Cost, doubt about tech hold back AI for HR investment

AI technology will improve the productivity of HR departments by eliminating many routine and transactional processes. But what will happen to the HR employees?

Concern about the cost of AI for HR technology and its maturity is keeping HR departments from deploying this tech. But users believe this technology will improve productivity and cut labor costs.

Those were some of the findings in a new survey of more than 1,300 HR professionals about AI for HR deployments. The survey was conducted by Future Workplace -- an HR research and networking group -- and Oracle.

More than half of the survey respondents believe the leading benefit of AI for HR technology will be an increase in worker productivity. These respondents said they expect HR technology will become interactive -- not dissimilar from how people communicate with Apple's Siri or Amazon's Alexa. The simplification of this technology was the second leading benefit cited by survey respondents.

The third benefit -- cited by 41% of the respondents -- is AI for HR's ability to eliminate labor costs. But this labor-cost elimination won't happen quickly, and there's debate about the real impact of this AI tech on labor.

Nearly 70% of the respondents to the Future Workplace and Oracle survey reported cost was a barrier to AI tool adoption. This was followed by "failure of technology" at 66%, meaning users don't see the technology as mature and ready for adoption. The third leading impediment, at 55%, was security risks.

About half of HR processes can be automated

The reason AI for HR tech may be disruptive is approximately half of all HR spending goes to transactional processes and routine administrative activities, according to The Hackett Group, a management consulting organization based in Miami. These are processes that are primed for automation.

The expectation is chatbots and machine-to-voice interactions will take over much of the work of HR help desks and redundant administrative tasks.

In the coming years, all the administrative jobs in HR "are going to be wiped out," said Dan Schawbel, research director at Future Workplace, based in New York.

As automation arrives, these HR employees will have to take on new work, shift to other jobs in HR or deal with layoffs. The people remaining will be focused on the strategic work, Schawbel said.

HR employees need to get training on these new technologies and skills, Schawbel said, "so when these shifts happen, you're prepared and set up for success."

Schawbel said he believes AI for HR technology is ready for enterprise use. Chatbots and voice user interfaces have demonstrated that they can handle initial employee inquiries, such as answering basic questions about benefits or onboarding. But, according to some, this doesn't mean HR staffs will necessarily shrink. 

HR workloads are rising

As these [AI] technologies get deployed, I don't think you're going to see a net loss of people.
Tony DiRomualdosenior research director for global HR executive advisory at The Hackett Group

HR workloads "are rising every year. They've got more work, and they have to do more with the same or fewer employees," said Tony DiRomualdo, senior research director for global human resources executive advisory at The Hackett Group.

DiRomualdo said workloads are increasing because of difficulties in recruiting, as well as demands by the business on HR to help improve the productivity of the workforce, develop better leaders and exploit human capital for competitive advantage.

"As these technologies get deployed, I don't think you're going to see a net loss of people," DiRomualdo said. But HR workers will have to learn how to handle more sophisticated tools, he said.

Even though AI technology creates some uncertainty about the future of work, people in HR aren't necessarily opposed to its adoption. Failure to adopt this technology may hurt their careers and leave them with obsolete skills.

The use of advanced tech tools in the home life of HR employees may help drive adoption in business, similar to what happened with mobile devices, according to Emily He, Oracle's senior vice president of the human capital management cloud business group.

"Employees are more ready  [to use advanced tech] than the enterprise," He said. "There's a gap between the rate at which employees are ready to adopt new technology and the rate at which enterprises are adopting technology."

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