HR Teams Need AI to Unlock Organizational Success — But There's One Thing Holding Them Back.

Opinions expressed by Entrepreneur contributors are their own.

Industry leaders have long recognized HR as the fulcrum of organizational success. It stands to reason, after all, that the department charged with molding an enterprise’s identity and culture should have the most profound impact on how it achieves its organizational goals. It also follows, then, that with generative AI models at the vanguard of business innovation, human resources should be considered a pivotal area of development for leaders seeking to optimize their organizations through digital transformation.

Current data bears this logic out, with recent research showing that 76% of HR leaders feel their organizations must leverage AI in the next 12 to 24 months to keep up with competitors in terms of organizational success. Yet, while some are embracing applications like generative AI in HR, benchmarking indicates that around 48% of leaders are still not exploring their use. This raises some key questions, namely: Are the benefits of AI genuinely significant in HR? And if so, why aren’t HR leaders taking the plunge to embrace it?

I’ll explore these questions in this article, shedding some light on how enterprise leaders can confidently leverage AI to best empower organizational success.

Transformative potential

In HR departments, where there is such a strong administrative focus, the power of AI to automate repetitive tasks and expedite data processing is nothing short of transformative. As such, the potential applications for AI are both extensive and varied.

One area where AI can have a major impact is employee relations. For instance, enterprises can utilize AI to analyze responses to pulse surveys, allowing them to gain meaningful insights into employee sentiment without needing to invest substantial resources in the process. Additionally, AI can be used for predictive analytics, using massive volumes of current and historical data to forecast changes in employee turnover. In this sense, AI can enable enterprises to be more dynamic and responsive to HR trends to boost employee engagement and retention, even when operating at scale.

AI can also serve to enhance talent acquisition. Businesses can leverage the power of AI algorithms to scan the resumes of job candidates and shortlist the most optimal matches — a traditionally painstaking task. Moreover, AI applications can help promote better outcomes in the screening process by selecting candidates based solely on objective, standardized criteria, eliminating the possibility of unconscious biases skewing results.

Were this not enough, AI can also be applied to a plethora of other HR duties, from performance analysis to resource allocation, risk management, and more. So, if the benefits of embracing AI are so considerable, then what’s at the root of HR leaders’ misgivings?

The AI fear factor

In my view, the trepidation around AI in HR can primarily be attributed to an aversion to perceived risk.

Of course, there certainly are risks associated with using artificial intelligence in HR. Utilizing generative applications, for instance, naturally raises concerns about ethics, privacy, and security, as it requires companies to provide large quantities of potentially sensitive data to AI models. In fact, Gartner predicts that by 2025, 70% of all enterprises will rank the ethical use of generative AI among their top concerns, and understandably so. In many cases, however, I believe that the perception of the risks around AI is skewed by a misunderstanding of how such tools should be implemented.

In essence, it would appear to be a question of adoption. Companies that are leading the exploration of AI in HR are those with a proven track record of successful transformations, such as IBM, who have emphasized the benefits of the technology in improving aspects like candidate selection, hiring cycles, compensation planning and employee support. Those who are more hesitant, then, must be those who are less confident in their ability to adopt the technology.

When uncertainty prevails around the implementation of new technologies, the potential benefits of using them, however immense, will always be dwarfed by the perceived risks.

The thoughtful approach

To gain the confidence to embrace AI wholeheartedly, enterprise leaders need to carefully evaluate their approach to its adoption. That starts with dispelling misconceptions about the technology.

AI models are not the all-knowing, ungovernable entities that they are often suggested to be. Quite the opposite, in fact. While modern AI models are undoubtedly impressive in their ability to process, analyze and extrapolate from data, the fact remains that they can only work from the data they are fed. This is why data governance is critical.

By establishing comprehensive policies and guidelines on how data assets should be stored, updated and maintained, organizations can keep a firm grasp on what data AI models will have access to. Additionally, by designating teams to conduct regular assessments of AI models, companies can prevent erroneous or discriminatory outcomes in HR that might result from machine learning biases.

In conjunction with proper data governance and regular auditing, businesses should seek to develop more comprehensive onboarding processes for those utilizing AI tools. This should entail the establishment of designated communication channels for employees to provide feedback on AI-powered technologies.

Moreover, a thoughtful approach to AI adoption should involve the utilization of a digital adoption platform, which can provide employees with personalized, real-time guidance on how to use AI tech proficiently. Such a platform can help mitigate risks associated with user error and enable IT to monitor the use of new tech to weed out shadow AI.

By employing these measures, companies can create an internal framework that enables the seamless integration of AI tools for HR.

The future of AI in HR

While AI applications have enormous potential in human resources, the sensitive nature of the data they will be required to handle is proving a cause for trepidation at many organizations. That needn’t be the case, however, as taking a thoughtful approach to adoption can assuage the concerns associated with the use of generative AI.

By engaging in proper data governance and auditing and implementing purpose-built adoption solutions to facilitate the transition to AI, you can confidently embrace new technologies in HR. As a result, your enterprise will be empowered to evolve its internal culture, improve overall performance and reach its organizational goals with greater consistency and velocity.