Whereas HR professionals used to see AI as novel and a bit unnerving, the technology is now commonplace in the HR landscape and starting to deliver real business benefits, with core HR platforms quickly evolving.
Josh Bersin, founder and CEO of The Josh Bersin Company, says that it took time for HR professionals to see where AI could fit into a business, but now many have seen real Return on Investment (ROI). This in turn has led to a transformation in the HR department itself, which is now reorganizing to make the most of the technology.
In his keynote at September's HR Technology & Exposition Conference 2024, Bersin stated:
Some of the things that seemed novel have become commodities already, like writing a job description or making an email easier to understand. I would say that 80-90% of the HR people I talk to are not intimidated by AI anymore. They just want to see if it's going to solve a problem.
There is a flood of technology and new vendors hitting HR at the moment, including intelligent systems for recruiting, for employee experience and support, for training and development, and for sentiment analysis. At the same time the general business community is facing an accelerating set of labor and skill shortages. So HR people are arming themselves with all these tools, and looking for serious ROI. Bersin says:
Because of all of the new technologies for HR, the profession is under stress. Most of the CHROs we talk to tell us they have to reorganize, and transform the HR department to deal with all these operational tools and the automation that eliminates some of the tactical work that HR is doing.
In the summer, The Josh Bersin Company launched HR Career Navigator, which aims to help HR professionals take advantage of the transformational changes in their departments, and their roles. Bersin explains:
When the HR leader takes a step back and looks at all these changes, they say, 'How are we going to reorganize the HR department to deal with this big technology change?' We took all of this information we had about HR job titles and HR skills, and we put it into an AI system, and built a career planning tool for HR people.
Bersin says it's part of the whole solution for transforming the HR function. He believes HR is becoming a much more strategic business area, as the relative importance of human capital in businesses has exploded. As a result, salaries have gone up, too. He says:
It's not just an administrative job anymore, so the expectations are much higher. Around 25-30 years ago it was a bureaucratic personnel administrative function. But when we get into digital transformations, skills gaps and labor market issues, global hiring, the pandemic, wellbeing and mental health issues, and increasing benefits, the relative importance of human capital has skyrocketed.
To help meet these challenges the company launched its AI assistant for HR, Galileo, about a year ago, which provides answers from an archive of research and data on HR technology and practice curated by The Josh Bersin Company. Then at the Workday Rising annual conference it announced that it was becoming a Workday Innovation Partner, and would be attaching Galileo to Workday. Bersin says:
Workday wanted to give its users easier to use front ends, so any Workday user will be able to push a button and get access to Galileo, and ask a bunch of questions, for example 'How do I measure profit? And what is profit, and what could be the contributors to profit?' And then it'll go back to Workday and help you solve the problem.
The company has also just launched a low-cost subscription version of the AI assistant tailored to individuals and small teams. Bersin says:
Before, you had to sign a corporate agreement, and go through your IT department. Now every HR person can get access to all of our research, all of our benchmarks and the whole platform. I think of it as the Bloomberg terminal of HR. If you're a financial professional, you want to have a Bloomberg terminal to keep up on all the stuff going on in the financial world. And we want Galileo to be that for HR.
These and similar efficiency gains are giving HR professionals a clear ROI on AI projects that is getting easier to justify. Bersin identifies three types of ROI from AI. The first is reducing the number of staff. He says:
If I can get a chatbot to handle the incoming call center questions about benefits or pay or whatever it may be, I can reduce the number of people in the call center so that's a labor market cost reduction.
The second is speeding things up. Bersin comments:
We had an example where we were trying to figure out the impact of overtime on profitability. That might be a three month project for an analyst. Well, with AI, it might be three hours or it might be three minutes. So now, we can make decisions faster and operate in a more dynamic way. Companies will pay for that, both in the labor and the time it took. Also when things take a long time, you quite often don't do them at all. You just don't do the analysis. You're just flying blind.
The third ROI comes from rationalizing applications. Bersin says:
The average large company has around 94 employee-facing systems. Everything from the time scheduling system, the badge reader, the payroll system, the system that computes taxes, the recruiting tools or training tools on and on. AI agents can automate a lot of these stacks of tools, and if companies have an agent that can directly automate some of these processes, they can eliminate some of these systems.
Bersin believes in a couple of years there's going to be a new stack of tools with AI systems sitting on top. He comments:
The vendors selling you software today are probably not going to sell you software then. They're probably going to sell you services. A lot of the things that people are spending a lot of money on in their tech stack are going to be decomposed into services.
For HR professionals trying to choose the right vendors when AI is evolving so fast, Bersin has compiled a list of what he calls The HR Technology Trailblazers. It includes vendors which he thinks are the most emblematic of what is happening in the market. He says:
A lot of vendors reach out to us to tell us what they're doing, and we try to talk to most of them, and we always want to talk to customers. We don't put anybody in that list if we haven't talked to their customers. Then from the kinds of inquiries we get from HR departments, we can get a sense of what they're buying and what they're thinking about buying.
Bersin is offering HR decision makers a bit of clarity in what is a rapidly moving and complex HR tech landscape. The partnership to hook Galileo up with Workday, along with the personal editions of Galileo and HR Career Navigator, should help HR professionals see more clearly.
