The swift adoption of Artificial Intelligence (AI) is having a transformational impact on business operations and therefore also on the HR function. This is due to its potential to profoundly reshape corporate operations and ways of working by restructuring work processes and revolutionising business models. This technology has the potential to significantly transform the HR function of organisations locally.
AI, the HR function and associated risks
The use of AI in HR is taking different forms, with some of the more common being streamlining processes and improving decision-making. AI is also able to automate repetitive HR tasks such as initially screening resumes, interview scheduling, and elements of the onboarding process, freeing up HR professionals to focus on more strategic and value adding efforts.
AI can assist in talent acquisition by identifying candidates who are a better fit for the role requirements, while AI-driven insights can help in workforce planning and identifying skills gaps. This technology can also be used to enhance performance management by providing real-time, data-driven insights related to employee productivity, allowing HR to identify trends and areas for improvement more effectively.
In this regard one must tread very cautiously. While such functionality is possible, the EU AI Act specifies classification rules for high-risk AI cases. This means that while AI can have a transformative force for various HR activities, the users must be mindful of risks involved, such as using AI systems for the evaluation of classification of natural persons. The EU AI Act clearly outlines prohibited uses which may lead to detrimental or unfavourable treatment of certain persons or groups of persons.
AI and L&D
AI can be used to improve organisations’ existing L&D strategies, by enhancing the effectiveness of training with the aim of driving business results while remaining cost-effective. Indeed, over 70% of employees see GenAI as a tool for learning new skills and enhancing creativity (Global Workforce Hopes and Fears Survey 2024). Initial insight from the 2024 HR Pulse Survey, which is a joint annual exercise carried out by PwC Malta and the Foundation for Human Resources Development (FHRD), confirms that AI is already being utilised in organisations in Malta for L&D initiatives. AI may be used to create personalised training content, automate curriculum design, and provide interactive learning experiences. This integration is generally aimed at enhancing the adaptability and efficiency of training programmes by generating tailored learning paths and enabling immersive training environments. AI can also help analyse learner performance and preferences, facilitating continuous improvement of L&D initiatives and ensuring alignment with organisational goals. In this regard, 15% of respondents indicated that their organisations were actively integrating the use of AI for content creation. The full 2024 HR Pulse Survey results will be launched at the FHRD Conference being held on October 18, 2024.
Access to AI remains a challenge
AI reshaping the skills landscape
The skills that are being demanded by employers are shifting. There is an increased quantity of jobs that require specialist AI skills, such as machine learning, according to PwC’s 2024 AI Jobs Barometer. Compared to 2012, there have been seven times as many postings for specialist AI jobs in 2024, where the growth rate of specialised AI jobs has surpassed overall job growth since 2016. These specialist jobs carry up to a 25% wage premium, highlighting their significant value to companies. Besides increased demand for specialist AI skills, there is also increased employer demand for skills that AI cannot replace, such as coaching, and reduced employer demand for skill sets that AI can assist with, such as coding in Javascript.
AI and employee productivity
GenAI has the potential to enhance the productivity of employees. About 60% of CEOs anticipate GenAI to yield efficiency benefits by offering relief from some of the routine tasks that take up about 40% of employees’ time at work, according to PwC’s 27th Annual Global CEO survey. In order to enjoy the benefits of GenAI, it is therefore essential to upskill employees on GenAI to help them optimise work processes and adapt to technological advancements.
Looking ahead: Challenges to overcome
Access to AI remains a challenge, with some HR professionals unable to use it due to employer restrictions or lack of access. Moreover, HR professionals should acknowledge the associated risks, including concerns about potential bias and misinformation. These concerns highlight the need for supportive environments with clear governance and Responsible AI strategies. Behavioural changes and collaboration led by HR policies and role modelling from leadership are necessary. Leaders must actively engage in building trust in AI by prioritising its responsible use and fostering adoption throughout the organisation. Education and training on responsible AI use are essential for HR professionals, business leaders and employees to detect and address risks. Leaders should also ensure transparency about AI systems, including how they function, the data and algorithms they use, and involve employees in providing feedback on their experiences with AI tools. It is important for CEOs to involve HR professionals in the integration of AI to encourage them to play an active role in reinvention, enabling them to feel more comfortable with its utilisation.
Claudine Attard is FHRD Board Member and Director, Management Consulting, PwC Malta.