Will Artificial Intelligence Benefit HR Tech?
By Manoj Sharma & Marcus Tan of CusJo
Introduction
Are robots going to take our jobs? Is the end near?
Absolutely not; at least not in the foreseeable future. An article by Dr. Jeremy Nunn of the Forbes Technology Council opined that AI technology will not displace the livelihoods of Human Resource (HR) professionals. Instead, the AI tech will transform HR departments by revolutionising functions such as recruiting and performance evaluation thus benefitting forward looking professionals and organisations that invest in AI for HR Tech.
Challenge
While most departments, such as finance and operations have been quick to adapt to new technologies, the adaptation of HR Tech has been much slower. Laurence Collins, director of HR and workforce analytics at Deloitte, urged HR departments to embrace analytics or fall behind other departments in an organisation. Research from Deloitte showed that only 8% of businesses have strong HR analytics capabilities. Furthermore, an Oracle report noted that there was a substantial gap between the importance of data and predictive analytics (68%) and its’ current effectiveness (13%).
The ability to embrace HR Tech and effective analytics is contingent on having possession of the necessary and relevant technology. This is not always the case. According to Bersin by Deloitte, 47% of companies have HR software that is over seven years old. To put the statistic into perspective, seven years ago, the iPhone 4S was released and we are now on the iPhone X. A seven-year-old HR software can easily be considered to be out-dated. It would be speculation to pinpoint causation for these companies not having newer HR Tech. Regardless of the reason, ambitious and high-performance organisations should make an investment towards optimisation especially with the potential gains which result from using newer HR systems much less AI in HR Tech. In the same study, Bersin by Deloitte found that companies with newly upgraded HR systems see cost savings of 22% per employee.
HR professionals, in the daily course of their work, build a great deal of human intimacy and as a result accumulate a substantial amount of human intelligence. But even the best HR professionals can’t be everywhere, talking to everyone, documenting everything, making perfect sense of present and historical intelligence while making it presentable and accessible to key stakeholders to act upon in real-time. An August 2016, Harvard Business Review analytic services study showed that only 7% of respondents felt that time should be spent on managing administrative functions however, in actuality, more than 40% of respondents spent more time on the same administrative functions.
The Society for Human Resource Management (SHRM) noted that a key challenge is for HR professionals to turn HR data into a form that managers can use to measure HR’s contributions to organisational profitability. In simpler terms, HR professionals have to find a way to deliver intangibles tangibly. They are required to prove that people and cultural ideals are being maintained and managed, ensuring the operational and strategic rigour that a stable organisation demands, all whilst attempting to co-relate their functions to their organisation’s profitability, performance and fulfilment levels.
Having spoken to many bright, good and hardworking HR professionals, the response is centred around the thought that it is not for a lack of effort that has resulted in this building pressure. It’s the substantial amounts of time, over the last decade, spent scrambling to get their HR operational and management systems up to speed while constantly playing catch up to the ever-changing technological value propositions.
They are fighting a battle on two fronts. One, with attempting to keep up with the changing technological value propositions and the second with the systems itself. The HR solutions providers, on many occasions, have failed to deliver on their opportunistic promises, leaving the client to firefight the operational shortcomings of the purchased systems or finding a different way to fulfil their job functions. While fighting the battle, they haven’t had the opportunity to explore and capitalise on new and more appropriate technologies that have arisen from the knowledge age.
These challenges have amounted to a growing pressure to find solutions. To help cope with these challenges, the Singaporean government has responded by laying out a manpower plan for the HR industry in 2017. Ms. Josephine Teo, Minister of Manpower, stated that the HR department is the key to unravelling Singapore’s talents while maximising businesses’ great potential in adapting and transforming the industry. (FYI, and for full disclosure CusJo was appointed as a HR Tech partner by the Singapore government to help organisations in Singapore to upgrade their HR technologies. As a result organisations are able to get up to 50% of the cost as a grant for > 17 of CusJo’s AI enhanced HR Tech solutions.)
Solution
It is becoming abundantly clear that the future of work in the age of AI will be vastly different from the one that has been known. A TIME magazine article noted that humans are still superior in terms of general intelligence, creativity and a common-sense knowledge as compared to AI. However, AI and advanced computing systems are exceptional at completing repetitive mathematical tasks considering that they have no biology and don’t get tired. Satya Malick, founder of Big Vision LLC, is aware of the advantages AI systems have over us. However, he stresses that it is not a competition but a collaboration between man and machine.
In the last 24 months, there has been a newfound realisation about Artificial Intelligence, Robotics, and Automation (AIRA). Investors and organisations have also begun to realise the importance of HR Tech. According to an article by Randstad, there were investments amounting to $1.96 billion in HR Tech companies globally in 2016. Many organisations are beginning to realise technology is going to influence every part of their organisation. When responding to the use of data analytics and technology in OCBC Bank’s operations, Mr. Jason Ho, head of group HR, said,” A digital strategy is not about technology, but also people, and how they adapt and use technology, and a mind-set to embrace changes in the organisation.”
HR Technology will soon make its transition to relying on cyber-physical systems as part of Industry 4.0. The same cyber-physical systems will be able to easily handle repetitive administrative functions which have been bogging HR departments down while compiling and processing Human Intelligence into easily understandable diagnostic and predictive analytics in real-time. According to Dr Jeremy Dunn, AI in HR Tech will automate the current HR systems resulting in self-service systems which will allow HR professionals to focus on more complex and pressing questions that warrant their attention. HR professionals will be able to address the most critical questions which adds the greatest amount of organisational value. Questions such as, “Now that I have entrance to engagement to exit intelligence across my entire talent journey, what do I need to do to improve organisational profitability?”
Conclusion
“We cannot expect a different working world by doing the same things we have done before. We have to transform to thrive”- Michael Gale, co-author of The Digital Helix.
A failure to adapt may be detrimental as noted by an article by McKinsey & Company where fewer than 10% of the non-financial S&P 500 companies in 1983 remained in the S&P 500 in 2013.
It would be wise for organisations and HR departments to begin exploring the use of AI in HR Tech in order to gain a competitive advantage in their industry. HR professionals should augment their human intelligence with AI which encompasses Artificial Intelligence, Augmented Intelligence and Assisted Intelligence.
Embracing and adapting to the ever improving technology available will provide HR departments with end-to-end intelligence throughout the recruitment, empowerment and growth stages of an organisation’s talent management plan. In doing so, organisations will become more intelligence centric while gaining a superior advantage in the industry.
