HR must be at the heart of decisions on AI and automation
Artificial intelligence (AI) and automation are bringing major changes to what jobs are available and to people’s working lives. But, while not all doom and gloom, the scale of the impact is undeniable, and far greater than that of other new technologies.
A report by the CIPD, the UK’s professional body for HR and people development, argues that these changes require managing and that employers need effective people strategies that relate to AI and automation. However, the People and Machines: From Hype to Reality report says that, in general, this does not appear to be happening.
In the UK, nearly a third of organisations have invested in AI and automation in the past five years. This is split between machines used for cognitive tasks(22%) and for physical tasks (20%).
The primary danger lies in the potential complacency of an absence of a strategy. This could pose risks to such organisations, in that they may fall behind their competitors in technological capability and relevance to their stakeholders, as well as not realising important gains in productivity
Why invest in AI?
The most common reasons for introducing AI were to improve the quality of goods and services (38%), deliver goods or service more cheaply (33%) or reduce overall costs (32%) and to keep up with competitors (32%) or wider industry (32%).
The research points to three strategic approaches to investing in AI and automation:
• Innovation strategy: employers who adopt this strategy view AI and automation technology in the workplace as an opportunity to innovate and develop new approaches, not necessarily for the purposes of immediate short-term gain but for long-term sustainability. This strategy is often a build on the instrumental strategy approach, possibly arising from a desire to seek competitive advantage through the implementation of such technology
• Instrumental strategy: employers adopting this strategy tend to view the purpose and outcomes of AI and automation in the workplace on a case-by-case basis, with a specific focus on improving productivity, performance, efficiency and cost measures. This type of strategy may involve rejecting applications of AI and automation – for example, as cost ineffective or risky – but their potential is not ignored. The case-by-case approach may potentially result in short-term and reactive decision-making regarding investments in technology, which has various resource risks associated with it – for example, organisations may be susceptible to low-quality products and make ill-informed procurement decisions
• Absence of strategy: employers adopting this strategy are comfortable with their current business model but lack the impetus to consider alternative approaches using AI and automation. Often these organisations are based on low-productivity, low-investment and low-skill models of employment. In the short term they may survive, but in the long term they may stall from a stagnating approach to such technology. This strategy can involve a conscious rejection of the need to explore AI and automation in the workplace or can reflect a lack of awareness of the potential opportunities.
The main reasons for not investing in AI and automation are a lack of customer or user pressure (33%) and poor awareness of the technologies available and their utility (30%).
“The primary danger lies in the potential complacency of an absence of a strategy. This could pose risks to such organisations, in that they may fall behind their competitors in technological capability and relevance to their stakeholders, as well as not realising important gains in productivity,” say the report’s authors.
Where is HR in all this?
Information technology, production or operations, research and development and accounting and finance are most likely to be involved in decisions to invest in AI and automation. However, HR is least likely to be involved in investment decisions around AI and automation.
This, says the CIPD, means an increase in the risk that people management and workforce implications are not properly considered, increasing risks regarding the effective bedding-in of the technology and negative impacts for employees. A negative impact could cause a dip in productivity, well-being or efficacy of the new ways of working. Where HR professionals are involved, a plan for people change, engagement and take-up of new ways of working could increase the value of the investment in AI or automation.
Peter Cheese, chief executive of the CIPD says there is a real need for HR and longer-term workforce planning “but too often HR struggles to be part of the conversation”.
He adds: “Instead, people professionals should be taking the lead, orchestrating the debate on who does what work, where, when, and how technology interacts with those processes. To get to this point, they must improve their understanding of AI and actively pursue a role in shaping how new technology is used from the very outset of discussions.”
For this reason, HR should look to develop the skills and abilities to advise on where AI or automation could provide skills augmentation. Its role should ensure that the implementation of these technologies enables the design of new organisational structures that deliver a more satisfying employee experience.