Human Resources' Big Bet on AI has Arrived

By Gary Russo, PhD, Director HR Workforce Intelligence, Providence St. Joseph Health

Gary Russo, PhD, Director HR Workforce Intelligence, Providence St. Joseph Health

As of 2020, half of the global workforce is made up of millennials; this number is expected to balloon to 75% by 2025. Even though the total adult population is increasing there is not enough labor to go around. In the United States, job openings have outnumbered job seekers for two years. The gap is continuing to widen, potentially to a global deficit of 85 million workers by 2030. Companies not only must find ways to maximize value generated by each employee but also must create a strong value proposition for employees. That value proposition is transforming as well: workers are expecting moral and social alignment with brands, schedule flexibility, and effective tools. Many potential candidates have demonstrated a willingness to leave traditional workspaces entirely, instead opting to join the rising tide of the gig economy. Human Resources (HR) is turning to an unexpected ally, artificial intelligence (AI), to compete on the front lines of the war for talent.

AI is entering the corporate mainstream both behind the scenes (e.g. algorithms supporting predictive analytics) and in plain view (e.g. chat robots/bots that directly engage with customers or employees). The International Data Corporation estimates that about 29% of companies have already invested in dedicated AI systems, a number expected to double by 2022. Automated customer service is one of the most common use cases, and HR is part of the bandwagon. This is especially apparent in high-volume segments of HR like recruitment and service centers. Nearly 50% of organizations may already be using some form of AI in the recruitment cycle. This is expected to increase above 75% within a few years, in part because large software vendors are actively adding AI features to their core products. AI performs the best at highly structured or rules-based tasks, making several traditional HR functions prime targets for success.

The first impression an applicant forms about a company may be through its chat robot. One of the top business challenges is finding qualified, experienced candidates. Simultaneously, most companies believe that their own recruitment process is inadequate. Rather than increase the number of sourcers or recruiters, HR is beginning to leverage AI to reduce administrative workload and to improve candidate engagement. Chat bots are able to interact with applicants at any hour to assist with simple questions or provide general information without adding volume to a call center. Other time-intensive but methodical steps of the recruitment process are getting a robotic assistant as well, such as candidate sourcing and interview scheduling. Automated recruitment platforms already boast a 30%-50% reduction in screening time as a result of these process efficiencies. As a result, applicants have an efficient and positive experience with the brand while recruiters/managers regain time to spend on interviewing and final candidate selection. Candidates will become more expectant of the faster workflows as more organizations adopt these tools, further pressuring late-adopter companies to participate or risk missing out. Market leaders will be differentiated by the quality of the chat bot experience rather than by the mere presence of one.

Current employees are also being introduced to company chat bots and new automated workflows as another bid to seamlessly integrate HR into the flow of work. The mountain of transactional HR work that fuels the business has been a continuous pain point. Self-service HR (like empowering employees to edit their own mailing address) has been a popular strategy used to redistribute work and avoid unnecessary bureaucracy. However, moving work around is not a sustainable strategy during a talent shortage. HR is now looking to give employees an AI virtual assistant to remove some work entirely. The company chat bot is becoming a 24/7 call center representative: navigating forms, providing answers, or even changing basic information upon request. AI tools are popping up in scheduling and payroll as well; automatic time off approvals, shift balancing, and timecard corrections are being handled behind the scenes. Extending past transactions, expect to see AI playing a pivotal role in predictive and proactive applications of HR and workforce analytics like workforce planning.

HR is inviting AI into its foundational workflows to give businesses the competitive edge needed to be an attractive employer. Behind-the-scenes work has already begun, even if a robot has not yet introduced itself. The ongoing adoption of modern, cloud-based enterprise resource planning platforms is bringing a level of data and process cohesion never before achievable using previous suites of tools. Increasing visibility to the value of, and potential risk, of people data is providing clarity to the importance of data cleanup and standardization. These are all bricks in the road toward an accurate and valuable suite of next-generation AI tools that will be interlaced throughout the business. Success will tackle the ongoing talent gap in two major ways: by ensuring ongoing success at bringing on new employees and by maximizing the value of time spent by employees. At the end, we may find that technology has allowed us to focus on being more human.

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