BROUGHT TO YOU BY
THE FUTURE OF HR
Improving Your Current HR Strategy Using AI
The Future of HR2
While many companies may not know
much about AI in the workplace at this
point, according to Forbes, investment in AI
accelerated from $282 million in 2011 to $2.4
billion in 2015 —a 746 percent increase in five
years. The World Economic Forum noted that
investment continued to increase in 2016 with
another $1.5 billion invested in more than 200
AI-focused companies.
Just look at the digital assistants exploding on
the market these days— from Amazon’s Alexa
smart home speaker to Apple’s Siri, Microsoft’s
Cortana and Samsung’s Bixby. Research and
consulting firm Ovum predicts that the native
digital assistant installed base is set to exceed
7.5 billion active devices by 2021, signaling the
beginning of an AI-assisted world and advanced
machine learning taking hold in society.
“There are so many tasks that consume a lot
of time and money in enterprises . According
to our survey with our customers, various
kinds of data input and communication
between HR, managers and employees takes
up 70 percent of an HR team’s time,” says
Ken Osaki, Global Strategic HR Development
Analyst at Works Applications, a company
striving to improve the ERP experience for
companies globally. “Those kind of repetitive
tasks, up until now, only had one solution—
hire people to input that data. Now that we
have Artificial Intelligence, we can utilize it to
automate as many of those repetitive tasks as
possible because AI can improve itself through
machine learning.”
Currently, AI examines and learns very
specific subjects by finding patterns and
analyzing data to suggest or perform a set
of actions. A 2013 Oxford study estimated
that approximately 47 percent of repetitive
jobs will be automated by 2033. While some
workers may fear that AI will take over many
of their duties and jobs, the reality is AI is not
that sophisticated at this point. Today’s AI in
the workplace is about freeing workers from
menial tasks in order to elevate them to more
decision-making and value-adding positions
for a company.
Most every company has some sort of
customer service department or call center that
receives many inquiries. Those inquiries create
patterns as customers ask the same questions
repeatedly—which led many companies to
include Frequently Asked Questions (FAQ)
sections on their websites to help address
questions and reduce the number of customer
service reps needed at a company.
Today, AI provides a more dynamic
approach to the FAQ section by learning
inquiry patterns and expanding their scope to
give comprehensive responses to consumers.
Some companies developed chatbots to
address those inquires. For example, hotels are
starting to use chatbots to directly interface
with their guests. Guests can submit a question
through a mobile app on their phone and the
hotel’s chatbot system already has a catalog
of answers, so guests can ask what time the
spa is open or what time breakfast is served
and the AI system will give them an immediate
response. The benefit of using these AI systems
are simple —they can gather, process and
analyze data much faster than humans.
Society tends to look at the
idea of AI as some far-off sci-fi future,
but that future is happening now.
When discussing Artificial Intelligence, or AI,
images from movies like Ex Machina, Westworld or the
Terminator franchise come to mind first for many people.
In reality, an AI system is actually quite human in its
ability to collect large amounts of data, store it, analyze
it and make suggestions based upon it. But often this is
confused with human intelligence. The difference is that AI
is great at analyzing one simple operation such as reading
a resume, where humans excel at more complex tasks such
as empathizing with potential candidates or analyzing how
someone may fit into the company culture.
The Future of HR3
ARTIFICIAL
INTELLIGENCE IN HR
While companies are already beginning to
use AI systems for customer interactions,
incorporating AI for human resource operations
is a logical next step. Using AI in an HR
environment can assist a company in analyzing
operations and providing suggestions for future
operational needs.
As AI in HR gets people to move away from
the repetitive tasks their talents are wasted on,
they can target their energies on more high-
level tasks, such as finding promising employees
and working to keep them with the company.
HR staff will be able to focus on being a
strategic partner to business divisions rather
than just crunching data as a task processor.
“If you submit the same report every week
around the same time, the system will pick up
on that and it will just begin to automatically
create that report for you,” explains Richard
Harris, Global Strategic HR Development
Director at Works Applications America. “This
process then turns an HR employee into sort
of an administrator where they just review the
report and approve it. That way, they don’t
have to do the physical creation of standard
reports anymore, which is really the basic idea
behind using AI in HR.”
