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The employment landscape is changing rapidly, and the last few years have accelerated these changes. Demographic shifts, technology, employee expectations, and complex employment law are all contributing to the changes.  

The role of human resources is rapidly changing as well. Traditionally, HR has been viewed as an administrative function overseeing transactional work and policy development, which has led some to wonder if artificial intelligence (AI) will replace HR.  

Concerns about being replaced by technological advancements may make HR professionals hesitant to embrace AI and other advancements. However, failing to adapt is typically a sure way to end up obsolete. Instead of fearing AI, HR professionals should be preparing for what’s coming. That means understanding both the benefits and potential pitfalls of AI. It also means expanding or acquiring skills that will allow HR professionals to go beyond the traditional task-focused functions of HR and instead become strategic business partners.  

Embracing AI in HR may have upsides. According to a recent article by Business News Daily, the most common utilizations of AI in HR are performance management, payroll processing, benefits administration, recruiting and hiring, onboarding, and employee record management. Benefits of AI may include increased efficiency, cost reduction, and the ability to use data to make sound business decisions.  

While there are potential benefits to AI, there are also considerations that must be made to avoid potential pitfalls. The following are some of the resources that Employers Council has developed to help members navigate AI responsibly:  

Much like the technological advancements that have come before it, AI will bring new ways of working. For HR professionals, this means focusing on the following: a people strategy that supports the overall business strategy; strategic, workforce, and succession planning; employee development programs; and other long-term programs that seek to solve business problems. 

Below are four strategic steps that HR can take to ensure that as technology advances and the way work gets done evolves, the organization’s people strategy is responsive to the changes.  

Organizational Alignment  

Becoming a strategic HR business partner starts with knowing and understanding the business of your business. It means knowing the company’s mission, vision, and values and using these as guideposts in developing HR programs and initiatives. It means understanding the business of your business, such as the following: 

Once you have aligned with the organizational strategy, you will need to get buy-in, which is critical. To get buy-in, you are going to need to be able to demonstrate your knowledge and understanding of the business. Doing so will allow you to illustrate the connection between the people strategy and the organizational strategy, which can be done by developing business acumen. Employers Council can assist you through our Strategic HR resources and through our Organizational Development Services, which can help you with organizational alignment through leadership coaching and development, strategic planning, and organizational culture development.  

Build Your Business Acumen 

Business acumen is knowledge of business drivers, such as cash, profit, assets, growth, and people, combined with the ability to utilize that knowledge to execute good judgment and quick decisions in the business domain. More specifically, for an HR business partner, it means the ability to read, understand, and apply financial statements, such as a profit-and-loss statement, a balance sheet, and a cash flow statement.  

You need to understand the organization’s top and bottom lines and how to positively impact them, which often means looking for ways to decrease costs. But it could also mean finding ways to increase revenue. The key is to identify the line items on the financial statements that HR can influence. For example, HR can influence benefit costs, labor costs, administrative costs, and much more. Also, be sure to strengthen your understanding of the difference between cost and indirect cost. Then ask yourself, "What can I do to positively impact these line items?" 

Performing a gap analysis can also assist in finding opportunities, identifying areas of focus, and prioritizing needs. PESTLE (political, economic, social, technological, legal, and environmental) and SWOT (strengths, weaknesses, opportunities, and threats) are two popular gap analysis techniques that can be used to analyze influences that may be impacting your organization and assist you in aligning your people strategy to the organization’s strategy.  

When you effectively demonstrate the value of an initiative or project by illustrating how it generates revenue to the top line or reduces impact to the bottom line, it generates buy-in from leadership. Employers Council can assist you with developing your business acumen in a wide range of topics through our Training and Development content that assists participants in building strategic processes that focus on compliance and best practices, which lead to efficiencies and cost-effectiveness. Some recommended classes include the following: 

Data Utilization  

When utilized correctly, data is an invaluable tool. Not only does it provide a means of measurement that allows us to gauge whether we are moving the needle and in what direction, but it is also a vehicle to demonstrate value to our stakeholders. Strategic HR business partners take data beyond visualization; they utilize data to control the environment and to validate the changes that are made. Data should not just be stagnant facts you have no control over; it should validate whether your programs and initiatives are meeting their objectives.  

Data can be extracted in abundance, but we should avoid collecting data just for the sake of collecting data. Every data point collected should serve a purpose. Focus on collecting data that will inform your decision-making and validate whether your initiatives are meeting their stated purpose. Employers Council can assist you with data utilization through our class HR Metrics: Focusing on What’s Important.  

Partnership 

Trust is the cornerstone of what successful partnerships are built on, and trust in the context of a business partner is derived from the six Cs: 

Employers Council can assist you in developing these effective partnerships through our training related to communication and leadership. Some recommended classes include the following: 

Advances in technology, including AI, are not replacing the need for HR professionals, but they will change the way work gets done. The number one competitive advantage any organization has is its people. By building the skills necessary to be an effective strategic HR business partner who develops a people strategy that aligns with and supports the organizational strategy, HR will remain an invaluable resource that is focused on the human aspect of business. If you have any questions, please contact the Employers Council Member Experience Team.