Will GenAI Broaden CHROs’ Influence?

Generative AI (GenAI) promises to have a profound impact on HR leaders.

No one can forget the outsized role that HR executives played during the pandemic, when C-suite executives relied on HR to do everything from managing employee furloughs and remote and hybrid work to implementing procedures that promoted worker safety and tried to limit turnover during the Great Resignation. 

Now that the pandemic is in the rearview mirror, HR stakeholders and analysts wonder if the importance of the HR leader’s role will be diminished. Can the implementation of GenAI boost the role of CHROs and broaden their executive influence as companies incorporate the technology into employees’ workflows? 

“What an amazing time for people who work in HR and people who make their career in technology,” said Quincy Valencia, senior vice president of innovation at Harri, a New York City-based employment management platform for the hospitality industry. “The pandemic was a once-in-a-lifetime event, and generative AI has quite literally flipped everyone’s product road map on their head in the past year. I have never seen anything like it.

“The opportunity for HR to capitalize on generative AI and really maintain their position at the proverbial table that was thrust upon them during the pandemic is great, if they use it,” she added.

However, Valencia said that in her conversations with CFOs and CEOs, she’s hearing that they see HR leaders as less important now that the pandemic is over, and fewer executives are looking to their HR peers for guidance.

This scenario is particularly important in the hospitality industry, where some segments have high turnover rates. For example, data from the U.S. Bureau of Labor Statistics shows that as of January, the average annual turnover rate in the restaurant industry topped 80 percent each of the past 10 years.

As HR executives focus on boosting employee retention, improving employee engagement, enhancing the employee experience and increasing worker productivity, Valencia said there is a greater sense of urgency for HR executives to deploy GenAI to reach these business outcomes.

In one hypothetical scenario, an HR executive may make reducing 90-day turnover their top priority because it is costing the company millions of dollars to hire and retrain workers, and the HR leader decides to use AI tools to achieve that goal.

The HR executive’s message to leadership shouldn’t just be that they want to reduce turnover because it’s important to HR, Valencia said. Instead, the message should be, “We need to reduce turnover because that level of turnover that we are experiencing today is X dollars per year and by reducing that even by 20 percent, it will save us Y dollars and will give us the ability to generate Z more dollars in revenue.”

HR executives should then make sure they understand and can explain which GenAI tools will help solve the problem, where they can be applied and how they will impact the business at large. By doing this, Valencia said, “HR executives can speak the language of their C-suite peers that they are trying to influence, whether it is the COO, the CFO or the CEO.”

But will HR leaders jump on the opportunity?

In Gartner’s Implementing Generative AI in HR Benchmarking Report, only 22 percent of HR leaders said they are highly engaged in enterprisewide discussions on the use of GenAI. Furthermore, the report notes that HR leaders are most focused on legal or ethical considerations (65 percent) and potential risks (58 percent) as critical determinants for deciding whether to adopt GenAI.

If HR leaders want to make their mark during the implementation and adoption of GenAI, they’ll have to steer the technology into the places where they can expect improvements in employees’ workflows, including virtual assistants, tools that handle administrative tasks and solutions that make it easier for employees to accomplish their day-to-day work, said Helen Poitevin, distinguished vice president analyst in the Gartner HR practice.

“This is easier said than done,” she said. “With generative AI, you need other technologies alongside it to actually create a great experience for employees, but there are enterprises that have made strides forward and there are tools on the market that help you combine generative AI to generate the answer in a way that will be specific to the person and understandable to the audience.”

Technology companies are seizing the opportunity and developing GenAI-driven solutions that improve workflows, along with the employee experience. A few examples are:

• Espressive, a Santa Clara, Calif.-based company, uses GenAI to leverage internal company information to provide answers that help resolve employee issues.
• Vantiq, a Walnut Creek, Calif., software company, has integrated GenAI into its real-time application development platform to help workers in sectors such as health care and public safety get more up-to-the-moment information to improve decision-making.  
• Huma, a London-based digital health company, has partnered with Google Cloud to use its GenAI tools to give health care professionals better insights to improve care delivery.

HR leaders can take advantage of GenAI’s ability to create text, documents, videos and images in a variety of use cases, such as managing and updating skills data and ontologies, generating content and documents about policies and compliance that are often revisited and revised, and generating emails and text messages that recruiters use to communicate with job candidates.

However, while CHROs are part of the GenAI discussion within HR, there is a pressing need for them to become part of broader organizationwide conversations about GenAI skills development, headcount and productivity targets, Poitevin said.

“If HR is not part of that conversation upfront and not part of those plans, then they will not be in a good position to really support employees through any upskilling or reskilling or redeployment,” she warned.

Poitevin added that GenAI’s impact on employee workflow will extend the reach and impact of HR through, for example, the ability to personalize the technology and redesign workflows to adapt to the ways different teams work. HR can also support businesses in role design, organizational design, and skills-based talent planning and talent management.

Valencia said that first and foremost, CHROs need to consider how GenAI is going to impact their own function and organization. Looking outside of HR, CHROs will have to focus on how jobs will be impacted, what new skills will be required, and, if workers don’t have those skills, how the organization will find people who do and/or retrain workers in GenAI.

“CHROs can be at a competitive disadvantage if they aren’t evaluating where they are today and where they need to be,” Valencia said. “They don’t want to be caught off guard.”

Nicole Lewis is a freelance journalist based in Miami.