We are entering a new reality — one in which AI can reason and solve problems in remarkable ways. This intelligence on tap will rewrite the rules of business and transform knowledge work as we know it. Like the Industrial Revolution and the internet era, this transformation will take decades to show its full promise — and will bring broad technological, societal and economic change.
The 2025 Work Trend Index Annual Report is designed to prepare leaders and employees for this shift. As in previous years, it draws on a large global survey, Microsoft 365 telemetry and LinkedIn hiring and labor trends. New this year are insights from AI-native startups, economists, scientists and academics — all pointing to a seismic shift already underway. In fact, 82% of leaders say this is a pivotal year to rethink core aspects of strategy and operations.
The data reveals the emergence of a new kind of organization: the Frontier Firm — built around intelligence on tap, human-agent teams and a new role for everyone: agent boss. While the shift ahead is profound, human ambition, creativity and ingenuity will continue to create new economic value and opportunity. In fact, 71% of workers at these firms say their company is thriving, compared to just 37% globally.
You can buy intelligence on tap
Imagine if you knew, before the internet took off, just how much it would reshape business. That’s where we are with AI. Intelligence is no longer bound by headcount or expertise. It’s an essential durable good: abundant, affordable and scalable on-demand. As economic and shareholder pressures grow, this on-demand intelligence offers a new lever for growth — one that can close the growing gap between business demands and human capacity. While 53% of leaders say productivity must increase, 80% of the global workforce reports lacking the time or energy to do their job. And on average, employees are interrupted by a meeting, email or ping every 2 minutes. To bridge this Capacity Gap, 82% of leaders expect to use digital labor to expand their workforce in the next 12 to 18 months.
Digital labor will spur the reinvention of even the most established firms — and the birth of new companies we haven’t even thought of yet. On LinkedIn, top AI startups are hiring at 2X the rate of Big Tech. Much of that talent is flowing out of Big Tech and staying in the startup world, pointing to a deeper shift where innovation — and opportunity — are rising. As incumbents adapt and challengers scale, like we saw in the .com boom, the rules of talent and competition are being rewritten in real time.
Human-agent teams will upend the org chart
As AI continues to democratize expertise, we’re seeing a move from rigid org charts to more fluid, outcome-driven Work Charts. These structures flex with the needs of the business, drawing on the right mix of humans and agents to get the job done. While every function will evolve at a different pace and scale, 46% of leaders say their organization is using agents to fully automate workstreams or business processes — with customer service, marketing and product development as the top AI investment priorities.
To maximize the impact of these human-agent teams, organizations need a new metric: the human-agent ratio. Leaders must ask two critical questions: How many agents are needed for which roles and tasks? And how many humans are needed to guide them? Getting that ratio right will be critical — and task-specific. Organizations will need to consider if there are times when human and digital labor outperform AI alone, when customers prefer a human touch or when society expects people to be responsible for the consequences — like a high-stakes product or finance decision. Whether it’s a customer conversation, a strategic decision or a product launch, knowing how to staff the right mix of humans and agents will define how work gets done — and how success is measured.
Every employee becomes an agent boss
As agents increasingly join the workforce, we’ll see the rise of the agent boss: someone who builds, delegates to and manages agents to amplify their impact and take control of their career in the age of AI. From the boardroom to the frontline, every worker will need to think like the CEO of an agent-powered startup. In fact, leaders expect their teams will be training (41%) and managing (36%) agents within five years.
For those ready to lean in, AI will be a career accelerator — but leaders are ahead. We measured the agent boss mindset across seven indicators — from regular use and trust to career impact. Leaders outpace employees on every measure: 67% are familiar with agents (vs. 40% of employees) and 79% believe AI will accelerate their careers (vs. 67%). But this shift won’t stop at the top. As agents become embedded into daily work, roles across every level and function will evolve — along with the broader workforce. While 33% of leaders are considering headcount reductions, 78% are considering hiring for new AI roles. And 83% say AI will enable employees to take on more complex and strategic work earlier in their careers.
This shift is multifaceted — every industry and role will evolve differently as the technology diffuses across business and society. Just as the internet era created billions of new knowledge jobs — from social media managers to UX designers — the AI era is already giving rise to new roles, with many more to come. Preparing for what’s next is no longer optional. Employees must build AI skills and companies must support them with the right tools and training. This moment calls for honest conversations, intentional communication and real investment in reskilling. The companies that invest now won’t just keep up — they’ll shape what comes next.
Copilot is the new UI for AI
Today we’re announcing the Microsoft 365 Copilot Wave 2 Spring release — designed to power the next era of human–agent collaboration. The Microsoft 365 Copilot app is now your window into the world of agents, with new capabilities for this next phase — driven by more advanced models, adaptive memory and reasoning agents that work alongside you. Updates include:
Researcher and Analyst agents powered by OpenAI’s deep reasoning models rolling out to customers through the Frontier program — and with our new Agent Store, you can easily find, pin and use agents — from partners like Jira, Monday.com and Miro — or your own custom agents.
Create brings OpenAI’s GPT-4o AI image generator to work, unlocking design and content creation skills for everyone. Easily modify or customize brand images or generate AI images aligned to your company’s approved brand guidelines and create everything from marketing copy and social assets to newsletter banners, videos and more.
Copilot Notebooks transforms your notes, documents and data into immediate insights and actions. By grounding Copilot in a notebook containing specific chats, files, meeting recordings and more, it can focus on the most relevant information — all while constantly scanning your source material to update in real time as your data evolves. Notebooks can even create an audio overview of your content with two hosts that walk you through the key points — a fun, flexible way to stay informed.
Copilot Search is a new AI-powered enterprise search that helps you find what you need instantly with rich, context-aware answers from across your organization’s apps and data. It connects to first- and third-party apps — from ServiceNow to Google Drive, Slack, Confluence, Jira and more — so you get fast, relevant results at work no matter where your data lives.
New capabilities in the Copilot Control System empower IT pros to enable, disable or block agents for specific users or groups — to help ensure the right agents are being used by the right people.
2025 will be remembered as the year the Frontier Firm was born — the moment companies moved beyond experimenting with AI and began rebuilding around it. Like the digital native companies of a generation ago, they understand the power of pairing irreplaceable human insight with AI and agents to unlock outsized value. We’re giving customers the insight to anticipate what’s next — and the technology to help shape it.
Read the Annual Work Trend Index on WorkLab and visit the Microsoft 365 Blog to learn more about our product announcements. Learn what this year’s Work Trend Index findings mean for small and medium-sized businesses.
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