their understanding of AI and uncertainty about where best to develop. Many report higher stress levels and say they are reassessing career sustainability in the face of accelerating technological change. This matters because leadership confidence and coherence strongly shape how change is experienced across an organisation.

AI investment that is matched by leadership capability consistently delivers stronger ROI. Where leadership understanding lags technology deployment, organisations risk destabilising workflows, eroding trust and undermining the very productivity gains AI promises. (See previous insights on AI Learning for Executives: Building Competence for Transformation and Transition and AI is Changing Everything – How can Executives Stay Ahead?)

Board-Level Governance: The Strategic Imperative

Effective AI workforce transformation requires board-level governance that recognises AI adoption as strategic transformation, not merely operational implementation. Yet governance maturity remains uneven. A 2025 global survey by Deloitte of 700 board directors and executives across 56 countries found that 31% report AI is not on the board agenda, while 66% say their boards lack sufficient knowledge or experience in the domain.

This governance gap carries material consequences. According to MIT research, organisations with digitally and AI-savvy boards outperform peers by almost 11% in return on equity, while those without lag 3.8% below industry average. Meanwhile, analysis by McKinsey reveals only 15% of boards currently receive AI-related performance metrics, despite workforce transformation representing one of the highest-risk and highest-impact areas of AI deployment.

Strategic alignment therefore requires formal oversight mechanisms. Boards should mandate regular AI impact assessments covering ROI by business unit, the proportion of AI-enabled processes, workforce reskilling progress and regulatory alignment. Yet Deloitte reports that only 5% of organisations have fully incorporated AI into their core business plans, highlighting a material disconnect between ambition and integration.

Workforce capability oversight must also move beyond informal reporting. Human capital committees must track talent pipeline development, ensuring skills necessary for AI transformation are being built systematically.  This includes monitoring reskilling participation rates, AI fluency at leadership levels and retention of AI-capable talent. Capital allocation frameworks must rigorously assess AI investment proposals, balancing short-term efficiency gains against long-term capability development and resisting the “Klarna temptation” to prioritise headcount reduction over institutional resilience.

Risk oversight requires structured approaches to monitoring algorithmic bias, data privacy breaches, compliance failures and workforce displacement risks. The AI Incident Database tracked a 26% increase in AI incidents from 2022 to 2023, with a further 32% increase in 2024.

Finally, boards must recognise cultural stewardship as a governance responsibility. AI strategy affects organisational reputation, employee trust and psychological safety, all of which materially influence adoption success. In the human–AI era, culture is strategic infrastructure.

Redesigning Workflows: Beyond Automation

Redesigning work is now a strategic leadership decision that determines whether AI amplifies human capability or erodes trust and engagement. The BMW example illustrates this principle: rather than automating entire procurement processes, BMW decomposed workflows into component tasks, assigned appropriate tasks to AI agents while elevating human roles to focus on strategic supplier relationship management, negotiation strategy and risk assessment requiring contextual judgement.

Process orchestration becomes a distinct capability requiring new roles and skills. Someone must design workflows determining when tasks move from human to machine and back, establish quality control mechanisms and identify failure modes.

Quality assurance mechanisms must evolve substantially, as AI systems produce outputs that appear authoritative but may contain subtle errors or contextually inappropriate recommendations.

Organisations that succeed treat human-machine redesign as core strategy, rather than a side-effect of technology adoption. They invest deliberately in workforce capability, embed AI into workflows with intent and prioritise organisational resilience over narrow cost reduction.

Managing Structural Role Reduction Responsibly

Not all roles can be redesigned or augmented indefinitely. Evidence suggests that up to 40% of current roles could be affected by AI, making some degree of workforce restructuring unavoidable. Responsible leadership requires early modelling of which functions are likely to consolidate within two years. Transparent communication and structured transition planning mitigate long-term cultural damage.

Where exit is inevitable, early honest communication and genuine transition support including career coaching and skills assessment, often serves employees better than extended uncertainty. The organisations managing this transition most effectively also provide reskilling for viable internal alternatives, clear timelines and meaningful severance and outplacement support that enable affected workers to plan their next moves while still employed.

Creating a Resilient Culture

As AI reshapes work and skills simultaneously, AI transformation depends on cultural readiness. Organisations that treat culture as a soft issue or delegate it entirely to HR typically struggle to scale AI beyond pilots.

CIOs and CDOs are increasingly required to work in close partnership with CHROs, CFOs and CPOs to align technology adoption with workforce design and capability development.

Leaders must ask, does the organisation reward learning, judgement and responsible experimentation, or does it default to risk aversion, silence and short-term cost control? The answer increasingly determines whether AI investment translates into sustainable growth. Klarna’s Glassdoor ratings fall demonstrates how aggressive AI deployment without cultural preparation can destroy the trust and psychological safety required for sustainable transformation.

The Path Forward

The WEF projections suggest net job growth, but the maths reveal the deeper challenge: 78 million net new roles against 338 million population growth means transition management becomes the defining leadership competence of the next decade. Technology deployment is the simple part. Workforce transformation is the challenge that will differentiate successful organisations.

The executives who navigate this transition successfully will treat workforce capability as strategically foundational to successful technology deployment. They will invest in learning infrastructure as deliberately as they invest in computing infrastructure. They will redesign workflows around human-machine collaboration rather than automating legacy processes. They will communicate honestly about displacement risks while providing genuine transition pathways. They will choose augmentation over a displacement trajectory that hollows out.

