RSM Chief Economist: Ageing Workforce Makes the Business Case for AI 'Inevitable'
The News
The US labour force participation rate for civilians aged 55 and older fell to 36.9% in July from 38.1% a year earlier, a demographic shift that RSM US Chief Economist Joe Brusuelas calls “a historic exit from the American labor market.” In a new analysis, Brusuelas points to two converging forces: baby boomer retirements (the over-65 share of the population has risen from 12% in 2005 to 18% last year) and restrictive immigration policy that produced negative net migration in 2025 for the first time in at least 50 years. The result: US labour supply shrank 0.77% over the past year, and the economy now needs to generate only about 35,000 jobs monthly to maintain equilibrium. “American businesses will need to turn to technology as a substitute for labor,” Brusuelas said. “That means more artificial intelligence, not less.” Gartner forecasts worldwide AI spending will reach $2.6 trillion this year, up 47% from 2025.
Why It Matters
This is the macroeconomic version of a hiring manager telling you they can’t find people and need automation instead. When a respected economist at a major US firm frames AI adoption as not a strategic choice but a demographic necessity, the conversation inside your organisation shifts. The argument stops being “should we use AI in hiring?” and becomes “what parts of talent acquisition can we afford not to automate when the labour pool is structurally shrinking?” For TA leaders, this means the pressure to adopt AI sourcing, screening, and matching tools will intensify — not from vendors, but from the CFO who reads the same labour supply numbers you do.
Taking Action
All action is situated in your corporate context. These are starting points, not prescriptions — choose what fits.
Connect
Who to talk with in your enterprise
Your CFO: ask whether the workforce plan models labour supply constraints beyond wage inflation. If it doesn’t, that’s a conversation worth having before the next budget cycle. Your HRIS lead: are your current systems capable of measuring time-to-fill against shrinking candidate pools, or are you still benchmarking against pre-2024 baselines that no longer reflect reality?
Inspect
What to take a closer look at
Run a 12-month trend on applicant-per-opening ratios by role family. If ratios are declining for roles that depend on experienced mid-career hires — the cohort most affected by boomer exits — your sourcing channels, salary bands, and time-to-fill expectations may all need recalibration. Compare your data against BLS participation rate trends by age bracket.
Reflect
What to think about more deeply
If the business case for AI in hiring is being made by demographic necessity rather than by HR, who owns the automation strategy in your organisation — and is that who you want owning it?