Generative AI – how can it help HR operations?

As employers continue to deal with ongoing challenges around staffing, human resource (HR) departments are increasingly challenged by the tension between the need to adapt and innovate versus the need to control costs.

The current economic climate remains characterized by instability and unpredictability, so organizations need to prepare for the uncertain future of work over the coming year, says the annual HR Trends Report 2024, from HR research and advisory firm McLean & Company. The report suggests that the rise of generative artificial intelligence (AI) will likely bring even more change to the workplace, but it can also be used to adapt to and prepare for change.

“HR leaders will be helping companies with digital transformation and organizational behaviours that will affect the adoption and good use of technology,” says Lisa Highfield, principal director, HR technology and artificial intelligence, with McLean & Company. She says that addressing technology challenges only from an IT or business perspective can fall flat. “We really need to start thinking about this more holistically in terms of the impacts to the organization and the people as we start to move through these changes.”

Leaders come together to align strategies with vision

Firms need to look for return on investment and if it is actually feasible for them to use AI tools, she says. Different organizational leaders will have a different idea of what AI can do or can’t do for their organization. “I see a lot of the value in all strategic leaders – including HR – coming together around the strategy and vision of the organization and work to align the technological strategy around that.” As technological innovation experiences exponential growth in 2024, HR’s role in supporting change and enabling innovation will be increasingly important to organizational success.

Highfield believes new technologies such as AI will be very beneficial to create efficiencies and automation for HR functions and operations. “It will also enable us to do better with data, insights, and decision-making.

The report says that 65 percent of HR leaders are already making better use of technology, and those that are making better use are 1.3 times more likely to be high performing at changing quickly at scale to capitalize on new opportunities. Sixty-three percent of HR leaders are leveraging data for talent decisions, and this demonstrates that HR is seeking to deliver on its priorities through a data-driven approach, enabled by technology. However, the report shows HR remains slow to adopt newer technologies such as generative AI, with just 28 percent of HR organizations taking steps to implement generative AI in 2024. 

Technology key part of employee experience

“In our research around the HR trends, one of the areas that we looked at was the employee experience and we see a close tie in technology being part of that employee experience story,” says Highfield.

Employees’ expectations of a great employee experience has grown in recent years, and providing a great employee experience has been a top-two organizational priority since 2022. Whether organizations have delivered on this expectation is a different story. The report says a more systematic and intentional approach is needed for organizations to improve employees’ perceptions of their cumulative lived experiences with the organization. A positive employee experience is directly linked to multiple success measures, including overall organizational performance.

Technology is one of five crucial areas (along with physical space, social and relationships, culture, and task) for improving the employee experience, as accessible and reliable technology is central in ensuring a smooth day-to-day employee experience. Technology is also vital in improving HR functions and operations.

As for generative AI, since ChatGPT launched in late 2022, the HR world has been buzzing with the potential of the technology. Despite this potential, HR has been slow to assess the new technology, citing a lack of time to assess the possibilities as the number one reason they are waiting.

The report says that in 2024, as technology vendors embed new generative AI products into software already used by HR, like human capital management (HCM) platforms, it will make it easier and faster for organizations to assess and embrace the possible use cases.

Unfortunately, the risks of AI remain a concern for many HR professionals, with 32 percent citing risk as a reason for not implementing the technology.

Potential for all areas of business

“There’s a lot to explore around AI,” says Highfield. “There really isn't any one area where I don't see AI or technology having opportunities to help us and make things more efficient and automated.”

Importantly, “it’s not a one-size-fits-all approach and, oftentimes, a lot of foundational work will have to be done around HR technology enablement. Organizations will have to do a current state application portfolio assessment in terms of what HR tools they have available including data that that resides in the system and then take a fresh approach to building an HR technology portfolio that will work for the organization in the future.

“Along the AI maturity curve, organizations typically start with exploration. They can look at all of the functional HR areas and find where they can get the most return on investment and then they could initiate some pilot programs around AI.”

Providers can help organizations with assessment, education, installation, and utilization of new technologies. They can look at the opportunities within the organization, prioritize what is most feasible and where it could potentially get the most value, and develop a roadmap.

Leaders will “need to be prepared to seize opportunity and mitigate risk at the same time. They don’t want to shy away from these opportunities. They will want to be prepared for them and they will also want to do their due diligence. It’s likely going to be a reiterative process because it’s a changing environment.”

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