The alternative is the worst-case scenario where short-term efficiency gains hollow out organisational capability, workforce displacement outpaces transition support and the benefits of AI accrue narrowly while the costs distribute broadly. This outcome is not inevitable, but as Klarna demonstrates, it is entirely possible when AI is treated primarily as a cost-reduction tool rather than as a strategic transformation requiring deliberate workforce design.

About Rialto

The human-machine era will not be defined by the speed of automation, but by the quality of organisational judgement guiding it. AI will reward those who design deliberately and penalise those who optimise prematurely. The question is no longer whether work will change but whether leaders will change fast enough to shape it.

Rialto partners with executives to navigate strategic workforce transitions in the AI era. We work alongside leadership teams to assess organisational capability, design human-machine workflows, and develop transition strategies that balance productivity gains with capability development. With deep expertise in executive capability development, transition and organisational transformation, Rialto provides trusted strategic counsel during periods of structural change and transition.

Contact Rialto on +44 (0) 20 3746 2960 to discuss your workforce transformation strategy or find out more about the  AI Business Leaders Circle.

The boardroom discussion that never happened often costs the most. While organisations pour resources into strategic planning, market analysis and digital transformation, executive agendas often carry a glaring and potentially damaging omission: when to leave.

Timing a strategic exit benefits the individual – avoiding ennui, stagnation, complacency, unexpected and unplanned-for end of tenure – and protects legacy. It is also essential for the health of the organisation.

Analysis by Harvard Business Review found that poorly managed CEO and C-suite transitions may be responsible for loss of up to $1 trillion annually in market value across the S&P 1500 alone.

Executives who have engaged in leadership development and reflection are increasingly recognising this reality and asking their Rialto coaches for guided support to prepare exit strategies and onward plans up to three years in advance.

The Career Life Cycle and Succession Timing

Executive careers follow distinct phases, each demanding different approaches to succession planning. Between ages 45-59, just as career earnings and status typically peak, leaders face additional responsibilities: parenting, caring for aging parents, and planning for their own health and wellbeing. This midlife phase represents the critical window when proactive succession planning delivers maximum benefit. However, senior leadership of all ages and at all levels can benefit from this type of detailed strategic career development.

Academic research (from Boston University, the University of Cologne, the University of St. Gallen, and the Karlsruhe Institute of Technology) examined S&P 1500 companies over 25 years and identified a pattern: company value typically peaks around a CEO’s tenth year in post. After approximately 14 years, firm value begins to decline – first gradually, then precipitously – for as long as the CEO remains.

CEO turnover reached a record level in 2025, rising 16% in a single year and continuing an upward trend as a result of geopolitical and economic volatility which is creating unprecedented pressures for senior leadership to deliver results in a complex and challenging market. Russell Reynolds Associates’ research found that 38 FTSE 350 chief executives stepped down in 2022, more than double the 18 exits of the previous year. In the S&P 500, CEO successions rose from about 7% in 2024 to 12% in 2025, even in top-performing quartiles. The average tenure for outgoing CEOs fell to about 6.8 years from around 7.7 in 2024.

In other c-suite positions:

• In 2025, the average tenure of sitting S&P 500 C-suite leaders was 5.2 years.
• The average tenure for COOs in the FTSE 100 fell to 2.7-3.3 years in 2025, down sharply from 4.2 years in 2023.
• CFOs averaged 4.7-5.8 years with turnover at 15.1% at leading global companies, the highest on record.
• CHRO average tenure in the S&P 500 was 4.1-4.6 years while 18% in the S&P were new hires.
• About 12% of S&P CIOs were newly appointed

Communication and innovation-driven sectors saw the highest turnover, while financial services and communications saw lower turnover.

The Critical Questions Many Executives Avoid

At this crossroads, many leaders find themselves asking: What is truly important to me now? What might a future next phase look like? How do I want to be remembered? Do I want to continue working at this pace, or would a new balance bring more fulfilment?

These questions demand structured reflection. Successful succession planning requires taking stock of what matters most, evaluating past roles, career highlights and determining key areas of impact and enjoyment. Values and priorities shift: is it mentorship, family, innovation or social impact that now drives decisions?

Exploring the Path Forward

Executives who plan succession 2-3 years ahead give themselves the best chance of securing markedly better outcomes than those caught in reactive transitions. This extended timeframe creates space to explore alternatives systematically.

A portfolio career offers one compelling path. Instead of full-time leadership, many senior executives shift to a portfolio of advisory roles, non-executive director positions and/or board memberships. This approach allows individuals to remain engaged while enjoying more flexibility and variety. For others, entrepreneurship beckons, turning expertise into new business ventures or advisory practices.

This is where network activation proves essential. Leveraging and building networks to explore new avenues aligned with passions and expertise can be achieved while continuing in role, creating transition options before they become necessity.

Reading the Early Warning Signals

Savvy executives monitor organisational and market indicators 12-24 months before restructure announcements become public knowledge. Board composition changes warrant particular attention. New CFO appointments, strategic review announcements or activist investor involvement frequently precede senior-level restructures.

Research published in the Journal of Finance found that CEO succession planning disclosure significantly mitigates negative market reactions when outperforming CEOs depart. Conversely, executives whose organisations underperform sector benchmarks face compressed timelines regardless of individual capability.

Analysis showed that up to 50% of business exits stem from unexpected approaches from buyers, making reactive planning increasingly costly.

The Cost of Staying Too Long

Excessive tenure can damage outcomes as severely as premature departure. The optimal CEO tenure ranges from 7-15 years.

Long-tenured executives freeze career paths for rising talent while success and stability can breed complacency. Fortune magazine analysis found that CEOs in years six to ten often fall into the “complacency trap,” playing defence rather than offence, building strategy and capital allocation based on existing core competencies, focusing on what has succeeded in the past instead of laying down the foundations for what is approaching on the horizon.

