In the war for talent, employers are facing three tectonic shifts in the labor force. Technology, changing demographics, and new employment laws are causing a quantum shift in the labor market and human resources (HR). Artificial intelligence (AI) is both a cause of the shifting HR environment and a potential solution to these tectonic changes.
During a recent Mission to Grow podcast on “How AI Will Disrupt HR: Tectonic Shifts in HCM,” host Mike Vannoy reviewed the underlying shifts in the labor market as well as possible solutions. One major demographic change stems from the baby boomers. According to Vannoy, “The boomers are retiring about 10,000 a day [. . .] That’s 3. 6 million a year hit retirement age.”
Retiring baby boomers leads to a drop in the number of new workers available for new jobs. As people rise out of poverty around the globe, they’re less likely to have as many kids, which contributes to the demographic problem.
Meanwhile, employers are also dealing with a tidal wave of new labor laws. As the government continues to promote more employee-centered workplaces, these laws are likely to continue.
Technology is the third sea change affecting HR, but it is also a potential solution. With AI, HR departments can navigate changing demographics without losing their productivity. Plus, workplaces can use AI to easily navigate shifting labor laws.
What Is the Impact AI Will Have on HR in the Next Decade?
Over the next decade, AI will have a major impact on HR and business management. From better employee retention to increased HR personalization, your workplace can benefit from AI in a variety of different ways.
Increased HR Personalization
Unlike human workers, AI can quickly go through all of the data your company has generated about an employee. It can analyze every survey, performance review, job application, feedback form, and completed project to create personalized programs for each individual.
For example, you can use AI to personalize wellness programs for each worker. It can also spot knowledge gaps and weaknesses. Then, AI can build personalized training programs to help each worker reach their full potential.
Better Talent Acquisition
AI can improve your HR processes before someone even begins to work for your company. With AI, you can review employment trends and skill gaps to see where you need workers. Then, AI can forecast future needs so that you can find workers and prepare in advance.
Advanced applicant tracking software (ATS) can help you review job applicants for specific criteria and keywords. This can help you save time and weed through prospective hires. Additionally, it helps you avoid bias issues by putting AI in charge of the initial screening.
Streamlined Benefits Management
Unlike humans, AI doesn’t make transcription errors, and it can be relied on to send out payroll on time. This means it is easier to manage benefits for your workers. In addition, you can use AI to analyze standard compensation levels for different jobs to make sure your workers are getting competitive wages.
Enhanced Performance Management
AI can help with performance management in two key ways. First, you can use it to analyze your workforce to find potential skill gaps. AI can also help with creating more accurate performance reviews by instantly analyzing objective employment data.
Improved Employee Retention and Engagement Levels
With AI, you can review all of an employee’s surveys, feedback, exit interviews, promotion information, and other data. Then, you can use this data to understand why an employee quit. If the same reason occurs frequently, you can make changes to improve your employee retention.
The same type of data can be used to analyze engagement levels. Other than spotting individual workers who are disengaged, you can also gain a better understanding of why your workforce struggles with engagement and ways you can make improvements.
Better Legal Compliance
Employment laws are constantly changing, and they vary from state to state. This creates an added layer of complexity when you hire remote workers. Employment laws are based on the state the employee is doing the work, so you may need to understand employment rules for many different states.
You can feed AI a website, like the state’s online repository of legal codes, and ask it to summarize all of the legal codes related to a specific question. When you hire workers, you can also use AI to review employment and hiring data to look for potential biases and Equal Employment Opportunity (EEO) violations.
Redirected Workforce Planning
AI and predictive HR analytics can help you plan your hiring and employee management. HR analytics allows you to analyze employee talents, workloads, and availability, so you can balance which workers will perform each task. You can optimize your workforce to avoid employee burnout, increase productivity, and complete projects on time.
How to Incorporate AI Into Your Workplace
The International Monetary Fund (IMF) estimates that 60% of worker jobs may be impacted by AI. As an employer, AI-based tools can streamline your workforce and boost your productivity. To adopt AI tools in your business, consider the following three steps.
1. Determine the Best AI Tools for Your HR Department
First, you need to evaluate your HR department. Which activities take up the most time? Where are your greatest challenges?
Afterward, look for AI tools that can solve your major challenges. You can also talk to an HR provider, like Asure, about some of the best AI tools for HR departments and small businesses.
2. Implement the AI Tools
Next, you need to create a plan for implementing AI tools in your workplace. You may want to start small. Instead of changing every procedure, it may be better to adopt AI gradually so that you have time to train your workers and get them used to the new tools. If you do adopt AI in a piecemeal fashion, you should prioritize the processes where it can have the biggest impact.
3. Assess, Gather Feedback, and Evaluate
Finally, you need to ensure that your AI tools are more efficient than your current methods. This means you should regularly gather feedback from your employees. Afterward, you can evaluate the new technology to see if it is fulfilling all of its promises.
Prepare for the Future of HR
While shifting demographics, new technology, and changing employment laws will have a significant impact on HR in the next decade, AI can help you navigate these changes. Through AI, workplaces can become better at hiring, training, and retaining workers. It can also help you spot weaknesses, manage deployment, and improve your performance reviews.
If you’re interested in learning more about AI’s impact on HR, reach out to our team of small business HR and payroll experts today.