How HR Is Driving Competitive Advantage With AI

John Gustafsson, HR VP EMEA, Blue Yonder

John Gustafsson, HR VP EMEA, Blue Yonder

Artificial intelligence (AI) and the digital tools that it enables have the potential to quickly make an even greater impact on work and organizations than the industrial revolution did. The industrial revolution enabled machines to do heavier lifting that humans cannot do. AI algorithms have been appointed to the board of directors for many years now. With the AI revolution, we will see tools supporting organizations in making logical decisions in ever more complex situations.

Over the last few years, I have interviewed more than twenty HR managers in large international companies to better understand how AI is being leveraged by HR organizations. My overall conclusion was that they are already leveraging AI in specific areas, often linked to business priority. e.g. AI-supported recruitment, or to forecast worker needs by location and time.Of the HR managers I talked to, no one really leveraged AI tools in more than one or two specific areas of work. Many were actively looking for tools to leverage in more areas but could not find any suitable tools in the market.

“With the AI revolution, we will see tools supporting organizations in making logical decisions in ever more complex situations”

The HR managers that I talked with confirmed that for the AI tools to be accepted by the organization, it is key that their strategic use has the support from middle managers of the organization in both the scope and the advantage for it to be successful. The culture was also an important factor when considering an AI-led strategy. AI needs to be embraced and understood as a complementary tool for the organization and can help reduce bias for hiring and other critical decision-making areas. If the AI algorithm is of a ‘black box’ nature, it is not mathematically possible to get a line of sight to the selection criteria on why a candidate was selected or not, for example. New AI tools will drive competitive advantage and need to be seen as enhancing and augmenting tools that leave the final decision to the user.

Why does AI support the increased importance of HR? HR has a long history of being perceived as strong on “soft” factors like culture or workforce engagement. While it can be questioned how “soft” it is to support managers e.g. with layoffs, it is not the focus of this article. The work on culture however is.

 In speaking with HR managers, they found that digital tools provided a transparent view of the correlation between culture and engagement, mapping well against the KPIs of their companies. AI also takes the heavy lifting off individuals and organizations for logical decision-making, freeing up their time – and brains – to think more creatively. And thinking creatively is critically important for individuals and companies alike. As anything that is digitalized can be recorded and copied by the competition, the culture and the tacit knowledge of the organization becomes even more important as intellectual property.

The historic focus from HR on “soft” factors like engagement and culture is, therefore, increasing in importance. The increased importance of culture as a competitive advantage, the core focus of HR, is giving HR a natural seat at the table of leadership.

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