HR needs to shift its mindset if organisations are to reap the benefits of artificial intelligence, according to a white paper from the Institute of Employment Studies.
The paper gathers evidence from a plethora of research on the impact of AI on HR and concludes that so far, the function has been too slow to take full advantage of advances in technology.
HR might miss the bus unless it identifies the organisational destination and the best means to get there” – Peter Reilly
According to author Peter Reilly, principal associate at the IES, HR needs to adopt a ‘service now’ climate and become more proactive in engaging with change, because this is what senior leaders expect.
The IES emphasises that many areas of HR are already benefiting from AI and machine learning, particularly administrative or transactional tasks such as data processing and payroll. Employee and manager self-service has increased, it notes, as AI deals with more simple HR queries.
However, many of the other potential advantages to be drawn from AI are yet to be realised. “The argument could be made – as it was with the HR transformation of the early part of this century, combining standardisation, automation and consolidation – that time and resources will be saved by eliminating the ‘grunge’ work, thereby releasing HR to concentrate on high value-added work,” says the report.
Getting the most from AI
“This may not have happened to the extent expected because not only has the IT revolution been piecemeal, as noted above, but there has also been managerial resistance to HR ‘devolving’ people management tasks to them and a lack of skills within the HR function to take up the strategic baton.”
Organisations should be looking at realising more sophisticated improvements through AI, such as more sophisticated analytical processing to match candidates to high performers, better analysis of pay data for reward discussions, and reducing gender bias in recruitment or performance management.
The IES also highlights the potential risks associated with adoption of AI, including the potential for it to increase rather than reduce bias in certain processes, an over-reliance on it leading us to underestimate human capabilities, and the ethical issues around automating numerous processes and making teams redundant.
It also suggests that the recently introduced GDPR legislation could “constrain analytics and limit the impact of AI on the work of the HR function”.
Another impact could be further damage to the “three-legged stool” or Ulrich model of HR, where functions are made up of shared services, centres of expertise and business partners.
HR now has a critical role in developing learning cultures, encouraging the exchange of knowledge and removing silos or hierarchies within the business, said Reilly.
“AI offers HR a great opportunity to become more efficient in discharging its basic functions, but also offers the chance to shape the organisation of the future. HR might miss the bus unless it identifies the organisational destination and the best means to get there,” he said.
The IES offers HR 12 tips to enhance the positive potential of AI for the workforce:
- Be clear on objectives. Is AI a cost reduction or value-adding exercise?
- Be driven by business needs, rather than technology
- Understand where your digital strengths and gaps lie
- Develop a data-savvy HR function (and develop those skills yourself)
- Develop good personal and professional links with the IT function
- Build an attitude of change and learning in your HR team
- Ensure systems learn from humans and vice versa
- Determine the optimal point in AI roll-out where humans should intervene
- Test systems in a variety of circumstances to ensure results are not just efficient but also fit your culture
- Think about errors in a more structured way – machines will also make errors
- Maximise transparency – ensure how AI operates is widely understood
- Look for small improvements rather than a “big bang” change.