How generative AI will reshape HR, according to Mercer's Jason Averbook and Ilya Bonic
The convergence of generative artificial intelligence (AI) and Human Resources (HR) presents an unprecedented opportunity for organisations to redefine their HR practices and unlock new levels.
But how do they approach this in what is a new - and still evolving - field?
In an exclusive interaction with People Matters, two industry experts at the forefront of digital HR strategy: Jason Averbook, Senior Partner Global Leader, Digital HR Strategy at Mercer, and Ilya Bonic, President of Career and Head of Mercer Strategy, share their valuable insights around the exciting intersection of generative AI and HR, exploring its potential applications, implications, and the skills required for success in the evolving landscape.
Edited Excerpts
How do you perceive the concept of generative AI 'democratising skills' in the context of HR? What implications does this have for work and the workplace?
Jason Averbook: Generative AI holds immense potential to revolutionise the HR function like never before. For a long time, we have discussed the need for HR to transition from a tactical role to a strategic one. However, this transition has been hindered by the lack of a solution to offload the tactical work, such as repetitive tasks that are repeatable, auditable, and documented. If we can effectively harness and guide generative AI, it has the power to propel the HR function from a tactical focus to a strategic one, elevating its position along the value chain.
Rather than solely counting people, our goal should be to make people count. And the key to achieving this lies in shifting our focus from the tactical to the strategic realm.
Ilya Bonic: The impact of generative AI on HR extends beyond skill democratisation. It also raises important questions about the future of work and its implications for the workforce. As jobs evolve due to AI integration, HR will play a crucial role in managing this change and ensuring that employees can adapt while prioritising their health and well-being.
For instance, we see AI being incorporated as a co-pilot in tools like Microsoft Office, specifically excelling in tasks like writing. While this may seem like a productivity boost initially, it also creates a significant increase in the volume of work.
Interacting with AI-generated content and having humans interpret and respond to it could inadvertently shift the nature of work and intensify work pressures. We can draw parallels to how email has transformed work dynamics, providing productivity benefits but also blurring the boundaries of work-life balance.
How can HR leaders ensure that employees are prepared to embrace and maximise the benefits of generative AI technologies in their daily work? What strategies can be used to facilitate a successful digital transformation within the HR function?
Averbook: The foremost priority for every HR leader should be adopting a digital-first mindset. Rather than waiting or fearing the impact on their jobs, HR leaders should embrace a proactive approach and intentionally design HR work processes in the present, not just for the future.
It's important to consider the skills and capabilities that will be required in HR, as AI takes over much of the IQ-focused work, allowing HR professionals to focus on the EQ-related aspects they have always wanted to prioritise — taking care of people.
A digital-first mindset should be accompanied by the development of a digital strategy, which goes beyond technology adoption. It involves being open to unlearning outdated practices, embracing change, and fostering an agile mindset. It's crucial to redefine the concept of change as not merely changing technology, but also transforming the way work is done.
We often discuss the importance of cultivating the skill of "change fullness" instead of traditional change management. Change fullness means being open-minded to new ways of thinking, working, and accomplishing tasks.
Rather than viewing technology as a threat, it's essential to start with a positive outlook and then establish appropriate safeguards to ensure effective governance.
Bonic: Recognising and addressing the fears of employees is crucial. The HR function, especially its leaders, must acknowledge that significant change is on the horizon. There is considerable media coverage highlighting the potential impact of generative AI on HR, with some even suggesting it could be decimated.
In this context, it becomes imperative for HR to proactively articulate a vision not only to the C-suite executives, explaining how they will contribute to the future with the help of new technologies, but also to ensure they bring their entire team along on this transformative journey.
HR leaders have an opportunity to set an example for the rest of the organisation in terms of embracing and adopting AI.
What steps can HR leaders take to overcome resistance/address concerns from employees who may be skeptical or wary of generative AI in HR processes?
Bonic: Lead, and by lead, I mean, provide a clear vision how generative AI will shape the future of work in the organisation. This vision should emphasise the organisation's proactive approach to using these technologies to benefit employees and help them progress in their careers,
Recognise that there's change, but the worst thing to do is just to sit back and wait for the change to happen.
Within our own organisation, we prioritise being at the forefront of utilising artificial technologies, both internally and with our clients. This commitment stems not only from commercial considerations but also from our obligation to ensure our employees are well-positioned for sustainable careers.
To address scepticism and wariness, transparent communication is key. HR leaders should openly discuss the potential impact of generative AI, addressing concerns and clarifying how it will enhance rather than replace human capabilities. By fostering a culture of open dialogue and engagement, HR leaders can guide employees through the change process and instill confidence in the organisation's strategic use of generative AI technologies.
Averbook: It is essential for HR leaders to recognise that simply adding generative AI on top of existing work processes will not yield the desired results.
To fully leverage the potential of generative AI, we must be willing to change the way we work and the rules we follow. Instead of fearing this technology, we should embrace it and adapt our practices accordingly.
An analogy can be drawn to when calculators were introduced in schools. We had to change the way students were allowed to work and incorporate calculators into the learning process. Similarly, generative AI requires a shift in our mindset and approach. If we only allow its use outside of work but restrict it within the workplace, we won't achieve optimal outcomes. In fact, it may lead to people finding workarounds, which can be risky.
