How effective is HR today? What needs to change or improve?

The article "Why We Hate HR" from Fast Company by Keith H. Hammonds offers a critical view of Human Resources (HR) departments in companies. It argues that HR often fails to fulfill its potential as a strategic partner in business, focusing instead on administrative tasks and lacking business acumen. Hammonds points out that many HR professionals don't have the educational background or the strategic thinking needed for their role. He also criticises HR for being more concerned with efficiency and standardisation than with adding real value to the business, often at the expense of employee satisfaction and development. The article suggests that HR's focus on compliance and risk management can lead to a lack of innovation and creativity in handling workforce issues. For more details, you can read the full article on Fast Company's website.

Here are the cold, hard facts by SHRM: Companies exist to make money, and employees gets hired to help profitability in one of three ways:

1. Making more money.
2. Saving money, which is pretty much the same as making money.
3. Increasing productivity, which creates more time to make more money.

Imagine for a moment that you and I owned a company together. As business partners talking about adding more employees, every penny we add to payroll is money we take out of our own pockets.

Consequently, for every position added to the payroll, we must answer the question "How does this job help our company make a profit?" If we can't clearly answer that question, you and I would be giving away our hard-earned money for no good reason.

In truth, HR does not exist to help employees, although much of what we do and how we do it achieves that goal.

The main job of HR, from the C-suite point of view, is to protect the company by delivering competent employment candidates on a timely basis, supporting effective and legal recruitment and selection procedures, and keeping the company's behaviour on the right side of the law at all times and in all matters.

The good news is that 89% of CEOs say HR should have a central role in the business, according to new data from Accenture. The bad news is only 45% of CEOs say they are creating the conditions for HR to lead business growth successfully. Clearly there is a lot of room for improvement in 2024.

Of the CEOs who responded to our survey, 80% reported effective integration of AI into their recruitment process, whereas only 45% of HR leaders (Head of HR, Head of Talent, Head of Recruitment, etc) said they had.

In response, our contributing subject matter expert, Christine Morton, Principal Consultant at Proxima, reflected that CEOs might be viewing AI through a different lens than just talent acquisition. With the ability to use AI throughout the employee lifecycle, CEOs will likely see it making a positive impact in many areas. She also highlights that HR and TA teams are not software professionals and not inherently equipped to navigate the increasing amounts of technology within their talent processes. They are rightly more cautious about adopting something new and must kick the tyres of all tech they are considering to ensure alignment with business needs, especially from a bias and candidate perspective.

Using Talent Intelligence for strategic workforce planning

A resounding 90% of CEOs reported they used talent intelligence for strategic workforce planning, while a comparatively lower 58% of HR leaders reported the same.

Alison Ettridge, CEO of Stratigens, suspects this disparity comes from HR's overall involvement in the conversation about business strategy. A CEO will leverage insights and data to inform their strategic decisions, but if HR is not regularly involved in those decisions, they will answer the question differently.

Toby Culshaw, Head of Talent Intelligence at Amazon, suggests some mixed messaging is reaching the C-Suite too, and it comes down to the definition of talent intelligence. Often, the term is used to describe internal talent management or talent acquisition analytics. However, true talent intelligence practitioners would take this data and overlay it with external labour market data to comprehensively inform strategic workforce planning. While internal data can offer some forecasting and valuable insights, the absence of external market data makes it hard to understand your data in the broader context of the talent landscape. This is the granular level of intel wanted by execs and what HR leaders need to be able to provide by Instant Impact.

Expectations of HR have not only grown from an employee side but also from the C-suite. While 69% of executives recognise that their HR department will only get more important in the future, half say their HR team isn’t very involved in business strategy and 53% say they don’t get enough input and advice from HR.

HR teams don’t feel valued and it’s causing attrition problems

Nearly 40% of HR managers say that they are mainly a reactive function, tackling issues as they arise, while 57% say HR is only important when in crisis. Two thirds of HR managers felt valued more during the peak of the pandemic than today, while 60% say their strategic influence has reduced since then.

This shift has far-reaching implications on satisfaction and retention: 50% of HR managers don’t feel HR’s input is valued in their organisation and 70% wish it had a bigger influence. The result is frustration and predicted attrition – 40% of HR managers are planning to leave their job in the next 6-12 months, Personio.

Having the right data on hand is key here – almost 75% of C-suite leaders say it’s important for HR to deliver metrics, with 71% saying they would like HR to deliver metrics that show contribution to commercial goals.

With work models shifting and employers searching desperately for the skills they need, many are struggling to keep up the right levels of productivity. “What is key is solving this productivity and human performance challenge… by orchestrating a human-machine collaboration [via AI] and augmentation of work strategically to free up employee time,” says Lily Milash, Senior Manager Consulting at Deloitte ServiceNow.

She adds that this will involve looking at where AI can help provide insights through many functions, by automating requests and workflows and reducing the number of tasks.

