People strategy | HR transformation

The transformative impact of generative AI on HR shared services 

Serious multi ethnic-group of friends working on a school project together while sitting and standing at desk and reading new lesson from a books and laptop computer.    
Generative AI is revolutionizing the world of work at an unprecedented rate.
Mercer’s 2024 Global Talent Trends study reveals that generative AI (gen AI) is expected to fundamentally change business models in the coming years, increasing productivity by 21%–35%. Gen AI is changing how work gets done, amplifying the intelligence of the workforce, driving work model reinvention, and enabling individualized and meaningful experiences at scale.

What does this mean for HR today?

The significance of HR shared services: In the past, HR shared services (HRSS) have played a crucial role in delivering positive interactions and redesigning both the HR experience and overall work experience for employees. HRSS achieved this by simplifying transactional processes and establishing integrated online platforms — supporting the workforce through a digital conversation portal powered by advanced technologies. However, many organizations still struggle to be agile and implement new services.
This chart highlights how Gen AI improved productivity. 46% analyzes large amounts of data, 43% improves decision-making accuracy, 40% innovates and develops new products, 38% increase decision-making speed, 36% facilitate customer self-service experiences, 31% synthesize and summarize data, 25% automate routine tasks, 21% forecast future trends. The source is Mercer's Global Talent Trends 2024.
With the introduction of gen AI, we’re embarking upon the fourth generation of AI in HR. AI is already available for use in HRSS, most often embedded in platforms and tools that are widely used today, such as applicant tracking systems and portal and case management platforms. However, many HRSS functions aren’t aware of currently available AI capabilities or don’t have them turned on. Do you?
  • Differentiating AI-powered and gen AI-powered employee self-service
    AI-powered employee self-service relies on predefined rules and patterns to provide accurate answers to common HR inquiries. On the other hand, gen-AI-powered employee self-service feels more like a conversation with a human, offering personalized and real-time information based on the context within the conversation. Gen AI can handle more complex and open-ended inquiries, widening the application for HR.
  • Unlocking the potential of HRSS with gen AI
    HRSS is the epicenter for the application of gen AI in HR. By infusing gen AI into HR operating and delivery models, organizations can unlock improved productivity, scalability and consistent experiences. This allows HRSS professionals to transition from question-handlers to problem-solvers and experienced subject-matter experts, focusing on human-to-human interactions.
On average, the typical worker in an AI-enhanced workplace can save 36 days.
Mercer 

Global Talent Trends 2024

  • Measuring the impact of AI
    Mercer’s HR Operations Scanner™ measures how AI deployment will impact day-to-day activities within HRSS functions. It assesses the efficiency gains and identifies opportunities for augmentation and elimination of HRSS work. Concrete examples include efficiency gains in employee support, data management, exit interview analysis and onboarding administration (to name just a few!).
  • Preparing for gen AI
    Addressing concerns around security, data privacy, reliability and validity of knowledge is crucial when preparing for gen AI. Organizations should view gen AI as an aid rather than a replacement, keeping the human in the loop and providing feedback to refine and enhance the AI systems. Ethical data practices and accurate data are essential for reliable results and recommendations.
  • Starting the AI journey in HR
    To embark on the AI journey in HR, organizations can participate in workshops, conduct impact assessments, develop strategy roadmaps and receive project management support. These resources help organizations understand the possibilities of gen AI and identify specific use cases to drive value.

Gen AI’s impact on HRSS

The transformative impact of gen AI on HRSS is reshaping the way work gets done. By leveraging gen AI, organizations can unlock productivity gains, streamline HRSS functions and provide personalized experiences at scale. Embracing gen AI in HRSS allows HR professionals to focus on meaningful human-to-human interactions, driving the future of work.

The transformative impact of generative AI on HR shared services

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How to start your AI journey in HR

The sooner HR (and the workforce) understands the art of the possible with Gen AI, the better positioned it will be to start its AI journey. Hands-on, domain-specific training is best.

  • AI@Work workshop
  • AI@HR — Art of the  Possible Workshop
  • Talent acquisition
  • Listening
  • Performance and rewards
  • HR services
  • People analytics
  • Employee experience

Understand where AI may impact the HR workforce, and, with a focus on scale and impact, identify a few use cases (versus many) to drive value.

  • Gen AI vision and guiding principles
  • HR Operations Scanner™ impact assessment
  • Organization digital adoption and Gen AI readiness assessment
  • Gen AI innovation labs

Develop an actionable strategy and plan for deployment of Gen AI in HR where it brings a competitive advantage.

  • Gen AI strategy road map and business case
  • Project management of Gen AI development and deployment
  • Selection and integration of Gen AI technologies
  • Gen AI digital adoption and governance
About the author(s)
Jonathan Gordin

Mercer Partner, Transformation

Kristin Rhebergen

Mercer Principal, Digital HR Advisory

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