Back

Digital team members will be common in Australian workplaces within five years: Report

Microsoft Australia

Sydney, Australia, 29 April 2025 – This year marks the birth of the “Frontier Firm”, where teams of humans and AI agents work together and the role of human workers is reshaping, according to a new Microsoft report released in Australia today.

Microsoft’s latest Work Trend Index draws on insights from 31,000 workers across 31 countries, including 1,000 from Australia. This year’s report highlights three key themes:

1.     You can buy intelligence on tap

The data highlights a clear tension: leaders want more productivity, but employees feel stretched. In Australia, 47% of business leaders say productivity must increase but 79% of the workforce – both employees and leaders – say they’re lacking enough time or energy to do their work. Employees are interrupted on average every two minutes by meetings, emails, or pings.

The report found that Frontier Firms, businesses where AI is not only being used for automating simple tasks but where AI agents are being used to take on decision-making roles, are far outperforming their peers. Globally, 71% of Frontier Firm workers are twice as likely to say their company is thriving compared to just 37% on average, and are more than twice as likely to say they are able to take on more work.

As a result, 75% of business leaders in Australia say they’re confident they’ll use agents as digital team members to expand workforce capacity in the next 12 to 18 months.

Lucy Debono, Modern Work Business Director, Microsoft Australia and New Zealand, says the findings reinforce the new business reality we are facing, and that now is the time for every organisation to be looking at how AI agents can be incorporated to support their workforce.

“Most businesses are already using AI to automate tasks, but the next phase will see agents join teams as “digital colleagues,” taking on specific tasks such as building go-to-market plans or internal communications strategies under human supervision. These agents will help boost employee skills and free them to do more meaningful work and reshape how they work. The final step will be seeing agents run entire business processes and workflows. But the critical thing will be getting the balance right, ensuring organisations are using enough AI agents to maximise productivity, without overwhelming human employees’ capacity to oversee their decisions and provide them with the necessary direction,” Debono said.

2.     Human-agent teams are the future, but human expertise is essential

Agentic AI is starting to reshape not just how work is done, but who does it. In Australia, 40% of business leaders say they’re already using AI agents to fully automate workstreams or business processes for entire teams or functions. While a third (37%) are considering reducing headcount as AI adoption accelerates, 70% of business leaders in Australia are considering hiring new AI-focused roles in the coming year.

This reveals a dangerous misconception: that AI can simply replace people. Debono said the reality will be that new jobs will emerge, some jobs will change, and others will disappear.

“Replacing people with AI might seem efficient in the short term, but it erodes resilience and innovation. Leaders must stop seeing this as a binary choice. It’s not AI or people – it’s both. The fact that the majority of Australian leaders intend to hire AI-focused roles in the new year is a clear sign that AI is transforming work, not eliminating it,” she said.

“And what we’re seeing is that the reasons employees turn to AI over a colleague is because it’s available 24/7, it can do a task faster, and it helps with creative ideas – but it’s going to take a long time before it can match the judgement of a human being. Not every business function will change at the same pace, or to the same degree.”

3.     The rise of the agent boss

In just five years, Australian business leaders expect their teams to be redesigning processes with AI (36%) – building multi-agent systems to automate complex tasks (37%), training AI agents (45%) and managing them (32%). Microsoft calls this shift the rise of the “agent boss” – where every employee is responsible for directing both human and digital workers.

However, Australia is behind the curve when it comes to understanding agentic AI, making the learning curve potentially steeper for local workers. While 71% of Australian business leaders say they’re familiar with AI agents, only 31% of employees say the same, which is a much wider gap than the global average. That disconnect could be one of the biggest threats to long-term competitiveness.

“AI agents are about to become part of every team and every workflow. But if only leaders understand how to use them, we’re setting up a two-speed workforce. Closing that gap is not a tech rollout issue: it’s a leadership challenge, and a massive opportunity to support Aussie workers in their confidence and capability to leverage agentic AI,” said Debono.

The report identified three key steps organisations should take now, to move towards becoming a Frontier Firm:

• Hire your first digital agent employees and treat them like you would any team member: onboard them, assign ownership responsibilities, and measure their performance.
• Set your human-agent ratio to ensure customers still get a human touch where they expect it, and where judgement and high-stakes decisions rely on humans.  
• Get to broad scale – fast: The time for pilots alone has passed. Real change requires broad adoption and activation at every level of the organisation. Target high-need areas like operations, customer service, or finance, and identify where AI can drive measurable impact. 

“We’re not in an AI pilot phase anymore – as the report says, real change requires broad adoption and activation at every level of the organisation. This is our moment to build an inclusive AI economy. If Australia moves fast to get the foundations right now, it will be setting itself up for a much more productive future, and one where employees can also enjoy having more time to focus on valuable work and less on routine decision-making,” says Debono.

For a copy of the full Work Trend Index report, visit The Official Microsoft Blog.

ENDS

About us:

About Microsoft 

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organisation on the planet to achieve more. 

Contact details:

[email protected]