AI Literacy for CHROs: What You Need to Know (and What Your CEO Already Thinks You Do)

Artificial intelligence is no longer an emerging technology on the horizon — it’s here, embedded in the systems we use every day and shaping decisions in ways many leaders don’t fully see. Across industries, AI is influencing how work gets done, how customers are served, and how organizations compete.

And yet, despite the rapid uptake, over one-third of companies are still figuring out what to do with AI. That puts many CHROs in a tricky position.

CEOs are asking: “What’s our AI strategy?” Employees are asking: “How will AI affect my job?” Meanwhile, HR technology vendors are flooding the market with “AI-powered” features — some transformative, others more marketing than substance.

For CHROs, this is more than a technology conversation. It’s about trust, transparency, compliance, and business impact. You don’t need to code, but you do need to lead, and that means building AI literacy: the ability to understand, question, and make informed decisions about AI in the workplace.

With the right grounding, it’s easier to step into AI discussions with confidence, bring clarity to your teams, and approach vendor promises with a well-informed perspective.

AI Disruption Is Here: Why It Matters to HR

AI’s influence isn’t confined to massive corporations or digital-first organizations. From small businesses to global enterprises, AI is affecting business models, workflows, and workforce needs. For HR leaders, AI matters because it is touching three critical areas at once:

1. Jobs and Skills — AI is automating routine work, augmenting decision-making, and creating demand for new skills almost overnight. This creates pressure on hiring, reskilling, and workforce planning strategies.
2. Business Priorities — 26% of organizations named AI, automation, and new technology as a top business concern; yet, 1 in 4 employees (including C-suites) are unsure how it benefits the business. The U.S. government’s “America’s AI Action Plan” aims to accelerate innovation, build AI infrastructure, and lead in global AI standards. Together, these forces mean AI will shape not just technology choices, but also how companies compete and operate. HR’s role is to ensure those strategies keep both the work and the people in focus while the business case takes shape.
3. Regulatory Momentum — Governments are moving quickly. In the European Union, the AI Act is introducing stringent rules on transparency, bias testing, and high-risk use cases. In the U.S., states are rolling out AI bias and data privacy regulations, and federal guidance is evolving. In our research, one-quarter of companies said AI and data privacy compliance is a top compliance focus.

AI disruption is not theoretical — it’s here. And it’s an opportunity for HR to step forward by shaping how AI is applied so it works for both the business and the people who make it run.

AI Is Already in Your HR Stack

Even if your company hasn’t formally adopted AI, chances are you’re already using it — often in ways that aren’t obvious. For years, capabilities such as resume parsing, skills matching, and learning recommendations quietly ran in the background, marketed as “smart” or “predictive” features rather than AI.

That changed as advances in machine learning, natural language processing, and generative AI converged. Vendors began grouping these capabilities under the “AI” label, giving the category momentum, visibility, and boardroom attention. Consumer tools such as ChatGPT pushed AI into the public spotlight, prompting business leaders to ask what it could do for them.

What was once an invisible feature set is now a strategic priority. That shift creates an opening for HR to guide the conversation while ensuring AI adoption strengthens both business performance and the employee experience.

Once you know where to look, the signs of AI in your HR tech are everywhere. Visible uses include things like:

• Resume parsing and matching in applicant tracking systems.
• Chatbots answering questions from candidates or employees.
• Predictive analytics for turnover risk or internal mobility.
• Personalized learning content recommendations.

But many AI applications are harder to spot. Hidden uses might include:

• Algorithms ranking applicants before a recruiter sees them.
• Sentiment analysis of employee survey responses.
• Automated scoring in productivity or performance tools.
• Behind-the-scenes workflows that trigger actions without human review.

Understanding both the visible and invisible uses matters, because even if AI isn’t labeled as such, it can still influence hiring decisions, employee experiences, and compliance risks. And not knowing is no longer an option.

In Aspect43’s Insights@Work 2025 survey, only 6% of companies said they have fully integrated AI across multiple areas. This means most CHROs are leading organizations in the early to midstages of adoption, when the decisions being made will shape long-term outcomes.

Questions to Ask Your Vendors About AI

When evaluating HR technology, you can’t take “AI-powered” at face value. Whether you’re buying a new system or reviewing existing tools, ask these questions:

1. What problem is this solving, and how will we measure success?
   Push vendors to be specific about the use case and intended outcomes. Avoid vague promises about “efficiency” or “optimization.” Ask for measurable results and examples from similar organizations so you can set realistic expectations.
   
   
2. How was it developed and trained, and where does the data come from?
   Understand what datasets were used to train the AI — whether public, proprietary, or your company’s own — and how they were vetted for accuracy, completeness, and bias. The quality and representativeness of the training data directly impact the reliability of the tool.
   
   
3. How does it make decisions, and what factors are considered?
   This is about explainability. You don’t need the vendor to reveal their full algorithm, but you do need to know how inputs are weighed, what outputs are generated, and which variables could influence results.
   
