How artificial intelligence could influence the workforce solutions industry
By Neal England
HCM Practice Leader
“I’m sorry Dave, I’m afraid I can’t do that.” — HAL 9000, a supercomputer capable of recognizing human feelings in the epic 1968 sci-fi film “2001: A Space Odyssey.”
Fast forward to today: Artificial intelligence (AI) is reshaping the way business is done across many industries, including in the human capital management sector, where human resource managers, staffing agencies, PEO firms and talent acquisition companies are all taking notes.
We’ve likely all experienced at least a bit of AI via the smart home technologies many of us are installing in our homes, but our workplaces are in the midst of this change as well. Earlier this year, GeekWire reported that Amazon is believed to have sold more than 10 million Alexa-powered Echo devices since 2014, with more than half of those sold between November 2016 and March 2017.
Artificial intelligence refers to smart computer systems that are able to learn, reason and interact with humans; this includes being able to analyze data and respond to visual and voice recognition commands — and even detect emotions.
AI was a grand opening topic at the American Staffing Association’s “Staffing World 2017” conference, and I suspect it will be something we’ll be talking about regularly as we attempt to answer the question: Is artificial intelligence an enabler or disrupter in the human capital management space and what will be its impacts and capabilities?
IBM, which talked with over 3,000 CEOs earlier this year about artificial intelligence, says 34% of respondents plan to push forward with AI investments, and Staffing Industry Analysts notes that it’s watched the talent acquisition scene “explode with dozens of new technologies.”
From the human capital management perspective, AI promises to free up employees from routine tasks to allow them to concentrate on higher-value activities such as thinking up the next great idea.
“Because AI doesn’t just improve automation, but also the reasoning and evidence behind answers to complex questions, it gives every employee the capability to understand, reason and respond as well as the very best in that organization. AI can elevate everyone’s expertise,” the IBM report notes.
That also means, however, that AI — and the increased automation that comes with it —will replace workers who do routine tasks and these workers will need to be retrained for other jobs. While the impact on the staffing industry is still being sorted out, it appears the less complex, low risk functions in recruiting, on-boarding, compliance, employee engagement, and training are just a few areas that might be affected by AI in the future.
High AI interest across industries
While healthcare is the No. 1 industry adopting AI, it has begun to emerge in other sectors such as human resources, according to CB Insights, a venture capital analyst firm. Current uses of AI in HR include chatbots that answer repetitive questions, algorithms to manage applicant pools, and “people analytics” platforms to gauge if a candidate fits a company’s culture, CB says.
“Recruiters spend 60% of their time reading CVs,” says Juergen Mueller, SAP’s chief innovation officer, in the Wall Street Journal. “Why should a person read 300 resumes if a machine can propose the top 10?” AI can take a job description and collect and crunch data from a variety of sources to find people with the right talents and experience, even those who might never have thought of applying.
With the reams of data collected by HR managers, AI uses are ripe for future use in this segment of human capital management.
“Artificial Intelligence in Talent Acquisition,” a Staffing Industry Analysts’ report using research from Talent Labs, notes that of 105 talent acquisition businesses surveyed, 73% of companies in this particular ecosystem were using some form of AI, while 22% have it on their radar to implement within the next two years.
In a 2017 report, “The State of Talent Acquisition Technology,” Talent Labs notes that skepticism still exists over the use of AI in the human capital management sector, however. Talent Labs said “only 11% of respondents rate chat bots and artificial intelligence tools highly for innovation, ostensibly because they are very new and their value has not yet been rigorously tested.” In the same report, Talent Labs said 33% of respondents ranked employer branding as the most innovative tool that is likely to see increased future adoption.
SIA says it envisions a future where AI computer systems will be able to identify talent trends on a proactive basis by anticipating shortages before they occur, thus allowing companies to share talent across their corporate entities. It still expects that automation in the talent acquisition segment of human capital management will still bring people into the hiring process in areas where it’s determined that human factors are essential.
We will continue to blog more on this topic as trends emerge.
Capital Alliance Corporation is a Dallas-based investment banking firm with an extensive international reach and a 40-year history of providing trustworthy advice to private company shareholders who want to sell their businesses. Our team has deep operational and M&A experience across many sectors, including human capital management.
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