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Why AI is the next frontier for HR?

By Mike Pino, Workforce of the Future Learning & Technology Leader, PwC Partner

Mike Pino, Workforce of the Future Learning & Technology Leader, PwC Partner

Artificial intelligence (AI) has the power to transform business which is why companies are increasingly deploying it across their organizations to improve everything from customer service, marketing and tax to supply chain management, finance, data systems and more.

There is one area where AI is still in its preliminary stages, though, and that is in Human Resources.

Only 22% of companies are currently applying analytics in HR, according to recent LinkedIn research and, when it is used, AI in HR management is mostly being applied now to do things like help automate repetitive tasks. The hesitancy is in great part because people value the human touch in HR. Our global survey of more than 12,000 workers found that 40 to 45% of employees prefer face-to-face interactions for tasks like performance reviews, getting help with difficult problems and asking questions of their HR team.

"Having more qualified candidates from the beginning shortens the hiring process, enabling managers to dedicate more time to analyzing HR data and improving strategic planning"

But half of workers also say they prefer digital interactions for many common HR tasks like searching for a new job within the company, scheduling vacation, enrolling in benefits and updating personal information. This preference indicates that digital assistance is welcome when it’s unobtrusive, seamless and enhances people’s work experience by freeing up their time to do more important and engaging tasks and there are limitless opportunities for that.

As more companies test AI in HR, they’re finding that the benefits outweigh the concerns. One PwC study finds AI will create more jobs than it destroys. And a recent 2019 Gartner report on the three most common use cases of AI in HR highlights the use of automation and intelligent agents in talent acquisition, voice of the employee research to monitor employee engagement and virtual assistants to improve employee experience.

Here are 5 other reasons you can expect to see more AI powered Human Resource management in the future.

1. HR departments need the help

When it comes to AI in HR, intelligent agents are currently being tested in everything from talent acquisition to onboarding and talent retention. The biggest area by far, though, has been in recruiting. Being able to sift through hundreds or thousands of applications per opening reduces time to hire and increases productivity for recruiters, helping to free up time for staff to focus on enhancing the candidate experience.

2. HR’s emphasis is changing

Few individuals in the C-suite are in a position to appreciate and help address the way a company works across functions, business units, and geographies like HR professionals. The emerging role of digitally transformed HR is to reinvent itself, moving from safeguarding the business by ensuring policies exist and are followed to addressing performance through developing critical skills and teaming, changing processes and policies, and fostering shared reality and purpose.

This is why some companies are changing the function’s name to Talent & Culture or People & Performance and then embracing new AI technology as part of that change.

3. HR teams have a lot of catching up to do in leveraging people analytics

For years, organizations have been collecting data to gain insights to predict future behavior but when these organizations rely on humans alone to identify and share insights about these trends, a challenge quickly emerges relating to data, or more specifically, the ability to track, analyze, manage and protect that data. AI can and will play a larger role within HR to support smart people analytics in innovative ways to attract top talent. Areas that have had some good progress to date are related to approaches that enhance the candidate experience and meet expectations. Doing this effectively and deliberately helps an organization use the employee experience as a form of branding and relationship building, distinguishing one organization from another.

4. AI can widen the talent pool under consideration

We are currently witnessing a shift from talent pools to talent streams. The ability to leverage software and AI to have more timely and reliable talent and workforce strategies is allowing business strategy to make informed decisions.

AI processes data much quicker than the average human and it can cast a wider net. This brings attention to people who employers might not have considered or who may not even be looking for work. Having more qualified candidates from the beginning shortens the hiring process, enabling managers to dedicate more time to analyzing HR data and improving strategic planning.

5. AI-powered HR can help foster a sense of belonging, advancing diversity and inclusion efforts

Organizations often have their own blind spots in building software and system development teams who oversee this sort of work. Some of the early leaders in this space are using sentiment analysis and other forms of recognizing patterns and opportunities through emotion captured in language.

Others have been experimenting with technologies related to assessing collective intelligence to identify issues related to diversity. If those teams aren’t diverse enough and their testing isn’t rigorous enough, blind spots can creep into the code – 76% of respondents saw that as possible in PwC’s 2017 CEO Pulse Survey.

Protecting against that bias is important to companies. In fact, in our 2019 AI predictions survey, 37% said developing AI systems that were trustworthy was their #1 concern. But, just 18% said cleansing data of bias was an organizational priority. A separate global survey of business and HR leaders found a staggering 72% have no ability to use analytics to de-bias hiring and rewards.

Combating algorithmic bias starts with more diversity and inclusion training and initiatives. Organizations can and should also implement clear governance practices for robust monitoring and transparency and they can extensively test their algorithms, so that any bias that slips past the development teams can be weeded out in the testing stage.

There will no doubt be challenges as AI becomes more deeply embedded in the work of HR, but, even so, there’s no question this is the direction our industry is headed. AI adoption accelerated in 2019 – 20% of organizations said they planned to implement it enterprise-wide this year. That’s because AI is not simply about metrics or data. It’s about the important practice of people analytics, helping to bring actionable insights to the business with respect to talent decisions and improving employee experience.

For those reasons, it’s no longer a question of ‘if’ your organization will embrace AI as a critical component of your human resource management – but rather ‘when’ and for what reason.

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