AI in the Workplace: Impact on Employee Mental Health in China

By Zhang Xiaomeng, Associate Professor of Organizational Behavior, Cheung Kong Graduate School of Business (CKGSB)

While the AI wave has created unprecedented opportunities for companies and individuals, uncertainties and challenges have disrupted mental health in the world of work.

An IMF study predicts that nearly 40% of jobs worldwide will be affected by AI. Goldman Sachs found that the application of AI “could expose the equivalent of 300 million full-time jobs to automation.” It is clear that such an impact would shake the global labor market. There is still very few research that assesses the specific impact of AI on China’s labor market. But the National Development Research Institute at Peking University and Zhaopin.com, an online recruitment services provider in China, analyzed millions of recruitment data and found that white-collar jobs such as finance, customer service, accounting and law in China have been clearly impacted by AI whereas blue-collar jobs such as housekeeping, logistics and technical workers have yet to see impact.

As AI tools become more common, they tend to impact the labor market in multiple ways. Economists often argue about AI’s three effects: substitution (AI technology replaces traditional jobs while improving production efficiency), complementarity (AI enables human-machine collaboration, which props up technological synergy and industrial integration), and creation (AI creates new occupations and opportunities). The way that AI affects jobs is often a combination of these effects, while the impact of AI on the workplace mental health is more nuanced – the technology and how it is perceived will both take a toll on people’s mental well-being in the workplace. Just as the specific impact of AI on the labor market is yet to be defined, employees are found to have an ever more complicated attitude towards AI.

Employees can tell that AI improves their efficiency. But in the meantime they are also concerned that they might lose their jobs to an AI tool one day. More than half of American adults are worried that AI will replace their jobs, and 38% are worried that some or all of their jobs will become obsolete. Computer practitioners in Switzerland predict that they will lose their jobs due to AI in the next five years. In China, National Development Research Institute at Peking University and Zhaopin.com found in their research in 2023 that 69% of employees had used large language model tools such as ChatGPT or Wenxin Yiyan (Ernie Bot AI), and 48.7% of them thought AI can do their jobs. These predictions and anxieties about AI are likely to affect workplace mental health and start chain reactions at work and in society.

To figure out the impact of AI on the work and mental state of professionals in the workplace in China, CKGSB’s Research Center for Leadership, Behavioral Science & Inclusivity ran a large-scale survey among science and technology workers on “Keqing Online”, one of China’s largest online survey platform for tech professionals, and collected 11,814 valid answers to understand how professionals are using AI in the workplace, how they think AI may disrupt the current employment market, and how AI affects people’s workplace mental wellbeing.

Our Main Research Findings and Their Implications for Business Leaders

1. AI has been fully integrated into the workplace in China
AI is now an important tool in the workplace in China, used widely to speed up business processes. 91.36% of the respondents’ industries have introduced AI, and 95.82% of respondents have, at the very least, tried AI tools. 2% of the respondents use AI almost every day. Women use AI more frequently than men. The frequency of AI use is found in a positive correlation with age, education, years of work and income level. This shows that people with higher education and longer workplace experience are more prone to accepting and using AI tools.

Management Takeaway
AI technology is due for immediate integration. Business leaders should actively help employees at all levels adapt to this change. For less educated employees or those who have just entered the workplace, companies may even consider providing systematic AI training so that staff can master AI tools sooner. Knowing how to use AI may reduce workplace inequality caused by lack of digital access, and improve team efficacy.

2. AI anxiety is real: A red flag for mental health
AI technology is taking the world by storm and that has triggered widespread fears of job security. Most respondents believe that it is only a matter of time before AI fully replaces some occupations. As many as 85.53% of respondents are worried about being replaced, 6.37% of whom are extremely anxious. 67.57% believe that they will lose their jobs to AI within the next five years. The degree of anxiety varies and it is more serious among people who are older and those with a higher education level. We found respondents’ income levels and concerns of AI substitution exhibit an ‘inverted U-shaped’ correlation, and the middle-income group (mainly white-collar workers) is most anxious. In addition, male respondents show slightly more concerns about AI than their female peers, among whom young women are more optimistic about the development of AI and older men tend to downplay the pace of AI replacement.

Management Takeaway
When promoting AI technology, business leaders should fully consider its psychological implications on different employees and how well they may adapt to it. AI training and support should be tailored to different groups, in particular middle-income and older employees, according to their level of acceptance and adaptability.

3. AI drives up workplace efficiency, but with individual differences and cross-generational impacts.
61.23% of respondents believe that AI improves their work efficiency, but 18.72% think that AI reduces their efficiency instead. About one-third of respondents with lower education levels said that AI lowers their work efficiency. Overall, more respondents view AI as a tool to improve their efficiency rather than the other way around. More female respondents than male respondents voiced recognition to AI. 74.29% of respondents believe that AI will create new jobs, while 78.82% worry that AI will reduce job opportunities for the next generation, indicating that AI may have a cross-generational employment effect.

Management Takeaway
When promoting AI tools in their companies, business leaders should evaluate how compatible AI tools are with the current workflows. Companies should also provide more training for employees with lower education levels. At the same time, while introducing AI, business leaders should foresee the impact of AI on their future human resource structure, and plan ahead to hire and train relevant talent.

