Generative AI is key to Improving HR efficiency : Survey
Hackett Group survey says, building effective leaders will remain HR's top priority in 2024, for the second year in a row. In 2024, the requirement to build and maintain a high-performing organizational culture rose three ranks to become the second most important priority. As organizations negotiate these goals, it is critical to acknowledge the growing demand for HR business partners to incorporate leadership coaching at the highest levels.
The Hackett Group, new survey stated that as companies face significant uncertainty, such as the possibility of stalled global economic growth, high interest rates, and labour and skills shortages, HR teams expect to feel increased pressure, including a growing workload and the need to enable the success of business stakeholders. HR leaders consider generative AI and other technologies as critical to increasing efficiency and effectiveness.
As per the Hackett Group survey, building effective leaders will remain HR’s top priority in 2024, for the second year in a row. In 2024, the requirement to build and maintain a high-performing organizational culture rose three ranks to become the second most important priority. As organizations negotiate these goals, it is critical to acknowledge the growing demand for HR business partners to incorporate leadership coaching at the highest levels.
According to the Hackett Group’s research, firms should carefully consider how leadership development fits into the larger HR operating model. Given these trends, the research recommends that HR organizations take proactive steps to align workforce planning and strategy with business planning, as well as improve the experiences of employees, managers, and candidates—both of which are newly added to the top ten priorities list for 2024.
While HR workload volume is predicted to increase by 7%, cost savings are also a priority. According to the report, both HR operating expenditures and staff are likely to decline modestly in 2024, resulting in severe efficiency and productivity gaps. Technology investment, which is predicted to increase by 4%, is one method HR firms hope to close such gaps. More HR work will also be allocated to the functionality of fully automated and self-service systems, with HR executives expecting global business services and HR shared services units to handle 3.5% more work, while centers of excellence, corporate HR, and business unit HR will see overall workload increases of more than 2%.
The study suggests that HR firms investigate generative artificial intelligence (AI) as part of their HR operations digital transformation efforts. Although its adoption is still evolving, generative AI holds enormous promise. According to our latest research, generative AI has the potential to reduce selling, general, and administrative (SG&A) costs by 40% and SG&A staff by 40% over the next five to seven years.
According to the research, 41% of HR firms have adopted pilots or small-scale generative AI deployments, and a 7% growth rate is predicted by 2024, which is higher than any other emerging technology.
“HR organizations are placing increasing focus on using technology to improve efficiency and productivity,” according to Harry Osle, principal and global HR advisory practice leader at The Hackett Group, “with a 19% growth rate expected in the adoption of cloud-based human capital management applications and significant growth expected in the adoption of HR point solutions, generative AI, and agile orchestration.”
“Emerging technologies made possible by AI are being adopted more frequently, though currently on a smaller scale,” says Osle. “HR businesses are already cautiously experimenting with generative AI as part of their digital transformation efforts, especially for low-risk tasks like developing chatbots, addressing frequently asked HR-related inquiries, and establishing uniform job descriptions. However, there are many more areas where generative AI will be used by HR to optimize processes, including communications, learning and development, talent acquisition, onboarding, and employee engagement. This will free up HR personnel to accelerate business-critical strategic projects. There will be a significant impact.”
Based on data from over 375 executives in finance, procurement, supply chain, HR, IT, and GBS at a global sample of midsized and large businesses, the Hackett Group conducted this study.
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