HR Is Already Behind in the AI Revolution. Here’s How to Take the Lead

BY the Editors | November 16, 2023

Most HR leaders didn’t go into their field because of their love of technology. Their affinity is more about seeing people reach their potential in the workplace. Yet now comes a transformative revolution in which they’d be best advised to embrace both. And do it soon. 

It was only a year ago, when OpenAI launched ChatGPT 3.5, that generative AI burst into the public consciousness. Within two months of its release, it had 100 million users, ranking it as the fastest-growing consumer software application in history. Tapping its uncanny cognitive capabilities, people began using it to compose songs, draft emails, plan parties, write software, and conduct myriad experiments. 

Yet in the HR world, most professionals have taken a guarded approach, one that could prove detrimental to their businesses given the speed and potential of AI’s transformative impact, according to a global study that surveyed 1,522 professionals in HR and related fields across 62 countries. Conducted by the Institute for Corporate Productivity (i4cp), the study concluded that because of “HR’s purview of workforce capabilities, skills, potentials and deficiencies, this is a strategic miss that needs to change if organizations expect to truly leverage AI,” wrote Kevin Oakes, CEO of i4cp, in his foreword to the report, titled “Is HR Already Behind in the AI Revolution?” His answer to the titular question is yes­, followed by a detailed assessment of the situation and recommendations for how HR can take a leading role. (An executive brief is available here.)

As part of the survey, i4cp interviewed HR pleaders, many of whom testified to the benefits that are already apparent for those who have embraced AI early. “As an HR professional if you’re not digging into this space, then you’re already behind. It’ll change the way we do so many things,” said Cameron Hedrick, chief learning officer at Citi. 

An executive summary of i4cp’s new report can be obtained here.

In the years since the pandemic, repeated crises have heightened the influence of HR leaders in their organizations. The arrival of generative AI is the next disruption, one in which HR profession could take a leading role at the decision table. “We’ve always said we want HR to be more strategic partners with the business,” said Dalia Kendik, head of digital HR for Thomson Reuters, the news and information giant. “There’s a lot of opportunity for generative AI to improve the employee experience and HR needs to be an advocate for the rest of the organization.”

Approaching Generative AI: Three Organizational Types

Based on its survey, i4cp identified three archetypes to describe how organizations are approaching AI, which it calls the Generative AI Maturity Model:

AI Laggards, where leaders have not communicated clear guidance on usage and have no formal usage policy.

AI Enquirers, where leaders are researching potential uses but are largely in wait-and-see mode. They’ve likely told employees to refrain from using AI until there’s more evidence of how other organizations have used it.

AI Innovators, whose leaders have communicated their support of AI usage and experimentation, and likely have put formal usage parameters in place.

To evaluate these organizations, i4cp described nine AI Innovator practices that every organization should follow if they hope to stay current with the revolution. These practices range from openly communicating about generative AI to reduce fear and uncertainty in the workforce to providing a secure environment for workers to experiment with generative AI. The survey found a striking gap in engagement between AI Innovators, who on average have put into place 77% of those nine practices (or are planning to adopt them), the AI Enquirers, who have embraced just 13%, and the AI Laggards, who are at fewer than 1% of those practices. 

The difference can be huge for organizations who take the innovative path, the study forecasts: “AI Innovators lead when implementing these practices compared to others. Their gap-creating lead can be cataclysmic for those lagging in the number of practices they are planning to implement or have implemented.”

How AI Innovators Can Create a Competitive Advantage

Organizations who wait to embrace generative AI will face a huge opportunity cost. Here’s what they’ll miss: “Organizations that are the most advanced in AI applications (the AI Innovators) are more likely to have higher market performance, increased innovation and productivity, and healthier cultures than those that are slow to adopt,” the i4cp report asserts. 

To illustrate these points, the report offers several case studies of organizations that have acted quickly to apply generative AI to their processes. Felix Martinez, senior director of talent acquisition at General Electric Appliances, describes how TA leaders at his GE division are using an internal platform similar to ChatGPT to draft individualized recruiting messages to potential candidates. “Best practice is you send 10 emails and get four responses—that’s best in class,” Martinez said. “Our ChatGPT-crafted emails are generating 70% to 90% response rates. Now we’re able to reach individuals in a more compelling way and they’re responding at a higher rate, which affects time-to-fill and quality-of-hire.” 

The mandate to be innovative comes from the top, Martinez said. “We’re very fortunate to have a CEO who is leading the way,” he said, speaking of Kevin Nolan, CEO of GE Appliance.

“He gave us a task where anyone could come up with any idea to use AI to solve for business problems. There were 300 submissions. And our CHRO is challenging us in HR—how can we use this and how can we get in front of it? If you don’t learn how it can impact you, you are going to be left behind." 

For Leaders, What You Don’t Know Can Hurt You

Besides the risk of missed opportunities, an overly cautious approach to generative AI has other dangers, some of which could strike quickly. In organizations where management have explicitly forbidden employees from using AI for work, 36% are certain their employees are doing so anyway, and another 36% say it is highly likely, according to the i4cp survey.

In such cases, companies can increased the hazard of data leakage. “Exposing company information often happens unintentionally when employees copy and paste proprietary or sensitive data, such as a source code, into publicly available models like ChatGPT,” the reported noted. AI Innovators are more likely than their laggard peers, for example, to have data security and ethics policies, as well as requiring fact-checking and citations when AI is used.

Another risk is bias in the system. “Since generative AI models are trained on content created by humans, it can perpetuate human biases at scale,” the report said. Such bias can not only undermine an organization’s commitment to diversity, equity, and inclusion (DEI), but can also run afoul of the need to comply with new regulations among, local, state, and federal governments about how organizations use AI in candidate selection, hiring, and promotion.

There’s Almost No Area of HR That AI Won’t Change

The list of tasks for which AI can be useful starts with the mundane (searching information, data cleaning) and rises to much more strategic levels. Today, HR professionals in the survey said they’re using generative AI in learning and development (58%), people analytics (57%), talent acquisition (54%), employee experience (46%), and leadership development (45%). Many AI Innovators say they plan to use it next in such areas as workforce planning, succession, labor scheduling, and performance management.

To help organizations be on the forward-looking side of the AI revolution, the report makes four recommendations: Be prepared to lead strategic discussions about the workforce implications of generative AI; proactively prepare HR with the necessary skills for the AI revolution; approach generative AI as a systems enabler, not just a personal productivity tool; and create a change-ready culture.

Already, HR leaders who have taken these steps on the journey start seeing exciting prospects down the road. At Sysco, the world’s largest foodservice distributor, the company expects to use the technology to make end-to-end HR processes more efficient, for example, by matching employees in need of specific skills with internal “gig” opportunities to help them advance. 

“Those are huge opportunities for us, and they are just some of the use cases,” said Michael Fischer, Sysco’s VP of global talent management. “You’ve got transactional work, then you’ve got really meaningful work around career development and around colleague development. We know it’s the future and we also know it’s early days. We are going to invest in this. But we want to be very thoughtful about it as we continue because it is changing so fast.” 

Editor’s note: From Day One thanks its partner, i4cp, for sponsoring this story. An executive summary of its new report can be obtained here. (Feature illustration by Quoya/iStock by Getty Images)

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