Microsoft’s fifth Annual Work Trend Index reveals the rise of a new type of organisation: the Frontier Firm. According to the report 2025: The Year the Frontier Firm Is Born, the Frontier Firm differs from traditional organisations in that it has access to intelligence on demand and is composed of hybrid human-agent teams.
The Frontier Firm
“Frontier Firms are already taking shape, and within the next 2–5 years, we expect that every organisation will be on their journey to becoming one,” the report noted.
The study shows that most leaders (82%) say this is a pivotal year to rethink key aspects of strategy and operations and expect agents to be moderately or extensively integrated into their company’s AI strategy in the next 12–18 months (81%).
Moreover, AI adoption is accelerating. Twenty-four per cent of leaders say their companies have already deployed AI organisation-wide, while just 12% remain in pilot mode.
Preparing for the shift
To prepare for this shift, Microsoft urges leaders and employees to be proactive by hiring their first digital employees, citing that “AI agents are ready to take on a host of tasks traditionally done by humans.”
Organisations must also set their human-agent ratio by identifying which processes are ripe for automation, which require a human touch, and which can be addressed with the right mix of humans and agents.
Lastly, Microsoft urges organisations to adopt and activate AI technologies broadly where they can drive measurable impact.
This report captures insights from a survey of 31,000 people across 31 countries, labour and hiring trends in the LinkedIn Economic Graph, and trillions of anonymous and aggregated signals from emails, meetings, and chats within Microsoft 365.