AI is already here, and companies need to get on board.That's the view of Eightfold's CEO, plus HR leaders from Ubisoft, NTT, Coca-Cola and Vodafone.

Why not conduct a HR AI Impact Assessment in 2024, and lead on strategic technology needs

Conducting an HR AI Impact Assessment in 2024 is crucial for several reasons:

• Adapting to Technological Advancements: AI is rapidly evolving, impacting various HR functions like recruitment, training, and employee engagement. An impact assessment helps in understanding how these advancements can be best integrated into your HR practices.
• Improving Recruitment Processes: AI can significantly enhance recruitment efficiency by automating screening processes, analysing resumes, and even conducting initial interviews. An impact assessment identifies the most effective AI tools for your organisation’s unique recruitment needs.
• Enhanced Employee Experience: AI can personalise employee experiences, from onboarding to career development. Assessing its impact allows you to tailor these experiences to individual employee needs, boosting satisfaction and retention.
• Data-Driven Decision Making: AI tools provide insights into workforce analytics, such as performance, productivity, and engagement levels. An impact assessment helps in understanding how to use this data to make informed HR decisions.
• Legal and Ethical Compliance: As AI becomes more prevalent in HR, legal and ethical considerations, especially around data privacy and bias, become critical. An impact assessment helps ensure that your AI tools comply with these evolving regulations.
• Cost Efficiency: By automating routine tasks, AI can reduce operational costs. An impact assessment helps quantify these savings and identify areas where AI can bring the most financial benefits.
• Talent Management and Development: AI can assist in identifying skills gaps and predicting future training needs. An assessment helps in strategising how AI can support continuous learning and career development.
• Workforce Planning: AI's predictive analytics can be pivotal in strategic workforce planning, helping predict future staffing needs and guide recruitment strategies.
• Cultural Alignment: It's essential to ensure that AI tools align with your company culture and values. An impact assessment can help in selecting and implementing AI solutions that reinforce your organizational culture.
• Staying Competitive: As more companies adopt AI in HR, staying competitive means understanding and leveraging AI's potential in enhancing HR functions.

Doing a HR AI Impact Assessment in 2024 is a strategic move to ensure that AI integration is effective, aligned with company goals, legally compliant, and beneficial in enhancing overall HR processes and employee experiences, present this to your CEO and the Board. Leaving no legislative gaps.

Transform Your HR AI Impact Assessment in 2024 with AI Capability Ltd

In the rapidly evolving landscape of artificial intelligence, staying ahead isn’t just an option; it’s a necessity. This is where AI Capability Ltd steps in to elevate your AI Impact Assessment, ensuring you not only meet but exceed your CEO's expectations in 2024.

Why Choose AI Capability Ltd?

• Cutting-Edge Data Analysis: Our advanced AI algorithms dive deep into your data, uncovering crucial insights and trends. We transform complex data into strategic knowledge, enabling you to make data-driven decisions with confidence.
• Predictive Analytics at Its Best: Imagine being able to forecast industry trends and organisational needs with precision. Our AI tools specialise in predictive analytics, offering you a glimpse into the future, so you’re always one step ahead.
• Tailored Reporting: Every CEO is different, and so is our approach. We customise reports to resonate with your CEO's unique preferences and interests, making your assessment not just informative but also engaging.
• Dynamic Visualisations: With our state-of-the-art visualisation capabilities, we turn numbers into narratives. Our interactive charts and graphs will bring your data to life, making complex information easily digestible for any audience.
• Scenario Analysis: Navigate through "what-if" situations with ease. Our AI-powered scenario analysis helps you assess potential risks and opportunities, preparing you for any business challenge.
• Real-Time Insights: The business world waits for no one. Our real-time data processing ensures that your assessment is always up-to-date, relevant, and actionable.
• Competitive Benchmarking: Know where you stand in your industry with our comprehensive benchmarking tools. We provide a clear, comparative analysis to highlight your strengths and pinpoint areas for improvement.
• Efficiency and Accuracy: Time is precious. Our AI solutions rapidly analyse data with a level of accuracy that manual processing can’t match, saving you time while enhancing quality.
• Personalisation at Its Core: We understand the power of a personalised approach. Our AI analyses past successful strategies and tailors your presentation to match your CEO's style.
• Engaging Interactivity: Keep your CEO engaged with interactive elements, such as real-time Q&A powered by AI, making your presentation not just informative but also a memorable experience.

Let’s Make an Impact Together

Your HR AI Impact Assessment is more than just a report; it’s a roadmap to your organisation’s future. Partner with AI Capability and turn your 2024 HR AI Impact Assessment into a powerful tool for strategic decision-making and organisational growth enabling board members to see tangible progress.

Ready to impress your CEO and lead the way in HR AI-driven success? Contact us today to schedule a consultation. Book a meeting.

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