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From Hollywood to Big Tech, major industries across the U.S. are increasingly going all-in on AI workflow tools, and theyre expecting employees to follow suit. Late last month, Business Insider reported that Microsoft has started evaluating some employees on their AI fluency, factoring their competency with AI tools into metrics like performance reviews. But in spite of the growing workplace incentive to adopt AI tools, some employees are actively resisting AI uptakeand their reasons make more sense than you might think. According to a new study conducted by a team of researchers at Peking University and The Hong Kong Polytechnic University, an emerging phenomenon is actively deterring employees from picking up AI tools, even at companies where doing so is strongly encouraged. Dubbed the competence penalty, this bias leads to AI users being seen as less competent by their peersregardless of actual performance. Its a perception gap thats especially damaging for women in technical roles. The background The researchers study was conducted at an unnamed leading tech company. In an article written for the Harvard Business Review (HBR), the studys authors explain that this company had previously rolled out a state-of-the-art AI coding assistant to its developers, which was promised to boost productivity significantly. Still, 12 months later, only 41% of the nearly 30,000 surveyed engineers had even tried the coding assistant. Adoption also varied based on employees identities. Just 39% of engineers 40 and older were using the tool, alongside a meager 31% of female engineers. Thats not for lack of trying on the companys part, either: Rather than throwing their employees into the AI deep end without guidance (a prevalent issue as AI workflow tools become more common), this company offered dedicated AI teams, adoption incentives, and free training. So, researchers set out to understand what was going wrong. The competence penalty To get to the bottom of this lackluster adoption pattern, the studys authors established an experiment with 1,026 engineers from the same company. The engineers were given a snippet of Python code to evaluate. While the code was the exact same for every participant, each was told that it was created under different conditionsincluding with or without AI and by a male or female engineer. The results showed that, when participants believed a fellow engineer had used AI to write their code, they rated that engineers competence 9% lower on average. The competence penaltys severity was also dependent on the reported gender of the engineer. If they were described as male, there was only a 6% competence reduction, compared to 13% for those described as female. Further, the reviewers own identity and stance on AI had an impact on how they rated others. Engineers who hadnt adopted AI themselves were most critical of AI-users, and male non-adopters penalized female AI-users 26% more harshly than their male AI-using counterparts. Through a follow-up study of 919 engineers, the researchers found that many employees were actually innately aware of this competence penalty, and were avoiding AI usage as a result. Those who most feared competence penalties in the tech industrydisproportionately women and older engineerswere precisely those who adopted AI least, the studys authors write. The very groups who might benefit most from productivity-enhancing tools felt they couldnt afford to use them. Women often face extra scrutiny The studys findings offer a strong counterpoint to the oft-repeated sentiment that AI tools might even the proverbial playing field at work, presenting a one-size-fits-all solution by making everyone more productive. Our results suggest that this is not guaranteed and in fact the opposite could be true, the authors write. In our context, which is dominated by young males, making AI equally available increased bias against female engineers. These results could help explain patterns that have already been observed in AI uptake. According to recent research conducted by Harvard Business School associate professor Rembrand Koning, women are adopting AI tools at a 25% lower rate than men, on average. In an article for Fast Company earlier this month, Kamales Lardi, author of the book Artificial Intelligence For Business, noted that, In my experience, women often face extra scrutiny over their skills, capabilities, and technical prowess. There may be a deep-rooted concern that leveraging AI tools may be perceived as cutting corners or reflect poorly on the users skill level. How leaders should prepare for the competence penalty Companies like the one in the study shouldn’t give up on implementing new AI tools, especially given that agentic AI is predicted to play a huge role in the future of work. Instead, leaders should use this data to put more AI adoption guardrails in place. In their analysis for HBR, the studys authors offer several main steps for managers to consider: Map your organizations penalty hotspots. Leaders should focus on identifying teams where the AI competence penalty might be highest, including those with more women and older engineers reporting to male non-adopters. Monitoring these teams might help to understand where and how the competence penalty is playing out. Convert the influential skeptics. Because non-dopters are the harshest critics of AI users, influential skeptics can have a major impact on the whole team. The studys authors suggest that breaking this cycle requires the skeptics to see respected colleagues successfully using AI without professional consequence. Redesign evaluations to remove the signal. Based on the study’s results, flagging a product as made with AI can negatively impact performance reviews. The solution is straightforward: Stop signalling AI use in performance evaluations until your culture is ready, the authors write.
