Artificial Intelligence (AI) is dominating nearly every executive management and boardroom discussion. As companies mature their thinking and strategy, one function is incredibly well positioned to help lead this transformation: Human Resources. Because in addition to the intricacies of integrating AI technologies, fostering a culture that embraces such change will be equally important to its success. While building this culture will be challenging for HR leaders, if they succeed there will be opportunities to create value for employees, customers, and shareholders.
Given that AI presents risks as well as opportunities, executives are likely to be cautious. But they may underestimate the urgency if HR leaders do not make the case for how AI will impact every aspect of the business, including the most precious asset—the people. We know employee experience continues to lag, with nearly 6 out of 10 employees “quiet quitting” and disengaged from their work, according to Gallup’s The 2023 State of the Global Workplace report; and AI solutions may be arriving at just the right time to help address this crisis.
We have been holding several discussions with HR leaders and thought leaders across industries on the topic of AI and its impact on the workforce. In this article, we delve into three big areas that have emerged from these conversations: (1) Reconciling AI and Human Judgement; (2) Bringing HR to Strategic Discussions; and (3) Considering the Employee Implications of AI Adoption—and discuss how HR leaders and senior management can approach them.
1) Reconciling AI and Human Judgement
As businesses embed AI solutions into their processes, HR leaders are exploring how to leverage AI to enhance the function’s processes—both internally and externally. In this regard, HR leaders must reflect on to what extent the “human” element should be overtaken by AI when it comes to decision-making. We explored this with David Stillwell, a professor of Computational Social Science at the Cambridge Judge Business School. For him, AI’s biggest pitfall is its inability to provide an explanation in many cases, whereas human beings tend to rely on a sensible communication style with each other. This is an important consideration to make, especially true for recruiting processes, that should strive to be inclusive and humanized. For example, when denying someone the opportunity for an interview, human understanding and oversight in justifying such a decision is essential, since accountability rests with the person (and organization) conducting the process.
Several important questions arise: Are AI algorithms biased to an extent that creates harm? How accurate are they compared to humans? What specific cues do they rely on? These are crucial considerations HR leaders are thinking about when using AI technology, as excluding the human element might create discomfort for some individuals, potentially resulting in the loss of a valuable potential employee. It is important to note, that this does not suggest that humans have less bias than AI algorithms, in a lot of cases humans in fact have more bias – however, research suggests that humans trust the judgement of other humans regardless of this.
Embedding AI as Part of HR Processes: Case Studies
Improving workflows. Several notable examples where AI algorithms can positively impact employee well-being and streamline internal HR workflows already exist. Take ChatGPT, for instance, a renowned Large Language Model Currently categorized as “weak AI,” since it relies on touch of human intervention, this tool combines human inputs with automated logic to respond to questions, even though answers might not always be entirely accurate. Internally, it proves valuable for summarizing vast amounts of information, composing responses, and drafting documentation—HR leaders could leverage it for summarizing interviews, CVs or brainstorming interview questions.
Employee wellbeing. ChatGPT and other generative AI tools can act as a catalyst for personalized coaching, career development, performance evaluations, onboarding or goal setting. Expediting personalized coaching and career development could enable employees to proactively seek feedback without waiting for human involvement. In the context of onboarding, new hires can benefit from tailored experiences, focusing on pertinent tasks and accessing instant answers to queries without dependence on the human element.
Hiring processes. When it comes to hiring, there are interesting examples of tapping into AI creatively and effectively. For instance, German multinational corporation SAP adopted a machine-learning application that provides individuals with personalized career advice regarding open positions. The app matched candidates with roles that could fit their personalities by analyzing Facebook data. This proved to be a creative way to get individuals started with potential good matches for a position.
