Why 48% of Your Employees Are Hiding Their AI Use From You | Human-Centered AI Leadership| AI for Executives

According to the Henley Business School, 48% of employees are hiding their AI use from their employers. 

This is not a technology problem. It is a trust problem rooted in nervous system science. 

When employees do not feel psychologically safe enough to be transparent about their tool use, they go underground. 

Sahar Andrade, MB.BCh, Forbes Coaches Council member,  host of AI Cafe Conversations (Top 2% globally), and Neuroleadership consultant unpacks the neuroscience behind why employees go underground with AI and why most executive responses make the problem worse. She explains the Shadow AI trust gap and what executives can do to close it before it becomes a $670,000 liability.

Nearly half of your employees are hiding their AI use from you. Not because they are dishonest. Because they do not feel safe being transparent.

 This is Shadow AI and according to the Henley Business School, IBM, Cybernews, and UpGuard research, it is costing organizations $670,000 more per breach than sanctioned AI, with 75% of users sharing sensitive organizational data.

 In this Forbes article-like Edition episode: The real statistics behind Shadow AI use. Why 25% of employees trust AI more than their manager. The FAIR and CARES approach to closing the trust gap. 

And two concrete actions you can take in the next 90 days.

Shadow AI Assessment (5 min, free): saharandrade.com/assessments/2148598163

Book a Leadership Clarity Call: calendly.com/saharandrade

Website: saharconsulting.com

•       Why are employees hiding their AI use from their employers?

•       What is Shadow AI and why does it happen in organizations?

•       What does it cost a company when employees use unapproved AI tools?

•       Why do employees trust AI more than their managers?

•       How can executives close the Shadow AI trust gap?

•       What is the neuroscience behind why employees go underground with AI?

