Driving HR Performance with Gen AI

On this episode of the “Gen AI Breakthrough” podcast, Jessica Haley and David Gibbens discuss the findings from their annual HR Digital World Class®, highlighting key trends in the evolution of HR practices. They emphasize the importance of technology investment and digital enablement within HR operations, which allows organizations to shift their focus toward more strategic activities. The conversation also touches on the defining characteristics of Digital World Class® HR organizations, particularly their ability to align service delivery models with overall business strategies.

Welcome to The Hackett Group’s “Gen AI Breakthrough” podcast, where top experts give actionable artificial intelligence (AI) insights, expert advice and strategies to achieve breakthrough business performance. The conversation today is between Jessica Haley, Global HR Advisory practice leader at The Hackett Group®, and David Gibbens, head of Europe’s HR Advisory program at The Hackett Group®. They talk about the annual data cuts they release to analyze the trends, comparing world-class organizations to the peer group, which is considered more average.

Jessica and David start by defining a Digital World Class^® organization. They look for the top performers in both efficiency and effectiveness. They are organizations that excel across human resources (HR) key indicators like implementation of automation, AI applications, internal mobility strategies or anything that enhances the HR function, while also addressing the efficiencies and effectiveness of the organization. Jessica states that they’re interested in the value and efficacy delivered, not the cheapest service at the lowest price.

They then follow up with recent trends they’ve seen in data in HR. They say that HR has a lot of investment in technology or the digital enablement of HR, specifically focused around HR operations. We see the business investing in technology by leveraging the HR head count to tackle the strategic areas of delivering business value, which is focused on talent.

David and Jessica explain the defining characteristics in these data cuts around Digital World Class^® organizations. There are a number of areas in which Digital World Class^® organizations stand out – formalizing their service delivery model, greater engagement within management and increased perception of HR as a business partner. These organizations are implementing things that are making a real difference. They are assuming the HR function as a strategic advisor and a business partner. These organizations are being more proactive and assertive with HR strategies, which drive some of the wider business strategies.

HR stakeholders have a desire to be more involved in the business, and what HR leadership at The Hackett Group® has learned is that there’s a lot of things we have to do to enable that sort of behavior. The newer HR leaders coming into the role really understand how to tie the value of what HR is doing today to the enterprise strategies and the value that the business is trying to drive. In world-class organizations, they prioritize initiatives to do those things. They understand their success is compounded to what the business is trying to accomplish. These organizations may have struggled in the past, but have found strategic workforce planning more effective through the use of generative AI.

World-class organizations also implement business strategies that are flexible under current geopolitical influences. They have a sense of agility. Digital World Class^® organizations are “horizon scanning” and able to understand that as things change, they have the data analytics, technology, skills management, and a clear and strong link with HR strategies to continue to be successful and efficient.

Jessica and David talk about the fact that disruption is happening at an accelerating rate. The shelf life of skills used to be five to 10 years, and now it’s closer to two-and-a-half years in regard to the innovations with AI. AI offers an ability to leapfrog in a way that they’ve never seen before. The constants to consider are that the data is safe, people understand the usage and businesses have buy-in, but the way in which they use the tech is fundamentally different. The conversation around talent is for employees to apply themselves to a new way of working. With AI, everything is being shaken down to the foundations, and every conversation seems to now have AI in it. That is disruption, and with that comes a multitude of challenges but also opportunities. Skills development and skills management become a huge task for HR.

David says you have to already understand what the HR function can do for an organization, which can be seen across the lifetime of an employee. Skills development and management are important because it links to strategic workforce planning, which leads to internal mobility, performance, review and succession, performance management and promotion, etc. When you start to think about the opportunities that exist within the organization, it’s important to think about what opportunities to capitalize on most that involves prioritization, which can be difficult for many clients.

Stakeholders that Jessica speaks with also have experiences with diving in and attempting many different aspects of the HR function to access the goal of strategic workforce planning. They approach it from talent, skills management, internal mobility perspectives and others. Jessica says there are a lot of distractions when you think about the buzzwords, but you have to continue to have good strategies around people and process. This is a time when organizations that are not world class can take big risks and close those gaps. The real risk is to continue doing what everyone else is doing and leaning into complacency or hesitation. High risks, high rewards.

David agrees that it’s a great climate to take big risks and the lead in some of these areas. The key is moving forward with purpose – lots of people are still hovering around waiting to see what’s going to happen. This can be good sometimes, but business is so complex and moving so fast that moving with short sharp purpose is the answer. You might fail fast and then you try again. This is the key – the Digital World Class^® organizations that they work with already did the analytics, they have the stuff they need, they’ve taken risks, and done so with conviction and learned from it. They find new ways to innovate and drive business value – this leads to a culture of thriving in innovation rather than fearing it. The two distinct camps are those that are going to be hesitant and wary, and then those who are convicted in their purpose and ready to take risks. The majority of the latter would be in the Digital World Class^® cohort.

Jessica then wraps up and thanks the listeners for joining them!

Time stamps

1:38 – Digital World Class^® organizations defined.

2:39 – Trends in HR.

4:23 – Digital World Class^® organizations in the data.

6:22 – HR as a business partner.

9:23 – Flexibility within HR.

11:25 – Talent and disruption.

14:38 – HR function in a business.

15:54 – High risk, high reward.

19:10 – David on risk.