The damage extends beyond organisational performance. Executives who overstay often struggle to secure comparable positions elsewhere. The market might interpret extended tenure as either lack of ambition or inability to secure alternative opportunities.

Building Legacy Through Strategic Transition

Legacy planning requires intentional action. This involves mentorship and knowledge sharing, passing wisdom to the next generation of leaders. It requires ensuring current roles transition smoothly by empowering successors and leaving behind clear vision.

For some, legacy involves exploring internal leadership opportunities – transitioning into strategic roles such as board positions or practice leadership whilst continuing to shape the organisation’s future. For others, it means contribution to causes through philanthropy or social impact initiatives.

Effective transition readiness operates on multiple parallel tracks. Succession narrative development requires particular sophistication. The distinction between “I’m pursuing new challenges” and “my role was eliminated” determines future opportunities. Demonstrable exit planning enables individuals to retain control and value, as well as creating a mindset of continuous career development, planting visible markers of that dynamic trajectory.

UK corporate governance codes explicitly call for “plans in place for orderly succession to both the board and senior management positions.” Executives who visibly champion succession planning display their strategic credentials while building transition optionality.

The 24-Month Strategic Framework

Strategic transition planning operates on a 24-month horizon. Months 1-6 involve honest evaluation of organisational trajectory, personal market value and alternative opportunities. This requires engaging discrete advisory support to assess options without triggering organisational concern.

Months 7-12 focus on network activation and credential building: securing board positions, advisory roles or strategic appointments that establish credentials independent of current role.

Months 13-18 require active cultivation of internal successors while developing the transition narrative. This determines whether the move reads as strategic evolution or forced departure.

Months 19-24 involve formal succession announcements, handover planning and launch of next-phase positioning. Done well, this period cements legacy while launching the executive’s next chapter from strength.

The Financial Imperative

Poor succession planning costs organisations an average of $1.8 billion in shareholder value according to research on the world’s largest 2,500 public companies. Korn Ferry found that nearly a third of newly appointed CEOs departed by their third year, with 11% leaving after just one year. This “three-year itch” represents devastating personal financial and reputational cost as well as an organisational one.

ASAE research analysing 28,000 tax forms found that CEO severance packages averaged just 10 months of base pay, with a median of 8.2 months. Executives terminated without preparation lose unvested equity compensation, often the most valuable component of their package.

Executives who position early can negotiate enhanced severance packages (C-level packages often reach 1-2x base salary, CEOs up to 3x) as well as valuable outplacement support, benefits worth hundreds of thousands to millions that evaporate in reactive scenarios.

Meanwhile, those who exit reactively often face prolonged periods securing comparable roles, with market perception of forced departure diminishing negotiating leverage in subsequent positions.

Conversely, executives who plan transitions 2-3 years ahead can achieve dramatically superior outcomes.  Executives who build board credentials this far ahead can command premium NED fees, for example, while those forced to seek board positions reactively often begin with unpaid pro bono roles to establish track record.

Beyond Crisis Management

The executives who secure the best outcomes share a common characteristic: they begin planning transitions long before circumstances force decisions. They recognise that succession planning demonstrates strategic thinking, not admission of weakness.

For those willing to have the conversation now, while performing strongly, the future offers opportunities that crisis transitions can never deliver.

About Rialto

Rialto partners with executives to protect what they have built and navigate their next critical phase of transition. Our specialised programmes help leaders map priorities, explore opportunities both within and beyond their current organisation and communicate next steps strategically to secure desired futures. With deep expertise in market intelligence and UK/European executive markets, Rialto delivers boutique, discrete, highly personalised support during critical transitions.

Contact Rialto on +44 (0) 20 3746 2960 to discuss your executive transition strategy.

Navigating Divergent Global Growth

In our Q1, 2026 executive outlook for the United States, Asia, and the Middle East and North Africa, we look at economic forecasts across these critical markets, executive hiring dynamics and the capabilities commanding premiums in an increasingly selective global landscape. The briefing finds divergent growth patterns, sector-specific opportunities and persistent demand for transformation leadership within a more general theme of hiring caution.

United States:

GDP growth of 2.1-2.2% is predicted for 2026, reflecting modest expansion by historical standards, tempered by trade policy uncertainty and constrained labour supply from restrictive immigration and demographic shifts.

Manufacturing is projected to rebound gradually as automation, AI and reshoring initiatives improve productivity.

The technology sector is anticipated to lead growth, driven by expanding demand for AI applications, cloud infrastructure, semiconductors and cybersecurity services, reinforcing tech’s role as a primary investment and employment engine.

Healthcare and biotech are forecast to continue expanding due to aging demographics, digital health tools and AI-enabled diagnostics, despite cost pressures and regulatory complexity.

In retail and consumer goods, companies are prioritising omnichannel strategies, logistics efficiency and personalisation to adapt to cautious but resilient consumer spending patterns.

The energy sector is undergoing structural change as electricity demand rises and renewable generation grows, while oil and gas firms face price volatility and capital discipline pressures

Financial services and M&A activity are expected to strengthen as easing capital constraints and AI-driven analytics support dealmaking and consolidation.

The labour market presents a stark contrast to economic growth. US employers added just 50,000 jobs in December 2025, bringing total 2025 payroll gains to 584,000, marking the weakest year of job growth since 2003 outside recessions. This compares to 2 million jobs added in 2024.

The disconnect between GDP growth and weak employment reflects ongoing productivity acceleration, much of it attributed to AI adoption.

