The Impact of AI on HR: Are We Already Behind?

Artificial intelligence (AI), particularly generative AI, is quickly revolutionizing business functions worldwide. As discoverers of next practices in human capital, at i4cp we wanted to know: where is HR in this revolution?

The bad news is that overall, HR is already behind. The good news is that there are plenty of pioneers to emulate.

In our brand-new study exploring AI’s impact on HR, our research analysts uncovered a group of leading-edge organizations we’ve labeled AI Innovators. The HR teams in these companies are already successfully integrating AI technology to be both more efficient as well as effective. This adoption has a distinct correlation to business performance: AI Innovators are more likely to have higher market performance, increased levels of innovation and productivity, and healthier cultures than those that have been slower to adopt AI.

For many companies, efficiency is a quick win—using AI to offload those mundane tasks every function tolerates. There is still a long way to go for most to deconstruct jobs and leverage AI to free individuals and teams to be more strategic. But there are already proven methods some organizations have employed.

The real prize is effectiveness—AI can rapidly accelerate the business to a new level of competitiveness and preparedness for a radically different future of work.

The reality is that most organizations are only beginning to experiment with these new AI tools or are simply watching and waiting. For such HR teams, we applied the label AI Enquirer. These teams are more likely to be exploratory—merely researching potential uses of AI. Unlike the AI Innovators, in organizations in the AI Enquirer stage there has been very little communication to the workforce other than to refrain from using AI at work for the time being.

Some are downright skeptical and intentionally ignoring the signals of change that are everywhere. These represent the AI Laggards. While many in this category have yet to communicate any guidance or usage policies for AI to their workforces, a small number of large organizations (4%) reported that the use of AI at work is expressly forbidden. “We prefer to use our own senses to compose documents,” one leader told i4cp.

Despite the newness of generative AI, next practices are already emerging for the HR function. Our study identified nine used by most AI Innovators that others can certainly learn from.

On average, AI Innovators have implemented or are planning to adopt 77% of these nine practices. Conversely, AI Enquirers have adopted (or are planning to adopt) a mere 13%, while AI Laggards are at fewer than 1% of the same practices.

While most HR teams have been slow to adopt AI, a concerning issue the study uncovered is that most HR leaders aren’t currently involved in AI—related decisions that impact their organizations’ workforces. In fact, our data shows that HR has a weak influence on AI decisions at more than 60% of organizations, and this is due primarily to a prevalent lack of belief in HR’s capabilities. More than half of those surveyed told us they have no-to-low confidence in HR’s readiness to contribute to AI strategy.

Given HR’s purview of workforce capabilities, skills, potential, and deficiencies, this is a strategic miss that needs to change if organizations expect to truly leverage AI.

The future of work will be significantly impacted by AI; HR needs to be at the center of this revolution. There is a high level of long-term strategy and utilization already underway in several organizations that can serve as models for others.

I’m hopeful that our new study (available to i4cp members)—and the peer collaborations we will continue to organize around this constantly evolving topic—will propel more organizations into AI Innovator status.

If you’re organization isn’t an i4cp member, download the executive brief or contact us to learn more about enterprise membership.