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The application of AI to workforce management presents a unique blend of potential benefits and risks. A well-planned AI strategy for human capital management (HCM)––aligned with corporate goals––can mitigate many of the risks and ensure that AI initiatives are ethically sound, compliant with regulations, and support the organization’s key objectives, priorities, and values in a cost-effective manner.
Trusted Insights for What’s Ahead™
•Current and evolving use cases demonstrate the value of advanced AI in HCM. The integration of advanced AI in HCM has already showcased transformative potential in streamlining HR processes and enhancing the employee experience. Organizations should evaluate AI-driven solutions that can optimize operations and benefit workers throughout the talent life cycle.
•An AI strategy for HCM provides focus and direction amid the many AI choices available. A comprehensive AI HCM strategy provides CHROs with a framework to prioritize and implement AI solutions that align with corporate and workforce needs while
offering the best resource-to-returns ratios within acceptable risks.
•Clear metrics and reporting connect AI HCM strategy to business and financial outcomes. By tracking, measuring, and analyzing critical metrics, such as employee engagement scores, turnover rates, and productivity levels, CHROs can demonstrate the
direct impact of their AI-driven HCM initiatives on key performance indicators, helping justify investments and inform continuous improvement.
Current and Evolving Use Cases Demonstrate the Value of Advanced AI in HCM
AI is revolutionizing the way organizations manage their workforce. As AI technology evolves and its integration into HCM becomes more sophisticated, the scope of AI applications will continue to expand. AI is already impacting many aspects of the employee life cycle and offers the potential to further enhance and personalize employee experiences going forward. Given the wide range of applications of AI in HCM and limited HCM time and budgets, CHROs need to assess their options strategically, selecting AI initiatives that align most directly with business strategies and objectives.
•In workforce planning, advanced AI models can predict future staffing needs based on
business trends, identify skills gaps, and suggest training or hiring strategies.
•AI can streamline the recruitment process by automatically scanning résumés, matching candidate skills with job requirements, and identifying suitable candidates.1
•AI can create training and learning paths based on an individual's role and learning preferences. For example, a company utilized an AI-based deep learning system to analyze millions of data points from current job roles, mapping these to future skills and capabilities.
This approach helped predict job and skills evolution, leading to the development of relevant learning paths. These paths now guide the upskilling, reskilling, or transitioning of teams and individuals into new roles vital to the firm’s future.2
•AI also promises to transform knowledge management by making the knowledge possessed by individual employees more understandable and available to the entire workforce and by tailoring information to the needs of the individual. At Cummins, for
example, knowledge summarization tasks that once took almost two weeks of employee time now produce comparable results in just 15 minutes using AI.3
•In performance management, new AI tools can gather data to interpret how an employee is using various applications. Machine learning can predict what actions the user will take next and can provide real-time performance support. Ultimately, this provides employees with the information they need in the context of the task they are doing, giving them just-in-time knowledge and performance support when they need it most.
•AI-driven surveys and feedback tools gather real-time insights into employee morale and job satisfaction, driving personalized engagement and wellness plans.
•AI can help identify and mitigate unconscious bias in recruitment and performance evaluations and provide insights to foster a more diverse and inclusive workplace. AI analytics yield insights into workforce dynamics, employee turnover trends, and engagement levels, aiding leaders in making data-driven decisions to improve overall organizational effectiveness.4
Strategic application of AI in HCM, with sufficient attention paid to the risks, will avoid scattered and inefficient use of resources, promoting a coherent and effective integration of AI in driving organizational success.
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