What Role Do Middle Managers Play in an AI-Driven Workplace?

How can organizations rethink middle manager roles in an AI-driven workplace? In this episode of Work Week, Dr. Gabby Burlacu of The Upwork Research Institute examines the changing role of middle managers in an AI-powered workplace. We highlight findings from The Upwork Research Institute’s latest report, From Tools to Teammates: Navigating the Human-AI Relationship, as well as relevant industry research from Gallup, Gartner, and Capgemini.

We uncover why middle managers feel disengaged—and why their role is more important than ever as organizations integrate AI. Learn how freelancers are modeling sustainable AI use, why reimagining—not eliminating—middle management is critical, and how to support middle managers amid the AI transformation.

Episode Transcript

(00:01):
(pensive music)
- Hello and welcome to "Work Week,"
the podcast where weanswer a relevant question
about the future of work,
discuss recent research about the topic,
and explain what it all means for you.
I'm Dr. Gabby Burlacu,
Senior Manager at theUpwork Research Institute,
and what you're hearing isa digital proxy of my voice

(00:21):
created by our team with the help of AI.
Today, we're talkingabout an often overlooked,
but pivotal, group in the workforce:
middle managers.
Discussions around AItransformation in the workplace
typically focus either onleaders making business decisions
or on the individual contributorswho are doing the work.
But between these is a layer of managers

(00:41):
who are leading through change,
rapidly adopting technologies
they may yet not fully understand,
and keeping their teams motivated
amid significant disruption.
And that makes today'squestion increasingly urgent.
What role do middle managersplay in an AI driven workplace?
And equally important,
what support do they needto thrive in their role?

(01:03):
Let's start with the data.
According to Gallup
State of the Global Workplace 2025 Report,
the number of employees worldwide
who are engaged at workdeclined from 23% to 21%,
the first decrease since 2020
and only the second in the past 12 years.
Any decline in engagement is troubling,
but even more alarming iswhere the drop is happening.

(01:25):
The Gallup research shows
that individual contributor engagement
was flat year over year.
However, manager engagementnotably decreased
from 30% to 27%.
The data also shows moreconcerning insights.
Managers under 35 years oldexperienced a five-point drop,
while female managers
saw a seven-point decline in engagement.

(01:46):
These are the very peopleorganizations need most
to navigate the nextchapter of AI-driven work.
And they're signaling loud and clear:
they're disengaged and need more support.
What's driving this decline in engagement?
Part of it is context.
Since the pandemic,
many middle managers
have faced an almostconstant state of disruption,
including organizational restructuring,

(02:06):
pressure to adopt AI toolsand other technology,
and shifting employee expectations,
such as increasedflexibility and autonomy.
In short, they're beingasked to do more with less,
while also taking on muchof the responsibility
of reinventing how work gets done.
Some headlines and research suggest
that middle manager rolesmay soon become obsolete.

(02:27):
These reports conjecture
that AI will flattenorganizational structures,
automate oversight, and removethe need for coordination.
In fact, research fromGartner predicts that by 2026,
20% of companies will flattentheir organizational structure
with the help of AI,
which could lead to eliminating
more than half of middle management roles.

(02:48):
However, middle managers
are critical to organizational success,
especially during periodsof transformation,
such as the current shifttoward AI integration.
Why?
Because middle managers are the bridge
between vision and execution.
Ideally, they understandthe context from both sides
and are trusted by their teams,
but now their role is changing.

(03:09):
In an AI-driven workplace,
managers aren't only supervising people.
They're also tasked withredesigning workflows,
facilitating collaborationbetween humans and machines,
and reallocating tasksbetween full-time employees,
freelancers, and AI agents.
At the same time,
middle managers also needto ensure their teams
don't lose human connectionsamid increased automation.

(03:31):
This doesn't mean lesswork for middle managers.
In some cases, it's morework and it's different.
In 2024, the Capgemini Research Institute
surveyed 1,500 executives and leaders
to identify insights aboutgenerative AI at work.
According to their findings,
more than half of leaders believe managers
will play a critical role
as catalysts ofgenerative-AI-driven change.

(03:54):
Additionally, more than half of leaders
believe generative AI
will lead to morespecialized manager roles.
However, the CapgeminiReport also found a gap
between AI usage and its adoptionin professional settings.
While 97% of leaders and managers
reported that they have experimented
with generative AI tools,
only 15% use them atwork at least once a day.