The Federal Reserve is seeking to freeze interest rates at 3.75% for the immediate future – in the face of pressure for cuts from the White House. Inflation trends and the Fed’s approach to returning to its 2% target will shape the near-term economic environment if it is able to retain its independence. Economists fear Donald Trump’s pressure to keep slashing interest rates could heat up inflation again.

For executives, the US market presents constrained hiring. Leaders must recalibrate growth narratives toward operational efficiency, profitability and demand modelling. Capability-driven hiring – skills in AI governance, transformation leadership and resilience planning – is disproportionately valued as overall headcount budgets face pressure. Risk governance in navigating federal policy shifts around trade, immigration and tax will be essential. Cross-sector mobility and skill transferability, particularly across tech, healthcare and advanced manufacturing, will enhance executive relevance.

As Trump seeks to expand US economic and geopolitical influence and push back on Chinese economic imperialism and Russian aggression, his threats of further tariffs and invasion of Greenland threaten to disrupt supply chains and diplomatic relations with key economic allies, especially in Europe.

Asia:

Asia’s growth narrative in 2026 is likely to remain around 1-2% stronger than in advanced economies, though slowing down on 2025 and with significant differentiation across subregions. Technology-integrated economies such as South Korea, Singapore, Taiwan and Malaysia are poised to capture rewards from AI-related semiconductor demand, while non-tech exporters face headwinds from sluggish global trade.

China is predicted to see growth moderate to around 4.5% as it faces export costs, a weak property sector, falling consumption and investment challenges. Chinese exports have shown resilience despite US tariffs, having diversified across Asia and Africa. However, global trade growth is expected to slow sharply in 2026 as tariff impacts fully materialise. Executive demand in China concentrates on leaders who can navigate supply chain reconfiguration, manage export diversification and drive domestic consumption growth in the face of structural headwinds.

The Indian economy continues to expand with a healthy 7.4% predicted this year, beating even last year’s 6.8%, valuing it at $4.51 trillion by year end. However it faces growth risks from US tariffs, which increased form around 2.4% in 2024 to 20% last year.  Inflation rates have been fluctuating between 0.7% and  2%.

India is seeing the rewards of early widespread AI adoption, with huge government training programmes, infrastructure and R&D investment creating a highly skilled workforce and an increasingly innovative environment. Expect to see India compete with China and the US in this domain.

Executive demand remains robust in infrastructure development, technology services and manufacturing as India positions itself as a viable alternative to China in that sector too.

Japan and South Korea present outlier status with accelerating growth driven by large fiscal stimulus packages that offset weaker export growth. AI infrastructure investment continues to flow. Executive demand concentrates on leaders who can deploy capital efficiently in semiconductor manufacturing, AI infrastructure and technology supply chain management.

Southeast Asian economies benefit from lower labour costs, geographic proximity to China and improved infrastructure, positioning them as alternative manufacturing hubs. However, Thailand, Philippines and Indonesia face headwinds from weaker non-tech export demand and domestic political uncertainty. Executive roles increasingly focus on supply chain repositioning and manufacturing relocation from China.

Across Asia, rapid AI adoption and automation in advanced markets is changing value creation patterns and driving polarisation between high-skill and low-skill labour. Labour force participation rates among women and youth remain structural levers for growth. Leaders fluent in cross-market nuance, regulatory diversity and partner ecosystems will find premium opportunities. Executives must prioritise digital fluency, cross-cultural leadership and strategic workforce planning, while balancing speed of growth against economic, geopolitical and operational volatility.

Middle East and North Africa:

The MENA region is projected to outperform global growth in 2026, with significant variation across markets. The Gulf states are seeing the fastest regional growth in part due to expansion in non-oil sectors including tourism and financial services and private sector investment flows.

Saudi Arabia, the United Arab Emirates and Qatar show momentum driven by infrastructure development, energy sector expansion and economic diversification efforts.

Executives targeting MENA markets must demonstrate capability in large-scale infrastructure delivery, navigate complex stakeholder environments across public and private sectors and possess genuine fluency in both traditional industries and emerging technology sectors. The region’s pace of transformation demands leaders who can operate across cultural contexts while driving execution at scale. Championing workforce inclusion as a growth strategy will be central as the region targets untapped potential among women currently outside the workforce.

What Executives Should Watch and Do

The structural reset is global, not confined to a single national economy. Across the United States, Asia and MENA, the patterns are consistent: growth is modest but differentiated, labour markets are shifting toward strategic demand and leadership expectations are realigning around capability, adaptability and cultural fluency.

Cross-border capability commands premiums. With major economies implementing significant tariff regimes, executives who can navigate trade policy complexity, manage supply chain reconfiguration and maintain profitability amid shifting trade regimes are in high demand. This extends beyond traditional international roles to any leader managing supplier relationships or market access.

The outlook for Q1 2026 reveals a diverging market. While the UK and Europe navigate fiscal constraint with declining hiring and a shift toward interim fractional leadership, the US presents strong GDP growth coexisting with the weakest hiring since 2003.

Asia offers dynamic opportunities, with India’s growth and technology-driven demand in South Korea and Singapore creating genuine expansion appetite, though China’s structural imbalances require specialised navigation expertise.

MENA stands apart with diversification imperatives driving concentrated demand for large-scale project delivery and transformation leadership at compensation levels that reflect urgency.

The divergence creates distinct pathways. European executives face a market prioritising cost discipline and operational efficiency within modest growth parameters. Those targeting the US must demonstrate productivity gains through technology deployment while managing workforce reductions. Asia-focused leaders require cross-border regulatory fluency and the ability to navigate geopolitical complexity alongside rapid growth. MENA demands scale execution capability and public-private stakeholder management. Yet AI governance fluency and demonstrable impact have become universal executive requirements.

