Until HR leaders transform their own function to make it ready for the forthcoming AI era, they will be in no position to re-design work effectively within the wider organization. This is the view of Jess Von Bank, Global Leader of workplace consultancy Mercer’s HR transformation & technology advisory service. Speaking at Gartner’s recent HR Symposium in London last week, she pointed out that most companies’ HR infrastructure had not kept pace with the promise of AI. This is despite the fact that a huge 92% or HR leaders are currently piloting or implementing AI within the department, according to Mark Whittle. He is Vice President of Research and Advisory at Gartner’s HR practice. Von Bank explained: I’ve been thinking about the role of HR and how what it’s tasked with delivering has changed. How the mantle of responsibility has shifted over time from being stewards of employment to becoming stewards of work. This means taking responsibility for the care of the workforce and for shaping it and making people proud to work there. But HR has a new mandate now. The emergence of AI is about reimagining work and thinking of it as a human-machine teaming. Kristin Rhebergen is a Senior Principal at Mercer. According to a survey among HR professionals undertaken between May and June this year, there are five “strategic gaps” that are holding leaders back from transforming their function, the business and how work is undertaken, she said. These consist of: Operating models that need reinventing A lack of clarity on roles and structures, which is hitting strategic effectiveness Nearly three-quarters of respondents to Mercer’s HR Operating Models and Design Practices survey said that while they had refreshed their operating models a bit, they had not reinvented them. Around 55% of those questioned based these models on an HR shared services, business partner, and centre of excellence approach. A further 11% of respondents had also added an ‘agile pool’ to ensure they could match the right skills to the right projects at the right time. But as Rhebergen pointed out: These are based on legacy premises and structures, so what you’ve got there won’t get you to an AI-powered future. the question here is how do you measure success if you don’t know what you want or how to do it? During his ‘CHRO Leadership Vision’ presentation, Whittle pointed to one possible answer: what he described as an “AI-infused” HR operating model of the future. At the heart of this model would be an HR Innovation Command, which would include a head of HR strategy, head of HR transformation and an AI in HR product leader. The Command would be tasked with leading HR through its reinvention process and managing its transformation. There would also be a Center of Excellence. This would consist of custom HR product designers, owners and managers, plus value stream leads. Their role would be to work together to develop hyper-personalized HR products based around employee needs. At the HR operations level, meanwhile, a digital HR solutions and delivery team would support HR’s data and tech enablement and manage an agile HR delivery team. HR business partners, on the other hand, would enable human-first AI transformation within the business and provide strategy people-related advice. They would do so by assuming the role of executive people partners and creating dynamic people partner pods. These are small cross-functional teams of people partners who work together to support a specific business unit. Critical HR capabilities and skills that are not up to scratch Strategic and agile HR roles that are underdeveloped: While 56% of leaders are investing or planning to invest in developing HR capabilities and skills, learning programs still tend to focus on “legacy constructs”, said Rhebergen. As a result, the focus today is on areas, such as HR service fundamentals, basic analytical skills, and leading change or transformation. As a result, there is a marked underinvestment in important skills for the future. These include systems, process and critical thinking, the use of generative AI in HR, and ethical AI stewardship. As Rhebergen explained: We need to re-think what HR needs and what people are doing as the focus today is on legacy constructs. We need emotional intelligence to lead and navigate change but that’s the baseline. We also need systems thinking, process redesign and critical thinking. It’s where humans are imperative and, together with the tech capability, it’s what the future will look like. Inadequate digital and AI experiences Mercer’s survey also revealed that HR technology is nowhere near consumer grade in terms of user experience. It likewise indicated that, despite productivity being a key aim of many HR tech projects, only one in three believed such initiatives had reduced their admin burden. Furthermore, AI adoption did not necessarily appear to be focused on the right places. Only two out of five respondents said they had implemented dashboards to show people data trends in real-time and provide interactive workforce insights. Three out of five also admitted they had an underdeveloped data capability. A further third said they had no intention of introducing generative AI into their shared services functions over the next 12 months, even though it is just this kind of setup that could benefit most from the technology. Another quarter were unsure. Finally, fewer than one in five organizations acknowledged providing chatbots to answer employee frequently asked questions. Half said they would do so over the next year, but a third have no plans to implement them at all. But it is important that HR gets to grips with these kinds of AI initiatives as they will inevitably help transform the function for the better, Gartner’s Whittle indicated. In fact, he believes that “HR is at a crossroads” already. For instance, up to half of the activities HR professionals undertake today will either be automated or performed by AI agents over time, he predicted. A huge 100% of what HR currently does will also be “AI-augmented”. A key problem at the moment though is that many HR leaders have already entered the ‘Trough of Disillusionment’ phase of Gartner’s Hype Cycle as they struggle to demonstrate value from the technology. Re-thinking HR But the upshot of all this foot-dragging, Rhebergen believes, is that: Today’s prevailing model and practices are fast becoming the solution for yesterday’s challenges. We are no longer constrained by time, place, productivity, knowledge or skills, so we have to re-think HR and become the design muscle for the workforce. This means that “what got us here”, that is centralization, segregation, specialization, and standardization “won’t get us where we need to go”. Instead, the focus now needs to be on aligning people and technology strategies to enable ‘human-machine teaming’ and organizational agility. This ‘human-machine teaming’ is about enabling dynamic collaboration between the two to fit requirements as they change. At a basic level though, the idea is that while AI handles facts and rules, humans will focus on discernment, interpretation, and solving complex challenges. Technology will also be used to ensure humans, data and knowledge are all connected across the organization. Rhebergen explained: One of the fundamental design shifts is about how to drive value. It’s about orienting around business outcomes, not just activities, so rather than talking about ‘time to hire’, it’s about ‘time to productivity’. So, it’s more strategic. Human-machine teaming will be fundamental here as humans will provide the discernment and analysis, while the machines will do the deep work. She also recommends that to enable such value, HR needs to develop a closer relationship with the finance department. This will entail establishing what ‘value’ means for the organization. It will also involve developing a common language, metrics, and data sets. Ultimately though, Rhebergen concluded: To organize effectively in future, you’ll need fluid models across HR and the workforce so teams can proactively and reactively respond. I believe centralization isn’t the only way to drive consistency and value. But to be successful, you can’t just focus on mindset although it does all start with what we believe the future will be. It’s also important to focus on skillset, that is the capabilities required to lead and sustain new ways of working. And the heartset too. The heartset are the cultural and emotional enablers of change, and how you bring the culture to life. And lastly, it’s about the tools, technology and infrastructure required to make it all happen. My take Staying static in the AI era is not an option and that includes HR. If it wishes to be at the centre of forthcoming but necessary work re-design activities moving forward, a radical rethink of how it operates sounds like it will be vital no matter how painful it might be at the time.
https://diginomica.com/gartner-hr-symposium-london-why-hr-must-transform-if-it-spearhead-work-re-design-across-wider
