AI disruption anxiety intensifies stress and job insecurity for SMEs

The research also highlights the role of AI as a job demand within the Job Demands–Resources model. AI awareness increases the cognitive load placed on executives, raising concerns about their ability to keep up, lead effectively, and maintain control over their tasks. This demand drains psychological resources and directly contributes to burnout. For policymakers and business owners, this finding signals that digital transformation programs must be paired with stronger psychological support structures to avoid long-term harmful effects on leadership sustainability.

Executives are facing growing psychological pressure as artificial intelligence becomes more embedded in business operations, according to new research that links AI awareness to higher levels of job insecurity and burnout among SME leaders in the United Arab Emirates (UAE). The findings published in Sustainability point to a widening strain inside organizations undergoing digital transformation, raising concerns about the human toll of rapid technological change.

The study, titled “The Smart Shift: A Knowledge Management and Industrial–Organizational Psychology Perspective on Digital Transformation and Sustainable Well-Being Among SMEs,” is based on a sample of 615 senior managers and CEOs from SMEs across the UAE. It offers one of the most detailed examinations to date of how AI awareness influences leadership well-being. The authors combine concepts from knowledge management and industrial–organizational psychology to understand how executives interpret AI’s growing role in the workplace and how this shapes their mental health, job attitudes, and sense of security. Their work adds new depth to the discussion on sustainable digital transformation by showing the psychological demands that come with advanced technologies, especially in highly competitive small and medium enterprise environments.

The UAE, a country that has aggressively advanced its national AI strategy, now faces a new policy challenge. While digital transformation remains central to economic growth and global competitiveness, the study suggests that the human side of this shift requires more attention. T

AI awareness as a growing psychological pressure

The findings show a clear positive relationship between AI awareness and burnout among executives. Managers who have a deeper understanding of AI’s capabilities, potential disruptions, and future role are more likely to experience emotional strain. This relationship is not driven by exposure to AI tools themselves but by the broader awareness of how AI may reshape leadership roles, reduce the value of certain skills, or shift decision-making power.

In the context of the UAE’s fast-paced digital transformation, executives are exposed to constant messaging about AI adoption, predictive analytics, automation, and data-driven decision making. The study suggests that when leaders feel unprepared to adapt or lack a clear pathway for skill development, AI awareness becomes a source of stress rather than empowerment. This effect is especially pronounced in SMEs, where resources for upskilling and restructuring tend to be limited.

The research also highlights the role of AI as a job demand within the Job Demands–Resources model. AI awareness increases the cognitive load placed on executives, raising concerns about their ability to keep up, lead effectively, and maintain control over their tasks. This demand drains psychological resources and directly contributes to burnout. For policymakers and business owners, this finding signals that digital transformation programs must be paired with stronger psychological support structures to avoid long-term harmful effects on leadership sustainability.

Job insecurity as the key link between AI and burnout

The study identifies job insecurity as the mediator between AI awareness and burnout. Executives who understand AI’s potential impacts often fear that their current competencies may become outdated. This fear is not limited to lower-level employees. SME leaders, who are often responsible for shaping their firm’s digital roadmap, experience significant pressure when they feel unprepared or unsupported during the shift.

The study demonstrates that rising job insecurity intensifies burnout, creating a chain reaction that erodes well-being. Executives begin to question their role, worry about long-term career prospects, and feel anxious about possible skill gaps. This insecurity reduces motivation and dampens engagement, leaving leaders more vulnerable to exhaustion.

The UAE’s SME sector, which includes more than half a million firms and employs a large share of the workforce, is particularly sensitive to these dynamics. Many SME leaders adopt AI tools without comprehensive guidance or training. As a result, awareness of AI’s power does not always translate into confidence, but instead heightens fear about the future. The study’s findings suggest that unless firms introduce structured learning programs and clear communication about AI integration, job insecurity will continue to undermine leadership well-being and weaken the sustainability of digital transformation efforts.

Self-esteem as a shield against digital stress

The research highlights the role of self-esteem as a protective factor. Executives with higher self-esteem experience significantly weaker links between AI awareness and job insecurity. These individuals interpret AI developments as opportunities for growth, innovation, and skill improvement rather than threats. Their confidence supports their ability to adapt and engage with new technologies in a proactive manner.

For leaders with low self-esteem, the situation is reversed. Awareness of AI fuels strong insecurity, which in turn drives burnout. This creates an uneven digital landscape where psychological resources determine how well leaders cope with digital transformation. The findings emphasize the need for leadership development programs that strengthen self-esteem, resilience, and adaptive thinking.

Self-esteem does not eliminate the pressures of AI awareness, but it reduces their intensity, giving leaders room to process change more constructively. In SME environments, where leaders must shoulder multiple responsibilities from business management to digital strategy, psychological resilience becomes a critical component of successful transformation. By identifying self-esteem as a buffer, the study highlights the importance of leadership training and well-being programs as organizational tools that can prevent burnout and maintain performance during technological shifts.

A new perspective on sustainable digital transformation

The study argues that sustainable development is not limited to environmental or economic performance but includes the mental health and stability of decision makers. AI awareness, while essential for building competitive and innovative firms, becomes harmful when it is not supported by strong structures for knowledge management, communication, and training.

From a knowledge management perspective, AI awareness should empower leaders with insight and strategic clarity. However, when knowledge is incomplete, misunderstood, or poorly integrated into organizational learning processes, it generates confusion and insecurity. This tension reflects the need to rethink how firms manage AI-related knowledge, ensuring that leaders receive ongoing support rather than sporadic exposure to complex technological concepts.

Through the lens of industrial–organizational psychology, the findings reinforce the idea that technology-driven change must be accompanied by psychological resources. Digital transformation increases demands on leaders, and without resources such as self-esteem, skill development and organizational support, these demands quickly translate to burnout.

For the UAE, a nation that has positioned itself as a global AI hub, the implications are far-reaching. Policymakers promoting digital transformation must also promote mental well-being, leadership resilience and responsible change management. Without this balance, digital progress may come at a human cost that undermines long-term sustainability.

Moving forward: Policy and practice recommendations

The study calls for immediate action to protect leadership well-being in the midst of digital transformation. Firms should develop clear communication strategies about AI plans, including how roles will evolve and what opportunities will be created. Training programs must be frequent and accessible, helping executives bridge skill gaps and reduce uncertainty. Mental health support, coaching and leadership development should be embedded into transformation strategies, not treated as optional extras.

The authors also encourage future research to expand beyond UAE SMEs to other industries and regions. Understanding how AI awareness affects different levels of employees will be essential as AI adoption increases globally.