Simply put, AI will empower companies to
make faster decisions by accessing up-to-date
information quickly, spotting trends through
pattern recognition, using machine learning
to identify past mistakes to avoid and, overall,
accelerating processes.
By incorporating AI into a company’s
human resources department, the mission
of HR is likely to see three stages of
transformation:
No. 1:
Productivity and efficiency improvement by
the process automation of routine tasks
No. 2:
Value addition to HR by high-level automation
of tasks and enhanced intelligence
No. 3:
Strategic workforce consulting
Now let us dive deeper into how AI
technologies could impact the future role and
mission of HR.
EFFICIENCY IMPROVEMENT
Experts believe that two fundamental things
will happen in HR during the first stage of AI
implementation. The first is the automation of
routine tasks. By leveraging machine learning,
certain repetitive HR tasks can be automated,
such as the data entry of resumes.
Many companies deal with a high volume
of resumes. Large organizations might get
hundreds of thousands per month. Processing
them by hand is a very arduous task, and just
getting them into the system is the first step.
HR staff must go through the document and
put relevant data into a database so they can
work with the information. Paper resumes
have to be scanned to create digital versions,
and electronic copies do not always line up
exactly with a company’s database. But what
if there was a better way of handling these
documents?
In the future, by utilizing AI in HR, a system
will understand the basic concept of resumes
and pull information such as names, addresses
and work history from digitized documents to
populate an organization’s database. If the AI
system is unsure how a resume section correlates
with the database, it might suggest to HR what
it thinks is the correct action. The HR staff will
then either accept the suggestion or decline it,
allowing the AI system to learn from the decision
and adjust its suggestions going forward.
The second fundamental change during this
stage concerns communications between HR,
managers and employees. Companies should
redesign their communication processes
across the organization to reduce unnecessary
contact, thereby enhancing productive
communication since communication steals
up to 70 percent of HR’s time. This can be
achieved with a central communication
hub that includes an analytical dashboard,
statistical information and productivity tools
for employees, as well as an integrated,
AI-powered chatbot that can handle day-
BASIC IDEA
AI will empower companies to make faster decisions by:
• accessing up-to-date information quickly
• spotting trends through pattern recognition
• using machine learning to identify past mistakes
to avoid and, overall, accelerating processes
The Future of HR4
to-day inquiries such as employee benefits
information or obtaining new tax forms.
“A chatbot would be one way to respond
to all of the basic questions and inquiries
coming from employees,” explains Osaki.
“That would integrate alongside other working
tools such as a timeline, chatting tools or
online spreadsheets. It’s very important that
those productivity tools are fully integrated
into the software. The current strategy is to
build standalone tools, forcing users to log in to
multiple systems throughout the day. That’s not
efficient.”
Other examples of how AI will start to
transform HR include assisting employee
requests for things like personal time off or
signing off on an evaluation.
“Those kinds of tasks cannot be fully
automated, but an AI system can suggest to
the HR department if they should approve the
specific item or not by learning past approval
histories,” says Osaki.
To utilize chatbots, data is key for AI to
learn and analyze. In order for AI to work
well, it’s important that HR data is integrated
in one HR core system. Organizations need
to collect all the tasks and inquiries they can
find and plug the information into the system.
The AI software will learn from this data to
find patterns or formulas for asking questions
in order to find the most effective responses
and answers. The system picks up on past
questions to figure out what the best response
is so that the HR department doesn’t need to
respond to 50 percent of inquiries — freeing
up employees to focus on other work.
VALUE ADDITION TO HR
The question for HR professionals at this
stage is: what value can they add to their
organization after many routine tasks have
been automated? The short answer is
better management of a company’s human
resources — but HR personnel will have to
be creative to establish new value during this
transitional stage and the situation will be
different from company to company.
“In this stage, the HR department hasn’t fully
transformed to the future HR department,”
explains Osaki. “That means that some people
will still be working on routine work — things
like responding to more complex questions,
some document processing and organizing
performance review results.”
Organizations should determine what
additional functions they require of their AI
solution. Some companies need a succession
planning function, while others might want
further task processing automation. HR and IT
leaders will need to work together to design
the future combination of HR software and
AI, because the goal is not just to automate
more tasks, but to get the right tools to the HR
department for their existing needs.