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E-Commerce
U.S. stocks are rallying and recovering much of their sharp losses from last week, when worries about how President Donald Trumps tariffs may be punishing the economy sent a shudder through Wall Street. The S&P 500 jumped 1.4% in afternoon trading to claw back more than two thirds of Fridays drop. The Dow Jones Industrial Average was up 558 points, or 1.3%, as of 1:11 p.m. Eastern time, and the Nasdaq composite was 1.8% higher. Idexx Laboratories helped lead the way and soared 26.2% after the seller of veterinary instruments and other health care products reported a stronger profit for the spring than analysts expected. It also raised its forecast for profit over the full year. Tyson Foods likewise delivered a bigger-than-expected profit for the latest quarter, and the company behind the Jimmy Dean and Hillshire Farms brands climbed 4.3%. They helped offset a 3% drop for Berkshire Hathaway after Warren Buffetts company reported a drop in profit for its second quarter from a year earlier. The weakening was due in part to the falling value of its investment in Kraft Heinz. The pressure is on U.S. companies to deliver bigger profits after their stock prices shot to record after record recently. The jump in stock prices from a low point in April raised criticism that the broad market had become too expensive. Stocks just sank to their worst week since May, not so much on that criticism but on worries that Trumps tariffs may be hitting the U.S. economy following a longer wait than some economists had expected. Job growth slowed sharply last month, and the unemployment rate worsened to 4.2%. Trump reacted to the disappointing jobs numbers by firing the person in charge of compiling them. He also continued his criticism of the Federal Reserve, which could lower interest rates in order to shoot adrenaline into the economy. The Fed has instead been keeping rates on pause this year, in part because lower rates can send inflation higher, and Trumps tariffs may be set to increase prices for U.S. households. Fridays stunningly weak jobs report did raise expectations on Wall Street that the Fed will cut interest rates at its next meeting in September. That caused Treasury yields to slump in the bond market, and they were mixed on Monday. The yield on the 10-year Treasury eased a bit to 4.20% from 4.23% late Friday. The two-year yield, which moves more closely with expectations for Fed action, rose to 3.70% from 3.69% late Friday. In our view, if the Fed starts to cut rates at its September meeting, we believe this would be supportive for markets, according to David Lefkowitz, head of US equities at UBS Global Wealth Management. Such hopes, combined with profit reports from big U.S. companies that have largely come in better than expected, could help steady a U.S. stock market that may have been due for some turbulence. Before Friday, the S&P had gone more than a month without a daily swing of 1%, either up or down. This upcoming week may feature fewer fireworks on Wall Street following last weeks jobs report and profit updates from some of the U.S. stock markets most influential companies. This week’s highlights will likely include earnings reports from The Walt Disney Co., McDonalds and Caterpillar, along with updates on U.S. business activity. On Wall Street, Wayfair jumped 11% after the retailer of furniture and home decor said accelerating growth helped it make more in profit and revenue during the spring than analysts expected. Tesla rose 1.6% after awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately $29 billion. The move, coming six months after a judge ordered the company to revoke his massive pay package, could remove potential worries that Musk may leave the company. CommScope soared 90% after reporting a stronger-than-expected quarterly profit and saying that it will sell its connectivity and cable business to Amphenol for $10.5 billion in cash. Amphenol rose 3.1% They helped offset a drop of 11.6% for On Semiconductor, which only matched analysts expectations for profit in the latest quarter. The company, which sells to the auto and industrial industries, said its beginning to see signs of stabilization across its customers. Boeing was mostly unchanged after workers who build fighter jets for the troubled aerospace giant went on strike overnight. In stock markets abroad, indexes rose across much of Europe and Asia. South Koreas Kospi rose 0.9%, and Frances CAC 40 climbed 1.1%, while Japans Nikkei 225 was an outlier with a drop of 1.2%. ___ This version has been corrected to say that the U.S. stock market had its worst week last week since May, not April. Stan Choe, AP business writer AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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E-Commerce
Furniture maker Steelcase is being acquired by HNI Corporation in a $2.2 billion deal that shows the upside to office furniture at a time when return-to-office remains on the rise. HNI Corporation, which manufactures workplace furnishings and residential building products like fireplaces, announced the acquisition with Steelcase Monday. The companies cited their complementary geographic footprints, dealer networks, and skillsets as the deal’s benefits and said they estimate an annual revenue of about $5.8 billion should shareholders agree and the transaction close by the end of 2025. “This is a historic moment for Steelcase as we embark on the first step of a transformative combination that will unlock new possibilities for our customers, dealers, and employees alike,” Steelcase president and CEO Sara Armbruster wrote in a letter to employees obtained by Fast Company. “Together, we will be positioned to redefine what’s possible in the world of work, workers, and workplaces.” Armbruster said Steelcase would maintain its Grand Rapids, Michigan, headquarters and continue to operate as Steelcase with its brand and business strategy following the close of the deal, but that HNI chairman, president, and CEO Jeffrey Lorenger would lead the combined company. RTO growth Steelcase has rebounded from pandemic lockdowns with 12 consecutive quarters of year-over-year gross margin growth, including 7.11% year-over-year growth in the most recent quarter for a reported $779 million in quarterly revenue, according to PitchBook data. As firms instituted return-to-office (RTO) policies in the years since lockdowns, Steelcase’s office chairs, work stations, lockers, and phone booths have been in high demand. As recently as last year, RTO was still picking up steam, and fast. The percentage of employees who work “mostly in person” rose from 34% to 68% between 2023 to 2024, while the share of employees who work “mostly remote” has dropped from 44% to 17% in the same time period, according to McKinsey & Company. Steelcase, which did not respond to a request for comment, reported strong order growth from financial services companies and large technology companies on its most recent earnings call. Armbruster noted on the call healthcare was an area of growth and said Steelcase’s work in the education space was “well-positioned” but threatened by federal policy targeting education.
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E-Commerce
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