The executives who will thrive, then, are those who recognise these regional nuances while building the skills, credentials and narratives universal to all economies in this evolving and volatile landscape.

Here you can also find a briefing on the executive outlook for Q1 2026 in the UK and Europe.

Navigating the Structural Reset

As we enter 2026, Rialto analysts examine the evolving executive landscape across UK and European markets. The data confirms we are not experiencing a cyclical downturn but a fundamental recalibration of executive value. Traditional management hierarchies are being compressed, generalist roles are disappearing and leaders are expected to demonstrate immediate impact in constrained environments.

This quarter’s insight examines UK and EU broader economic forecasts to support organisational planning and decisions, executive market dynamics and the capabilities driving demand in an increasingly selective hiring landscape.

It finds some resilience, pockets of dynamic growth and room for cautious optimism amid continuing uncertainty, the near-constant flow of global shocks and GenAI-driven disruption.

UK Economic Outlook: Modest Growth, Fiscal Constraint

The UK economy grew 0.3% in November 2025, marginally higher than economist predications and rebounding from a 0.1% contraction in October. For the three months to November, GDP increased just 0.1%, with services up 0.2%, construction down 1.1%, and production declining 0.1%. The Office for Budget Responsibility forecasts GDP growth of 1.4% for 2026, down from 1.9% projected in March, reflecting weaker productivity expectations. KPMG’s outlook is more cautious, projecting 1.0% growth, while the Treasury’s survey of independent forecasters averages 1.1% for 2026.

Inflation is easing toward the Bank of England’s 2% target. The Consumer Price Index rose by 3.2% in the year to November 2025. KPMG expects inflation to return to target by April 2026, supported by measures announced in the Autumn Budget, including energy bill reforms projected to save households £150. The base rate currently sits at 3.75%, with market pricing indicating further cuts to 3.25% by year-end, though the pace of reduction is slowing as the Bank approaches neutral policy settings.

Fiscal space remains severely constrained. Debt servicing now consumes approximately 10% of government spending, the highest proportion since the 1980s. Public sector hiring contracted 3.2% year-on-year, and procurement budgets for external consultancy and interim leadership have been reduced across Whitehall. The OBR’s November forecast confirmed the government faces limited room for stimulus, with the tax-to-GDP ratio projected to reach 37.7% by 2027-28, a post-war high.

Sectoral Performance: Retail Under Pressure, Manufacturing Stabilises

Retail: The retail sector enters 2026 facing acute margin pressure. Retail sales volumes rose 0.6% in the three months to November 2025, with clothing stores and computer retailers performing strongly, but the sector confronts mounting costs. The British Retail Consortium estimates that increases to National Insurance contributions (from 13.8% to 15.0%) and the National Living Wage will cost the sector £5 billion annually. PwC’s Retail Outlook notes that 81% of retailers plan to increase prices to offset these challenges, squeezing consumer demand. Executive hiring in retail has softened accordingly, with demand concentrated in transformation roles focused on cost optimisation and omnichannel integration. Executives in consumer-facing sectors must demonstrate cost discipline or face obsolescence.

Manufacturing: UK manufacturing showed tentative recovery in December 2025. The S&P Global UK Manufacturing PMI rose to 50.6, the highest reading in 15 months. However, the expansion was driven primarily by inventory building and backlog clearance rather than sustained demand growth. Manufacturing employment declined for the 14th consecutive month. Export orders contracted for the 47th consecutive month in December, reflecting weak global demand and continued impact from US tariffs.

The sector’s recovery remains fragile, dependent on domestic demand and vulnerable to external shocks. Executive demand in manufacturing is concentrated in operational turnaround roles, supply chain resilience and automation deployment.

Construction: Construction output fell 1.1% September to November, the largest quarterly decline since March 2023. However, infrastructure remains resilient, with output reaching £9.93 billion in Q3 2025, up 4.2% from Q2. Roads and electricity infrastructure drove growth, up 30.2% and 28.2% respectively, supported by government commitments to energy transition and public infrastructure. Executive demand in infrastructure and renewable energy projects command premiums for project delivery leaders, while residential and commercial segments face headwinds.

Financial Services

Financial services enters 2026 in strategic recalibration. Higher-for-longer interest rates support net interest margins, but credit conditions tighten and loan growth slows. Capital markets activity remains selective, with restructuring and private credit robust while IPOs. Regulatory pressure on capital adequacy, consumer duty and operational resilience increases costs sector-wide.

Executive demand softens in growth roles but remains resilient for risk, regulatory change, cost transformation and balance sheet optimisation. Credibility with regulators and execution discipline now outweigh expansion narratives.

Technology

Technology shows renewed revenue momentum but persistent hiring caution. Enterprise spending on AI, cloud optimisation and cybersecurity remains strong, while discretionary transformation budgets tighten. Investment shifts from broad growth to targeted productivity improvements.

Executive demand concentrates in roles bridging technology and commercial outcomes: AI governance, platform rationalisation, data architecture and value realisation. Boards increasingly prioritise executives who can industrialise AI over pure innovation leadership.

Healthcare and Life Sciences

Healthcare faces sustained structural pressure. Public systems struggle with workforce shortages, aging populations and constrained funding. Private healthcare and life sciences navigate higher financing costs and elongated investment cycles. Pharmaceutical pipelines remain active.

Executive hiring targets leaders in workforce transformation, operational performance and regulatory navigation. Digital health attracts interest but adoption varies. Executives translating innovation into scalable, compliant, cost-effective models command premiums.

