More than half (58%) of workers believe that AI has allowed them to produce better quality work than they could have a year ago.

This rises to eight in ten for the most advanced users.

That’s one of the key findings from Microsoft’s 2026 Work Trends Index, which analyzed trillions of Microsoft 365 productivity signals, 100,000 conversations with Microsoft Copilot, and surveyed 200,000 workers.

The Index shows 49% of workers now use AI for cognitive work – problem solving, evaluation and creative thinking – while two-thirds said AI allowed them to spend more time on high-value work.

Given employees’ increasing maturity with AI, why aren’t organizations seeing greater ROI from their technology investments?

The problem is that “employees are ready to reinvent how they work, but the system around them – metrics, incentives, and norms – continues to reinforce the old way,” noted the report.

“The same forces accelerating AI adoption are holding it back.”

Microsoft data shows that 45% of workers think it’s safer to focus on current goals than to redesign work with AI – this is because only 13% are being rewarded for AI work reinvention.

The Index also found that the primary driver of AI impact isn’t individual; it is institutional. Organizational factors, such as culture and manager support, drive more than twice the AI impact, compared with individual factors like new mindsets and behaviors (67% versus 32%).

If organizations want to truly see the business benefits of AI, they need to break from old ways of working, and redesign work for the AI era.

As Jared Spataro, CMO, AI at Work, Microsoft, wrote in the report: “The firms that build a new operating model today won’t just move faster in the short term. They’ll build something more durable, setting themselves up to create value in ways that we can’t yet conceive of.”

“Access to AI won’t be the advantage for much longer. How the work is designed around it will be.”

UNLEASH dug into the Microsoft Work Trends Index to find out where employers need to start; here’s the redesign decisions that HR teams, and organizations more widely, must make now.

‘Companies that learn fastest from their own work will win,’ finds Microsoft

Microsoft stated the opportunity in front of not just every organization, but every leader, is to “take control” and “choose to do the work.”

“The job of every leader is to rearchitect work,” noted the index.

Employers are facing a systems problem when comes to AI – “and systems don’t fix themselves – they have to be redesigned.”

Microsoft’s report identified that the biggest failing now is that organizations are too focused on AI adoption, rather than “AI absorption.”

As AI is further integrated into workflows, the tools will generate valuable signals about what’s working and what isn’t.

Most organizations are not leveraging those signals to make decisions – whereas at leading edge companies, those signals and insights getare “captured, shared, and built into how the organization operates. They function as a learning system.”

Microsoft ‘s Index recommends that organizations start with three questions to shift to a learning system and create an evaluation infrastructure:

• Who reviews agent performance?
• Who has the authority to update the workflows that agents run?
• How does a local win get captured and scaled across the organization?

The key to success with this evaluation infrastructure its “coordinated reinvention” between employees, leaders, IT and security.

Employees rearchitect work to focus on outcomes, leaders redesign processes around those outcomes, IT build the infrastructure for AI to operate organization-wide, and security ensures trust is embedded into AI use.

“When these four roles work in concert, the organization becomes a learning system: one in which work continuously produces insight, and insight continuously reshapes how work gets done.”

Ultimately, “the companies that learn fastest from their own work will be the ones that win,” found the report.

While Microsoft’s Index doesn’t specifically pinpoint a role for HR leaders in this work redesign, the importance of the HR function cannot be overstated.

Workers and leaders will need significant support, guidance and investment as they step up to reinvent work. IT and security cannot work in siloes; they will need to work in concert with HR to ensure the future of work is better than the current or past.

As Microsoft’s Chief Scientist Jaime Teevan told UNLEASH in an interview, “AI is already changing work”, but “it’s not something that is happening to us.”

HR is responsible for figuring out “the future we want.” Organizational redesign won’t be easy, but for the employers that get it right, it will be more than worth it.