“While some HR staff will continue
working on traditional tasks, other people
will be freed up to start providing insight to
other departments and improve recruitment
methods as HR starts to become more of a
strategic business partner to other divisions,”
adds Osaki. “One example would be advice
on who would be the best possible candidate
for a department’s next project, based
on the information HR has on employee
qualifications and abilities. But qualifying
abilities can be tricky without AI.”
Each time an employee interacts
with a company system, it creates a log
with associated data. When the data is
incorporated into an AI system, the AI can
start to see correlations over time—something
that would be impossible for humans to do.
It is akin to online dating apps that try to find
connections for users based on data such as:
hobbies, desire for children or love of pets.
All a dating app is doing is correlating data to
make suggestions.
Recruiting automation is using similar
data correlations to make inferences about
applicants’ ability to fit into a company’s
In the future, the main job of HR personnel
will be to create value in organizations
beyond just processing tasks such as:
• Incorporating payroll data with cost
accounting and global optimization
of compensation
• Global data integration (Integrate HR
data with accounting, external systems/
services, etc.)
• Data-driven talent analysis, talent
management and succession planning
• Data-driven recruiting
FUTURE OF HR
The Future of HR5
culture. When a company recruits a new
person, they might have specific criteria or
qualifications that they are looking for, but
currently it is hard to determine the high
performers in a company perfect for the job or
if an applicant will become a high performer
in a particular position.
“It’s difficult for recruiters to see because
they don’t have enough data to back them
up,” says Osaki. “So the AI system tries to
collect as much data from not only the HR
software, but also from any possible data
points like performance review results, work
history or education history.”
Based on high-performing individuals
already within a company, an AI system in
HR can suggest the type of people that would
fit well in a new position. The system can
help HR try to fit personality types, skills
and education with a particular position
in the company. HR can also use AI for
succession planning for higher-level positions.
If a company needs a new VP of marketing
for a New York office, The AI system can
provide a list of potential candidates and
make recommendations based on the job
description — that HR has defined — to
narrow down the selection process. By mixing
AI system recommendations and human
employee intelligence, companies can receive
high-level suggestions for succession planning.
“The HR department is now spending
more time picking the right people to
be employees,” adds Harris. “Before
implementing AI, they spent most of their time
with data entry and had very limited time to
look at candidates. Now the HR department
can begin to really think about how a
candidate or employee fits in. They can really
develop a relationship with them and make
sure they fit the company culture. The amount
of money it can cost to recruit, hire and bring
someone on board can be astronomical.
Using AI in HR can help the department make
better personnel decisions and reduce the
costs associated with high turnover.”
STRATEGIC WORKFORCE
CONSULTING
At this stage, most of the old, necessary tasks
are automated so that HR is no longer a task-
processing department. The HR staff will fully
transform into an critical group that analyzes
objective HR data provided by the AI system.
“After automating those repetitive tasks,
the mission of HR will be to give suggestions
as more of a consultant to other divisions,”
says Osaki. “Other departments always need
advice on how they can best utilize their
human resources. The new HR department
can be the analysts of existing human
resources and a strategist to assign employees,
or recruit people from outside the company, to
fill needs and open positions. So, HR becomes
more of a strategic partner for the rest of the
business divisions in the company.”
While the success of an AI implementation
might not be immediately observable, a
company could look at some measureable
metrics to begin to understand the
connection. For example, a company can
measure increases in productivity due to the
introduction of AI. An organization can use
data that examines productivity over time or
other company-specific KPIs such as reduction
of workforce or working hours.
“HR will be better positioned to effectively
manage their current workforce,” adds Harris.
“It’s developing new strategies and having the
time to develop those new strategies that add
value.”
WHAT LEADERS
NEED TO DO
To start down the road of using AI in HR,
company leaders first need to understand
APPLICATIONS
• Reduced inquiries regarding payroll, time and
attendance, benefits and approvals
• Reduced time and effort in creating reports
• Reduced management effort for document submission
during the onboarding process
• Improved routine efficiency in operations for recruiters
ABILITIES
• Finds patterns in large
amounts of data
• Performs repetitive,
routine tasks
• Gives suggestions tailored
to each user
AI IMPROVING WORKFLOW
The Future of HR6
ABOUT THIS REPORT
The information in this report
was researched and produced by
Manufacturing.net in conjunction with
Works Applications. Statistical data
was researched and compiled by
Advantage Business Media
in June 2017.
