Better, Faster, Leaner: Reinventing HR with Generative AI

HR is at a critical juncture. For years, the function has been under pressure to meet mandates that feel at odds. On one hand, executives have called on HR to become more cost efficient. On the other, they want it to be more human centric and strategic. HR teams often feel caught in a tug-of-war. HR business partners (HRBPs) struggle to move beyond generalist roles, centers of excellence (COEs) are bogged down by administrative work, and shiny new tech solutions don’t live up to their promises.

Enter generative AI. Paradoxically, the technology can help HR professionals have a more human touch—and at a lower cost than ever before. By enabling drastic efficiency in transactional tasks, it frees up HR professionals to refocus on their expertise and play a more strategic role. In fact, Bain analysis shows that companies can save an average of 15% to 20% in HR labor time through AI automation and augmentation.

But AI isn’t a magic wand for HR’s problems. So, how can companies identify which HR tasks are ripe for generative AI? How can they reshape traditional HR roles, career paths, and operational strategies to make the most of the technology?

Redefining roles for generative AI

Generative AI has the power to elevate HR’s role within the organization, transforming practitioners from transactional operators to strategic advisers. But to capture its full potential, chief HR officers (CHROs) need to pinpoint where AI can have the greatest value.

According to Bain’s Generative AI Workforce Impact Explorer, automating or augmenting select HR tasks can save more time than others. Certain tasks consume a disproportionate share of HR capacity, offering a roadmap for AI investment. For example, HR operations tasks, which tend to be more transactional in nature, are prime candidates, as AI can save around 25% or more in employee time (see below).

With AI streamlining everyday tasks and reducing the human involvement needed for routine processes, CHROs can rethink their teams' structure and skill sets. They can become more efficient and reallocate time saved with AI to value-added tasks. COEs can become hubs of innovation, HRBPs can evolve into advisers of the business and designers of workplace culture, and shared service centers can become frictionless. The key is redefining job roles and responsibilities to match these new realities.

How to manage HR’s reinvention

To succeed with generative AI, HR needs to adapt operations and actively shape opportunities. Forward-thinking leaders adopt a future-back approach informed by business strategy. This starts with envisioning the future of work and HR’s role within it. Then, they create a pragmatic plan to bring their vision to life. Six principles guide the most effective plans.

• Build a robust tech and data foundation, protecting personally identifiable information (PII). This includes defining the appropriate tech and data capabilities, robust data quality, platforms, and infrastructure to support the generative AI strategy. HR needs to secure and safeguard PII for both employees and prospective talent against unauthorized access or misuse. It needs to upgrade existing data governance and management practices to tackle new challenges in security, privacy, and ownership.
• Focus on the most strategic opportunities. Launching several small proofs of concept across use cases will spread efforts too thin. Instead, successful organizations will start by testing one use case with the potential for transformative change. For example, a company could automate talent screening, demonstrating to wary recruiters the time that AI can save them.
• Stay ahead on legal and regulatory compliance. HR leaders need to ensure that they embed human oversight for AI capabilities into HR processes. It is up to them to understand and mitigate any potential risks that may arise. This will require strengthened compliance reviews and close ongoing partnerships with legal counsel.
• Invest in reskilling and upskilling. As AI takes over rote tasks, HR professionals will need enhanced skills, such as the ability to solve increasingly complex business problems. Leading organizations will proactively support this change and propose an ambitious upskilling plan to support their new role.
• Foster a positive narrative. Transparency and communication are key. HR leaders can avoid doomsday narratives and foster curiosity and adaptability by engaging the entire HR community in generative AI adoption early and learning together.
• Role model the change. The best HR leaders will embrace AI in their day-to-day work. This is crucial to send the appropriate signals to the organization, particularly digital natives. HR departments that turn their backs on AI risk pushing away talented, forward-looking employees. Luckily, it’s easy enough for HR leaders to get started with simple applications—for example, a custom chatbot that helps recruiters determine if candidates are a good match for a position (see below).

Adopting generative AI is more than an operational upgrade; it’s a strategic leap forward that will unlock new levels of efficiency, innovation, and value. CHROs that embrace the change now will transform HR into a true engine of strategic advantage.