EY helps clients create long-term value for all stakeholders. Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate.
At EY, our purpose is building a better working world. The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets.
AI amplifies HR’s ability to make unbiased decisions, drive productivity and enable data-driven talent management across organizations
Dr. Michael Housman
Technologist, Data Scientist and Founder of AI-ccelerator
For your convenience, a full-text transcript of this podcast is also available.
Ashish: Welcome to the EY.ai podcast series, where we deep dive into generative AI (GenAI) and its impact across various industries. To be specific, we will be discussing about GenAI and its transformative powers for Chief Human Resource Officers (CHROs) and how it can help them in executive decision making.
Hi, I am your host, Ashish Jain. I am a Partner with People Consulting at EY India, and with me today are two eminent guests who have extensive experience in GenAI and its capabilities. First up is Dr. Michael Housman. He is a frontrunner in GenAI, and he has extensive experience working at the intersection of GenAI and human psychology.
Welcome, Dr. Housman.
Dr. Michael Housman: Thank you so much for the invitation, Ashish. It is a pleasure to be here.
Ashish: Really happy to have you here, Dr. Housman. Our second guest is Anurag Malik, Partner and Leader, People Advisory Services, EY India. He has been a frontrunner in technology transformation and has been advising many CHROs in India and abroad on managing change through technology, and more recently, how to leverage GenAI in HR.
Ashish: Welcome, Anurag.
Anurag Malik: Thank you, Ashish. Delighted to be here and privileged to do this podcast
alongside a thought leader like Mike (Dr. Michael Housman).
Ashish: Happy to have both of you here.
Ashish: Mike, how do you think AI is going to reshape the HR as a function and its impact?
Dr. Michael Housman: There are two ways AI is going to transform HR. The first is largely driven by GenAI, which leads to productivity improvements. These tools are game changers for productivity, and research shows that when you give them to knowledge workers, they become far more productive, efficient, and deliver higher quality results.
We are going to see hyper-efficient and hyper-productive HR teams because these tools amplify their powers. Additionally, HR will play a key role in reskilling and retraining the workforce, allowing the rest of the company to benefit from these tools.
The second way involves machine learning and its ability to enhance decision-making within organizations. There is a lot of research which shows humans are often poor decision-makers and are prone to various biases. This is especially true when evaluating employees, bonuses, learning, and development.
There is a field called people analytics that focuses on using these tools to make the right decisions about who to hire, what to pay them, how to onboard and mentor them, and ultimately how and when to separate them. Those are the two ways AI will transform the HR function.
Ashish: Fantastic! To summarize, it is about efficiency and decision-making. I would like to ask you the same question, Anurag. How will A impact and reshape HR?
Anurag Malik: AI is going to have a fundamental impact on the HR function. Mike gave some great examples. Let me focus on the role of the CHRO and HR leadership. To add to what Mike said, AI can have a very significant impact in elevating the role of CHROs and senior HR leaders, making it more strategic, data-focused, and future-focused.
At EY, we have been doing far amount of research in this area. Our belief is that, based on today's available technology, there can be 35 to 40% impact in the efficiency of the HR function in the next 24 to 30 months. Processes like onboarding, hiring, learning, HR operations, and HR data center - the potential impact on their productivity is extremely high. And that is a great opportunity for HR.
Ashish: How prepared are CHROs to be at the center of these changes and to drive this change within their organizations? First to you, Anurag and Mike, I will come back to you with the same question. Anurag Mailk: First, it is about what I call AI literacy within the HR leadership today. Awareness is not a problem, but specific understanding of AI’s impact and its potential, different HR processes, understanding of areas like ethics, AI governance, AI policies, all these play a huge role in preparedness. It is important to develop conviction and confidence in our leaders to take this forward.
Second, it is largely about HR leaders themselves and how convinced are they about experimentation. We, at EY, have been advising HR leaders and CXOs across functions that this is the year of experimentation. We believe that dramatic, visible improvements that AI will bring to organizational processes are 12 months away. But next 12 months are about implementation, experimenting with AI technologies, running pilots, looking at where is it that we are getting value, and scaling that into core HR processes. This is the year to do that. Additionally, the openness of HR leaders to some of these experimentations is a major factor influencing their preparedness.
Ashish: That is very insightful. And if I throw the same question to you, Mike, how prepared are CHROs to take on this role?
Dr. Michael Housman: I spent the first five years of my career building a hiring and assessment software and selling it to a lot of call centers. Frankly, some of those call centers were in India and the Philippines. 15 years ago, HR was not as data savvy as it is today. People analytics as a field was still at an early stage, and I do not think they understood the power of data and analytics back then in enhancing productivity and decision-making.
