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Human Resources
Winning in the AI era: HR in the driving seat Â
No one expects CHROs to become technical experts, but with a firm grasp of the fundamentals they can help shape an intelligent approach to AI adoption.
The sheer speed and scale of change that AI is unleashing, and the rapid evolution of the technology itself, mean that senior executives must explore its potential with urgency or risk being left in the dust. CHROs must be a big part of this imperative.
At their core, the challenges involved in integrating AI are less about technology than about people and organizations. As with any form of change, the way the workforce adapts to new tools and ways of working will be key to success.
To make that contribution effectively, HR needs to grasp the essential truths about AI. Like other members of the C-suite, many CHROs have yet to cut through the hype around AI and anticipate the implications for their businesses and employees.
The focus turns to learning
Consider the differences between the two categories of AI, and the implications for HR quickly become clear.
For starters, traditional AI required organizations to hire people with new, specialized skills. But with GenAI, the main imperative is upskilling and reskilling the existing workforce to use AI to deliver business benefits.
At a global level, the World Economic Forum (WEF) suggests that AI will significantly affect more than 1bn jobs. This will be a major challenge for policymakers but, for CHROs, the immediate challenge is deciding on the key elements of AI training, which will involve reskilling on an unprecedented scale.
Of course, the aim is not to make all employees AI experts. The priority will be to improve how they interact effectively with the technology (e.g., prompting) so they can better instruct GenAI to optimize results and drive business performance. And one size does not fit all. Some employees will need to focus on day-to-day operations, while others will use AI as a creative tool to support product development and innovation.
This doesn’t mean that the HR function should abandon tried and tested development strategies. Training should include a significant experiential component, allowing employees to adapt AI capabilities to their individual learning styles and roles. HR should support workers in finding time to experiment with AI more broadly, share best practices with colleagues, and keep up with relevant AI developments.
Raising the floor, not the ceiling
Another key insight for CHROs to consider relates to AI’s impact on employee performance. Early studies and experimentations suggest that AI’s biggest impact will be on the performance of less experienced or lower-performing employees.
For example, a BCG study among 750 employees found AI improved productivity by 30-40% for new hires, compared with just 20-30% for experienced consultants. This pattern is likely to be widespread. Assuming organizations train AI on best practices, the most effective personnel, who will already be using these practices, will have less to gain from AI than their lower-performing and less knowledgeable colleagues. AI may not benefit all employees equally, then, but it will raise overall standards and narrow the performance gap. For HR, this should be an area of focus.
AI will augment, rather than eliminate, roles
The human capital focus should be on how businesses can re-engineer roles to augment the capabilities of their workforces as AI adoption becomes prevalent. The media-fueled focus on AI taking over entire jobs and replacing human workers leading to mass unemployment, is neither grounded nor useful.
The mindset of HR leaders when it comes to AI should be more on augmenting employee capabilities than a headcount reduction exercise. Of course, some jobs will be lost, and others will be created but the mindset should be on augmentation, allowing human workers to spend more time on the strategic, high-value-added – and, therefore, more fulfilling – elements of their roles.
AI will not replace human effort in the foreseeable future. Rather, human-AI collaboration, with each taking on the tasks most appropriate to their capabilities, will redefine the future of work towards a new division of labor between humans and machines.
HR leaders need to be sensitive to employee perception of AI impact as it will not be uniform across job functions or generations. Communication and messaging matter. Lead with an augmentation mindset.
Companies that fail to plan for successful adoption and consequently implement AI in a chaotic, uncoordinated way, will find business benefits harder to extract.
Guardian of the workforce
As CHROs contemplate the widespread adoption of AI in their organizations, they should play a key role in managing the impact on the workforce. Many principles of good people management, employee development, and change management still apply. It’s not about HR leaders becoming AI experts, but about the need to understand the specificities of AI adoption in organizations.
As well as championing the people and business benefits of AI, CHROs need to be aware of the implications of applying AI at scale in their organizations and be conscious of the ethical risks and dangers that employees will need to manage, such as the possibility of AI hallucinations. Alongside their C-suite colleagues, CHROs need to manage the implementation of AI with care to ensure that the workforce and the business remain protected as they reap the benefits.
There will be winners and losers. Some organizations will embrace AI and the workforce implications faster and better than others. Companies that fail to plan for successful adoption and consequently implement AI in a chaotic, uncoordinated way, will find business benefits harder to extract. Those who pursue an intelligent, strategic approach to managing change, reskilling their workforces, and mitigating AI risks, will be the biggest winners in the AI transition. Given the impact on people, CHROs should be in a leading role to shape that future.
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