AI in the people function: Building leaders, improving processes, creating value
Everyone is talking about how to “use AI.” But for leaders in the people function, the more pivotal question is: Are we truly changing how teams create value—or just making tasks faster?
At McKinsey, we are fully committed to leveraging AI to cultivate the next generation of leaders and redefine our work practices. We are advancing beyond using AI merely as a productivity enhancer. Instead, we are reimagining value creation through People processes, making them more human-centric, strategic, and impactful. From the outset, our entry-level business associates utilize McKinsey-developed AI tools in their daily internal tasks. They then encounter and utilize AI tools that we have adopted to improve training and development and build the skills leaders will need to guide organizations into a new, AI-enabled future.
Equipping leaders for an AI-enabled future
Focus on building leadership that thrives in AI disruption—not just survives it.
A modern view of leadership
Our latest research finds that the biggest challenge in AI adoption isn’t talent or technology—it’s leadership readiness. People are willing to use AI, but real transformation happens when leaders set a clear vision, align their teams, and foster a mindset shift—from “this is a tool” to “this is a new way of working.”
As a firm known for developing future leaders, our challenge is to go beyond teaching AI fluency; we’re helping people lead with and through AI. Our approach, anchored in learning, development, and apprenticeships, is challenging by design. We set the expectation that the best leaders start their journey as voracious learners and never stop learning.
But it’s not just technical skills that matter most. Judgment, empathy, and building trust—fundamentally human capabilities—are what enable bold, effective leadership in an AI-rich environment.
Developing talent that’s ready for what’s next
The most successful leaders are those who learn the fastest.
To prepare colleagues for the future, we embed learning, coaching, and personalized feedback directly into the flow of daily work. This isn’t new at McKinsey, but we’re doubling down. Our learning journeys now prioritize both tech fluency and human skills. We’re accelerating exposure to gen AI and encouraging knowledge sharing across roles and cohorts. Rather than waiting for the next wave of change, we are creating environments where learning happens fast and under first-of-their-kind client projects that sharpen thinking, judgment, and adaptability so leaders can help shape what comes next.
Elevating people function processes through AI
Across our people function, we’re not just streamlining processes, we’re using AI to enhance how we support our colleagues and improve employee experience.
Better tools for better experiences
AI is already reshaping how employees work and learn. Our data shows employees are three times more likely to use generative AI than their leaders expect.
We don’t start with the tool; we start with the problem. Whether it’s summarizing feedback or supporting self-reflection, AI helps people make better decisions about their development and performance.
Efficiency gains that unlock human focus
We’re using AI to automate routine administrative tasks like payroll queries and HR record updates. This allows our people function professionals to spend more time on the work that matters most: one-on-one coaching, mentoring, and support.
Smarter, more scalable learning
Our proprietary AI platform, Lilli, anchors our firmwide adoption of AI in learning and productivity. Its reach is already significant:
- Active users have already saved two to three million hours
- Top Lilli agents save consultants 20,000 to 34,000 hours annually
- Engagement teams save four to six hours weekly on presentations and research
We also leverage external AI-powered learning tools to accelerate onboarding, integrating seamlessly with existing LMS, HRIS, and content platforms. These tools go beyond simple content delivery by driving behavior change through practice and reinforcement. In doing so, they make personalized learning at scale possible—while still preserving the human element at the core of development.
Automating credentialing at scale
Our credentialing program, which is a process for verifying an individual's credentials, has moved from fully manual assessments to an AI-powered model that automates recognition of skills and expertise. Assessments should continue to be team-led, and humans remain in control for the highest levels still to prevent incorrect credentialing, but the system now recognizes over 20,000 credentials with far greater speed and granularity—dramatically scaling capability building across the firm.
What AI makes possible that wasn’t before
The true promise of AI lies not in the technology but in the types of problems it helps us solve.
New ways to create value in people domains
AI is opening up new ways to shape talent strategy, enabling people functions to match the right people with the right roles, teams, and opportunities with far greater precision. Beyond placement, it also powers personalized, adaptive learning journeys at scale—addressing real behaviors and skill gaps in ways traditional approaches could not. These capabilities elevate HR from a process-oriented function to a value-creating partner, driving stronger alignment between individual growth and organizational needs.
A redefined role for the people function
As highlighted in our Superagency in the workplace: Empowering people to unlock AI’s full potential report, employees are not only ready to embrace generative AI tools but often far outpace leadership in adoption and expectation, perceiving AI as capable of replacing up to 30% of work tasks in the near term. This shifting dynamic elevates the people function into a vital role: building future-ready leaders who can navigate AI-enhanced workflows, redesigning HR processes to integrate AI ethically and efficiently, and ultimately creating tangible value for both individuals and organizations. With the right investments in training, governance frameworks, and bold leadership, People teams can catalyze not just productivity, but lasting transformation in how work gets done—and who leads it.
A call to action for people function leaders
AI is on track to change the way people functions work from the ground up. As People leaders, we should focus on asking the right questions and solving the correct problems. By anchoring AI initiatives in human outcomes—such as inclusion, development, and wellbeing—and by working in close partnership across business functions, leaders can ensure that AI becomes a catalyst for sustainable value creation.