AI is coming for Workday (but not in the way you think) - HR Executive

A recent Andreessen Horowitz argument about “Workday’s last Workday” landed because it captured a frustration many HR leaders already feel. Workday is indispensable in many large organizations, but it is rarely loved. HR teams know the pain of manual workarounds, brittle processes and administrative friction. And yes, AI-native challengers are coming for exactly those weak spots. 

But there is a difference between identifying real frustration and correctly diagnosing what happens next. The future of HR will not be decided by which vendor automates the most clicks; it will be decided by who can manage complexity across people, agents, policy, process and accountability.

That is where a recent essay from London School of Economics professor Luis Garicano offers a much more useful lens for CHROs and HR technology leaders. His core point is simple and powerful: Firms do not buy isolated tasks, they buy bundles of tasks, embedded in roles, relationships and systems of accountability. That matters because labor markets price jobs, not individual moments of work. And jobs persist when the work inside them cannot be cheaply separated from judgment, context, coordination and consequence. In other words, the task is not the job.

That idea matters enormously for HR. Much of the current conversation about AI in enterprise software treats HR as if it were mostly a collection of repetitive transactions waiting to be streamlined. But any HR executive knows the real work begins where the workflow stops being routine. Compensation is more than a cycle; it is an exercise in budget tradeoffs, manager discretion, equity concerns, governance and organizational signal. Reorganizations are more than boxes on a chart; they are questions of authority, incentives, communication, legal exposure and trust. AI can absolutely automate components of these bundles. It does not follow that the bundles themselves disappear.

See also: What Workday’s new $700M deal means for HR technology

To be fair, the Andreessen critique gets several important things right. Workday often feels too hard to operate. Implementations are heavy. Configuration can be specialized and expensive. HR teams are right to demand more natural, flexible, agent-enabled ways of working. AI-native entrants will create real pressure on the layers of the HR stack that are admin-heavy, repetitive and experience-poor. There is no serious scenario in which the current architecture of HR technology stays untouched.

But this is where the argument veers off course. A painful workflow is not the same thing as a replaceable enterprise core. Far from simply moving information around, HR systems encode policy, permissions, payroll dependencies, compliance obligations, organizational structure and procedural legitimacy. They are, of course, systems of productivity. But they are also, and more importantly, systems of governed work. In large enterprises, the most important HR decisions are difficult because the underlying work is genuinely complex, cross-functional and high consequence—not because the tech interfaces are bad. Better AI will remove waste from that complexity; it will not eliminate the need to manage it.

Workday continues to matter despite difficulties

That distinction also helps explain why Workday still matters, even as the market changes around it. As the world changes, Workday is framing itself as an enterprise AI platform for managing people, money and agents, and its Agent System of Record is explicitly designed to give organizations visibility and control over digital labor—including third-party agents—in what Workday calls a “blended workforce.” Whatever one thinks of that strategy, it is a serious acknowledgment that the center of gravity is shifting from software screens to governed orchestration.

The future is unlikely to belong to a single winner. The Agent System of Record will be a crowded space. Some players will focus on orchestration, some on workflow, some on permissions or employee experience. The most likely outcome is not a clean replacement story, but a re-layering of the stack. Workday has a deep role to play in that future precisely because it already sits close to the authoritative records, policies and controls that enterprises cannot afford to lose.

For HR executives, this is why the moment is bigger than software. As Harvard Business School professor Joe Fuller recently told me, “If companies use AI simply to compress the bottom of the pyramid, they may solve a productivity problem and create a capability problem. That’s why skills-based hiring, work-based learning and much more frequent training can no longer be side initiatives: they are how organizations will build people who can supervise, challenge and improve AI.” Simply put, while the future of HR is certainly an IT modernization story, it is also a training story, and an operating model story, and a leadership story.

That is why the central question for CHROs today should not be, “Will Workday be replaced?” The better questions are harder: Which parts of our HR operating model are truly ripe for automation? Where do we still need human judgment and decision rights? What should remain anchored in the system of record, and what should move into agent-enabled workflows? How do we govern a workforce that now includes both people and software agents without creating new operational, ethical, or regulatory exposure?

The future of enterprise HR will absolutely be more agentic—more open, more conversational, and more dynamic. But it will also remain governed, political, interdependent, and deeply human. That is the part of the story that simplistic replacement narratives tend to miss. The task is not the job. And the workflow is not the system.