Energy and Utilities

Energy shows strong investment momentum but rising execution risk. Grid infrastructure, renewables and energy security attract capital, but project delivery constraints – planning delays, skills shortages, supply chain bottlenecks – are constraining the sector.

Leaders with proven large-scale programme delivery, stakeholder management and regulatory navigation are in highest demand. Boards prioritise managing political, community and commercial complexity while maintaining delivery discipline above technical expertise.

Private Equity

Private equity operates in a disciplined, execution-led cycle phase. Deal volumes remain below peak, constrained by valuation gaps and financing costs, but activity recovers in sectors with clear cash flow visibility. Value creation shifts decisively from financial engineering to operational improvement.

Executive demand within portfolio companies remains strong but selective. Operating partners, interim CEOs and functional leaders with restructuring, integration or rapid performance improvement are valued while executives can expect to be placed under unprecedented levels of scrutiny.

The Executive Market: Capability Currency Replaces Headcount

The UK unemployment rate reached 5.1% in the three months to October 2025, the highest since March 2021. Total unemployment rose by 158,000 from the previous quarter to 1.83 million. Employment fell by 16,000 to 34.23 million, marking the second consecutive quarterly decline. The employment rate dropped 0.3 percentage points to 74.9%.

Vacancies fell to 717,000 in September to November 2025, down 9.6% annually and now below pre-pandemic levels. The ratio of unemployed people per vacancy rose to 2.5. The steepest drops in executive hiring occurred in generalist COO and commercial director positions.

Yet this tells only half the story. While overall volumes contract, the nature of available roles has shifted. Three trends dominate:

A Surge in Interim Executive Placements: Companies increasingly seek rapid restructuring capability over institutional knowledge, turning to interim executives who can quickly evaluate financial controls and implement transformation initiatives.

AI-Driven Organisational Flattening: According to Gartner’s 2025 workforce predictions, 20% of organisations will use AI to flatten their structures, eliminating more than half of current middle management positions by 2026. This represents elimination of coordinative roles which are being displaced by autonomous agents and workflow systems.

Adaptability as the Critical Hiring Filter: The most significant shift in executive assessment is the prioritisation of learning agility and technology fluency over traditional credentials. Research from executive search firms indicates that emotional intelligence and adaptability now rank as top predictors of leadership success, particularly during periods of change. This technological transformation demands executives who can rapidly absorb, deploy and govern emerging technologies. Multiple 2025 recruitment reports confirm that boards increasingly favour candidates demonstrating AI fluency, change management abilities and cross-disciplinary thinking over those with purely sector-specific experience.

This represents a fundamental revaluation of executive currency. Tenure and domain expertise, once premium assets, are now basic requirements at best and liabilities at worst if they signal rigidity.

Bright Spots: Where Demand Persists

Despite broader contraction, specific niches show robust executive demand:

Energy Transition and Infrastructure: The UK’s commitment to 50GW of offshore wind capacity by 2030 continues to drive hiring in engineering and project leadership.

Governance, Compliance, and Sustainability: The EU’s Corporate Sustainability Reporting Directive entered full enforcement in January 2026, affecting approximately 50,000 companies. Demand for Chief Sustainability Officers and compliance-focused finance executives has surged accordingly, as reported by PwC’s CSRD Readiness Survey.

Digital Infrastructure and Cybersecurity: The UK’s National Cyber Strategy and increased investment in sovereign cloud infrastructure have created sustained demand for CISOs and technology risk executives.

Compensation:

Executive pay growth is cooling but becoming more sophisticated. Annual growth of regular pay excluding bonuses was 4.6% in the three months to September 2025, the lowest since April 2022. KPMG’s Report on Jobs for January 2026 reported that recruitment activity weakened in December as permanent placements fell at the sharpest rate since August, while candidate availability surged amid redundancies. However, starting salary inflation reached a seven-month high as employers competed for specialised talent.

Nominal salary increases for C-suite roles averaged 3.1% in 2025, barely outpacing inflation, but total compensation packages are evolving rapidly. Signing bonuses have increased in frequency, offsetting compressed base salaries.

Flexibility remains a negotiation point, with many FTSE 350 firms requiring executives on-site three or more days per week.

European Context:

The Eurozone is projected to expand by approximately 1.2% in 2026, with significant regional variation. Germany’s manufacturing output declined 2.1% year-on-year in Q4 2025, with automotive and chemicals sectors shedding senior roles. However, Germany’s €10 billion “Sovereign AI” initiative is creating concentrated demand in biotech, quantum computing and autonomous systems. Spain’s unemployment rate has fallen to 11.2%, its lowest in 15 years. According to Indeed’s European Job Postings Tracker, executive vacancies in Spain and Italy remain 53% and 46% above pre-pandemic levels, respectively, concentrated in professional services and construction tied to EU recovery funds. The EU’s data localisation regulations and proliferation of national AI governance frameworks are creating compliance complexity that favours executives with cross-border expertise.

What Executives Should Watch and Do

Articulate Value Creation, Not Activity: In a low-growth environment, boards scrutinise return on investment with forensic intensity. Executives must demonstrate measurable impact: revenue defended, costs extracted, processes redesigned. The ability to tell a compelling value story, quantified and evidence-based, separates those who secure roles from those who circulate CVs indefinitely.

Develop AI Governance Fluency: By 2026, AI literacy is no longer a technology function competency but a baseline executive requirement. Leaders must be conversant in ethical deployment, bias mitigation and regulatory frameworks. The EU AI Act, now in force, imposes obligations on executive leadership for high-risk AI systems. Boards are asking pointed questions about algorithmic accountability and executives without credible answers may find themselves passed over.