Another example, as reported by a Fortune story, is an AI-based game designed to vet candidates adopted by Mastercard. The game advances candidates to the next interview round based on the completion of specific tasks – among other assessments – and does not record demographic data. In the article, Michael Fraccaro, Mastercard’s Chief People Officer, says this game helps reduce the risk of unconscious bias in hiring. Additionally, the company uses an automatic scheduling system to streamline the interview processes, creating an 87 percent productivity bump.
A potentially more uncomfortable case of AI integration within recruitment is the deployment of automated video interview platforms such as Rotario, HireVue or Modern hire. Here is how it works: Candidates respond to pre-established questions while recording themselves, ultimately saving time. For major corporations that hire hundreds of employees and need a swift interview process, this could speed things up. Candidates also stand to benefit by sidestepping the need to coordinate interview dates and meeting managers as they interview “on demand.” On the flip side, companies may grapple with the challenge of evaluating an extensive array of prerecorded videos. To tackle this issue, video services have devised algorithms that scrutinize facial and linguistic cues to determine performance. But while innovative, this approach raises significant concerns that align with four key aspects of AI use discussed by Stillwell: transparency, control, understanding and working together with people rather than against them.
Our Take
Ultimately, HR leaders should exert their judgment on what tools they use, how they use them, and how they keep the “human” element in Human Resources at the core of the function’s processes while tapping into AI for improved efficiency.
2) Bringing HR to Strategic Discussions
Even before organizations begin to experience the benefits of AI, employee adoption poses a complex challenge for HR leaders to navigate. The pace of AI innovation is often described as exponential, and the uncertainty and mistrust felt by employees are likely magnified as well. The question arises: How can HR leaders navigate the paradox of adopting AI quickly to stay competitive while also heeding caution and adhering to guidelines and pertinent policies?
We recommend engaging in ongoing strategic conversations with C-suite peers. HR leaders possess an invaluable perspective in overseeing workplace dynamics, culture, and talent strategy. HR leaders we spoke with believe productivity gains from AI can span the entire employee lifecycle, from skillset job matching to distinctive onboarding and offboarding experiences. Moreover, HR leaders are well aware of the need for an AI-focused capability strategy at the core, in addition to fostering discussions centered on safety, equity and dignity for frontline workers – a group often most concerned about AI implications and job stability. Part of the conversation may also involve the recruitment of a Chief AI Officer. This executive would shape the technology side of things, while strategically partnering with the CHRO on culture efforts, and creating several organizational efficiencies. The real challenge, however, is how to build organizational competence in data and AI, rather than appointing a C-suite leader to own the transformation in isolation. The risk is repeating what we have witnessed with Chief Digital Officers, who have struggled at times with shifting the entire leadership of the company to engage in this space.
Despite the relatively limited use of AI tools in HR beyond basic recruiting and scheduling, the adoption and experimentation of tools have seen rapid growth, making it challenging for HR leaders to keep up with ongoing discussions. This has led to a sense of being undertrained in the technology, which parallels the feelings of overwhelm experienced by their employees.
A podcast hosted by HR thought leader Josh Bersin underscores the importance of being intentional about AI: What problem is it trying to solve? The efficacy of introducing an AI system is linked to its clear intention and launch strategy. Otherwise, organizations may procure and distribute AI tools only to witness minimal utilization due to a lack of understanding, time or absence of a clear purpose. When navigating the process of launching AI, traditional methods are not sufficient. We cannot just launch and “sit back.” Instead, C-suite leaders need to consider a dynamic approach that includes constant feedback from users.
Beyond HR: How a Talent Management Tool Improved Business Efficiency
While many HR leaders might sense that they are behind the curve of adoption, companies are in their early days of exploring build-versus-buy scenarios with only a handful of vendors ready for implementation. One example that stands out: Standard Chartered Bank has implemented Gloat's Talent Marketplace, a platform that highlights employee skills beyond traditional roles, enabling them to deploy their talents in other projects or engage in tailored development opportunities. According to the Standard Chartered case study, the bank gained 10,000 productivity hours across the company and achieved high employee satisfaction survey results focused on career and development opportunities. The implications of these productivity gains and the way employees work stretch far beyond the traditional realms of HR and require close dialogue with the C-suite and the board because it impacts the entire business. It requires strategic conversations on organizational design, talent strategies and commercial decisions—preferably at the C-suite table.
