Generative artificial intelligence (AI) is top of mind among business leaders, as trillions of dollars could be added to the global economy through its use. But while a third of organizations say they are currently using generative AI in at least one function, only 3 percent of them report using generative AI in HR.
Here, we look at the HR function’s potential to become a front-runner in utilizing generative AI to realize large efficiency gains. We have identified four use cases that can be applied relatively quickly with light adaptation, minimal programming effort, and a bit of customization to an organization’s systems, databases, and tools:
- Content creation – generating new content, such as text or images, to support recruiting. Companies across industries are using generative AI tools to formulate new job postings based on skill profiles, keywords, or old postings; to adapt postings based on context; and to draft personalized communication with candidates. For example, a large automotive player has introduced a generative AI-based avatar for the recruitment process that provides each applicant with personalized feedback on the application process. Our analysis reveals the largest value potential for generative AI in HR—about 20 percent—in talent acquisition, recruiting, and onboarding.
- Concision – summarizing and extracting insights from unstructured data sources to enhance performance management processes. For example, one European insurance company uses a work management platform to aggregate performance ratings with 360-degree feedback to synthesize insights, formulate development recommendations, and massively accelerate HR processes. Moreover, generative AI tools can provide augmented monitoring of employee sentiment in real time and help to ensure an objective performance appraisal process. Enhancing people and talent management processes comprises another 20 percent of generative AI value potential for the HR function, according to our analysis.
- Communication – fostering employee engagement through direct communication and exchange with an AI-based chatbot. Organizations are developing generative AI chatbots that can access the entire knowledge base of the HR function, guide employees through personalized journeys, and thus improve efficiency and individual experience. For instance, one major global software company uses a generative AI chatbot to provide employees with individualized learning recommendations based on skill gap assessments. Combining continuous learning and development with AI-powered personalized learning recommendations accounts for an additional 12 percent of generative AI value potential.
- Coding – interpreting data and generating programming code to support people analytics. Companies are using generative AI to compile different data sources, analyze a large amount of data, and identify patterns and connections comprehensively. A Europe-based pharmaceutical company has implemented a generative AI-based coding co-pilot to analyze large HR data sets to, for example, determine the probability of attrition in different business units. Our analysis shows that deploying generative AI for organizational analysis and planning accounts for 15 percent of the value potential in the HR function.
These are just four exemplary use cases for the deployment of generative AI in HR, but we see opportunity in every HR sub-function, often with the possibility of immediate use to capitalize on value potential.
Getting set for future success
There are a handful of factors that play a role in the successful implementation of generative AI in HR, including close collaboration with IT, establishing a strategic roadmap, and building critical capabilities. Additionally, organizations should practice solid risk management by analyzing potential hazards up front, including those associated with legal and compliance (e.g., intellectual property), cybersecurity (e.g., data protection), and data monitoring and analytics to mitigate biased decisions driven by generative modeling.
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The HR function of the future will look completely different than it does today. Employees will spend significantly less time—estimated up to 60 to 70 percent—on automated, administrative work with the help of generative AI. This saved time can instead be dedicated to important human-to-human interactions, thus serving as a massive cost efficiency factor for the HR function. Generative AI capabilities in HR not only benefit HR per se, but also give managers superpowers when it comes to HR topics (e.g., managers can better access HR data, write job descriptions, or get better prepared for interviews), with less tactical intervention from HR.
Moreover, exceptional and future-oriented HR is, at its core, about creating personal experiences. The calls for more strategic HR can now be answered, thanks to generative AI, by freeing up HR capacity. By streamlining and accelerating HR processes with generative AI, the HR function can better support the business and its AI aspirations, while role modeling technology adoption more broadly.