How Automation and AI Are Transforming Role of HR

Friday Mar 23rd 2018 by Mike Vizard
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Interest is rising in leveraging emerging artificial intelligence (AI) apps to automate as much paperwork as possible, and then surface the best possible candidates to meet new and existing job requirements.

Most companies are scrambling to hire and retain talent at a time when very few organizations can afford to pay everyone they employ top dollar. That means they not only need to maximize the talents of the people they already employ, they need to be able to proactively woo individuals outside the organization that have talents they need. In some cases, that may mean trying to entice individuals into becoming full-time employees. But it also may mean tapping into a “Gig Economy” because a growing percentage of the workforce prefers to work as an independent contractor.

The trouble is that most human resources (HR) professionals today are inundated by largely paper-based processes that leave them little time to focus on anything else. There are only so many hours in a week. If most of them are spent processing forms, there’s not much time to manage personnel. Because of that fundamental issue, there’s now a massive amount of interest in leveraging emerging artificial intelligence (AI) applications to first automate as much paperwork as possible, and then second, surface the best possible candidates to meet new and existing job requirements.

HR Needs Help with Paperwork, Regulations, Repetition

HR professionals spend most of their time engaged in activities that to one degree or another involve complying with various regulations. Most of that work involves checking that forms are properly filled out and filed on time. As machine learning algorithms that can visually inspect documents become more sophisticated, it’s now only a matter of time before much of the compliance activity associated with processing documents becomes automated.

While that may be disconcerting to some HR professionals, the less paperwork there is to process, the more time they will have to focus on everything from enhancing the employee onboarding experience to finding candidates both inside and outside the company that have specialized skills. HR is now at the center of workforce management, which extends to updating all the applications and systems as new employees come on board and others are terminated.

For example, HR is rapidly becoming the focal point around which identity management revolves in many organizations. Because HR is the department that typically gathers the most information on employees, many identity and access management (IAM) projects now rely on the records created by the HR department to be the single source of truth concerning the role individuals play inside an organization. That in turn dictates which specific applications that individual should be allowed to access, says Bill Evans, vice president of marketing at One Identity, a provider of IAM software.

“A lot of our IAM projects involve the HR department,” says Evans.

HR and HCM

Unfortunately, most of the applications being employed by HR professionals today consist of a mix of software loaded with often conflicting data. To get a better handle on the capabilities and responsibilities of employees, a major transition to modern human capital management (HCM) applications is now under way. For example, Oracle announced this week at the Oracle HCM 2018 conference that Ithaca College is subscribing to Oracle HCM Cloud because of a pressing need to eliminate manual processes. Because it’s simpler to make that transition employing software-as-a-service (SaaS) applications, most modern HCM applications are being accessed via the cloud.

That approach creates an opportunity to not just modernize HR processes, but also start providing mobile applications and various self-service capabilities through which employees can take care of certain HR tasks themselves, says Gretchen Alarcon, group vice president of HCM Strategy for Oracle.

“Many younger digital-native employees now expect companies to have these capabilities,” says Alarcon.

Once data starts to be aggregated in a central location, it also becomes a lot easier to start applying AI capabilities. In fact, IBM CEO Ginny Rometti, during a keynote speech at the IBM Think 2018 conference, said customers are starting to tell her that HR is one of the first departments they intend to apply AI in because the data has already been centralized.

“HR is a great place to start,” says Rometti.

Rometti contends that as AI takes over more mundane functions, it allows HR professionals to play a much more strategic role inside their organizations.

In fact, the single most important strategic role an HR professional can assume is talent management. HR professionals to one degree or another have always been involved in hiring. But rather than using software to search for keywords in a resume, HR professionals will be able to leverage AI and sentiment analytics to identify potential recruits based on, for example, how much social media influence they are exercising among their peers, says Rob Brimm, president of SAP Fieldglass, a unit of SAP that focuses on applications employed to manage external workforces.

It will then be up to HR working in collaboration with line-of-business executives to decide whether that individual should be hired as a full-time employ or as a contractor. But it often turns out these days that individuals with skills in high demand have no interest in working for one company full time.

“They have a gig mentality,” says Brimm.

Nevertheless, all those contractors still need to get paid via corporate accounting departments accessing payroll systems most commonly managed by HR.

The biggest HR challenge going forward, however, may not be the technology but rather cultural. Managers frequently have both known and unknown biases when it comes to personnel decisions. Many of them make hiring decisions based on, for example, who best resembles them rather than who might, based on the facts and requirements, be best suited for the task at hand. Senior managers are going to need to cede more control over hiring decisions to HR professionals armed with data and algorithms.

Of course, there will in time emerge a talent gap. The best HR professionals will migrate to the organizations that recognize their strategic value by providing them with the IT tools needed to realize it. Those organizations in turn will eventually attract better talent if for no other reason than being able to first recognize it, and second, appreciate it. Organizations naturally will still have to put the right culture in place to retain that talent. But HR is the place where organizations make their first impression on a new employee and, as the saying goes, no one ever really gets to make a first impression twice.

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