(04:16):
So how can leaders help middle managers
embrace the latest technology,
encourage their teams to do the same,
and thrive as organizationsincreasingly integrate AI?
Here's one place to look for inspiration:
freelancers.
The Upwork Research Institute
recently surveyed a cross-sectionof 2,500 global workers,
including C-suite executives,

(04:37):
full-time salariedemployees, and freelancers.
Based on the survey findings,
we developed a research report,"From Tools to Teammates:
Navigating the Human-AI Relationship."
As we covered in last week's episode,
employees experiencing themost productivity gains with AI
also report high levels of burnout.
Middle managers, in particular,
are among the most productive with AI,

(04:59):
as well as the most burned out.
The research shows that middle managers
reported average productivity gains of 42%
compared to 40% across all respondents.
At the same time,
middle managers also reportedthe highest level of burnout
at 76%,
versus 69% of individual contributors.
But our data also shows

(05:19):
that especially when compared to managers
and other employees,
freelancers are chartinga more sustainable
and empowered path forward intheir relationship with AI.
Unlike employees who mayfeel AI is imposed on them,
freelancers often choose their own tools,
shape their own workflows,
and prioritize learning andadaptability, and it's working.

(05:40):
According to our report,
90% of freelancers say AIhelps them learn faster.
And 37% strongly agree
that AI helps them buildnew skills quickly,
compared to just 29% offull-time in-house employees.
This is a model middlemanagers can draw from
and potentially find support in.
Picture a future in whichmiddle managers are doing more

(06:00):
than overseeing productivityand managing teams.
Picture a future in which middle managers
have embraced AI tools
to accelerate how they learnand develop new skills,
while also encouragingtheir team to do the same.
In an AI-driven future of work,
middle managers will beresponsible for curating ecosystems
of human and machine talent,
engaging freelancers whenspecialized support is needed,

(06:23):
and helping their teams build AI fluency
while maintaining emotional connection.
Meeting this challenge
will require empowering middle managers
with the support and direction they need,
rather than leaving them tonavigate change on their own.
Here's what the process could look like.
First, redefine middle manager roles,
update job descriptionsand performance reviews

(06:44):
to shift from supervisingto orchestrating.
Set expectations for middle managers
to take on the responsibility
of allocating tasks acrossemployees, freelancers, AI tools,
and AI agents.
In your job descriptionsand performance reviews,
also focus on the importanceof middle managers,
building trustedrelationships with their teams
to effectively drive change,including AI adoption.

(07:07):
Second, upskill middlemanagers and AI fluency.
Provide middle managers
with training on how toeffectively use AI tools,
how to roll out AItechnology to team members,
and how to integrateAI into team workflows
without losing importantconnections between people.
Third, empower managers to leanon the learning applications
of AI tools.

(07:27):
Similar to how freelancersembrace AI tools,
encourage managers to seeAI as a learning partner
that can help them build skills faster,
rather than simply anothertool in their day-to-day work.
Fourth, collect andimplement manager feedback.
As the Gallup Research shows,
manager engagement is declining.
Implement a process toregularly collect feedback,

(07:48):
such as quarterly or semi-annually,
about key drivers of managermotivation and engagement.
Address feedback byimplementing new practices
or offering resources to address burnout
or disengagement challenges.
Finally, reinforce human connections.
As we discussed in last week's episode,
human connection ismore important than ever
as organizationsincreasingly adopt AI tools.

(08:11):
Encourage middle managers
to implement relationshipbuilding practices,
including regular feedback,formal and informal check-ins,
and team-centered ritualsthat AI can't replace.
As AI reshapes work,
middle managers will take onmuch of the responsibility
of determining whether changesare empowering or alienating.
Middle managers are the architects
of this new blended workforce

(08:32):
that includes internalemployees, freelancers,
and AI tools and agents.
(pensive music)
As always, we like to endeach episode of "Work Week"
with an action item youcan implement immediately
and a reflection question to consider.
If you're a middlemanager or work with one,
identify one project or workflow,
where human effort, AI tools,

(08:53):
and possibly even freelance support,
could come together tocreate a better outcome.
This might mean bringing in afreelancer with AI expertise
to support a project your teamdoesn't have capacity for,
reassigning a repetitivetask to an AI assistant
so you can free up timefor coaching or mentorship,
or redesigning a team process
so it reflects both AI accelerationand human collaboration.

(09:15):
Pick one place to prototype this.
It doesn't have to be huge,
but it does need to be intentional.
And now, for this week'sreflection question, ask yourself:
Which tools or resources can you offer
to empower middle managers and their teams
to thrive amid AI transformation?
In this new AI-driven world of work,
management isn't about control,it's about coordination.

(09:38):
It's about designing systems
that elevate both people and performance.
The middle manager roleisn't disappearing,
it's being redefined.
And if organizationseffectively rethink the role,
middle managers will become oneof the most important forces
for shaping AI-enabled,human-centered workplaces.
So let's stop askingwhether middle managers
are still relevant

(09:59):
and start asking how toempower middle managers
to lead in the future of work.
Thank you for listening tothis episode of "Work Week."
I'm Gabby Burlacu.
And if this resonated with you,
and especially if you'rea middle manager yourself,
share it with a colleague
and don't forget to subscribe
to stay updated on the latest insights
about the rapidly-changing world of work.