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Blog: Generative AI in HR — unlocking innovation and transformation

Written by Mercer's Jason Averbook

The world is undergoing significant changes, and the nature of work has shifted more in the past four years than it has in the previous 50 years.

It is a pivotal time for employers. In this transformative era, we believe that HR has the power to unlock creativity and innovation within organizations. Through interactive workshops, we invite you to engage with peers and industry experts, uncovering practical ways to lead HR through this renaissance.

As we navigate the ever-evolving landscape of generative AI, continuous learning becomes crucial. Adapting to changing circumstances is more important than ever, especially considering the potential of using generative AI to optimize HR functions. From summarizing lengthy reports to automating processes and making data-driven decisions, the possibilities are vast. Effective communication and the use of innovative tools and interactive platforms are paramount in engaging managers and employees. We are exploring the concept of privacy and assurance that the use of generative AI does not compromise security. We highly recommend that you review the robust and informative report recently released by Oliver Wyman.

Monitoring and encouraging the application of generative AI in various HR functions, such as talent acquisition and learning, is essential. Participating in generative AI forums where companies share their experiences can provide valuable insights. HR and generative AI strategies need to align so that you can prioritize meeting people's needs while contributing to overall goals and business outcomes.

HR leaders should drive the digital transformation of HR. They must emphasize the importance of incorporating diverse digital tools and strategies, taking a holistic approach, and including all relevant components in the digital strategy.

Key takeaways and considerations:

  1. Evolution of AI in HR: There are four generations of AI in HR, starting with rule-based systems that evolved to generative AI. Generative AI has the potential to transform various HR functions.
  2. AI Applications in HR: Quick win areas for AI applications in HR include resume screening, employee retention analysis, predictive analytics in hiring, sentiment analysis, and employee churn prediction. These applications leverage machine learning and deep learning algorithms to automate and improve HR processes.
  3. Workforce Transformation: Generative AI will require new work models as work and skills cross traditional functional boundaries. We predict that roles will disappear, new roles will emerge, and existing roles will undergo significant changes. HR needs to retool all aspects of the employee experience and incorporate generative AI into its service delivery model.
  4. AI Maturity Assessment Framework: It is important to review the generative AI maturity assessment framework, which evaluates AI readiness, AI application deployment, AI communications, and AI governance within an organization. This framework provides a structured approach to assess and enhance AI capabilities.
  5. Deployment and Activation: Strategy, activation, deployment, and ongoing sustainment are crucial for the success of generative AI initiatives. Program governance, project teams, and continuous refinement of capabilities and experiences are essential.
  6. Ethical and Legal Considerations: Ethical and legal considerations associated with AI, such as bias in AI models, need to be addressed through assessment, management, and continuous improvement. It is vital to tackle these complex issues.

Continuous learning, effective communication, privacy considerations, and strategic planning are essential for the application of generative AI in different HR functions and the digital transformation of HR. Generative AI has the potential to significantly impact HR by automating processes, improving decision-making, enhancing employee experiences and transforming work models. Organizations must embrace AI, develop AI strategies and navigate the challenges and opportunities presented by generative AI. Change is not the enemy; it is the strategy we must adopt to thrive in the changing world of work.