HR leaders must implement a strategy incorporating future-facing technology
Like all industries, HR is undergoing a transformation as a result of the current digital revolution. AI is changing the way businesses operate and the way people work within them. It will redefine jobs, enhance employee productivity and accelerate workforce development. In fact, skills and culture – not technology – are the biggest barriers to business growth in the AI era. This means chief executives are looking to their chief human resource officers (CHROs) to lead culture change, manage talent and drive down costs.
The three main business cases we see are:
- AI has the potential to reduce the cost of running HR
Routine employee queries that are traditionally answered by HR agents in a shared service centre can now be handled 24/7 by virtual assistants. In some cases, up to 80% of the queries can now be answered by AI, freeing up HR resources to focus on more strategic workforce planning issues
- AI has the potential to make employees and managers more productive and effective
AI can help select the optimum candidates for a role, it can help new joiners onboard faster, it can recommend learning that will help staff perform better, it can help managers make better salary and reward decisions to incentivise and retain top performers
- AI has the potential to surface hidden insights into workforce performance
It can identify what makes a high performer, or what makes an employee likely to leave; it can identify what skills are most likely to help someone succeed and progress and what skills are in decline or obsolete.
How is AI being used to enhance HR?
Today we are seeing AI being used across the full employee lifecycle from recruitment and onboarding, to learning and performance management and employee care and engagement. The following are just starting points:
AI can be used to process large volumes of applications and CVs while analysing the organisation’s employment history and external data sources to determine key attributes for success in a given role and surface the most qualified candidates while identifying and addressing unconscious bias.
From a candidate’s perspective, AI can improve the recruitment process, helping job seekers find the right role fitting their unique skills, preferences, work and educational experience.
Once an individual has joined an organisation, virtual assistants can take on basic onboarding tasks, answering simple questions that new joiners may have about payroll, processes and office logistics.
Learning and development
AI can open up a radical, ongoing approach to learning and development, curating bite-sized pieces of content – such as articles, podcasts and videos – and suggest personal recommendations based on the employee’s role and interests.
AI can serve as a virtual coach, work alongside employees to provide personalised advice and guidance on their options for career progression and recommended training to help them succeed.
By drawing on unstructured data such as when the employee last had a raise, what skills they have gained in the last year, what the market rate is for their role and how challenging it would be to recruit a replacement, AI can provide objective facts and figures to inform salary decisions. Ultimately turning the end-of-year salary discussion into a dynamic conversation about skills and reinvention.
AI can reduce the day-to-day administration that takes up so much of employees’ time, for example, powering apps that make it easy to capture and share expenses, giving instant feedback to each other or quickly finding colleagues with the required skills to help with a project within the organisation.
How can good ROI with AI investment be shown by HR as it builds its case for using this technology?
Smart CHROs see AI is a fundamental ally. That's because it absorbs huge amounts of data at speed to make objective recommendations based on the data to supplement human instinct. From automating basic transactions - which frees up HR teams to think strategically, finding and recruiting the best talent for a role while addressing unconscious bias, to AI-enabled apps that enhance employee performance - there are very few aspects of the employee experience that won’t be touched by technological innovation.
One example of where we are seeing this today is with a major global client who introduced a new employee chatbot to help with onboarding and performance management. In the first 28 days of operation the chatbot answered 500,000 questions and achieved a return on investment in one week.
What are the current pressure points when designing and implementing an AI function into the HR process?
It’s important to see AI as an enabler, not as a threat to the HR function. This kind of transformative technology works best when designed and implemented with humans at the centre. For most organisations it is the fear of the unknown and how their employees will react to the application of AI. However, used smartly, AI will empower HR people to drive business decisions. It will complement and inform human decision-making, but it cannot replace human emotional intelligence and judgement. Great AI simply harnesses data analytics and predictive capabilities to make work processes more efficient.
When designing and implementing AI it is important to keep the scope realistic. While it is tempting to start with a chatbot that will answer employee queries, most organisations start with a defined and limited scope, such as answering questions on 'performance management' or 'travel & expenses'. Starting with a minimal viable proposition (MVP) and piloting fast is the most effective means of proving the use case and testing out the solution with your employee and manager community.
How should different departments across a company support the use of more AI within the HR function?
Increasingly organisations start the cognification of their back office in the HR function; HR processes lend themselves to early reinvention with AI. As a result, other functions are able to learn from HR's journey with AI, not just the experimentation with new AI technology, like IBM Watson and the integration with existing IT platforms, but also with the behavioural elements, including staff responses and user adoption.
How are businesses funding their development of AI within their HR processes?
The good news is that AI investments have the potential to be self-funding, often within a financial year. Employee support assistants or chatbots have a very short payback period and deliver long term savings by reducing the need for HR agents or admin assistants. Unlike many of the larger investments HR has had to make, eg implementing enterprise-wide cloud HR and Talent platforms, most AI investments are relatively small-scale MVPs.
Who are the key players who must drive the business case for using AI in HR?
The CHRO and chief information officer (CIO) need to be active sponsors of any AI investments; HR needs to ensure that AI serves the employee and manager base and is delivered in a way that actually reduces HR operational spend and/or improves effectiveness. IT needs to govern and control AI experimentation across the organisation, avoiding a free-for-all race to experiment by imposing the right governance framework.
We’re at the start of a long journey with AI in the workplace, and it’s impossible to predict where we will end up. But one thing is for sure, the CHRO plays a crucial role in enabling people and processes that embrace new technology and business models. No longer head of a back-office function, the CHRO must step up to become a critical member of the board, responsible for driving the success of the business, as well as guardian of the employee experience.
With the HR function more likely to change more fundamentally in the next three years than it has in the last 30, the CHRO must emerge as a strategic, growth-focused leader and implement an HR strategy that incorporates future-facing technology, to attract, retain and engage people critical to the organisation’s growth.
Cutting costs while upping revenue and productivity are a fact of life for most business leaders today. AI is simply raising the stakes: demanding the right type of leadership skills, creative vision, strategic mindset and empathy to get the best out of intelligent machines. The winners in this new era will be those who embrace data to introduce efficiencies and respond predictively, not reactively, to the need to attract, retain and engage people with the skills to drive the business into the future.
This is no longer a future, what-if scenario, it’s happening now.
Andi Britt, pictured, leads IBM's talent & engagement practice for Europe covering all aspects of cloud, cognitive & digital HR transformation, organisational change management and learning
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