Will Gen AI make the HR function redundant as we know it?

Back in the day, most of “HR” was managed by people in the line role.? HR was a ‘MVP’ (minimum viable product) and the level of people service was probably minimal viable service too. The emergence of the white-collar workforce and then the technology workforce changed all that. Workers landed in the workplace with expectations. The best workers were competed for with all sorts of benefits and roles became dynamic which meant workers needed to be dynamic learners. The no of HR tools & systems a company had? Payroll and maybe a handful of others.

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Fast forward to now and Josh Bersin shares a stat that the average Fortune 500 company has 80 tools in their HR tech stack. We have universally become a function which is over-stacked. I talk about this a fair bit in this paper.

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The prevalence of so many systems bakes-in a false longevity for HR, as someone has to manage all this complexity. I wonder how many of those systems are having true business impact vs helping relieve the tax of being in HR.? The example I hear the most is the need to hire people or buy tech principally to manage the tax of interview scheduling. The north star metric for HR in that scenario is not that you used tech to automate 50k, 100k, 250k interviews. It’s that you halved the number of interviews because you re-engineered your hiring process and solved the problem of hiring for fit thereby reducing the quantum of replacement hiring. That’s solving for business need not HR need.

Check your team next time they come to you, the CHRO and ask for the budget to buy a new tool.

Is your HR team doing business with itself or truly looking to shift business metrics via innovative tech?

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If I am coming across as a something of a ‘negative Nigel’ on HR, it’s because I spend most of my days with HR teams and if there is one thing, one muscle that is seriously under developed by HR - ?it’s prioritization.

To effectively prioritise, you need to quantify the ROI. That is the 2nd weakest muscle in HR teams.

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Two tips for you from my experience of living this battle every day as a founder of a start-up where you can’t focus enough:

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Stack rank – on business ROI

In a software business you have ideas and features requests coming from everywhere. The best problem you can have is your Customer Success team barracking for their customers to win space in the roadmap for the feature they want.

How we manage this imbalance between requests vs capacity? Stack ranking helps

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Stack ranking is only effective if you have a clear north star metric you are all aligned to.

I argued in a recent newsletter that retention @2 years should be that north star for most HR teams.

The hard bit is working out the ROI. That requires real thinking and work to quantify the impact of all your different initiatives and supporting systems.

E.g., A lot of investment has gone into CRMs supposedly to reduce the acquisition cost of hires. Any tech investment should have 4x payback in Year 1. Do the maths to test if you have hit the market hurdle rate.

Ditto the same crazy investment is going into Talent Intelligence systems. I expect with the same ROI target of reduced spending on new hires. Again, do the maths. What does it tell you.

A driver tree framework like the one below is a good start to getting to the ROI.

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Ask Why – a minimum of three times

A biography I read in my twenties that stuck with me is Maverick by Ricardo Semler. He takes the provocative stance of asking why three times when presented with any idea/request for investment.

When you apply this tactic to HR conversations, the answers can be very revealing…

Usually, they reveal a lack of clarity and alignment to the business need you are solving for. Just not enough time is spent by HR teams in my view on really understanding the business need – deeply. If you do that, you find yourself prioritising the problem statements of the business not the technology requests or change initiatives put forward by the HR team.

How does this lead to the outcome of redundancy?

I will get to that in my next newsletter.

Anything in particular you want to hear my thoughts on? Drop me an email ([email protected] ) and I might use it in my next newsletter.

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