With the dawn of AI set to automate mundane tasks and free us all to do more creative jobs, why is HR lagging behind Finance and Procurement in adopting this new technology?
Why the slow adoption of AI in HR?
Analysts such as the Hackett Group consistently forecast that adoption of AI across Finance and Procurement will be significantly greater over the next two to three years. Is it simply that Finance and Procurement control the cash, or is it something more fundamental?
Having worked for Software vendors for over 20 years, I have overseen the implementation of many back-office ERP systems across different business functions, but it is the HR department that I identify most closely with. I have recently come to realise the extent of the gaping holes that these ERP systems have left – and continue to leave – in their wake for many overworked HR professionals, who spend much of their working week crunching spreadsheets and wondering when they are going to apply the skills they gained when obtaining their CIPD qualifications. For this, I apologise on behalf of the IT Industry!
If there is one area of a business that desperately needs automation of processes it is HR, which struggles to deal with two major issues:
- Administration overload: most large organisations have rationalised their HR Functions as they transitioned to Shared Service Centres with the promise of ERP-enabled process improvements. The current norm for HR staffing Ratios in companies with over 7,500 employees is 0.42 per 100 employees; that’s 1 HR professional supporting 238 staff! (SHRM Human Capital Benchmarking Study.)
- Scope growth: the corporate demands on HR will undoubtedly grow and therefore the scope of services that an HR Shared Service delivers will also grow accordingly. HR professionals are starting to deal with a new set of challenges, including new working patterns, shorter contracts, diversity and inclusion, and “Strategic Talent Management,” where improved talent acquisition and retention in the face of skills shortages becomes the norm.
So, given this situation, why is AI adoption lowest in HR?
Human thinking technology
One answer could be the type of AI that is most prevalent in the market today: Robotic Process Automation (RPA). RPA is the simplest form of AI and is the most-adopted technology within Finance and Procurement departments today. However, at its most fundamental level, RPA is about the automation of always consistent, never-changing, repetitive tasks – for example, ‘copy the data from this invoice and enter it into this back-office Finance system’. While some of these never-changing tasks do exist in the HR world, RPA would be pretty poor at automating most processes undertaken by HR professionals. And then, of course, there is the human sensitivity factor; do you really want a “bot” to manage, for example, your process for dealing with a repeat absentee?
The solution to this, I believe, lies in the application of a different type of AI to the HR function: Cognitive Intelligence (CI). CI is the ability to computerise the way people think; it enables the automation of highly complex thoughts, decisions and tasks. For HR in particular, this provides automation that is tightly blended with human action at the right time and the right stage in a process. CI allows HR to automate the right elements in a process, and provides support and decision points for HR professionals and line managers when human action or decision making is needed.
HR is complex as it deals with people and not just numbers, which is why I believe HR is behind the curve on AI adoption. However, I don’t believe that HR is too human to realise the benefits of AI; it needs to be the right type of AI supporting – not replacing – people, and automating the right processes to provide HR professionals with the space to deal with the more complex challenges they face.