Navigate Trade and Regulatory Complexity: With UK trade disrupted by US tariffs and EU regulatory fragmentation intensifying, executives who can demonstrate facility with cross-border operations, supply chain reconfiguration and tariff mitigation strategies are commanding premiums. This competency extends beyond traditional international roles to any leader managing supplier relationships or market access.

Cultivate Continuous Development: The most successful executives treat their own capabilities as a continuous project. Whether through structured coaching, peer advisory networks or targeted upskilling in emerging domains, the goal is sustained relevance. Organisations now expect executives to demonstrate recent learning, not simply cite past achievements.

The outlook for Q1 2026 is one of selective opportunity within structural constraint. While macroeconomic growth remains modest, the market for top-tier leadership is exceptionally dynamic. Generalist executives face headwinds; specialists with demonstrable impact in constrained environments are in short supply.

This is not a market to wait out. The executives who will thrive are those who recognise that 2026 represents a structural reset, not a cyclical pause, and who take decisive action to align their capabilities, narratives, and networks with the new reality of value-led growth.

For Q1, 2026, insights on the US, Asia and Middle Eastern markets click here

If 2025 was the year of AI experimentation and board level caution amid economic shocks and uncertainty, 2026 will be the year for value creation and accountability.

As organisations enter 2026, business leaders are making decisions against a backdrop of persistent volatility and structural change rather than short-term disruption. Traditional planning horizons are shortening, competitive advantages are eroding faster, and the margin for strategic missteps is narrowing. Executives have moved from responding to change to anticipating it and positioning their organisations to adapt faster than competitors.

Meanwhile, we are only just beginning to understand the capabilities of large-scale global AI adoption and the foundational work required from organisational leadership. Adoption has been uneven and returns inconsistent. Despite deep expertise and a strong innovation heritage, official data showed only around 23% of UK businesses using AI by late 2025, with uptake heavily skewed toward larger firms.

In this environment, strategic leadership in 2026 is defined less by having all the answers and more by setting clear direction, making disciplined choices and enabling organisations to learn and adapt at pace.

Here, we examine five executive leadership priorities we are working on with many of our clients as they build resilient and responsible organisations capable of competitive and sustainable growth in 2026 and beyond.

1. Technology as a Strategic Asset: Moving Beyond Hype to Value

The transition from 2025 to 2026 marks a decisive shift from experimentation to execution. While 2025 saw organisations race to adopt AI as a competitive imperative, much activity remained trapped in pilots, with leaders struggling to quantify meaningful returns. Research found that 71% of global CEOs and 78% of senior executives believe AI will enhance their value as leaders over the next three years, yet almost 90% report they are not delivering clear customer value from AI today.

UK businesses spent an average of almost £16 million on AI last year, with spending projected to rise by 40% over the next two years. The average UK business currently realises returns of 17% from AI investments, forecast to rise to 32% by 2027. However, investment levels remain well behind China and the US, reinforcing the importance of disciplined prioritisation and architectural redesign rather than indiscriminate adoption into incompatible legacy systems.

The leadership challenge now is intelligent execution. Integrating generative and agentic AI into products, operations and decision-making requires redesigning workflows, strengthening governance and aligning investment to measurable outcomes such as revenue growth, customer experience and operational resilience. Mobilising technology as a strategic asset demands more than purchasing platforms. It requires rethinking how work gets done, tracking model decisions and risk outcomes and tying AI investment to business performance.

Enterprises are moving beyond isolated automation tools toward AI-native processes designed to deliver real-time decision support, autonomous workflows and embedded intelligence across functions. This marks a shift from AI as assistant to AI as operator of core workflows.

Technology alone, however, is not a differentiator. Organisations that fail to align digital investment with governance, culture and leadership capability risk amplifying complexity rather than unlocking value.

The UK also faces a persistent AI skills gap that constrains productivity and slows the scaling of successful pilots into enterprise-wide deployments. Many organisations continue to look externally for scarce talent while underinvesting in internal reskilling, even as roles are displaced by automation. This approach increases cost and disruption while limiting long-term returns.

2. Risk and Resilience Leadership in an Expanding Risk Landscape

The risk environment confronting leaders in 2026 is broader, faster-moving and more interconnected than ever. Financial risk is inseparable from cultural, operational, technological and reputational exposure. AI opportunities come with profound challenges. Without robust governance, security and human oversight, autonomous systems expose organisations to significant risk, particularly in customer-facing and high-stakes domains.

By the end of 2026, predictions suggest more than 2,000 legal claims linked to AI-driven failures caused by opaque systems and insufficient guardrails. These warnings underline the urgency for boards, technology providers and governments to take shared responsibility for how AI is deployed.

Geopolitical fragmentation is reshaping cloud strategies, supply chains and data sovereignty decisions. By 2030, more than 75% of European and Middle Eastern enterprises are expected to relocate workloads from global public clouds into local or regional solutions to reduce geopolitical risk, up from less than 5% in 2025.

Human factors compound these risks. Research shows that when AI presents confident recommendations, people tend to defer to them, even when flawed. As AI makes poor information look credible, distinguishing expertise from illusion becomes harder. Shadow AI presents an immediate governance challenge. Sixty-eight percent of UK organisations report employees using unapproved AI tools, with many already experiencing data exposure or security vulnerabilities.

Cyber risk remains a board-level concern. Three quarters of boards have discussed the financial implications of a major cyber incident, yet organisational preparedness often lags. High-profile breaches in the UK during 2025 exposed gaps in awareness, investment and specialist capability, particularly as security leaders are expected to operate as strategic executives rather than technical specialists.

