Transparency is the Secret Sauce for the Adoption of AI in HR

By Claude Werder, Vice President and Principal HCM Analyst, Brandon Hall Group

HR is at a critical crossroads. Adopting AI-powered technology and the insights it provides is vital to HR and the future success of a transforming workforce. But HR executives, particularly practitioners, are deeply distrustful and wary of how AI goes about doing what it does.

Part of this is attributable to relative ignorance; Brandon Hall Group’s recent AI in HR research shows that only 26% of organizations are familiar or very familiar with AI and what it can do for HR. Another part is attributable to the “trust crisis” that Cecile Leroux, Ultimate Software’s VP of HCM Innovation discussed during the recent analyst summit at Ultimate’s headquarters in Weston, FL.

Leroux, citing research, said there is a growing distrust in institutions around the world due to ongoing political and social discord. The bright spot for employers is that at this point they are the most trusted institution[1] by at least 31% over NGOs, business, government and the media.

The key to maintaining and growing employees’ trust, Leroux said, is by protecting their privacy while being transparent with them.

The complicating factor with AI, however, is that employers are pushing HR to transform, leveraging AI to do it. HR practitioners’ angst is percolating on three levels:

  • Their instinct is to trust their own judgment about the workforce over technology’s, even against evidence that in many cases, machines can make better decisions.
  • They worry about the motives of employers in pushing AI, thinking it is more about eliminating jobs and saving money than optimizing the human workforce.
  • And even if they somewhat trust the employer’s motives, practitioners – especially those in more tactical roles — worry about learning new skills and competencies to adapt to the new AI-driven HR environment.

In addition, employers are not the AI experts whose software redefines HR’s role. Technology providers are the ones developing all these solutions so they have the burden – and opportunity – to leverage the transparency employees seek to inform them how AI solutions are developed.

John Machado, SVP of Development and Cloud Operations for Ultimate confirmed this during his technology update at the analyst summit. He said their sales teams learned that potential buyers are more interested in transparency about the methods of developing solutions than they are even in the accuracy of the AI insights. In other words, if prospective buyers understand how the insights of AI are developed, they are more likely to accept the results.

Martin Hartshorne, Ultimate’s SVP Products and Strategy explained that HCM technology evolved from simple systems of record to “systems of connection” – technology that understands people and anticipates our needs; systems that use data and insights to reach out to us to make us better.”

This requires the sales team, which at Ultimate includes an I/O psychologist, to teach the customer how to use the systems. “Our job is no longer just providing software and have them use it,” Hartshorne said. “We are now telling them this is the best way to engage your employees. We need to show them best practices.”

The AI learning curve for most HR organizations is steep, according to our AI in HR research:

  • Only 16% of respondents said their HR organization is ready for AI
  • Only 19% say their HR organization makes moderate or heavy use of AI
  • Less than half (42%) say AI is important for their HR organizations
  • Only about one-third believe AI will actually be used for predictive analytics, decision-making and augmenting/replacing human activities
  • 60% don’t see use of AI significantly increasing for at least 3-5 years

This supports the theory that transparency is critical – from employers and providers. We have several corporate clients in the middle of HR transformation efforts. The ones having the most success are investing significant time to getting their HR staffs comfortable with AI’s role. One Fortune 500 organization spent the first four months of an 18-month project almost exclusively on education and transparency.

On the vendor side, organizations such as Ultimate, with its “People-first HR” marketing strategy focused on understanding the needs and emotions of HR and employees, are well-positioned to leverage transparency to drive adoption of AI in HR.

[1] 2019 Edelman Trust Barometer, via the Holmes Report, London

Claude Werder, Vice President and Principal HCM Analyst, Brandon Hall Group

Claude Werder is Brandon Hall Group’s Vice President and Principal HCM Analyst. He focuses on Leadership Development and Talent Management. Brandon Hall Group is a leading research and analyst firm with Practices in Learning & Development, Talent Management, Leadership Development, Talent Acquisition and Workforce Management/Core HR.

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