Executives all over the world are looking now at artificial intelligence, trying to figure out how they can harness it to serve their operations. In that respect, it is very similar to past technological waves. But one way in which AI is different is that HR will not be the last function to join the party.
The reason is that HR stands to benefit significantly from AI, second only to procurement. With potential reductions in costs by 44%, productivity gains of 51%, and a 44% savings in headcount, the advantages of AI, particularly generative AI (GenAI), are undeniable.
At the moment, we are finding our biggest HR opportunities are in talent management. As a consultancy, talent is our most important asset, which means that recruitment is always top of mind. That’s why we are applying AI internally to create larger, deeper and more diverse candidate pools.
Scheduling candidate interviews – or any meeting – is much easier with AI. We are seeing efficiency gains of over 40%. But the advantages aren’t just in time savings: in the case of recruiting, one of the biggest challenges is always getting the right person in front of the right people at the right time. We are finding that automating the scheduling process is making it much easier to get all the planets to align and thus enhance the experience for our candidates.
Staff development is another area where we see immense potential for AI in the near future. If you are in an industry where staff members have continuing education requirements, AI can help you keep track of who has completed their required courses. For elective development, an e-coach can help your team members focus their aspirations and empower them to reach their full potential.
Managing inhuman resources
As of 2024, many AI applications are still a work in progress. There are serious problems, such as the tendency to “hallucinate”– to make mistakes and cite plausible-sounding, but fake resources in answer to a question – but many of these issues are being addressed and mitigated. We anticipate that most of these concerns will be resolved in the near future.
A bigger problem for the CHRO is that AI technology is so malleable and so potentially useful in many different situations that it’s difficult to know where to start. So far, we have had the best luck with a six-step program:
- Assess the possibilities. AI is evolving rapidly. So is your business. Understanding what the technology can do now and where the biggest AI opportunities in your organization are likely to be is an important stage in your organization’s AI development.
- Educate your teams. Start by providing foundational knowledge to your team and then create a curriculum to build upon their expertise. A three-tier curriculum such as Novice, Intermediate and Expert levels is a good starting point.
- Start small. Select a process within a fairly large area, such as recruiting, then take a subprocess that looks ripe for automation, as we have done with candidate scheduling, and see if you can identify an AI-powered service that can take on the task.
- Set out governance. Particularly in the near term, it’s important to set out clear governance rules for these processes. They are fast enough and powerful enough that you can’t take the risk of leaving it to operate entirely on its own, particularly in the pilot stage. Leading organizations are even setting up a GenAI executive position, either by driving it within a function or from IT.
- Select your key metrics. It will be easier to build enthusiasm for AI if you can quantify the achievements of your pilots. Look for a combination of efficiency metrics, such as reducing the number of errors, and value metrics, such as finding that your employee engagement score has risen from 89% to 94%.
- Note your ethical risks. Technology can do things really fast and really well. On the downside, it can also do the wrong thing with the same dispatch. Try to anticipate where legal and ethical risks may present themselves, such as violating privacy laws. AI is a powerful tool that can help you build a better HR infrastructure in your organization. But only if you treat it with care.
While many HR executives are enthusiastic about AI’s potential, uncertainty persists about its specific implications for their function. If you are in that camp, now is the time to begin trying to identify where the biggest opportunities might be for your function.
Unlike previous technological shifts, AI will not manifest on the manufacturing line first; it’s already reshaping HR practices. In the coming years, AI will fundamentally change the way HR operates, and those who embrace it early will gain a competitive advantage in talent management and organizational performance.