By 2027, fragmented AI regulation is expected to cover half the world’s economies, driving billions in compliance costs. Governance will increasingly act as a competitive differentiator as customers, regulators and partners demand proof of responsible use.

Resilient leadership in 2026 is defined by the ability to anticipate disruption rather than simply respond to incidents, embedding governance and scenario planning into strategic decision-making.

3. Creating a Culture That Enables Change, Learning and Collaboration

Cultural readiness has become a decisive factor in whether organisations succeed or stall. Rapid automation and AI-driven change are reshaping roles and career pathways, generating anxiety, cynicism and change fatigue across workforces already stretched by successive transformations. Without a strong cultural foundation, technology deployment and risk management initiatives are likely to fail.

By October 2025, job cuts in the US were up 175% year over year, reaching their highest single-month totals since 2008, even as financial markets surged. Three quarters of CEOs expect further workforce reductions in 2026, with AI adoption cited more often than revenue growth or talent attraction. Short-term cost savings from headcount reduction risk being outweighed by longer-term damage to resilience, reputation and organisational capability.

Leaders must intentionally foster psychological safety so teams feel able to experiment, challenge assumptions and raise problems early. Recognition, belonging and trust are essential to retention and performance in an environment of sustained uncertainty. Anxiety is not limited to those most at risk of displacement. Recent research shows 71% of leaders report increased stress, with many reconsidering their careers.

Organisations face a difficult tension: maintaining workforce commitment while implementing technologies that will eliminate roles. Executives across functions will need to work more closely with HR and IT to redesign workforce models, embed continuous learning and use analytics and AI tools to monitor quality, sentiment and capability development aligned with current and future organisational priorities and goals.

Leadership itself must be protected from change fatigue and burnout as organisations manage overlapping pressures from AI adoption, geopolitical uncertainty and supply chain resilience.

Remote and hybrid working models further complicate cultural cohesion. Leaders must translate values into everyday behaviours and redefine performance around outcomes rather than presence. As technology adoption accelerates, closer collaboration between technology, people and risk leaders becomes essential so that cultural and human considerations are embedded into change rather than addressed retrospectively.

4. Cultivating Future Leadership Rather Than Managing Today’s Talent

The leadership capability required for sustained success in 2026 differs fundamentally from previous cycles. Digital and AI fluency are now core executive skills, essential for allocating capital, assessing risk and making informed decisions. Technical understanding alone is insufficient. Leaders must combine judgement, emotional intelligence and strategic vision as intelligent systems increasingly execute operational and customer-facing work.

By 2027, an estimated 75% of hiring processes will require evidence of AI literacy. Yet AI leadership demand is growing faster than supply. Fewer than a third of companies have trained even a quarter of their workforce to use AI. While most leaders use generative AI regularly, adoption among frontline employees has plateaued.

Only about a quarter of frontline employees report strong leadership support for AI adoption, highlighting a gap between executive intent and lived experience. Where leaders actively support AI use, employee sentiment improves sharply.

Building resilient leadership pipelines requires a shift from episodic training to deliberate, longitudinal development. The strongest organisations expose future leaders early to AI-enabled initiatives with commercial accountability, rotate talent across functions to build understanding of governance and human impact, and expect senior executives to sponsor capability building directly.

Effective pipelines combine experiential learning, cross-functional mobility and visible executive sponsorship. Organisations that embed digital and AI capability into leadership development consistently outperform peers, yet fewer than 30% integrate AI exposure into succession planning.

External partnerships with universities, industry bodies and consultancies can accelerate progress, but ownership of leadership readiness must remain with the executive team. Sustainable pipelines are built by treating learning and exposure as strategic assets rather than HR programmes.

5. Sustainable Value Creation and Responsible Growth

As leaders look beyond 2026, sustainable value creation has moved from compliance obligation to strategic imperative. Sustainability has evolved into a source of differentiation. The EU’s Carbon Border Adjustment Mechanism, taking effect from 2026, is already reshaping supply chains and investment decisions.

Investors and stakeholders increasingly expect environmental, social and governance considerations to be embedded into business models. Organisations that treat sustainability as a reporting exercise will struggle to compete for talent, customers and capital as ESG performance becomes integrated into regulation, financing, customer expectations and operational efficiency.

Climate disclosure requirements, resource scarcity and energy costs are already influencing competitiveness. Leaders must embed sustainability directly into growth strategies rather than responding defensively to external pressure.

Those that succeed will be better positioned to deliver resilient growth, maintain trust and compete in an increasingly constrained and scrutinised environment.

Leading Through 2026

The year ahead represents a convergence of technology maturity and organisational capability. Organisations that deploy AI to work alongside people rather than simply replace them will be better positioned to build hybrid teams capable of sustained innovation and resilience. Those that pursue short-term efficiency by stripping out human judgement may gain immediate advantage but risk fragility as technologies, regulation and societal expectations evolve.

Achieving the right balance between speed and sustainability requires deliberate choices: reimagining workflows, strengthening governance, investing in future-ready leadership and embedding resilience and sustainability into operating models. These are interconnected responsibilities that will define competitiveness through 2026 and beyond.

For executives, 2026 offers both profound risk and extraordinary opportunity. Decisions taken now about where to invest, how to manage risk, how to lead people and how to create value responsibly will shape organisational performance and reputation for years to come.

Rialto works with senior leaders to navigate this complexity, helping organisations unlock growth while building resilient leadership teams. Through targeted coaching and development, we create the space for leaders to think clearly, act decisively and lead effectively in 2026 and beyond.