How AI and Intelligent Automation Impact HR Practices

Today's businesses must continually improve process efficiencies to stay competitive. Given the high cost of human labor, they are turning to AI and intelligent automation technologies to lower costs and increase ROI. While there's considerable anxiety in some parts of the workforce about the impact of AI and intelligent automation, experts say workers and their employers are happier when humans focus on what they do best.

Forrester Research has defined a six-level maturity model that describes where companies fit along the automation spectrum. At the lower levels, companies are experimenting and piloting technology. At the upper levels, companies have full-blown automation centers with bots in production across the company, and they're using analytics to propel themselves to even higher levels of maturity. According to Craig Le Clair, vice president and principal analyst at Forrester, only 10% of companies are operating at the higher levels today.

How automation can help HR

The HR function is ripe for automation given its highly transactional nature. Much of what HR does is the same thing, done the same way, time and again whether it's recruiting, onboarding or other employment-related tasks. Since HR is typically seen as a cost as opposed to a revenue generator, its processes tend to be encumbered by old enterprise systems.

Craig Le Clair

"Most HR departments are waiting for systems-wide change which takes a long time," said Martin Fiore, Americas Tax Talent leader at global professional services firm EY. "Enterprise systems are hard to change because of their significant size and they require the whole organization to look at them. RPA and AI are the exact opposite because you can make efficiency changes without affecting the entire organization."

Right now, HR employees are buried in transactional work that involves data entry and simple math calculations. Those types of things can be done faster, cheaper and more accurately using Robotics Processing Automation (RPA).

EY started with a brainstorming session that mapped out current processes and identified opportunities for change.

"We probably came up with a half a dozen areas that we felt were not good use of human time, but a very good use of robots [such as] onboarding people, reconciliations for benefits, table batching and validation, travel and expenses, [and] learning and administration," said Fiore.

For example, each of EY's 13,000 tax practice employees must attend training that results in certification. The certification needs to be validated, which involves notifying employees and managers and making sure the certification is recorded properly.

"There's this whole process where people are pushing emails and spreadsheets for all the training that we do," said Fiore. "It's a team of people that are doing that kind of work we can free up."

Martin Fiore

Meanwhile, the new employee onboarding process has been reduced from 150 minutes to three minutes, simply by automating tasks, such as sending automated emails and automatically pushing forms.

The other benefit is a higher degree of accuracy. There's no longer a need for a separate group that validates forms, and HR does not have to manually enter forms into multiple HR systems.

Similarly, recruiters have traditionally read through a pile of resumes to identify qualified candidates. Then they graduated to running keyword searches. Now, they're using algorithms.

"There are people who can create algorithms that will look not just at key behaviors, job functions or skills, whether they're technical or accounting, but look at other words on the page that tell you that person might be a great accountant or controller so it can rank and prioritize things [recruiters] may want to use," said Jim Johnson, senior vice president, at staffing agency Robert Half International. "It's not perfect. In a lot of cases, accountants aren't professional resume writers, they're professional accountants, so you have to have an individual adapt the algorithm to predict some things."

Why HR is driving workforce transformation

Even though HR may be viewed as a cost center, it is at least partially responsible for ensuring that members of the organization are productive and driving value.

"Automation is coming from the top," said Forrester's Le Clair. "The head of HR is the target and they're the ones making decisions about investing in this kind of technology to help their operations. They're thinking about it as getting hours out of their organization [because approximately] 60% of a company's cost is labor. It varies with the industry, but some percentage of those hours are these repetitive, highly structured tasks RPA can help with."

One bot can do the same number of rote, repetitive tasks that 2.5 to 3.5 humans can do, Le Clair said. Organizations can build a bot for $30,000 and maintain it (including infrastructure and licensing) for about $20,000 per year while saving 6,000 operational hours. Not surprisingly, the organizations leading the bot revolution are those focused on digital transformation.

The move to human-machine partnerships is not without friction, however. Some employees fear they will be automated out of a job.

"There are going to be automation deficits, which are jobs lost and automation dividends, which are new data scientists and robot managers and things. There's going to be a lot of job transformation," said Le Clair. "I like the term, 'task harvesting' which is going in and redesigning what a human does based on this human transformation that comes from automation."

The ideal division of human and machine labor is not static, however. As machines continue to become more intelligent they will be used to automate more tasks. Change management practices must evolve accordingly.

Jim Johnson

"There's a whole new sense of what change management means. [Traditionally,] change management assumes that you know what the end game is," said Le Clair. "Machine learning algorithms learn at some rate which you really don't know when you start to deploy them, so you don't really know what the degree of change will be. There's a new lens we have to put on the workplace."

Get help

Companies can benefit from the expertise of consultants who have been automating tasks across functions and industries. Typically, consultants start with an assessment to understand the starting point. They may also help help companies define or refine their automation goals so they truly align with business objectives.

"Bring in some consultants that have HR domain knowledge and knowledge of the leading RPA systems," said Forrester's Le Clair. "Have them do an assessment because RPA is not ideal for all processes. If you have too many decisions involved and too many apps involved and too many clicks involved, it gets too complex to be maintained."

The best automation candidates are simple, high-volume transactions, which aptly describes a lot of time-intensive HR work. However, HR must also consider how automation will affect the entire company's workforce.

"The professional of the future has to think of technology as their colleague, a coworker, a peer to them versus some object that is just some physical piece of machinery," said EY's Fiore. "We've found that's had a positive impact because it then allows the individual the freedom to [delegate] mundane, high-volume work to a robot which will allows them to focus on more strategic and creative work."

Meanwhile, the company can drive higher ROI from the combined workforce.

"Labor is not cheap," said Robert Half's Johnson. "If I can get more from my labor by automating the things that keep them from doing the things I want them to do or the value they can add to my business, that makes sense."