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Transcript

SPEAKER_00 0:13

Welcome to the AI Cafe Conversations, your favorite podcast. This is the Friday Forbes Like Edition. I'm Sahari Nradi, your AI whisperer. I'm a neuroscience-based neuroleadership consultant, Forbes Coaches Council member and influencer, and someone who has been tracking the shadow AI conversation in organizations for two years now. I started talking about shadow AI even before people even knew what it is. And and to be honest, I still have people till today have never heard the word shadow AI. So let me give you a very um simple definition of shadow AI. Shadow AI means when people work in the shadow for with AI in your organization, meaning that they are using tools and platforms that are AI that are not sanctioned by your organization and they don't talk about it. That's what shadow AI is. So let's talk today. What I want to talk to you about is actually a number that stopped me when I first saw it. That number is 48%. Basically, half of your employees are hiding their AIUs from you. And that's according to research from Henley Business School. I'm not just making that number up. Okay, it's a real research. Not using AI on occasion, actively hiding it. And if you are an executive listening to this, your first instant might be that is a compliance issue. That is a risk issue. That is a policy issue. And I give you all that. All of that is correct. But I'm going to offer you a different frame. Because until you understand why this is happening, no policy in the world will stop it. So this is the hidden truth. Alright? Why they are going underground using AI. Here is what the data actually shows about shadow AI. AI tools used in the workplace without official approval. The cyber news survey found that 59% of employees overall use shadow AI tools. So one of them gives us 48%, the other one gives us 59%. So it's half or a little bit over half of your team members are using shadow AI underground. The number jumps to 93% when you look at executives and senior managers. Again, that's another number. Almost all your executives and senior managers, almost are using shadow AI. Which means that the people most likely to be using unapproved AI tools are often the ones setting AI policy. That's ironic, isn't it? The UpGuard report surveyed 1500 people across multiple countries and found that 80% of workers or employees use unapproved AI tools. 50% do it regularly, and less than 20% use only approved tools. Now here is the piece that I think executives need to sit with. This is not because your employees are reckless or dishonest. It has nothing to do with that, or they have a flaw in their personality. In most cases, it's because your approved tools are not meeting their needs. And I'm gonna share something very personal. It doesn't mean that it applies to everybody, it doesn't mean it's 100% correct, but this is what I have seen. For example, most of the organizations that I either hear about or work with, they use Microsoft Office. So logically, they push the co-pilot, which is the AI branch of Microsoft. And as we are learning and as AI is developing, you cannot use only one tool for all the needs that you have, for all your departments, for all their wants and needs, and have one. You have to create playbooks and workflows with all of them. And honestly, I personally again, this is a very personal opinion. Copilot never gave me everything I ever wanted. Again, that's a very personal opinion. I'm not saying it's bad, it's actually good, but for my use, for what I do, it never gave me a complete response that lets me feel like that's good, I'm satisfied now. Okay, other people's experiences are different. I'm just sharing again, mine, very personal. The cyber news data shows that only 33% of employees say the tools their company provides actually do what they need them to do. So when you think about shadow AI as a compliance failure, you are looking at the symptom. Again, what do I always say? Look at the root. The root cause is a trust gap. An eats gap. AI underneath those, both of those, is a psychological safety gap. Employees are asking themselves, if I tell my manager I'm using this tool to do my job better, what will happen? Will I be penalized? Will I be perceived as cutting corners? Will I get in trouble for not using the approved system? When the answer to any of those questions is I don't feel safe, being honest, they go underground. This is the brain in action. This is what the brain is actually supposed to do or created to do. The amygdala, which is our threat center, processes threat. Da. When transparency feels unsafe, the threat response fires. And the behavior that follows hiding, concealment, workarounds, is the nervous system doing its job, protecting the person. The question is, what is your organization doing that makes transparency feel unsafe in the first place? Now I want to discuss about something about the cost and what is actually costing you, like I always say. So let's talk about the financial reality of this because this is where the conversation often shifts for executives. According to IBM research, shadow AI data breaches cost organization $670,000. $670,000 more than sanctioned AI breaches. More per breach. And here is what it's important to understand. I actually call it the tax, the AI tax. And here is what is important to understand. Shadow AI breaches are not just more expensive, they're more common. Because when people go underground, they go outside your security perimeter and guidelines. They are using tools that do not have your organizational agreements, your data governance, your compliance guardrails. 75% of shadow AI users share sensitive information like employee data, customer data, internal documents with unapproved tools. That is three-quarters of the people doing this. Because a lot of people don't know how to put guardrails. So this is something maybe you can think about. 70% of employees are aware of colleagues doing exactly this. The behavior is not hidden from each other, it's just hidden from leadership. Less than 50% of employees know or understand what their company's actual AI policy says. So you may have a policy, but if people do not know it, do not understand it, or do not believe it applies to them, it does not function as a policy. It functions as a document. And this is something that I observed working with so many organizations. There are more organizations that don't have an AI policy or guideline or an MOU about how to use AI than those that have. None. There is no AI governance document that applies to all employees of an organization. Or very few. It's rare. Again, this is something that we need to think about. Here is the trust paradox I want you to see. 25% of workers say AI is their most trusted source of information, on par with their manager, in some cases, exceeding their manager. Think about what that means. Your employees trust an AI tool as much as they trust you or more. Not because the AI is more trustworthy, but because the AI does not judge them, does not have a performance review coming, does not have a reaction they need to manage. That is a human leadership problem, not AI problem. The solution and how we close the trust gap. So what do you actually do with this? I'm going to give you three things, as usual. One mindset shift and two concrete actions. One, the mindset shift stop treating shadow AI as a compliance problem and start treating it as an intelligence signal. See the shift? Shadow AI is your employees telling you exactly what they need that you're not providing. It is the one of the most honest data sets in your organizations right now. The question is whether you can hear it or not. When I work with executives on this, one of the frameworks I use is called FAIR, F A I R. It's specifically designed to help leaders make AI adjacent decisions that are grounded in accountability, impact, and responsibility. The first question it asks is not who is breaking policy, it's what is our behavior creating in the people around us. The question that changes everything is that one. Concrete action one. A 90-day AI amnesty window. No consequences, pure intelligence gathering. Ask your teams what tools they are using, what problems they are solving, what gaps exist in your approved systems. You will learn more from that conversation than from an adult. The neuroscience here is very straightforward. Psychological safety, the felt sense that honestly will not get you punished, activates the ventral, the vagal system, the one in our chest. People in ventral vagal are creative, transparent, collaborative. People in threat mode are protective and concealed. If you want transparency, you have to create safety first. Concrete action too. Involve your teams in building the AI policy, not just communicating it, but building it. The research is clear that people support what they helped create. Always, we always said that even in change management, to avoid resistance or to lessen it. When employees have a voice in the boundaries, when they understand the why behind the guardrails, compliance is not about fear. It's about ownership. That is what MyCARES C-A-R-E-S framework is designed for. Creating the human conditions for people-centered AI adoption. It's not about eliminating risk, it's about building the trust infrastructure that makes risk manageable. And before I let you go, I want to leave you with this. Shadow AI is not the problem. Shadow AI is the symptom. The problem is that your employees do not feel safe enough to be honest with you about how they are working. And that's really sad. And that is worth knowing because it's fixable. If you want to know exactly where shadow AI is likely hiding in your organization, I have a free five-minute assessment. It's free. That gives you a psychological safety score and specific recommendations link. The link is actually here in the description. And if you want to go deeper, if you want a conversation about what this looks like in your specific organization, book and no push, no sales, no pitch, leadership clarity call. No pitch, just clarity. The links are all below. Leadership does not fail. Nervous systems do. And organizations that understand this get ahead of the problems that everyone else is still reacting. I am Sahar Andradi. This is AI Cafe Conversation Podcast, the Forbes Like Edition. This is the only podcast where neuroscience, AI, and leadership interact together. I will see you next Wednesday on our long podcast. Before I go, I always say this: show me some love. Like, share, subscribe, comment, or leave us a comment on Google or on Apple or any of the podcast platforms that you see. It helps us being distributed to more people. And thank you for making us one of the top two percent global podcasts. Till we meet again. Peace.