5 Steps to Unlock the Power of Gen AI in Human Resources

May 21, 2024

Generative artificial intelligence (Gen AI) and other AI technologies are disrupting how human resources (HR) organizations operate while reinventing what’s possible. According to our recent analysis, Gen AI can yield a 44% reduction in HR function costs and a 51% human productivity increase over five to seven years for a typical $10 billion company. That return on investment, however, depends on you knowing how best to deploy the technology.

While there is tremendous excitement about Gen AI, there is also a lot of uncertainty about how to unlock its potential. Choosing the right approach is critical. Moving directly to use cases without first determining your enterprise AI opportunity and readiness will produce, at best, incremental improvement. To capture maximum value and deliver on groundbreaking potential, HR professionals must approach Gen AI both strategically and practically – separating hype from proven success.

Three types of Gen AI – and their use in HR today

As you consider Gen AI for your HR strategy and human capital management (HCM) processes, it is important to understand the three primary types and possible use cases to determine where and how to deploy AI technologies within your own organization.

TYPES:1. Embedded Gen AI solutions2. Native Gen AI solutions3. Domain-specialized Gen AI solutions
Uses Gen AI functionality embedded in third-party platforms – typically offered by enterprise software providers such as Oracle, SAP, Microsoft or HCM solutions. Users can turn on embedded Gen AI capabilities and begin employing them for specific business needs.Built by the organization to fulfill a particular purpose or use case. Requires an enterprise Gen AI platform on which the solution is built. Often functions as a digital assistant or integrated with an intelligent process automation solution to increase productivity, improve worker effectiveness, elevate employee/consumer experience, and/or enhance decision-making capabilities.Foundation models offered by solution/service providers that specialize in a particular industry/domain and have access to domain expertise and a large knowledge base. Users subscribe to the model and use the service – either through an application programming interface integration or direct access into solution/service provider portals. We believe this is where HR will see the biggest impact from Gen AI.
EXAMPLES IN ACTION:Job descriptions and requisitionsHR policy supportResume summarization
and filtering
The HR team turns on the new Gen AI functionality in its HCM system. A user can now ask the app to write a general job description for a role – such as fixed asset accountant – and then add role-specific criteria such as industry or system experience, or the ability to lead a team. Going forward, the app can compare the description to the resumes of people hired for the role and refine the description. Not only are HR staff more efficient, they become more effective in filling roles with the right skills.An employee is considering relocating from California to Massachusetts and needs fast answers to policy questions. The employee queries a Gen AI solution built using a retrieval augmented generation solution technique to find answers to questions – quickly and confidentially. Because the solution is trained on more than 300 HR policies and knows the details of the employee asking, it can provide accurate answers in a self-service format. This improves employee experience and is more efficient for the company.The HR team for a large organization receives hundreds of applicants for job openings. The team uses a domain-specialized AI solution where users “chat” to filter candidates – for example, first by industry background, and then by other criteria such as experience with a new system that the company is implementing. This improves staff efficiency and effectiveness in filtering candidates for further assessment.

Act decisively and move swiftly

Those who take bold action can unlock breakthrough levels of operational excellence and business value – if they choose the right path. Architecting the future of HR begins with a critical, strategic view of Gen AI readiness and opportunities. The good news is the steps for doing so are straightforward – and you can be on the journey to a successful AI strategy in just a few weeks.

Determining your AI opportunity, best-return use cases, and readiness will deliver tangible benefits and grow institutional knowledge, improving your organization’s execution and assessing what’s truly feasible. That’s how your HR organization can build momentum and accelerate the value potential of Gen AI.

5 steps every HR executive should take now

  1. Educate and inform your executive team, and level-set expectations around Gen AI.
  2. Understand where the greatest opportunities exist for leveraging Gen AI across the function.
  3. Examine specific use cases – based on the opportunities identified – to understand how Gen AI could impact work.
  4. Determine your organization’s readiness to realize the benefits of Gen AI – assessing data quality and availability, skills, governance, and infrastructure.
  5. Develop a prioritized Gen AI road map and corresponding workplan for deployment.

Architect – and accelerate – your Gen AI future

The Hackett Group can help you explore and understand the potential for Gen AI as part of a comprehensive, intelligent digital operations strategy. Visit our website to learn more about our:

  • Transformation services: Our consultants use our proprietary AI XPLR™ platform to architect your Gen AI journey – from strategy and business case to impact assessment, readiness, and road map.
  • Executive Advisory membership programs: We guide and advise you to explore Gen AI opportunities, select providers, and pilot Gen AI solutions.