This year, HR functions will embrace generative artificial intelligence (GenAI), invest in technology that boosts the employee experience, and adopt powerful predictive analytics and skills technologies, according to HR industry analysts, practitioners and thought leaders interviewed by SHRM Online.
HR leaders will turn to technologies that not only improve regulatory compliance but also help their organizations make better, faster talent decisions and redefine how work is done.
Forward-Thinking Companies Will Continue to Invest in EX
Some analysts are predicting an employee experience (EX) “recession” in 2024 as executives turn their attention to reducing costs and boosting efficiencies and away from issues such as inclusion, equity and diversity; flexible work schedules; and employee mental health. Employees will have fewer job options, and employers will take back some leverage.
But while many organizations may reduce or freeze EX spending in 2024, experts caution about the consequences of such moves.
J.P. Gownder is a vice president and principal analyst with Forrester. He wrote in a blog post that according to Forrester research, 66 percent of technology decision-makers said they’ll increase investment in EX or human resource technologies in 2024, and many of those investments will be designed to improve efficiencies instead of EX outcomes.
But leaders who buck the EX recession trend stand to gain tangible benefits in 2024.
“By developing a mature EX program, your organization can drive higher productivity, lower attrition and more creativity,” Gownder wrote.
Other experts believe resourceful HR leaders will find ways to invest in EX amid tighter budgets.
“HR will be pushed to preserve engagement in a down market and even throughout cost cutting and reductions,” said Dan Kaplan, a senior client partner in the CHRO practice with management consulting firm Korn Ferry. “It will be a difficult dance, but the best HR leaders will find a way to do so.”
Juan Pablo Gonzalez, a senior client partner specializing in HR issues for Korn Ferry, said that organizations’ commitment to EX will not wane in 2024, but EX will look very different.
“The nature of EX is likely to become more personalized while at the same time become less personal,” Gonzalez said. “For example, by using AI features already available in large software platforms like Microsoft Office Copilot, Workday and Salesforce, employers and employees have already changed their EX. What’s happening is that employees’ interactions with technology have increasingly replaced their interactions with people, but the interactions with technology have become more tailored to employees’ specific needs and profiles.”
Mark Stelzner, founder and managing principal of IA, a HR advisory firm in Atlanta, said that while budgets will be redistributed in 2024 as organizations are challenged to control their bottom lines, good EX-related technology investments will continue to pay dividends for companies.
“I would argue that investing in EX will, in fact, increase efficiencies and reduce costs,” Stelzner said. “What we might see in 2024 is a continued shift toward a ‘process-led, technology-enabled’ philosophy in organizations. The optimization of end-to-end processes often leads to decisions like the retiring of existing technology debt and the unification of tools and technologies to have fewer, well-integrated touchpoints to ease employee confusion and optimize personalization.”
John Kostoulas, a vice president analyst with Gartner specializing in HR technology, said making more strategic purchasing decisions and improving governance of existing technology ecosystems are two keys to improving EX. Recent Gartner research found that 60 percent of HR leaders believe their current technologies hinder rather than improve the employee experience.
Evelyn McMullen, a research manager specializing in the employee experience for Nucleus Research, said technology investments designed only to improve efficiencies and not EX outcomes can prove to be short-sighted. An improved EX typically leads to better performance and a reduction of costs associated with turnover, she noted.
“The risk of reducing EX budgets is especially large when considering the constant pendulum of the labor market and of job candidate advantage,” McMullen said. “When the control inevitably falls back into the hands of the job seeker, organizations that keep their investments in EX will be in a better position to capture and retain the best talent.”
GenAI Moves from Experimentation to Accelerating Adoption
HR functions will go from dipping their toes into GenAI to wading into deeper waters in 2024 through increased adoption of the technology.
As leaders enact more rigorous GenAI governance plans and the risks of using the technology begin to diminish, HR and recruiting will increasingly use GenAI tools already in their HRIS platforms to write job descriptions and interview guides, create engagement surveys, develop training courses, analyze data, and craft policies.
A Conference Board survey of CHROs in late 2023 found that 61 percent plan to invest in AI to streamline HR processes in 2024.
“Many HR leaders are still at the start of their GenAI journeys but will either get access to GenAI capabilities through their pre-existing HR technology providers or will go out and acquire new GenAI tools by mid-2024,” said Eser Rizaoglu, an analyst in Gartner’s HR research and advisory practice.
Rizaoglu said many HR tech vendors are still trying to figure out how to get the most from GenAI’s capabilities while balancing the need to protect data, ensure effective governance and factor in ethical considerations. “Until this fine balancing act is achieved the mass proliferation of GenAI capabilities across HR will be challenging,” he said.
Stelzner said that while GenAI created excitement and spurred experimentation within HR last year, the “cold reality” is many organizations still aren’t ready to jump in with both feet.
“Any growth in the adoption of GenAI in 2024 will likely be incremental, including better utilization of chatbots, augmentation for the personalization of employee communications, greater focus on possibilities in the talent acquisition space and the automation of testing for system upgrades and implementations,” he said.
