93% of HR managers use AI tools to reduce costs, report finds

There is a growing appetite for AI adoption in the workplace, with senior leaders spearheading its growth, according to new research from Personio.

In fact, a whopping 84% of HR managers have reported a keen AI uptake from members of their senior leadership team, with 78% reporting an interest in its adoption.

According to Pete Cooper, director of people partners & analytics at Personio, this shows how businesses are prioritizing AI – which now puts more onus on individual departments to look for ways to utilize it.

What’s more, although the rise in AI has caused its widespread adoption, only 5% of senior leaders have expressed concern about whether their jobs will become obsolete, according to new research from Workday.

HR decision-makers who are already using AI tools are seeing the economic benefit, but only 63% have officially forecasted the cost-saving potential. Supporting this, the study shared that 93% of HR managers already using AI tools believe it contributes to cost savings.

“While many businesses may have been playing around with AI tools in 2023, next year we could see more business leaders emphasizing the need for teams to demonstrate and quantify the cost-saving benefits,” Cooper says.

“Especially as more tools are made commercially available.”

Daniel Pell, vice president and country manager, UKI, Workday, agrees with Cooper, stating: “It’s a good sign that many HR leaders are hopeful about the power of AI to navigate today’s climate, from tackling talent shortages to boosting employee engagement.

By automating and simplifying manual processes that impact employee experience, AI can reduce the amount of time HR professionals spend on administrative tasks and thus boost the time spent on high-value tasks only a human can do.”

These advances are paramount to helping businesses stay ahead of the competition, particularly as 70% of HR decision-makers across Europe are using some sort of AI tooling as part of their regular processes. But this leaves the 30% not using them at risk of falling behind.

“In practice, AI technology has the potential to automate repetitive and time-consuming tasks, help HR teams to analyze data, and support improved decision-making – and therefore improve productivity and cost-effectiveness,” Cooper says.

“Overall, these technologies can empower HR teams to spend more time focusing on strategic, value-adding work that many say they currently have little time for. This will allow more teams to work more proactively, rather than reactively – planning to tackle future workforce challenges, as opposed to being in constant firefighting mode.”

Building confidence by offering training

Given the appetite for AI adoption amongst leadership, as well as the understanding of the cost-benefit, it’s almost inevitable that these technologies will become embedded in how businesses operate.

Currently, generative AI is one of the most important advancements that will impact how work gets done, but still so little is understood about how this could be used within HR departments,” Cooper says. “Indeed, nearly all (96%) of HR decision-makers across Europe say that at least some training will be necessary to successfully implement generative AI.

“For this technology to deliver benefits to businesses, all employees must understand how to use it – and this will also ensure that no one is left behind.”

He concludes by stating that training is especially important, given fears about whether AI could impact people’s jobs. Employers must, therefore, take this opportunity to turn any fear into confidence and improve people’s working lives.”

To ensure AI is integrated seamlessly, HR leaders will need to encourage employees to focus their skill set to adopt a more technical angle.

Workday found that HR leaders need to proactively upskill teams to build confidence in new technologies, with 32% believing employees don’t have the technical skills to work well with AI. Teams must therefore be empowered to overcome skills gaps, with AI-specific training and learning materials to support both technical and non-technical employees.

“As governance gatekeepers, those in HR understand the importance of ensuring transparency, compliance, and risk management when rolling out and using new tools,” Pell concludes.

He adds: “Leaders can do this by offering the right training, working with trustworthy partners, and leading with a human-in-the-loop approach, which keeps human decision-making at the helm.”