ABOUT
WORKS APPLICATIONS
Works Applications, founded in
1996, is Japan’s largest HR and ERP
software provider by market share.
More than 7,000 organizations from all
major industries, including healthcare,
education, manufacturing, energy and
transportation are customers, including
1,100 of the largest Japanese brand-
name companies. Works Applications
employs over 6,000 people worldwide,
with offices in Tokyo, Shanghai,
Singapore, New York, Los Angeles and
Chennai. For more information,
please visit worksap.com/us.
what they are looking for. There is no out-of-
the-box solution waiting on a store shelf for the
IT department to install and start using.
“Education would be the first thing,” explains
Harris. “Go to conferences, read whitepapers,
attend webinars — go online and do as much
research as you can. Find vendors that sound
interesting and sit down with them for a face-
to-face conversation and demonstration of
their software.”
To understand what a specific company will
need, leaders should determine the ideal future
of their HR department. They need to define
the strategic direction of the department once
automating tasks and redesigning communication
within their organization has taken place.
“Companies may want to avoid choosing
software that simply says ‘automation,’ because
what’s behind the software may not really
be automation, but people working behind
the scenes,” explains Osaki. “There is a lot of
business software that says it is ‘automation’ but
is more or less just paperless— requiring a lot
of manual involvement. For example, software
saying it is recruiting automation is more likely
to just have applicants apply through a portal on
a web browser so that recruiters don’t need to
work on data entry from paper resumes. That’s
not AI. To find true AI software, the key term is
‘machine learning.’ So find software that uses
machine learning for a genuine AI experience.”
As for IT leaders, they should support HR
leaders as much as possible from a technology
perspective. They need to help identify where
to start using AI first, how to integrate it within
the core HR system using company data, and
address any security concerns.
Leaders should start small by looking for an
unproductive area of the company or finding
routine or repetitive tasks to try AI first and
easily test its ROI. At the same time, these
leaders should identify the next steps needed
to deploy the technology most effectively
throughout the company — outlining the big
picture and designing the road maps needed
to get to the company’s ideal future.
“It really comes down to choosing the right
vendor,” says Harris. “Who’s going to check
all the boxes for what you really need?”
To avoid issues, companies have to sit down,
figure out what their current workflow is and
talk about how that workflow could change
for the better. Some vendors will conduct an
operational study to tell organizations where
those improvements can be made. Companies
should find a vendor that they can have a good
relationship with, are comfortable talking with
and can trust. Then they must get their whole
company on board.
“It has to be a global effort if you are
building a global system,” adds Harris. “You
just can’t dictate from the top down. We’ve
heard from several companies that the reason
that their implementation failed was because
their subsidiaries weren’t looped in. They
didn’t know what was going on. So have
regular meetings to make sure everybody
understands the steps that are being taken to
make sure everybody’s needs are being met.
That is the best way to be successful.”
“AI WILL BRING SIGNIFICANT COST REDUCTIONS AND
PRODUCTIVITY IMPROVEMENTS TO ENTERPRISES,”
concludes Osaki. “That’s significant and what companies
need to understand.”
CONCLUSION
Where is AI in the workplace heading?
“We see it as a personal assistant,” says Harris. “Imagine having Siri or Alexa in your office
actually helping you with your daily tasks. It’s very well possible.”
Who knows where workplace AI could be in 20 years? For the time being, AI is not there to
make decisions but to give suggestions to personnel. AI will continue to get better and better at
assisting HR strategists, but it is not designed to take over the HR department. It will just become
smarter to assist the HR department.
THE FUTURE OF HR: Improving Your Current HR Strategy Using AI
When discussing Artificial Intelligence, or AI, images from movies like Ex Machina, Westworld or the Terminator franchise come to mind first for many people.
In reality, an AI system is actually quite human in its ability to collect large amounts of data, store it, analyze it and make suggestions based upon it. But often this is confused with human intelligence. The difference is that AI is great at analyzing one simple operation such as reading a resume, where humans excel at more complex tasks such as empathizing with potential candidates or analyzing how someone may fit into the company culture.
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