Research conducted by Accenture found GenAI has the potential to transform 40 percent of all working hours in organizations. “That doesn’t mean 40 percent of jobs will go away, but rather it reflects a shift in the way work is done,” said Michael Benyamin, a managing director with Accenture who leads the firm’s HR transformation and delivery practice. “Technology will take away some tasks and allow employees to become more productive, creative and effective in the work they do. AI works as a multiplier of human capability.”
As GenAI begins to augment or transform more job roles, HR and learning leaders will need to create agile learning programs to reskill workers in the use of rapidly evolving GenAI tools. Many workers have received little to no training in how to use the technology.
A 2023 survey by Salesforce found 62 percent of workers said they lack the skills to effectively and safely use GenAI. Another study by the Boston Consulting Group found only 14 percent of front-line employees had gone through any AI-related upskilling, even though the technology promises to fundamentally reshape how they perform their jobs.
As GenAI becomes more prevalent in the workplace, Benyamin said it’s essential for HR to help establish policies for responsible and ethical AI use, as well as to create training programs to address concerns such as bias, discrimination, data protection and appropriate data use.
Greater Focus on Change Management, Improving Adoption of New HR Software
Experts believe many HR leaders will seek to improve the return on their technology investments in 2024 by adopting change management strategies, such as making sure employees use the newly adopted tech solutions.
One ongoing challenge for HR is managing the steady stream of updates and new features from cloud technology vendors, resulting in many HR software-as-a-service (SaaS) licenses going unused. A 2023 study from Productiv, a SaaS intelligence platform in Palo Alto, Calif., found that 53 percent of SaaS licenses go unused overall in organizations.
Ben Eubanks, chief research officer for Lighthouse Research, an HR advisory and research company in Huntsville, Ala., said many organizations underestimate what it takes to ensure workers regularly use new HR platforms and apps once they’re introduced.
“HR and talent technologies are not ‘Flip the switch and you’re good to go’ type of solutions,” Eubanks said. “But many employers still see it that way and underestimate the behavioral change needed for adoption.”
Rethinking Employee Engagement Surveys
More HR and EX teams will rethink how they create engagement surveys, as well as how often they distribute them, to reduce “survey fatigue.”
Gretchen Alarcon, senior vice president and general manager of employee workflow products for ServiceNow, said as organizations continue to try to find the “secret sauce” that will bring workers back into the office more often in 2024, HR leaders will need to use more meaningful measurement tools.
“Organizations will use employee voice surveys and feedback to analyze how time spent in the office correlates to employee sentiment and productivity,” she said. “This will allow leaders to make decisions based on data, not assumptions, so they can tailor their return-to-office [RTO] strategies to employee needs, behaviors and on what drives productivity.”
Reaping Benefits from Improved Skills Technologies
HR and recruiting leaders shifting to skill-based hiring and promotion strategies will get a boost from evolution in technologies such as skills ontologies that use AI and machine learning to automatically create, organize and update databases of employee skills—significantly reducing the amount of manual work required by HR.
Next-generation ontologies and other emerging skills technologies can make it easier for HR leaders to identify skills gaps in their organizations, then adjust recruiting or learning and development plans accordingly. While there is no true end-to-end skills technology solution in the market, many HR leaders are stitching together AI-driven point solutions to create effective skills databases and assessment tools.
“In 2024, as organizations embrace skills intelligence technology, they’ll start to recognize it’s not about having the biggest skills database, but a rich and connected skills database that is constantly updating,” Alarcon said. Such databases allow companies to understand whether talent gaps are due to a lack of the right people or a lack of skills, she added, and whether they need to build, buy or borrow talent for the future.
Predictive Analytics Tools Grow More Powerful
Human resource practitioners and analysts believe HR will benefit from increasingly powerful predictive analytics tools that will improve workforce planning and data-driven decision making.
“With larger data sets and improved algorithms, the HR function should be able to do things like moderate the hiring boom-and-bust cycles that have characterized the last couple of years,” said Gonzalez of Korn Ferry. Rather than hiring thousands of employees and then laying half of them off six months later, for example, Gonzalez said employers will be better able to predict the number and type of employees they’ll need over a reasonable period of time. “They then can hire and develop a more stable workforce to the benefit of all organizational stakeholders,” he said.
Stelzner believes many HR functions have missed opportunities by not fully embracing the potential of data analytics. Failing to invest in the necessary tools and skills to analyze HR data can result in missed insights and hinder the ability to align HR strategies with broader business goals, he said.
“Historically, HR also has struggled with the accuracy of its data,” Stelzner said. “This impacts the function’s ability to rely on reporting and data analytics to inform and support its decision making. What’s worse is that the rest of the business has been trained to expect questionable data from HR systems, so there is work to be done in data cleanup, reporting and analysis to regain credibility throughout the enterprise.”
Dave Zielinski is principal of Skiwood Communications, a business writing and editing company in Minneapolis.