Now, it is a different world where HR, CHROs, and their teams realize the power of AI and ML. Driven, in part, by things like Moneyball and all the emerging research, which show that these tools can help you get the most out of your people.
Also, back then, HR leaders were not the most empowered buyers because the organization saw it (HR function) as a cost center, not a revenue center. This is going to change now because these tools are going to force organizations to reskill, retool and retrain their workforce. They are going to want their sales team, their marketing team – everyone – to be sprinting and leveraging the latest and greatest in technology. And HR, as we all know, is going to play a huge role. They are going to be at the center stage of that learning and development effort.
I think HR is ready, and CHROs I interact with understand this power. Now, organizations will look to them for guidance and leadership on how to take their organization workforce and retrain them, so they can help us sprint ahead of the competition. I am excited to see where that goes, but there is no question that the CHRO is going to be at center stage.
Ashish: Super! We recently did a bootcamp on GenAI and HR for the top 35 CHROs in the country. What we heard from them was that most of them are trying to demystify what AI is and its potential impact on human resources as a function. And, secondly, as Anurag mentioned, they are looking for a roadmap on how to implement it and drive change within their organizations. So, this resonates with CHROs. A follow-up question to you, Anurag: what are the specifics for CHROs, and how can they get started on this GenAI adoption journey?
Anurag: It is extremely important to focus on building capabilities. A strong adoption journey needs to be supported by a massive capability-building effort across levels. You have to consider employees across functions and areas, providing them at least what we call a ‘AI 101’ to build base level capabilities.
As HR leadership, you should focus on identifying certain people across every function or business – we call them translators. These are individuals who may not be AI specialists but can understand and bridge the gap. For example, finance specialists who, with the right AI training, can become translators for AI in finance, procurement, HR, etc.
Number three is supporting your leadership team by building capabilities. At the end of the day, they are the ones who will sponsor AI initiatives, drive them forward and support AI-related activities. So, it is extremely important to build capabilities across the senior-most levels of the organization.
Ashish: Great thoughts, Anurag. Mike, what is your take on the key points that CHROs should keep in mind while embarking on their adoption journey?
Dr. Michael Housman: I agree with Anurag that capability building is a huge component of this. When companies approach me and ask about their AI roadmap, a lot of what I do is explain that it is not actually one AI roadmap – it is a few different pieces, specifically three.
First, look for incremental projects that could last two to three months, where you can start identifying low-hanging fruit, get quick wins and start building those muscles. A lot of projects can leverage off-the-shelf tools, put them in the hands of employees, and watch as they increase their productivity. They will really be able to sprint.
While you are doing that and showcasing those wins to the organization, you are also on a data journey. I have never encountered an organization whose data was pristine and perfect when they approached me. It always needs work, and you have to spend time fixing that foundation. Once that is done, you can move to the third piece – more visionary and disruptive projects.
Ashish: Fantastic! We all now know it is important to embark on this journey. This brings me to another important point, and Anurag, this question is to you first: what according to you are a few challenges that CHROs should keep in mind while embarking on this journey?
Anurag: There are many. I will build on the point on data that Mike so eloquently spoke about. There are three aspects to data that one needs to work around - data integration, data cleanliness, and data privacy.
In the AI age, data privacy has become even more important. Before you embark on an AI journey, you need to consider employee data – and are you adhering to GDPR laws? Have you taken care to mask wherever required and maintain the right level of privacy? These are extremely important.
The second aspect is checking for bias. This means checking if the underlying data or systems have any bias or if there are ethical implications that you might need to address in the future. You have traditionally run your hiring, selection, and promotion decisions – AI can unfortunately accentuate those biases if you are not careful. So, it is essential to test your past data and systems for bias and ensure that you have cleaned them up.
The third one, and I reiterate, is change management.
Ashish: Mike, your take on this?
Mike: I agree with everything Anurag said. On the data side, there is privacy and security. This is sensitive information, and we have a certain level of expectation around safeguarding that data. The second part is bias. Since this is people data, it impacts compensation, hiring, and termination decisions, and we have a very high level of scrutiny. We care deeply about it. We do not care about pushing ads in an online marketplace, but we need to be cognizant of this.
Ashish: Thank you so much Anurag and Mike, for being with us.
Just a quick crux of the conversation that we had today for our viewers. Here are a few key points things that I gathered:
CHROs and HR personnel need to demystify what AI is and how it can impact their organization.
Create sponsorship within various functions. with the MDs of their organization.
Focus on capability building across the spectrum of the organization.
Keep it human. Follow about laws. Remain unbiased, and safeguard privacy.
Show bias for action. I was recently reading somewhere, "If it is not catastrophic, it is not a failure." So, go for it.
Look forward to many more such EY.ai podcast series. Stay tuned with us!
If you would like to listen to our podcasts on the go:
