Indian companies have been slow to adopt the use of Artificial Intelligence (AI) in the human-resources department (HR department), according to Bruhat’s BIGSIGHTS 2019 report.
While AI-led tools and technologies is already considered game changing by many business sectors and departments in India, in human resources, its usage is still nascent. A recent research report reveals that nearly a third of of the organizations it interviewed in India have 30-50% of systems in HR using data and analytics, while only 5% of the companies have adopted AI in HR Systems completely. (Read the complete report here)
The Bruhat Global Insight’s BIGSIGHTS 2019 report surveyed over 260 organizations in India and states that half or 49% of the organizations fear AI can interpret culture based organizational decisions quite differently from what has been the norm, which can lead to wrong management decisions, inadvertent exposure and misuse of organizational data.
On completing one year of successful operations, Bruhat Insights Global (BIG) launched this nation-wide survey to understand the penetration of AI at the organizational level, covering a range of industry verticals – Education, Financial Services, Healthcare Services, IT services, Manufacturing, Media, Retail and Service Industry and to dwell deeper on different stages of the adoption levels of AI.
“While technology has been the backbone of India’s progressive growth, the usage of this (technology) in the most important function of an organization, which is people, is far behind. For any company to succeed in this dynamic business landscape, the people part plays a major role in which, AI – powered by data, certainly an element to be considered,” Umasanker Kandaswamy, Joint Director & COO, Bruhat Insights Global, said, adding that organizations must relook their HR systems and align their decisions in order to achieve better growth.
The report also states that Education, IT, BFSI, industries are leading the adoption of AI in their HR functions – 75% of organizations in Education, followed by 67% of organizations in IT and 58% of organizations in BFSI – making substantial progress in creating a “cool” employee experience. However, the findings from the survey revealed that Media and Entertainment industry falls behind as compared to other industries with 75% of the organizations in the yet to enter space of leveraging the power of data.
Some interesting findings of the report includes:
Adoption level of AI in HR in uneven
The adoption of AI in HR by various organizations across industries is uneven. Based on the research by Bruhat Insights Global, 41% of the organizations have less than 25% of their HR systems that leverage the power of AI while only 5% of the organizations have their entire HR function powered by AI.
HR Functions lack sufficient data for decision making
Nearly, 54% of the organizations have revealed that they do not have sufficient data for leadership development. This is closely followed by training and mentoring with 51%. All of which reveal that L&D lack the consolidation of data for decision making.
Talent Acquisition process can create value
Half of the organizations (50%) are applying data for Talent Acquisition process, concentrating on application processing while 59% of the organizations who participated in the survey are of the opinion that Succession Planning is the key HR function where application of data can create great value.
AI for HR drives process efficiency
According to the study, 78% of the organizations have mentioned Process Efficiency as the key reason for using AI in the HR function. There is a compliance process associated with each of the HR functions. Also, HR Leaders who embrace AI for process efficiency drive their functions towards more operational efficiency vis-à-vis those HR Leaders who embrace AI exclusively for creating a cool employee experience. Being agile and having a competitive edge over other organizations may be additional factors for AI adoption while few adopt it, since it is a top management call.
Human Bias affecting the HR functions
Discrimination is seen as being pervasive and highly prevalent in workplace especially in the recruiting function. Perhaps, it is indeed a no brainer that 41% of the organizations feel recruitment is the most biased HR function. With the ‘Halo Effect’ having a great influence on recruiters, it is absolutely crucial for Talent Acquisition specialists to become aware of the unconscious effect that gets created. AI is seen as a tool to eliminate bias.
AI requires change in mindset of HR Professionals
Nearly 38% of the organizations are of the opinion that they can adopt AI for all their HR functions with moderate level of difficulty. Even though organizations are gearing up for an AI reskilling, HR professionals are not fully aware of the pull factor. 29% HR Professionals accept that it is difficult to adopt as they need to upgrade their own skillsets, while also simultaneously training their existing workforce and changing how the business functions.
Risk factors exist
Organization’s perspective on the risk factors associated with AI adoption in HR is clear with 49% of the organizations fear that AI can interpret culture based organizational decisions quite differently from what has been the norm. This can lead to wrong management decisions and inadvertent exposure or misuse of organizational data. Similarly, 46% of the organizations feel the change is too disruptive, and might lead to non-beneficial results.
Some skills will remain purely human
AI may support in complex problem solving but the problems need to be creatively fed by human beings, the study says. Creative people have the ability to devise new ways to carry out tasks, solve problems and meet challenges. Clearly, abilities such as creating thinking and team work score on top among the organizations. Over 75% of the organizations feel creative people bring in fresh perspectives to work that cannot be replaced by algorithms, while 68% have expressed team work as a skill set that cannot be preempted by any systems.
Ownership of top leadership matter in AI adoption
The research reveals that it is the CEO of the organization who has to foresee the business value of AI in HR, as 74% of the organizations have stated that implementation of AI in HR should be led by the CEO or the top leader, whereas, 73% of them feel that the onus should be on both the CEOs as well as the HR Heads. That said, organizations where CEO himself/herself has taken the ownership for AI adoption have made the most progress in digitizing the HR processes and also are leading the edge of AI adoption.
The report states that Education, IT, and BFSI, industries are leading the adoption of AI in their HR functions – 75% of organizations in Education, followed by 67% of organizations in IT and 58% of organizations in BFSI – making substantial progress in creating a “cool” employee experience.
However, the findings from the survey revealed that Media and Entertainment industry falls behind as compared to other industries with 75% of the organizations yet to enter the space of leveraging the power of data.
Across the geographical divisions in India, HR professionals in 56% of organizations in New Delhi strongly feel there is lack of sufficient data and insights for decision making in Leadership Development. A majority of organizations in Chennai have chosen AI for application processing as they find lack of data in creating a sustainable and engaged candidate pool. Organizations in Bangalore want the HR Heads to own the responsibility of implementing AI and concentrate on Compensation and Benefits functions where the AI applications can be utilized to generate analytics.
Talent Management is creating gaps in employee retention, diversity and enhancement. Organizations across industries in Mumbai, find Talent Management as one of the functions that will most benefit from AI in HR. Organizations in Mumbai and Hyderabad fear that AI can lead to highly disruptive change for a function like HR which is more human, and this may eventually give results that are not beneficial for individuals and organizations as well.
Seeing the boss/supervisor as a Robot is not a concern shared by organizations in New Delhi and Chennai but their concern is the steep learning curve created by application of AI in various HR functions. Organizations in Bangalore fear their job becoming redundant with AI taking up most of the work, reveals the study.