Why KPMG US's CEO Thinks Leaders Should Measure AI Impact

Businesses are navigating critical decisions about workforce composition as AI reshapes traditional employment models.

According to KPMG's latest US CEO Outlook Pulse survey, fewer than one in 10 business leaders plan to reduce headcounts despite significant investments in AI technology.

The survey, which polled 100 CEOs from large US companies, reveals that more than half expect AI will actually increase their hiring efforts in 2026, while 36% anticipate no change to their workforce numbers.

This shift represents a significant departure from traditional automation narratives, where technology adoption was often synonymous with workforce reduction. Instead, business leaders are viewing AI as a complement to human talent rather than a replacement.

The findings suggest that executives are taking a measured approach to AI implementation, recognising both its transformative potential and the continued value of human expertise in their organisations.

How AI is changing recruitment

Tim Walsh, CEO of KPMG US, frames this challenge as the 'labour cost margin'. He tells Fortune that the fundamental question for any business engagement is: "What is my mix of labour? What is my mix of technology? And what is the overall cost of delivering that engagement?"

As company investments in AI increase, Tim says: "I am going to be able to run a lot more volume through my business in ways that I could not before."

AI is already transforming hiring practices at KPMG. Tim tells Fortune: "We are hiring technologists in ways that we never did before. We are hiring people that we call orchestrators, people that are actually managing gigantic parts of our workflow to make sure they are complete, they are accurate, that they are getting to the right output."

Other large scale companies have reported similar hiring plans for 2026.

IBM has revealed it plans to triple its entry-level hiring across the course of the year.

Nickle LaMoreaux, Chief Human Resources Officer of IBM, says that while AI has changed the way companies hire, employees can bring new value to their organisation.

Discussing this move at Charter's Leading with AI summit, she said: "The entry-level jobs that you had two to three years ago, AI can do most of them. So, if you are going to convince your business leaders that you need to make this investment, then you need to be able to show the real value these individuals can bring now. And that has to be through totally different jobs."

Capital allocation to AI

According to KPMG, nearly 80% of CEOs say 5% of their total capital budgets are being allocated to AI, while 35% put the number at between 11% and 20%. Tim describes the pressure to invest as "dizzying".

"It is stressful if you are not investing, if you are not keeping up. Because if you are not keeping up, you have the risk of losing market share," Tim says.

However, research suggests uncertainty remains around AI's long-term impact. According to PwC, CEOs are reporting their lowest level of revenue confidence in five years, partially due to rapid technological change.

Of those surveyed, only 12% of CEOs shared that AI had delivered cost savings and revenue benefits over the past year. This disconnect between investment levels and reported returns highlights the experimental nature of current AI adoption strategies.

Tim acknowledges the complexity of the transformation ahead. "There is no doubt that every single layer within the labour pool is going to be disrupted," Tim says. "But anyone who tells you what it is going to do or knows what the shape of it is going to be is not being truthful, because it is unclear at the moment."

The KPMG findings suggest that executives are approaching AI as a tool for growth rather than reduction, with the majority viewing the technology as an opportunity to expand capacity and create new types of roles rather than simply replacing existing positions.