AI for the CHROs and human resources leaders

All middle market companies are experiencing the impact of artificial intelligence and AI technologies across business functions. In particular, there is pressure to use AI to boost efficiency and mitigate risks. Combining this with an increasingly complex talent environment leaves HR leaders playing a pivotal role in implementing an effective AI strategy to streamline operations, enhance decision making and elevate employee experiences.

While the middle market is experiencing a surge in the integration of AI and generative AI technology, 76% of HR leaders fear falling behind the competition if they do not adopt and implement AI technologies as early as the next year, according to Gartner. Further, in the RSM Middle Market AI Survey: U.S. and Canada, 67% of organizations using generative AI reported they need outside help to get the most out of the tool.

Additionally, the RSM survey found that quality control (58%), automating repetitive tasks (45%), employee productivity and creativity (45%), and data-driven decision making (38%) are the leading areas where companies leverage generative AI to enhance people, process and technology. With the growth and potential of AI solutions, HR leaders have a significant opportunity to deliver tangible value through successful AI adoption.

RSM US Principal Marni Rozen and Managing Director Chris Mueller recently discussed actionable insights and best practices for leveraging AI within the HR realm to boost workforce productivity, implement automation and overcome challenges during RSM’s webinar AI in HR: From automation to strategic transformation.

Below, we take a look at some critical details for HR leaders to consider when developing an AI strategy, as well as opportunities, insightful considerations and potential use cases for many AI tools and applications.

The role of HR leaders in AI adoption

There is a growing interest among organizations in deploying AI technologies to fully support HR functions and maximize the employee experience. The role of an HR leader is multifaceted and bridges the gap between technology and people to improve employee engagement and operational efficiency.

HR leaders have six key responsibilities that guide successful AI technology investments and workforce strategies:

1. Change management: Promote AI user adoption, train end users to utilize AI tools effectively and manage change through clear communication.
2. Vision and strategy: Establish a clear vision and strategy for AI integration within HR teams and processes and align it with the organization’s goals.
3. Talent management: Identify opportunities for reskilling and upskilling to drive efficiency, innovation and growth.
4. Cross-functional collaboration: Partner with other teams to align people and processes to prioritize AI projects, outlining constructive feedback.
5. Governance and ethical considerations: Establish ethical guidelines, ensuring data integrity and compliance to optimize performance and mitigate risks.
6. Data-driven decision making: Leverage AI for workforce planning and talent strategy development, while continuously learning about new advancements.

“You can see the varying expectations for AI from an employee perspective—for some, AI is a very scary thing,” says Rozen. “But other employees want AI to be able to do their jobs better. If they don't have AI tools to use, they feel their organizations are lagging. Therefore, HR leaders must have a clear AI vision and strategy to truly modernize HR processes.”

Ultimately, HR is a critical function and provides the foundation for the organization’s ongoing success. Therefore, given the importance of AI moving forward, HR leaders must play a key role in the development of the overall AI strategy in alignment with the overall business priorities.

“As organizations start to think about their AI strategy, the HR leader should be at the table because the role of an HR leader is bigger than just policy and compliance,” says Rozen. “You can't develop an AI strategy or even deploy AI for HR in a silo. Partnering with executive leadership and the other back-office functions across IT, data analytics, finance and legal to ensure that the stakeholders in your business are aligned on the priorities is where HR can shine.”

Key issues

Implementing AI tools and applications can provide significant benefits for the HR function, but it does not come without significant potential challenges. As companies have worked to develop and integrate AI technologies, implementation concerns and data integrity and usage typically present the most frequent adoption challenges.

“There are a lot of positive aspects to AI, but there are concerns and risks,” says Mueller. “One of the first places to start when we think about risk is: The value of AI is only as good as the data that you have. If AI is leveraging either malicious or erroneous data, then you’re likely not going to get the benefits that you expect out of AI.”

Data privacy and security, cited by 46% of respondents in the RSM AI survey, are the leading concerns for organizations who have not yet adopted generative AI. Implementation of AI tools and the integration of these tools is also seen as a daunting task by many organizations, as 44% of respondents indicated a perceived difficulty in integrating generative AI.

Lack of knowledge about generative AI is also a common issue, cited by 39% of middle market executives.

“AI is less of an addition to our current technologies as it is an evolution of our technologies for the future,” says Mueller. “If we have that perspective, we want to keep in mind some of the challenges to move along with the next generation of computing. It mostly is data accuracy—a big concern in reliability and barrier to adoption.”

While the opportunities for efficiency and productivity are vast, there are multiple potential risks related to AI tools. These include generating incorrect information, reinforcing biases, risking data integrity and relying on AI too much, all of which can result in poor decision making.

In addition, HR leaders must understand how hackers and other criminals can utilize AI tools to harm an organization. This includes: 

Since an effective AI strategy is essential for the long-term success of the HR function, it is important to understand how the measurable benefits of AI-led HR transformation can directly contribute to a competitive edge. Some of these use cases include:

Talent acquisition: AI can help create job descriptions per organizational and labor market requirements, aligning with employer branding. It can curate top-quality leads including adjacent-skilled professionals, generate interview questions and automate interview scheduling. Benefits include:

• Improved consistency, accuracy and efficiency
• Reduced bias and compliance with hiring regulations
• Streamlined screening and shortlisting to improve scalability
• Enhanced candidate experience

Onboarding: Chatbots can provide contextualized responses to new hire queries. With AI, companies can monitor compliance, training and document submission more effectively. In addition, programs can compile reports on onboarding trends and patterns. Benefits include:

• Reduced time spent on administrative onboarding tasks
• Enhanced security and data protection
• Reduced costs of training resources
• Accelerated new-hire readiness

Training and performance: AI can quickly generate training materials with feedback options, adapted to different learning styles, cultural contexts and learning goals for upskilling, reskilling, career advancement and mentorship opportunities. Benefits include:

• Better identification of skill gaps and recommended learning goals
• Improved job satisfaction through career path transparency
• Reduced turnover rates
• Increased engagement, confidence and motivation

Workforce management: AI can generate quick access to employees’ paid time off balances, approval status and timekeeping policies. In addition, it can deliver attrition insights to predict short- and long-term headcount needs and staff/shift analyses by day/period/hours mapping. Benefits include:

• Improved scheduling and forecasting accuracy
• Minimized labor costs
• Reduced burnout with balanced work allocation
• More effective generation and analysis of time-off trends

HR operations: Chatbots can assist companies to change personal data in real time and initiate promotions, job changes, exit surveys and retrieval of company assets. AI-supported internal copywriting tools can create effective communications across multiple teams. Benefits include:

• Enhanced data accuracy
• Reduced time and labor due to automation
• Improved employee experience
• Reduced cost of accidental overpayments

Payroll and compensation: AI can provide deep analysis of payroll data against local, regional and federal statutory requirements. It can also identify issues related to overtime, minimum wage and taxes, and send automated notifications to complete timesheets and submit expenses. Benefits include:

• Prevention of data anomalies
• Better compliance in audit results
• More pay transparency to address pay gaps
• Mitigated fraud risks and payroll errors

Undoubtedly, AI can drive successful outcomes within HR functions for people, process and technology, creating a significant competitive advantage. A key for HR leaders is to develop a strategic AI vision with defined outcomes that align with the firm’s goals. However, the ever-evolving AI landscape and technical complexities may feel challenging at multiple stages. HR leaders may need additional guidance and insight, highlighting the importance of external advisors.

Ready to get started? RSM’s experienced AI advisory team understands the enterprise AI journey and the foundational elements necessary to generate increased value and reduce risk. Contact our team to learn more about how AI can transform your key business operations.