However, many HR leaders still aren’t fully integrated with their organization’s AI task force and this needs to change. While the need for upfront change management and upskilling has emerged during our conversations with HR leaders on the topic of AI, these critical first steps might face deprioritization from other C-Suite peers who are rushing to demonstrate speed over excellence. Microsoft’s Digital AI Leader, Rajamma Krishnamurthy, highlights the benefit seen from carefully mapping how to build, learn and use AI by employee role, which is an exercise HR leaders can help facilitate.
Our Take
It is important for leaders to remember that AI can only help companies think and operate faster. A symbiosis exists between employees and AI tools; they need each other to work well, both requiring the right input, training and careful thought. Including HR leaders in these discussions will be critical to generating value and advancing business goals.
3) Considering the Employee Implications of AI Adoption
Amid the ongoing surge of AI technologies, corporate leaders are grappling with a fundamental question: Should we welcome these advancements with excitement or apprehension? The prevailing sentiment leans toward an exciting time filled with potential. Yet, these tools demand careful planning and oversight as highlighted earlier.
HR leaders must approach AI adoption and the associated productivity gains with an eye toward its implications on employees. Rather than bowing to pressure from shareholders for short-term cost cutting as a result of productivity gains, continued growth could ensue. New jobs could be created, employees could be upskilled further, and employee satisfaction could strengthen.
Workforce reskilling and upskilling take center stage in this transformative era. HR leaders must proactively identify which roles might become automated and strategize comprehensive reskilling programs. Such initiatives can empower employees to transition into higher-value positions, where their creative and cognitive skills thrive. Performance management also evolves, becoming a dynamic process where AI-generated insights aid in setting objectives, tracking progress, and offering personalized development paths. Embracing continuous learning will not only bolster job security but also encourage a culture of innovation, where employees feel motivated to engage with AI systems as tools to amplify their expertise.
Moreover, as AI systems take over routine tasks, the attention can shift toward fostering creativity, collaboration, and emotional intelligence among employees. These inherently human qualities cannot be replicated by machines. Companies that recognize this shift and harness the potential of a hybrid AI-human workforce are poised to excel in the new era.
Decision-making undergoes a metamorphosis as well. AI’s data-driven insights can guide leaders, enabling more informed choices. Yet, the human touch remains irreplaceable, especially in ethical dilemmas. Here, AI ethical guidelines gain significance. Companies must establish transparent frameworks that govern AI use, ensuring that technology aligns with ethical values and respects privacy and fairness. Flexible work arrangements are redefined in the AI age. Telecommuting becomes seamlessly integrated with AI-augmented workflows, offering employees newfound autonomy and work-life balance. Redesigned employee training reflects the urgency of digital literacy. Nurturing skills like data interpretation, critical thinking, and emotional intelligence pave the way for a resilient workforce. It is important to note here the AI EU Act, which lists recruitment as “high risk” and thus some of the aforementioned AI applications in this sector are expected to become highly regulated.
Our Take
High-caliber leadership has never been more important to navigate these complexities. The core drivers of leadership potential remain critical as a gauge for future success, including curiosity, insight, engagement and determination. As AI presents several challenges related to employee wellbeing, it also offers an incredible opportunity to reimagine the workforce and amplify human potential.
Looking Ahead: Paving the Way for a Resilient Workforce
Human Resources leaders have an unparalleled opportunity in front of them. As AI revolutionizes the corporate landscape, they can promote a transformation from within without losing sight of the human component. Not only is the function uniquely positioned to champion the organizational culture and employee wellbeing through this journey, but by having a strong voice in the process, they are critical levers for ensuring businesses from across all industries pave the way for a more resilient workforce while they help companies grow.
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