AI IN HR - Where are we now and what should we be thinking about for 2024?

JON - From the results, 34% of respondents believe the impact of AI and HR is overhyped. Do you think that's remarkable?

DAVID - I think people take a very balanced view. When you look at the stats around AI on how much people believe it's overhyped, you get a very even split between the third that say it's not hype, and then there is the third who say it might be  overhyped - who I’d call the sceptical realists - and then you've got the final third who say, yeah it’s definitely overhyped; those people who are used to seeing HR chase shiny toys that don’t really deliver.

So overall, there is a healthy level of scepticism, but also a willing suspension of disbelief, based on the fact that ‘I'm seeing AI bubble up in lots of other places, and it's having effect on normal people's everyday lives’.

AI has so much promise to be a transformative addition to the role of HR. But most HR Teams are still trying to work things out, both in terms of their short-term application and the longer term implications. It early days, and AI tools are emerging in very specific parts of the employee life cycle, supporting managers, HR teams and individuals at a great pace.  So, not watching this space carefully is not an option.

JON - It's difficult to tell, but certainly in future only 8% of HR leaders don't plan to use AI more. So does that mean HR understands how transformative it could be?

DAVID - We had Microsoft launch their CoPilot in November this year, and the stats that come back around people's willingness to want to use AI to support their work are a good indicator of what’s happening. It's really quite interesting on the levels of advocacy, though. People say they don't want to be without it in the majority of spaces; and the wider view of how ChatGPT, how Generative AI, how algorithms are impacting other parts of their lives…it gives you a taste of what's coming into the workspace.

When we talk to HR professionals about how much they're already experiencing the impact of AI on their HR function, probably about half say they're getting a moderate amount of impact. But it's only 7% who say they've got a great deal of impact. So, it is early days for AI in HR. 

I think it will be something that we'll see more of in 2024. I think we'll look at 2024 as being a breakthrough, because most of the functionality, that really has an impact is growing from the roots up within some very niche providers, some very niche experiences and also within some very specific parts of the employee lifecycle.

And we're seeing some nice things from providers. For example, take AI generation of offer letters for candidates. When we want to make them a personalised offer letter, if AI saves 20 min, then just by repeating that small gain it soon grows into something huge.

So maybe it’s not going to be a huge immediate step change, but a steady adoption of marginal gains that over the next five years make a truly significant cumulative difference.

JON - One area that isn’t so prevalent - but this will change hopefully - is around bias and equity. It seems a bit of an untouched opportunity for HR in its adoption of AI. Do you see this changing? It doesn't seem very high up in the list of how it's being adopted.

 DAVID - Currently, most buyers aren’t doing enough to monitor AI for bias, or whether they are breaching regulations. Our own research shows that only 23% have implemented ethical guidelines on the use of AI in HR.

So HR has still got to do some work.

Longer term, I am hopeful about the role of AI to be a tool to counter bias and promote equity, inclusion and belonging - especially as we start see the fragmentation of work in the future workplace where the work we do is tied to roles and responsibilities, and more to our expertise and capabilities. That enablement provides us with an opportunity to be more proactively inclusive. AI can have a role to help us understand our people better, beyond limiting beliefs, and match people with the right capabilities to the right work. Historically, we haven't always been as proactive as we could in harnessing the talents of our people, and AI can be a proactive enabler of that.

JON - You mentioned governance. This is a less flashy but incredibly important and necessary part of this process. Guidelines, regulations, guardrails. If HR wants to move forward with adoption of AI, more than that quarter of HR teams need to implement guidelines for AI-powered HR systems.

DAVID - It's something that more organisations need to be proactive about. The challenge is that many organisations are quite resource-poor in terms of the depth of teams that they have, so to some extent they are relying on their provider to provide them with some indemnity, to say that AI is transparent, it's auditable, it's validated, it's approved by particular regulators. So actually, that level of due diligence does take a lot of effort.

To some extent, I think that means that we are going to see a pull-through of the leaders who have got the time and the money to invest in starting to define some of those guidelines, almost being the trailblazers; and then others can follow through on their coat tails, once particular processes or approaches have come through scrutiny. That's the risk of being an early adopter. But I think it's really positive.

And it is something that we need to encourage and get people to think about.

How do corporates train up their HR team around the ethics of using AI, their understanding from their IT team about the algorithms that they use, but also put providers under the spotlight to say, ‘what is your validation approach? And how are you going to make sure that you’re liable for this system, rather than me and my organisation - if something goes wrong? What indemnity are you offering as my provider?  And what compensation will you provide if your systems create brand damage to my company?’

Some of these are ‘wicked problems’ and finding a simple answer might not be possible, but they are questions we do need to ask.

What to do next?

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HR Realities Research | Fosway Group

More insights will be being shared over the coming weeks...