As an organisation, we should support the development of reliable generative AI models based on trusted data, validated information, and trusted sources. By integrating generative AI into our workflows, built on a foundation of quality data, we can establish trust in its capabilities. Conversely, if we block or impede its use, people may circumvent these barriers and utilise generative AI in uncontrolled ways, posing potential risks.
It's crucial to understand that generative AI tools possess tremendous potential, but they also carry risks if not appropriately managed. HR leaders must foster an environment that encourages responsible and authorised usage of generative AI, enabling employees to realise its benefits while minimising potential dangers.
How can HR leaders strike a balance between leveraging generative AI for efficiency while maintaining the human touch and personalised experience for employees?
Bonic: When it comes to work, we can identify three main aspects: transactional skills, competency-based skills, and decision-making/strategic skills. To strike the right balance, HR leaders can leverage generative AI to automate and streamline transactional tasks, thereby freeing up time and resources to focus on the other dimensions of work.
By applying AI technologies to handle repetitive and administrative tasks, HR can create more space for meaningful human interactions and personalised experiences for employees. This allows HR professionals to focus on work design and actively shape the future of jobs within the organisation. It's important to recognise that AI should impact every job, and HR's role becomes crucial in determining what those jobs will look like in the future.
Rather than fearing a diminished relevance, HR has an opportunity to engage in new and important work that supports their organisations' transition.
By embracing generative AI and embracing work design, HR leaders can ensure a balance between leveraging AI for efficiency gains and preserving the human touch that is vital for personalised experiences and employee well-being.
Averbook: When considering the future of work, it can be simplified into three categories: hands, heads, and hearts.
Machines excel at hand's work, while people excel at heart's work. The intersection, the fusion, occurs in the head's work. This is where artificial intelligence, or what I prefer to call augmented intelligence, comes into play. It enhances our cognitive capabilities, providing us with better data and enabling us to be better stewards of the heart's work.
How do you think generative AI will impact the need for institutional knowledge within organisations? Can it effectively replace certain aspects of human expertise and knowledge?
Bonic: As AI takes over transactional work and even some areas of expertise, it frees up time for HR professionals to focus on higher-order skills. Critical thinking, analytical skills, creativity, and the ability to learn become even more crucial in this context. These capabilities differentiate HR professionals who can truly make an impact in the future from those who may not adapt as effectively.
Averbook: Generative AI can effectively replace certain aspects of human expertise and knowledge, particularly for individuals who solely rely on institutional knowledge that can be replicated in a data source.
However, it's crucial to clarify that generative AI will only replace those individuals who fail to upskill and adapt to leverage the value generated by AI.
Just like any other technology, three categories of skills are required for implementing and operating generative AI: general, sectoral, and complementary skills. How do you see these categories applying to the HR domain? Which skills do you believe will be most important for HR professionals?
Averbook: The first is data fitness. HR professionals need to have a strong understanding of data governance and the ability to build and maintain clean, healthy data within the organisation. Without reliable and accurate data, generative AI cannot deliver meaningful results. Data fitness is a foundational skill for leveraging generative AI in HR processes.
The second category is the ability to design employee journeys rather than just processes. HR professionals should focus on creating experiences that meet employees where they are and provide seamless interactions. Employees shouldn't have to log into multiple systems or navigate complex processes to get things done. Designing for the employee experience and simplicity is key to optimising the use of generative AI in HR.
The third category is embracing radical simplicity. HR professionals need to challenge the inclination to customise everything and instead strive for simplicity in policies, processes, and interactions. Simplicity allows for customisation based on individual needs and preferences. It also enables the delivery of empathetic digital experiences that are driven by good data.
Lastly, storytelling is an essential skill for HR professionals working with generative AI. They need to be able to effectively communicate insights derived from the data and use storytelling techniques to convey meaningful narratives to stakeholders.
What advice would you give to HR leaders to ensure they emerge stronger amidst the evolving AI landscape?
Averbook: Experiment and start. There are no valid excuses for holding back. The barriers that may have once existed have been removed. The technology is readily available, and there is nothing stopping HR leaders from embracing AI in their practices. The only thing missing is a clear digital transformation strategy.
It's important to recognise that AI is already being utilised by CEOs and leaders across organisations. If HR leaders hesitate or express concerns, they risk being left behind in this evolving landscape. HR must demonstrate their ability to embrace and leverage AI to stay relevant and contribute to the success of the organisation.
However, it's essential to note that implementing AI is not as simple as flipping a switch. The foundation for effective AI utilisation is good data. HR leaders should invest time and effort into ensuring they have accurate and reliable data before diving into AI implementation. Rushing into adoption without a well-defined strategy can result in disappointment and ineffective outcomes.
Bonic: My advice to HR leaders is to focus on the people-centric aspects of work as AI becomes more prevalent in organisations.
HR has a unique role to play in ensuring that AI is introduced in a way that enhances productivity and creates new opportunities while considering the well-being and development of the workforce.
It is crucial for HR to take the lead in augmenting human capabilities effectively through AI and ensuring its adoption benefits both the employer and the employees.
By embracing this responsibility, HR can contribute to the sustainability and success of the business in the evolving AI landscape