   
4. What’s your process for ensuring ethical AI and preventing bias?
   Vendors should have a documented approach to ethical AI, including regular audits for bias and fairness. Ask how often these reviews are conducted, what metrics they use, and what steps they take if issues are found — especially in high-impact areas such as performance reviews, promotions, or compensation decisions.
   
   
5. What oversight and controls do we have once it’s in use?
   Confirm what visibility you will have into the AI’s performance after implementation, whether features can be turned off or adjusted, and who on both sides (vendor and your organization) is responsible for monitoring and compliance.
   

Remember: A vendor’s willingness (or reluctance) to answer these questions is itself a data point about their transparency and partnership approach.

What Your CEO Expects You to Know

CEOs are balancing competing pressures — cost efficiency, innovation, and risk management — and AI sits at the intersection. According to Aspect43’s Insights@Work 2025 survey of business and HR leaders, 61% said their leadership teams are focused on managing costs and improving efficiency, while 25% pointed to digital transformation and new technology adoption. These findings highlight the dual pressure for CHROs to deliver both operational savings and future-ready strategies, with AI often at the center of the conversation.

That means AI will keep coming up in your executive discussions, whether you bring it up or not.

Here’s what they’ll expect from you:

1. A Strategic Position

Can you articulate where AI fits into the company’s talent and culture strategy? For example: “We’re using AI to personalize learning recommendations and identify skills gaps, but we’re committed to having managers guide development plans to ensure they align with individual career goals.”

2. A Risk-Aware Perspective

Do you know the compliance and ethical risks and how you’re mitigating them? With 40% of companies concerned about data privacy with AI, being able to explain how your team is protecting employee and candidate data, auditing for bias, and staying aligned with evolving regulations builds trust with both leadership and your workforce.

3. An Impact Narrative

Can you show how AI supports the company’s broader goals — for example, 55% of leadership teams said they are most focused on improving operational performance, while 36% are prioritizing adapting to market changes — without losing sight of people priorities?

4. Preparedness for Tough Questions

Boards and executives may ask:

• Could AI introduce bias into our decisions?
• How are we protecting employee and candidate data?
• What’s our plan if a regulator audits our AI use?
• How are we training our people to work with AI?

Your credibility grows when you can answer clearly and proactively.

Staying Smart, Safe, and Strategic

The pace of AI development means your AI literacy will need regular updates. Here’s how to stay ahead.

1. Build an AI Governance Framework

Work with legal, IT, procurement, and risk teams to define:

• Approved use cases for AI in HR.
• Vendor selection and review criteria.
• Monitoring and auditing processes.
• Incident response plans for AI errors or bias findings.

2. Engage Employees Early

In our research, companies said employees not knowing how to use AI yet is the biggest challenge to AI adoption. At the same time, more than half of employees said they’re somewhat or very comfortable with everyday AI tools such as ChatGPT, Google Gemini, Siri, Alexa, recommendation engines, social media algorithms, and navigation apps.

The challenge isn’t always fear of the technology itself, it’s understanding how AI will be used in their work. Clear communication, targeted training, and feedback channels can bridge that gap and turn familiarity into confidence.

3. Track Regulatory Changes

Regulation is evolving fast. Assign responsibility across HR, legal, compliance, and technology teams for monitoring new rules, from state-level bias audits to international data privacy laws. Even if these requirements don’t yet apply in your location, they’re likely coming soon, and adopting them now provides a strong foundation for compliance and ethical practice.

4. Invest in Your Own Learning

You don’t need to become a data scientist, but you should:

• Learn common AI terminology (e.g., supervised versus unsupervised learning).
• Understand basic AI model types and limitations.
• Stay connected to industry forums, analyst reports, and compliance briefings.

5. Benchmark and Share Wins

As with any change initiative, track metrics — time saved, quality improvements, cost reductions, employee engagement — and share them internally. This builds confidence and support for further adoption, as well as helps identify areas to target with increased change agents, communication, and clarity.

AI Literacy: A New Core Competency for HR Leadership

AI is not replacing the human side of HR — it’s amplifying it. This can truly be HR’s time to shine! Leaders who understand AI’s capabilities, risks, and ethical considerations can guide their organizations toward better, faster, and fairer outcomes.

The good news? Most companies are still early in their AI journey. More than one-third of companies are still figuring out their main goal for AI. This leaves room for CHROs to shape the narrative and to ensure that AI adoption strengthens the employee experience, supports compliance, and advances strategic goals.

AI literacy isn’t about mastering the technology itself. It’s about mastering the questions to ask, the risks to watch, and the opportunities to seize. It’s about being ready when your CEO turns to you and says, “What’s our plan?” and being able to answer with confidence, clarity, and vision.

Joey Price and Tami Nutt are leaders at Aspect43, where they bring a unique blend of HR practitioner experience, compliance expertise, and market research to help organizations and HR tech providers navigate the future of work.