This is a new phase in the evolution of technology. Where 20th-century enterprise-HR software provided data storage and retrieval (i.e., people entered the data, the machine reformatted them but returned the same data), intelligent tools today create and improve data.
Digital tools built with data as their foundation are different than those built with code as the foundation.
The new tools require a different set of skills for analysis. Machines are entering the workforce as assistants, not in the mobile-phone sense, but in the “person who makes helpful additions” sense. Rather than serving as a source of answers to questions as they arise (which is very challenging for a machine), the emerging tools add color to ongoing decision-making processes and improve the overall quality of information that goes into the decisions. Increased data volume also can mean an increase in the number of decisions that need to be made, and machines will start making some of them.
Better decisions and more of them–that’s the underlying promise of the first wave of intelligent tools. It is critical for HR departments (widely known as risk-averse technology laggards) to get on board as quickly as possible. Companies with the technology will rapidly outpace companies without it. As the tech matures, it will be harder to catch up.
The early stages of the transition are best understood as “the end of stupid” rather than “the beginning of smart.” The current technology cannot replace any level of decision-making that requires nuance or judgment, but machines will provide members of the HR team ever-increasing amounts of input into the decisions they do make. However, the only tools that deliver meaningful ROI and actual productivity improvements involve robotic-process automation.
Evidence-based decision-making is slowly making its way into the HR toolkit. Yet, many HR professionals are not well-trained enough to make a quantitative case for a decision. A large part of the department is rooted in qualitative problems like conflict resolution, performance improvement and compliance training.
Where detail and precision are required (benefits administration, payroll, tax issues and system-of-record data), the emphasis is on data entry and accounting-like activities. Many organizations put these functions under finance rather than HR.
The dramatic increase in the volumes of quantitative data on HR subjects is hard to overestimate. New types of data include highly refined labor market analyses, complicated structural analyses of skills in jobs, behavioral maps of organizational networks, deep assessments, feedback from work-related devices, social-media inputs and detailed measures of skills deficits.
The flood of new types of data will require HR to aggressively increase the way that it measures and manages. Companies that meet the challenge will prosper by more effectively hiring, retaining and deploying their workforce. Data-driven decision-making provides a solid footing for the rapid workforce changes that are coming.
Whether or not it’s ultimately called AI, the new wave of intelligent tools creates an environment where monitoring and measuring is significantly increased. Data-driven HR is here to stay. What’s possible is increasing in direct proportion to the increase in data flows.
Intelligent technology is unlikely to deliver a traditional return on investment in the short- to medium-term; this is a five- to seven-year bet rather than something that pays for itself quickly. Becoming a data-driven HR department that uses intelligent technology is a journey. Pivots, reframing and improvements in understanding are key parts of the early-stage investment.
The workplace is already spilling over with improved performance-feedback loops, quantification of employee behavior, data from external sources and learning from sources beyond corporate control. Intelligent technologies represent the best way for HR to better manage itself and the workforce it both shapes and serves. At the most basic level, this is an investment that makes it possible to remain on course.
During the upcoming 2019 HR Tech Conference, I will be delivering a series of presentations, panels and demos that illuminate the possibilities of the most current offerings of intelligent tools in HR.