A growing gap in artificial intelligence (AI), digital and sustainability-related skills is emerging as one of the biggest workforce challenges for Indian companies, according to the SHRM India Skill Intelligence Report 2026 shared with Financial Express Online.
The report, launched by SHRM at SHRM Tech 2026 in Mumbai on Friday (May 22), showcased that while companies increasingly recognise the need for future-ready talent, most organisations are still struggling to build workforce capabilities at scale.
Based on a survey involving over 198 senior HR and learning leaders, along with insights from more than 200 consulting engagements, the report paints a concerning picture of India’s readiness for the future of work.
45% firms say AI skill gaps are biggest hurdle
According to the report, 45% of organisations identified AI, digital and data-related skills as their single biggest workforce constraint. The report also flagged major shortages in green and ESG-related capabilities, with 41% of companies reporting significant talent gaps in sustainability-focused roles.
Despite rising global focus on environmental, social and governance (ESG) standards, only one in 14 organisations in India currently qualifies as “advanced” in ESG talent capability, while nearly 31% remain at the awareness or planning stage.
India lags global peers in workforce training
The study noted that India formally trains only 2.3% of its workforce, significantly lower than countries such as the United Kingdom (68 per cent), Germany (75%) and South Korea (96%).
The report warned that this gap could become more serious as nearly 62% of India’s population falls within the working-age category, making skilling and workforce preparedness critical for long-term economic growth.
Learning investments not translating into practical skills
SHRM’s findings also suggested that companies may be investing in learning through ineffective formats. Nearly 60% of learning and development (L&D) budgets currently go toward digital self-paced modules and classroom-based instruction, while hands-on practical learning formats account for just 3% of investments.
The report said organisations were “learning in the wrong formats” despite recognising the right skills requirements.
Only 34% of organisations currently have formal systems in place to measure the actual outcomes of workforce skilling initiatives.
AI readiness still low despite growing adoption
The report further revealed that organisational preparedness around AI adoption remains limited despite increasing industry attention on automation and generative AI tools.
Around 54% of organisations reported moderate to low urgency around AI investments, while leadership concerns and uncertainty around returns on investment accounted for 44% of adoption barriers.
One in five companies also cited mindset-related resistance as a major challenge in adopting AI-led transformation.
According to the study, back-office functions, data and reporting teams, and customer service roles are expected to witness the highest AI disruption over the next three years.
Gig workforce concerns driven by trust, not regulation
The report also examined the evolving gig workforce landscape and found that concerns around skill quality and career continuity remain the biggest barriers to adoption.
Nearly 53% of companies cited trust-related issues with gig workers, while only 13% pointed to regulatory complexity as a concern.
SHRM leadership stresses urgent need for action
Commenting on the findings, Achal Khanna said India was at a defining point in its workforce transformation journey.
“As organisations accelerate investments in AI, digital transformation and sustainability, the real differentiator will be their ability to build future-ready skills at scale,” Khanna said.
“The SHRM India Skill Intelligence Report 2026 provides a clear, evidence-based view of where capability gaps are emerging and what leaders must do to move from awareness to action,” she said.
“We are proud to launch this report at SHRM Tech 2026, where the country’s most forward-looking HR and business leaders will come together to shape the future of work. The findings reinforce a critical message: skills are no longer an HR agenda – they are a business imperative,” she further added.
President and CEO, SHRM, Johnny C Taylor, Jr. said India has the opportunity to become a global benchmark in developing resilient and future-ready talent because of its young workforce and expanding digital ecosystem.
“The SHRM India Skill Intelligence Report 2026 offers practical insights for leaders seeking to turn emerging trends into meaningful action. It highlights the importance of making informed decisions about where to invest, how to develop capabilities, and how to ensure workforce strategies deliver measurable business value,” Taylor added.