Conference Board White Paper Outlines AI Opportunities and Risks for Human Resources

Despite fears that AI can automate many tasks that today require people, the authors cite a survey of chief human resources officers finding that 65% believe that AI will have a positive impact on human resources, at least over the next two years. Their paper outlines the anticipated impact of AI on the profession.

Need to Balance Risks and Rewards
The Need for Clear Guidelines

Looking for a thorough overview of AI and its impact on human resources? You have found it here in this Conference Board white paper by Dr. Solange Charas and Rebecca Ray, “Generative AI: Questions CHROs Should Ask.” Just about the only question left unanswered in the report: what is the potential for job destruction as a result of AI in many professions? The study cites a survey of CHROs suggesting that hiring remains strong, but does not address the long-term impact of potential job loss.

The authors write, “Besides enhancing HR processes and decision-making, generative AI has the potential to change the way work gets done and the way workers are managed. Sixty-five percent of CHROs expect AI to have a positive impact on the HR function over the next two years, according to The Conference Board CHRO Confidence Index, making proficiency in this technology a high priority for the function that is responsible for talent in the organization.”

Rebecca Ray

Solange Charas, Ph.D. is Founder & CEO of New York-based HCMoneyball, Distinguished Principal Research Fellow, Human Capital, The Conference Board, and an adjunct professor on human capital at multiple universities. Rebecca L. Ray, Ph.D. is Executive Vice President, Human Capital, at The Conference Board, a business information and research group based in New York.

In the report, they define generative AI as “a type of artificial intelligence or category of AI algorithm that generates new outputs based on the data it has been trained on. It can perform tasks that typically require human-like intelligence, such as problem-solving, learning, perception, understanding language, and making decisions. It has a wide range of applications, including creating content—text, imagery, audio, and synthetic data—and information that is artificially manufactured rather than generated by real-world events.”

Need to Balance Risks and Rewards

With people costs accounting for about half of most operating budgets, they write, “the HR function has a tremendous opportunity to impact financial outcomes. CHROs will need to prioritize investments in new HR technology. Making the business case by articulating the longer-term positive impacts to the organization—whether those are in job redesign, organizational processes, information, analytics, markets, and employer brand—is critical.”

On the other hand, they warn that “risks associated with generative AI must be carefully considered and managed to avoid potential damage to an organization’s reputation, customer relationships, and strategic plans. It must be vetted through the same rigorous process as all business risk decisions.” They note that AI is capable of what are known as “hallucinations,” or authoritatively written but completely fabricated statements, and that it does not actually understand concepts. So, everything created by AI has to be carefully overseen by qualified humans.

The authors believe “Generative AI offers significant opportunities for talent acquisition; total rewards; diversity, equity, and inclusion; and employee engagement—the functions most likely to experience significant disruption. This is because of AI’s ability to analyze vast amounts of data, identify patterns, and make predictions about the likelihood of a candidate’s success or an employee’s likelihood of leaving.”

The Need for Clear Guidelines

When adopting this new technology, they write, “CHROs will need to determine how workers and leaders are engaging with generative AI and developing guidelines to leverage this technology. HR serves a critical role in protecting the assets, strategic plans, client data, and intellectual property of the organization. Mastering the use of generative AI will become table stakes for successful employment and be considered a core skill for HR leaders.”

They suggest that “asking the right questions before adoption will be critical to optimizing the implementation of generative AI applications. For CHROs, the goal is to supervise its adoption in HR, implement it successfully and ethically, monitor its use, manage the impact of technology on job design and organization processes, and protect and upskill workers and those who lead them. The report includes a section on “Setting Policies, Creating Guidelines for the Successful Adoption of Generative AI: What You Need to Ask.”

They warn, “Without human intervention, generative AI might suggest and/or execute courses of action that would not reflect common sense or survive a legal challenge—not to mention damage the organization’s strategic plans, brand and reputation, customer relationships, and delicate partnerships. There could be significant damage to many processes of the current HR function which looks to ensure a fair and disciplined process for employees, which often requires human review and intervention shaped by experience and compassion. Using generative AI is one more business risk that should be carefully weighed against the tremendous benefits it might, under the auspices of clear guidelines, safeguards, and human intervention, unleash, allowing workers to do the work that only humans, at least at the moment, can do.”

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