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Human resources in the age of automation

Age of automation

by Mili Bustamante and Neel Gandhi

The core of HR 3.0 – McKinsey’s vision for the future of employee-related activities – focuses singularly on driving value from talent. But let’s be candid: HR will not have the bandwidth, resources or credibility to achieve this goal unless it delivers smooth and continuous customer service.

To provide such stellar service, HR must employ technologies that are changing how consistent process execution and excellent customer care are delivered.

The biggest workplace disruptor is next-generation automation technologies. The McKinsey Global Institute estimates that nearly half of all work could be automated with current technologies.

For HR, intelligent process automation, which includes artificial intelligence and related new technology advances, can help deliver consistent people processes – something that has eluded many HR operations teams given the dynamic nature of the requests they receive.

Cost savings also materialize through deploying such technologies as robotic process automation, machine learning and cognitive agents. Our analysis suggests that 56 percent of typical “hire-to-retire” tasks could be automated with current technologies and limited process changes.

Robotic process automation is the most mature technology. Its use of software with AI and machine learning capabilities to handle repeatable tasks that humans have traditionally performed is already changing the delivery of HR services. For example, a leading consumer packaged-goods manufacturer deploys bots in its hiring process, starting with onboarding new employees (by, for example, porting application tracking system data over to the HR information system).

With time, opportunities will abound to automate more elements of the hiring process. For example, a bot can draft offer letters, write job descriptions or set up payroll and benefits data. And beyond robotic process automation, cognitive agents can potentially transform the interaction between HR and employees. Always-on chat agents can answer questions instantaneously and be available on employee phones – a better service experience than calling an HR hotline.

Consider the experience of a fast-growing tech company hiring employees rapidly and generating numerous offer letters. Those letters were drafted manually and required many quality checks to ensure compliance and accuracy. The company deployed a bot to automate the entire process, generating an offer letter that pulled information from several systems. Compliance and accuracy checks built into the programmed workflow limited human involvement to the occasional exception and quality control.

The result: Processing time fell 66 percent, compliance improved and four full-time employees moved to more value-added work. Given the generally low cost of bots, the business case for automation is clear – and the service impact is equally apparent. Beyond the measurable impact, faster turnaround time is likely to improve job offer acceptance rates. That would dwarf automation’s potential productivity value.

Still, some important caveats exist. HR has fewer opportunities to carry out more mature automation technologies, such as robotic process automation, than some other support functions, particularly finance.

On their own, only the largest HR organizations would likely possess the transactional base to justify the robotic process automation learning curve. What’s more, many automation technologies require a portion of people’s time, so capturing the opportunity requires real transformation of process and organization.

However, as part of a broader enterprise strategy, HR can and should be a significant deployment opportunity for automation technologies. For example, HR should be part of the charge to automate customer service, particularly at larger organizations with sizable HR call centers.

As technology continues to transform the world, HR clearly must be part of that change, embracing robotic automation and other technologies that promise greater efficiency, superb customer service and significant cost savings.