With the combination of artificial intelligence (AI) and machine learning (ML), HR departments will soon be able to leverage the human capacity to understand and react to unknowns, while leveraging the speed and promise in AI that learns as it is used. By constructing algorithms which are the touchstone for its progress, artificial intelligence will become more and more successful in its ability to support HR strategies.
In order to complete the picture however, HR must construct a technology roadmap that supports a strong human capital strategy. To that end, one concept is to think of all HR strategies as being arranged on a continuum that begins with keeping costs low and ends with employee engagement. "Employee engagement" has long since become a buzzword--with myriad definitions and simply accepted as necessary--but it is truly backed by data according to the most recent Gallup poll. "When taken together, the behaviors of highly engaged business units result in 21% greater profitability."
Profitability is, after all, the end goal for all HR strategies--that the human capital strategies developed to keep costs lows and engagement high have clear impacts on the bottom line.
The most recent estimates note that labor is often the highest cost of a company, making up to 70% of any businesses cost. Keeping costs low through AI and ML is first and foremost a matter of turning the system loose on the data in order to find out why turnover happens and what has been successful in diminishing it. Estimates vary, but on average, turnovers cost six to nine months of employee salary in that position, meaning an $80,000 position costs between $40,000 and $60,000 to replace. Replacing a highly productive employee with a low-producing employee can also provide permanent negative impacts to the corporation.
It is becoming more urgent daily, as according to Gallup, 51 percent of employees (79.4 million) are actively looking for a new job--and 42 million people in the United States left their jobs voluntarily in 2019. Conservatively, turnover cost U.S. firms between $84 billion and $1.3 trillion in 2019 alone. Turnover, which will never go to zero, is an unavoidable cost, but can be minimized. The analysis available through AI and ML gives HR personnel the ability to track that cost in real time, with better and better accuracy. It also allows your company to know which disincentives have the most impact to your unique workforce's turnover levels. The ability to establish turnover causation and correct it as much as possible will be one key to lowering costs, and artificial intelligence and machine learning is an opportunity to move from defining correlated actions to pinpointing causation.
Predictive analysis has always been the key to both lowering costs and increasing engagement--and artificial intelligence has the ability to parse massive amounts of data to point toward potential pathways. When working with a talent company such as Swoop Talent, well-constructed HR algorithms will help them help you to source or hire a replacement that will be more likely to be highly productive, as well as more likely to engage with the company.
Post-pandemic, however, you will not be able to rely on the maxim that the best predictor of future behavior is past behavior. Cultural, corporate, political and social behaviors have all undergone a sea change in the United States, but as the entire world emerges from the pandemic, these currently unknown variables will be incorporated in the next set of algorithms for AIs. These may include skill sets that are necessary in the post-pandemic world, both culturally and professionally, as well as the ways a company provides opportunities for engagement to a hybrid or wholly remote workforce.
Humans, then technology
More than anything else, artificial intelligence and machine learning are nothing without a strong human capital strategy. Where your company lands on that continuum between minimizing costs and maximizing engagement will determine where human resources can best invest their time and energy. Thankfully, each end of the continuum improves the bottom line, and both are an investment in the future.
For more information on how to use and control your data to build your HR technology roadmap, reach out to us today.