The shift towards individualized solutions and the integration of human oversight in AI processes are essential to stay relevant in the evolving HR landscape.The HR function is undergoing a seismic shift, driven by the relentless pace of technological innovation. The book Exponential Organizations by Salim Ismail and Yuri van Geest (2014) highlighted how technology is shifting industries. In 2020, Peter Diamandis and Steven Kotler reinforced this idea in their book The Future is Faster Than You Think, focusing on technological disruption. More recently, the launch of ChatGPT by OpenAI in November 2022 marked a pivotal moment in AI's evolution. This has had a significant impact on the HR landscape.
The growth in AI adoption is remarkable. According to The Business Research Company, the AI in HR market is projected to grow from $11.63 billion in 2024 to $26.26 billion by 2030. This reflects a staggering CAGR of 17.1%. CHRO and team need to move beyond refining HR concepts designed for the world of today and yesterday. Most HR products still follow a one-size-fits-all approach. Even global players offer products and services, such as HRMS systems, that try to fit every organization or industry.
Despite advancements, many organizations continue to rely on outdated, on-premise technology. However, the future world of work will be very different. HR technology is evolving rapidly, and organizations must adapt to stay relevant. This is also exemplified by the gradual transition from company-owned desktop solutions towards user-centric smartphone solutions. The world of HR Technology is changing.
1.Internet "How do I manage you": Most organisations are (still) here. This is the world of process, shared services, CoEs, efficiency, productivity
2.Digital "How do I engage you": Most of our employees are expecting this. This is the world of consumerization engagement and employee experience. This is the world of mobile, social, cloud.
3.Incredibly digital "How do I make you feel": Only a happy few are scratching the surface. This is the world of predictive analytics and hyper individualization. This includes tech like big data and AI.
The HR software market has seen rapid growth in recent years, with innovative start-ups emerging rapidly. These companies often focus on a single step in the process to drive impact. Few examples I would like to illustrate.
a)The recruitment landscape has witnessed a seismic shift with the advent of AI. Traditional methods, often plagued by inefficiencies and biases, are being replaced by intelligent systems that leverage machine learning, natural language processing, and predictive analytics. AI can sift through resumes at lightning speed, match candidates to roles based on skill sets and experience, and even predict a candidate's cultural fit. According to a 2023 report by Deloitte, 67% of HR leaders have adopted AI in some capacity for recruitment, citing improved accuracy and efficiency as key benefits. However, what sets successful AI-powered recruitment apart is the integration of human oversight. By involving hiring managers and HR professionals in the final stages, companies ensure that empathy and intuition -- qualities AI cannot replicate -- remain integral to the hiring process.
b)Listening to Employees: A growing number of organizations are leveraging AI to listen to employees systematically and translate their feedback into actionable insights. For instance, one cutting-edge platform uses AI to conduct real-time sentiment analysis on employee feedback, flagging concerns about workload, team dynamics, or workplace culture. These insights are then shared with managers, who collaborate with employees to address pain points.
One notable feature of this platform is its ability to track whether employee suggestions are acted upon, creating a closed-loop feedback system. By continuously refining processes based on employee input, organizations have seen measurable improvements in both engagement and productivity. In one case, implementing changes based on employee feedback led to a 15% increase in job satisfaction scores within just three months.
c)There will be a gradual shift towards an individualized and worker-controlled learning management repository. Like a kind of Shutterstock or GitHub, everybody will record their learning portfolio in a publicly accessible repository and make this available to the employer they choose to work with. LinkedIn started doing this some time ago with their skills portfolio or few players are in the market.
There is an endless list of new entrants in the HR software market, some of them coming from areas that historically had nothing to do with HR. Many of these vendors are addressing a small portion of the market only or they just take one topic in their hands (culture, AI, team dynamics, pulse surveys, video interviewing to name but a few) and, over the years to come, we will witness a highly fragmented HR software market where the dominance of the large cloud-based systems will continue (as there is still a large unmet need to move away from on-premise systems), but this will be complemented by a myriad of plug-in tools. A one-vendor approach is obsolete, and companies increasingly will need to ask themselves the question "what works here", rather than "what's out there".
While AI offers unparalleled efficiencies, its deployment in HR must be guided by ethical considerations and a commitment to human-centricity. Over-reliance on AI can lead to depersonalization, eroding trust and engagement. Organizations must strike a balance by:
-Ensuring Transparency: Clearly communicating how AI tools are used in decision-making fosters trust among employees.
-Combating Bias: While AI can mitigate human biases, it is not immune to inheriting biases from training data. Regular audits and diverse data sets are crucial.
-Empowering HR Professionals: AI should augment, not replace, human roles. Training HR teams to work alongside AI tools ensures that empathy and intuition remain central to HR practices.
The future of HR demands bold, transformative thinking. CEO & CHRO must resist the temptation to merely refine concepts built for the world of yesterday and today -- concepts that often fail to address even our current challenges effectively. The world of tomorrow will be vastly different, shaped by rapid technological advancements, shifting workforce expectations, and unforeseen global events. In such a context, the tools and practices that brought us this far will no longer suffice. What we need is not incremental evolution but a disruptive revolution -- a reimagination of HR as a profession.
This is not just a theoretical thinking; it is a survival imperative. Organizations that fail to adapt will find themselves outpaced by those who harness the power of AI and other innovations to create truly adaptive, employee-centred, and future-ready workplaces. Consider the rapid adoption of remote and hybrid work models. What began as a response to immediate necessity has evolved into a long-term shift, fundamentally altering how organizations engage with talent and deliver value. This is just one example of how the landscape is transforming, and it underscores the urgency of rethinking how HR can stay ahead of the curve. The time to act is now. By embracing radical innovation and rethinking HR's role in shaping the future of work, organisations can ensure that the HR profession remains not just relevant but essential in the years to come.
Anish Singh, co-founder of All Things People (ATP HR Tech Pvt Ltd.)
