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How AI and automation software can make HR more strategic

As organizations have sought at new ways to drive efficiencies and secure sustainable growth, many have looked at human resources as a potential new engine for breakthrough progress. In the resulting quest to make HR more strategic and less transactional there have been some successes, but as we shall see much still needs to be done for HR to reach its true potential: particularly when it comes to data, AI and automation.

First, the successes. In a recent study, we found that HR professionals are already thinking strategically and that the function is well aligned with business priorities. For example, when asked about the top challenges they face, the HR executives we spoke to cited core business goals such as increasing productivity, keeping up with competitors and identifying and generating new business opportunities.

Importantly, the business leaders we spoke to are crying out for their HR teams to provide leadership and energy. For instance, when asked about critical enablers to achieve business goals, around two-thirds of the business executives surveyed (63 percent) identified ‘reskilling the workforce’ as particularly important. That puts workforce retooling right up there with other business and technology enablers like automation and artificial intelligence (AI) (62 percent); risk mitigation (63 percent); and use of cloud technology (64 percent).

So, business leaders are chomping at the bit for HR to play a more active role in driving the business. The door to a new and more valuable model for HR is wide open, so what’s holding things back?

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An instructor and a student work on an Apple Inc. laptop computer during a coding class at the First Code Academy in Hong Kong, China, on Friday, Nov. 13, 2015. About 2,500 students have taken courses at the First Code Academy. Photographer: Xaume Olleros/Bloomberg

There are, in fact, a number of barriers in the way of HR realizing its strategic potential, but perhaps the most important relate to automation and AI, data, and digital skills. Let’s look at each in turn.

When it comes to AI and automation, it seems that many HR professionals underappreciate the technology. In our survey, 62 percent of the business people we spoke to recognized that AI and automation will play a significant role as a business enabler – but only 44 percent of HR professionals thought the same. This is a shame, as automation and AI technologies promise to free HR teams from transactional, non-value-added activities; allowing them to focus on strategic work and further gain traction with the business.

Second is data. We all now know that data is no longer a business peripheral: it’s absolutely fundamental to securing growth and competitive differentiation. This was reflected in our research where 51 percent of business people named ‘interest in and ability to make data-driven decisions’ their top business driver. Once again HR significantly lagged this consensus, with only 28 percent of respondents recognizing the power of data insights. If HR is to transform and progress along the continuum of intelligent operations — HR processes that elevate business — then they need to consider AI and machine learning tools that use data to achieve these ends.

Finally, our research unveiled a digital skills gap that could further hold HR back from moving to the strategic center of the business. Enterprises today are in serious need of people trained in higher-level digital skills, as these skills are essential to data analytics, AI and machine learning. However, only 41 percent of HR respondents to our survey worry whether their organizations have these skills in house and only 46 percent see a need for people versed in digital business models. These findings suggest that businesses need skills that HR does not acknowledge or have the resources to address.

If HR is to achieve its transformation and become an engine for organizational growth, then I believe two key things need to happen.

First, HR teams need to refocus their skills strategies. Where tight budgets currently restrict HR teams from investing in anything other than basic training, the onus is on HR to build a business case to win investment in the higher-level skills needed to keep a business competitive.

The skills that will be required 12 months from now will be different from those needed today, and a business-relevant HR is better positioned to create a more business-relevant workforce. Second, HR needs to become more data-driven. This means looking beyond the core HR data set to build a deeper picture of individual employees and the teams they work in; finding ways to analyze data in new ways to understand exactly the value people bring to their roles and how this value can be enhanced.

Business stakeholders are looking for the kinds of capabilities owned by HR. At the same time, HR can do so much more by becoming more data-driven, embracing AI and automation, and thinking more like business leaders. The result will be a more strategic HR function and, ultimately, a better performing business.

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