Human Resources in the AI era: Prospects and Challenges

”Artificial Intelligence has long been part of our everyday lives — both consciously and unconsciously. AI relieves us of tasks, leaving us time for the most important things.“

— Benjamin Rolff, leadership coach and founder of New Performance Academy

The future of work is being redefined. Among major global events and broader market shifts, the surge in Artificial intelligence (AI) is at the forefront of this transformation and is fast becoming a mainstay of everyday working life.

At Leapsome, we recently surveyed 2,500 professionals (1) and found that an astounding three out of four employees already use AI on a weekly basis, with nine out of ten reporting that AI has a positive impact on their productivity. In fact, recent research from the National Bureau of Economic Research suggests that AI can improve productivity in workers by as much as 35% (2).

The HR space is not immune to these developments: After explosive growth, the HR market for AI is already projected to reach USD 17.61 billion by 2027 (3), with a compound annual growth rate (CAGR) of 35%. This could lead to many benefits in the field of people ops, with 65% of Chief Human Resource Officers (CHROs) expecting AI to have a positive impact on the HR function over the next two years (4). Our recent survey supports this notion, showing that nine out of ten HR leaders already utilize AI at least once a week, with 91% attesting to its efficacy in refining people processes (1).

However, integrating AI into HR has its challenges, including privacy concerns and the need for careful handling of AI systems to prevent bias or misuse. There is increasing wariness about Artificial Intelligence becoming too powerful in HR processes, perhaps even being used to make complex hiring decisions or misused to track employees’ movements — something a majority of employees are opposed to. HR professionals need to keep this in mind as they integrate AI into their roles.

To help make sense of the complex issues AI raises in the people & culture space, we reached out to five of the industry’s most knowledgeable figures to delve deeper into this marriage of AI and HR. This article shares their expert opinion on how to weave AI into the daily tapestry of people operations, understand its impact on the employee lifecycle, and navigate potential pitfalls in the HR realm with care.

Leapsome, 2023
National Bureau of Economic Research, 2023
HR Soltuions UK, 2023
The Conference Board, 2023‍
Pew, 2023
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An expert’s guide on integrating AI into your HR processes

A significant portion (76%) of HR leaders believe that their organization will fall behind if they fail to adopt and deploy AI technologies within the coming 12 to 24 months. But it can be hard to know where to start and what aspects of HR can be positively impacted.

We spoke to Jessica Zwaan, Startup Advisor and Chief Operating Officer at Whereby, to hear her perspective:

Integrating AI into HR operations requires a blend of strategy and sensitivity. I see there being a few key focuses and best practices:

Ensure data privacy and address concerns upfront
Train HR personnel on writing more effective prompts, interpreting AI insights, and acting on the results
Use AI to help your HR team bridge the gap between tech and humans
Balance AI recommendations with the human touch and make empathetic and considerate decisions.

Ultimately, Zwaan wants HR leaders to remember that “AI augments people ops capabilities, but the ’people’ remains paramount!”‍
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Leadership coach and founder of New Performance Academy Benjamin Rolff supports this and underlines the benefits of AI in nurturing employees, stating:

For coaching and training, AI applications can optimize content and tailor it precisely to your target group. Even better, AI can curate materials addressing individual learning needs and personalized content based on employees’ strengths and development goals.
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🤖 Want to integrate AI but not sure where to start?
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The Leapsome platform has many AI-backed features to help you write better feedback, streamline performance reviews & turn survey results into action.
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We also spoke to Hebba Youseff, Founder & creator of I Hate it Here and Chief People Officer at Workweek. She shared three best practices for integrating AI into HR teams’ daily operations:

Define what AI will actually achieve and what oversight will still be needed by HR. This is crucial to understanding the success of integrating AI and what time HR will still have to spend on the task.
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Train the team on how to use AI. Not everyone is as familiar with leveraging it! Training your HR team to understand both the pros and the cons will be impactful.
Monitor performance. You can’t just “set” AI and walk away from it. You need to measure the outcomes consistently and ask the team for feedback.

Youseff concludes that, when done right, AI can be “leveraged across the entire employee lifecycle” — from recruiting to training to retention — and sums its impact up in one word: “efficiency.”

Mitigating the challenges and risks that AI poses

Although AI offers a multitude of advantages for HR professionals, it’s crucial to acknowledge that due to their relatively recent development, AI technologies introduce a distinct array of challenges that require oversight and diligence as you integrate them into your processes.

”There are pros and cons to everything, including leveraging AI! The risks we’ve all been warned of are biased results, privacy concerns, and ethical considerations. There are many more, but those are top of mind when thinking about AI and HR. Ultimately, teams need to assess if these risks are ones they are comfortable with,” says Hebba Youseff.
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This human perspective is crucial if you want to maintain the trust and buy-in of your employees. As Benjamin Rolff puts it:

Using AI properly means maintaining a balance between algorithms and human touch. AI recommendations provide new perspectives — reflecting these critically is on us. This requires regular education, clear regulations, and transparency on AI-driven decisions. Undoubtedly, AI is improving our learning experience — staying human, fostering empathy, and acting morally remain our priorities!
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Beyond the broader ethical concerns, there are operational factors to consider as AI is rolled out more widely.‍

Daniel Huerta and Stephen Huerta, Co-hosts of The Modern People Leader podcast, point out the need for clear ownership and expertise for people teams tackling AI:

Many HR folks are already stretched thin — working with smaller teams, reduced budgets, and increased responsibilities. For each process that HR teams aim to improve or make more efficient using AI, achieving the desired results typically takes three to four days of trial and error. Most HR practitioners simply don’t have the time for that setup. We think a new role will emerge within HR teams — the ‘AI expert.’ Given the enormous potential of AI to go beyond current HR practices, we believe this role will be essential. Imagine having a teammate whose sole job is to audit and optimize every process within the people team.

The evolution of the workplace is undeniable, with Artificial Intelligence standing as a pivotal force in this transformation. As AI integration becomes not just beneficial but necessary, professionals across industries face the imperative to adapt. This is not without its challenges, as our experts emphasized. Privacy, potential biases, and ethical considerations form a complex landscape that HR professionals must navigate with caution.

Key to this journey is remembering that AI is a tool designed to augment, not replace, the human aspect of Human Resources. The task ahead for HR professionals is to weave AI into their processes in a way that amplifies efficiency while steadfastly preserving the human core of their profession. This delicate balance between tech-enhanced efficiency and innate human insight will define the successful HR landscapes of the future.
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We view AI’s role in HR as an accelerator, optimizer, and improver of content created by humans. We strongly believe in the potential of AI to enhance, not replace, the human role in people management. When technology is available to accelerate, streamline, and improve our work — we should embrace it!
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— Kajetan Armansperg, Co-Founder & Co-CEO of Leapsome