CEOs and HR Leaders Have Differing Opinions on the Impact of AI

by / ⠀Featured News / August 1, 2023
CEOs and HR Leaders Have Differing Opinions on the Impact of AI

Artificial Intelligence (AI) has emerged as a game-changer in various industries, promising increased efficiency and improved decision-making. When it comes to the HR function, AI has the potential to revolutionize the way organizations manage their workforce. However, there seems to be a divergence of opinions between CEOs and HR leaders regarding the impact of AI on human capital management. While HR leaders see AI as a valuable enhancement to their work, CEOs are more focused on enterprise-wide digital transformation. In this article, we will explore the differing perspectives of CEOs and HR leaders on the impact of AI and delve into the potential benefits and challenges associated with its implementation.

CEOs’ View on AI in HR

CEOs are primarily concerned with driving enterprise-wide digital transformation and may not consider investing in AI for HR a high priority. According to The Conference Board’s C-Suite Outlook 2023, CEOs do not view improving HR teams’ data analytics skills or investing in AI for HR as critical for human capital management. Instead, they prioritize initiatives that promote overall digital transformation within the organization. This discrepancy poses a challenge for CHROs (Chief Human Resources Officers) who aim to introduce AI technology into their function. CEOs need to understand the value and demonstrate the payback of AI in HR to justify the investment.

HR Leaders’ Expectations

On the other hand, HR leaders are optimistic about the potential of AI in transforming their function. The Conference Board’s CHRO Confidence Index reveals that 65% of CHROs expect AI in all forms to have a positive impact on their function within the next two years. HR leaders recognize that AI can enhance decision-making, streamline processes, and reduce labor costs. By leveraging AI, HR teams can conduct quicker analyses, make faster decisions, and automate various tasks such as pay transparency, equity audits, candidate selection, and performance evaluations. The possibilities for efficiency and effectiveness offered by generative AI in HR are virtually limitless.

The Business Case for AI in HR

To gain buy-in from CEOs and other stakeholders, HR leaders need to articulate the business case for AI in HR. One compelling argument is the potential cost savings. Payroll alone can represent a significant portion of a company’s spending, often accounting for as much as 60% of expenses for Fortune 500 companies. AI can help reduce labor costs by automating manual processes, optimizing workforce planning, and improving overall operational efficiency. HR leaders should highlight these potential cost savings and demonstrate the long-term positive impacts of AI, such as job redesign, improved organizational processes, enhanced information and analytics, and a strengthened employer brand.

Benefits of AI in HR

AI has the potential to revolutionize various HR functions, offering numerous benefits to organizations. Here are some key areas where AI can make a significant impact:

  • Recruitment and Selection: AI can streamline the recruitment process by automating candidate sourcing, screening, and selection. It can help identify the most qualified candidates based on predefined criteria, reducing bias and improving the overall quality of hires. AI-powered tools can also assist in writing behavior-based interview questions tailored to specific job requirements.
  • Employee Development: AI can generate individualized employee development plans based on performance data, skills assessments, and career aspirations. By leveraging AI, organizations can provide personalized learning opportunities, identify skill gaps, and offer targeted training programs to enhance employee growth and development.
  • Performance Management: AI can facilitate more objective and data-driven performance evaluations. By analyzing various performance metrics and feedback, AI algorithms can provide insights and recommendations for improving employee performance. This can lead to more accurate and fair performance assessments and enable organizations to identify high-potential employees for future leadership roles.
  • Pay Transparency and Equity Audits: AI can help organizations ensure pay transparency and equity by analyzing compensation data and identifying any potential disparities. By automating this process, organizations can proactively address pay gaps and ensure fairness and equality in compensation practices.
  • Workforce Planning and Analytics: AI can assist HR teams in analyzing workforce data, predicting future talent needs, and developing effective workforce planning strategies. By leveraging AI algorithms, organizations can make data-driven decisions regarding workforce optimization, succession planning, and talent acquisition.

Challenges and Considerations

While the potential benefits of AI in HR are significant, there are several challenges and considerations that organizations need to address:

  • Data Privacy and Security: AI relies on vast amounts of data, including sensitive employee information. Organizations must prioritize data privacy and security to ensure compliance with relevant regulations and protect employee confidentiality.
  • Ethical Use of AI: AI algorithms must be developed and implemented in an ethical manner to avoid biased decision-making or discriminatory outcomes. Organizations should regularly monitor and evaluate AI systems to ensure fairness and prevent unintended consequences.
  • Employee Acceptance and Training: The successful adoption of AI in HR requires employee acceptance and readiness. Organizations should provide comprehensive training programs to equip employees with the necessary skills to work alongside AI technologies and mitigate any concerns about job displacement.
  • Integration with Existing Systems: Implementing AI in HR may require integration with existing HR systems and processes. Organizations should assess their current technological infrastructure and develop a seamless integration plan to ensure smooth implementation and avoid disruptions.

In the News

As AI continues to shape the HR landscape, other noteworthy developments are taking place in the field. Here are some recent articles highlighting different aspects of AI’s impact on HR:

  • How Self-Employed Workers Use AI: This article explores how AI is being leveraged by self-employed individuals to enhance productivity and efficiency in their work.
  • The Rise of “Momaging”: This article discusses the growing trend of millennial women managers serving as emotional support for their employees, a phenomenon known as “momaging.”
  • The Cost of Poor Mental Health: A Gallup survey reveals the significant impact of poor mental health on employee productivity, highlighting the need for organizations to prioritize mental well-being.
  • Hiring People with Conviction Records: A study challenges the perception that hiring individuals with conviction records is a liability, emphasizing the potential benefits and reduced risk associated with this hiring practice.

Watercooler Discussion

In addition to the latest HR headlines, here are some intriguing snippets from Fortune:

  • Rush to Retrain: Employers are struggling to provide AI training to employees due to the rapid pace of technological advancements. While the majority of employees recognize the need for AI training, few have received any formal training so far.
  • Blank Checks: Actors participating in the SAG-AFTRA strike are sharing their residual checks on social media, highlighting the financial impact of the ongoing strike on their incomes.
  • A.I.-jacking: Researchers have discovered vulnerabilities in popular AI chatbots, allowing them to be manipulated to use racist language or engage in other unwanted behaviors, raising concerns about the ethical implications of AI technology.
  • Yellow Corp. in Deep Red: The Teamsters Union announces the bankruptcy of Yellow Corp., a trucking company facing financial hardships, leading to layoffs and potential job losses for thousands of employees.


Q: How can AI benefit HR functions? A: AI can enhance recruitment and selection processes, facilitate employee development, improve performance management, ensure pay transparency and equity, and enable data-driven workforce planning and analytics.

Q: What challenges are associated with implementing AI in HR? A: Challenges include data privacy and security, ethical use of AI, employee acceptance and training, and integration with existing HR systems.

Q: What are some recent developments related to AI and HR? A: Recent articles explore how self-employed individuals use AI, the rise of “momaging” among millennial women managers, the impact of poor mental health on productivity, and the potential benefits of hiring individuals with conviction records.

Q: What are some interesting snippets from Fortune? A: Fortune highlights the struggle to provide AI training to employees, the financial impact of the SAG-AFTRA strike on actors, vulnerabilities in AI chatbots, and the bankruptcy of Yellow Corp., a trucking company.


First reported on Fortune

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