HR leaders optimistic about A.I. impact, CEOs skeptical.

HR leaders optimistic about A.I. impact, CEOs skeptical.

For the third installment of ANBLE @ Work, my colleagues and I explored the potential of artificial intelligence (A.I.) in revolutionizing the HR function. We discussed how A.I. can enhance various HR processes, from hiring to performance review management, enabling HR teams to make faster and more informed decisions. While most Chief Human Resources Officers (CHROs) see A.I. as a valuable tool, CEOs are not convinced that it is a worthwhile financial investment.

According to The Conference Board CHRO Confidence Index for the second quarter of 2023, 65% of CHROs expect A.I. to have a positive impact on their function within the next two years. However, the organization’s C-Suite Outlook 2023, published in May, revealed that CEOs prioritize enterprise-wide digital transformation over improving HR teams’ data analytics skills or investing in A.I. for HR. This discrepancy poses a challenge for CHROs looking to introduce A.I. technology. The CEOs need to fully understand the value of A.I. and its return on investment.

Rebecca Ray, the Executive Vice President of Human Capital, and Solange Charas, a Distinguished Principal Research Fellow of Human Capital at The Conference Board, explained, “CEOs must have a clear understanding of the technology’s value and be able to demonstrate the payback for the incremental cost.” Therefore, CHROs must make a compelling business case for the use of A.I. in the HR function.

One significant area where A.I. can create cost savings is payroll. According to a 2017 analysis from Deloitte, payroll represents up to 60% of spending for ANBLE 500 companies. A.I. can streamline payroll processes and reduce labor costs, making it a compelling use case for CHROs. But A.I. extends beyond payroll and can be applied to various HR processes.

The authors of the report highlight that every HR process is an opportunity for generative A.I. Using A.I., HR teams can conduct quicker analyses, make faster decisions on pay transparency, and perform equity audits. A.I. can also streamline sourcing, selecting, and hiring candidates, assist in crafting behavior-based interview questions, generate individual employee development plans, performance evaluations, and monitor worker productivity.

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Furthermore, generative A.I. offers limitless opportunities for efficiency in other HR functions, including talent acquisition, total rewards, diversity, equity, and inclusion (DEI), and employee engagement. Its potential to enhance organizational processes, information, analytics, markets, and employer brand is critical for CHROs to articulate in their business case for A.I. implementation.

In the field of HR, there is a growing recognition of the importance of etiquette as employees return to the office. According to a survey by ResumeBuilder, 45% of companies are offering etiquette classes to their workers, with an additional 18% planning to do the same by the end of the year. These classes aim to educate participants on polite conversation, proper dress code adherence, and crafting professional emails.

Now, let’s take a look at some of the most important HR headlines from around the table:

• For entrepreneurs and self-employed individuals, A.I. offers a cost-effective solution and additional support.
• The rise of “momaging” sees millennial managers, especially female ones, serving as emotional support for their employees.
• U.S. employees with fair or poor mental health have nearly 12 unplanned absences per year, resulting in over $47 billion in lost productivity.
• Hiring ex-convicts may be less of a liability than employers assume.

Lastly, let’s dive into the watercooler news, featuring some compelling insights:

• Employers are struggling to train employees on generative A.I., as the technology evolves rapidly.
• Actors on ongoing strike share their surprisingly low residual checks, highlighting the challenges faced by the entertainment industry.
• A.I. chatbots, such as ChatGPT, can be manipulated to use racist language or engage in other nefarious activities, exposing potential HR nightmares.
• Yellow Corp., a trucking company, is facing bankruptcy, leaving many employees unemployed and putting thousands of jobs at risk.

In conclusion, A.I. holds immense potential for transforming the HR function, bringing efficiency, cost savings, and improved decision-making. CHROs must make a compelling business case to convince CEOs of the value and return on investment of A.I. technology. By showcasing its positive impacts on various HR processes and highlighting the opportunities for efficiency, CHROs can pave the way for A.I.-enabled HR transformation in organizations.