4. Employees in enterprises with a low AI recognition are more likely to get replaced.
Our research found that in enterprises that don’t recognize AI, employees are facing more risks in getting laid off. In enterprises that do not recognize AI, 9.82% of respondents believe that there is a 50% possibility that they will lose their jobs to AI, which is concerning as only 5% in enterprises that somewhat recognize AI and 5.7% in companies that significantly recognize AI share this view. Only 2.42% of enterprises surveyed have organized AI training. These figures show that enterprises that neglect the development of AI may experience increased employee turnover, potentially eroding their future competitiveness.

Management Takeaway
Business leaders should actively promote the adoption of AI technology in their businesses and emphasize the importance of AI in internal corporate communications. Senior leaders and executives should become pioneers in using AI tools and introduce the AI technology as a way to improve performance and management efficiency.

5. AI shocks can have a more severe negative impact on mental health than economic recession.
AI shocks are found to be positively correlated with the severity of mental health problems. The higher the concern about AI replacement, the worse an individual’s mental health tends to be.
Our data shows that:

• Within the group expressing minimal concern about the impact of AI, only 19.93% reported experiencing a high degree of involution (i.e., a state of being overworked, stressed, anxious and feeling trapped). By contrast, among individuals who expressed strong concern about AI replacement, this proportion increased to 35.46%.
• Similarly, the prevalence of severe anxiety was 20.52% among those who were largely unconcerned about AI replacement, whereas it rose to 41.57% among those highly concerned.
• With respect to depression, the proportion of working individuals with severe depressive symptoms was 16.61% in the group not significantly concerned about AI replacement. This figure more than doubled to 34.13% in the group expressing high concern.
• Finally, severe loneliness was reported by only 14.33% of individuals in the group with low concern about AI replacement. Among those highly concerned, however, the proportion rose markedly to 27.8%.

Compared with the fear of economic recession, AI shocks have stronger negative impacts on multiple psychological dimensions. The study didn’t find a correlation between economic recession and AI on mental health. It is noteworthy that the frequency of use of AI tools is negatively correlated with mental health problems, indicating that the more people use AI, the more their workplace stress may be alleviated, and frequent AI users are more positively affected than negatively by AI.

Management Takeaway
Business leaders shouldn’t overlook the impact of economic uncertainty and AI impact on their employees’ mental health. At times like this, it is essential to offer emotional support and guide employees to see AI technology in a positive light so as to minimize their concerns over job replacement by AI. Business leaders should also encourage employees to use AI tools to improve their work efficiency and minimize anxiety.

6. Companies need to monitor executives’ mental health and nurture resilient leadership.
AI-related workplace anxiety among executives is coming to the surface. Management’s concern about AI is found to be significantly higher than that of ordinary employees, and the proportion of executives who believe that they will be completely replaced by AI within five years is about 20% higher than that of general employees. In addition, the data shows that executives generally have a worse mental health than that of ordinary employees as shown in scores across five dimensions—involution, loneliness, burnout, anxiety and depression. With age, the mental health of executives deteriorates faster than that of ordinary employees. This shows that executives face significant AI anxiety in the workplace, mainly induced by workplace stress and the uncertainty due to technological change.

Management Takeaway
Business leaders should pay close attention to their executives’ mental health in the AI​​ era and build a comprehensive support system to lift their anxiety and pressure. They should also transform their organizational culture to embrace AI as an auxiliary tool for executive decision-making and management, rather than treating it as a job threat. These measures will allow executives and employees to be comfortable around and confident in the technology. In addition, companies should have a clear talent training and promotion plan to break the ceilings for young people and improve the cohesion and resilience of the organization.

In a nutshell, genetic AI is penetrating the workplace at a speed unseen in ages and has begun driving change in businesses. Research shows that by using AI, companies have not only significantly improved efficiency, but has also gained new corporate competitiveness. However, this technological revolution is hardly smooth sailing, as career replacement risks and mental health challenges are becoming unavoidable for people in the workplace.

From an individual perspective, the frequency of using AI is positively correlated with an individual’s educational level, workplace experience and income level. High-skilled and high-income groups are more inclined to embrace AI tools, while middle-income groups and executives show higher anxiety that they will be replaced by AI. It is worth noting that employees who use AI tools frequently have reduced their workplace psychological pressure while improving productivity. This shows that AI is both a challenge and an opportunity.

From the perspective of enterprises, how companies respond to AI will directly affect their competitiveness. The study found that the degree to which companies recognize AI is closely related to the career stability of their employees. Organizations that overlook AI technology are facing a higher risk of lagging behind, while those that actively embrace AI are expected to get a head start in the future.

Looking ahead, AI will not just affect the current job market, but may also reshape future careers and create new jobs. To fully leverage AI, companies need to work on three aspects: optimizing the career development system, providing better training on AI skills, and offering tailored mental support. With these measures, companies will find that their employees adapt to the AI era more easily with higher resilience and lower stress levels, which in turn will contribute to building a more innovative and sustainable workplace—key in the winning strategies for the long term.

Incorporating AI gives companies a new competitive edge, and fuels a sustainable society. By improving efficiency and optimizing resource allocation, AI is expected to inject new vitality into the economy. In order to improve welfare for all, companies and society need to work together to promote “AI for good” and avoid promoting AI at the expense of employees’ physical and mental health.

Only when AI is seamlessly incorporated into human work can we claim it to be an AI-driven workplace transformation, which in turn brings out sustained prosperity.