HR Strategy

Synergy Between Human Resources and AI: Unleashing Strategic Possibilities

AI in the HR world is moving beyond simply automating processes to supporting strategic talent management and workforce planning goals. It is an evolving human and technology partnership. - BY Sharon Ross

Human Resources (HR) increasingly uses Artificial Intelligence (AI) to automate common HR activities, including recruiting, sourcing the best candidates in a global job market, screening applications, and onboarding new hires. Automating these activities makes HR functions more efficient and competitive in a tight labor market. However, AI can do more than automate these tasks. AI-powered analytics and data can support HR’s focus on strategic activities like talent management and workforce planning. It can help with identifying patterns and trends in the labor market and predicting employee skills and retention needs. The technology can also support succession planning, predict future skills needed to remain competitive, analyze market compensation, and provide other information that supports strategic planning and decision-making.

Automating Tasks is Only the Beginning

AI is changing HR in significant ways. It helps automate many routine and time-consuming tasks, such as resume screening, scheduling, and data analysis. AI is also being used in chatbots and virtual assistants. These tools can help streamline the recruitment process by answering candidate questions and providing real-time feedback on their application status. The tools can also provide employees with on-demand support and guidance, freeing HR professionals to focus on more strategic tasks.

The use of AI in these tasks is becoming more prevalent by the day, proving its value in numerous ways. HR leaders face complex challenges. Once primarily involved in tactical duties, like job postings and applicant screening, modern HR professionals are now part of strategic organizational decision-making. This is because of the importance of their role in business sustainability. The ability of AI to automate the routine tasks of sourcing and screening job applicants and analyzing employee skills has freed HR professionals to focus on higher-level activities. This is critical in today’s business environment. After all, building and retaining a future-ready workforce to meet the organization's innovation needs is a strategic imperative.

AI Can Provide Building Blocks for Strategy Building

Oracle explains that AI, machine learning (ML), and digital assistants are not the same but are equally valuable for HR professionals. Machine learning recognizes patterns and makes predictions that inform AI. An example is a ML system that catalogs and evaluates employee behavior to determine if the person might leave for a new position. Digital assistants are interfaces built with ML algorithms that can participate in conversations. The algorithms understand natural language and the intent of the question. The technology can handle tasks like helping employees get answers to questions during onboarding or about policies and benefits.

These tools have been mainly used to automate repetitive but necessary HR tasks, freeing up time for strategic work. AI tools can access insights based on mountains of data, which supports strategic planning and decision-making. However, the machine based insights in no way replace human-driven decision-making. As Yuval Atsmon, senior partner in McKinsey’s London Office, says, AI can provide the building blocks of strategy.

AI development has six stages, with analytics being the first stage. When moving into the next two diagnostic and predictive intelligence stages, AI can support strategy by augmenting executive analysis. The word “augment” was purposefully chosen because strategic planning should not rely entirely on AI predictions. Atsmon explains, “Because strategic decisions have significant consequences, a key consideration is to use AI transparently in the sense of understanding why it is making a certain prediction and what extrapolations it is making from which information. You can then assess if you trust the prediction or not.”

Building an HR Future

The HR professional doing workforce planning for the next five years needs the support of these building blocks. AI can help get things started providing predictive analytics on future talent needs based on factors such as demographics, industry trends, and business objectives. This information can help HR professionals proactively identify skills gaps and develop targeted training programs to fill those gaps.

If an organization struggles to meet DEI goals, AI can identify biases in HR processes. The tool can then provide predictive analytics based on changes made to current policies and procedures. Will proposals make things better, or create unintended consequences? Better to model it all with AI first! AI can help to identify patterns and trends in employee performance, engagement, and retention. These can be used to develop targeted training programs and improve employee satisfaction while supporting strategic workforce planning. AI can help with workforce planning by providing predictive analytics on future talent needs based on factors such as demographics, industry trends, and business objectives. This information can help HR professionals proactively identify skills gaps and develop targeted training programs to fill those gaps. Of course, while the AI building blocks can lead to better planning and decision-making, AI is not a substitute for HR professionals' work in strategic workforce planning and talent management. It is a supplemental technology tool capable of providing critical insights that would otherwise be cumbersome to extract from massive amounts of data. By lessening the burden of making wise and strategic decision, AI can improve the candidate experience, reduce bias, improve employee satisfaction, and provide valuable insights for workforce planning.

AI is Still Evolving

Since AI is still evolving, the role of AI in HR is still evolving, too. McKinsey anticipates the next three stages of AI development, beginning with AI serving as an executive advisor for organizational value-creation based on analysis. Next, managers may delegate some decision authority to AI within constraints and human supervision. Finally, a fully autonomous AI may run some HR functions.

Whether all this comes to fruition remains to be seen. Still, HR professionals in companies with a large workforce can significantly benefit from AI, ML, and digital assistance in automating and improving employee processes. Indeed, the advantages are still emerging from AI’s ability to provide the analytical building blocks for strategic workforce planning and talent management, and the future is looking bright.

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