The Future of HR Industry in the Era of AI

The Future of HR Industry in the Era of AI
Updated date:
Feb 08, 2022

Table of Contents

Does HR have a future? Hmm, great question. But to determine the future of HR, we must first discuss the past.

A Hundred Years Ago

In the beginning, there was no Human Resources Department in any company, in any part of the world. Well, at least, not until the 20th century. It is believed that the first Human Resources department was created in 1901 by The National Cash Registry Company after several strikes and employee lockouts. 

The department, then called "Personnel Department" or "Welfare Management," was led by NCR head John.H. Patterson. 

The Future of HR Industry in the Era of AI

The responsibilities of this new department were record-keeping, compliance, safety in the workplace, wage management, handling employee grievances, training of supervisors on updates in the rules and office practices.

Past Foundations

However, this novel idea that was the origin of HR did not spread as rapidly as employees preferred. By 1910, the personnel department in two big companies, Tata Steel and Ford, introduced a ridiculous labor practice - the 8hr workday. Of course, this took longer to become mainstream.    

By the 1920s, however, Personnel Administration or Security Management, as it was called, emerged as a widely accepted field in the USA and later in other regions. Since national unions were budding at this time, the duties of the personnel department expanded to acting as a liaison between the associations and company management. 

As is common to every development, key figures made Human Resources roles a reality. One of such figures was Frederic Taylor, aptly termed the Father of Scientific Management. He played an essential role in developing this department in the 1900s. Most of his insights are contained in his book "Shop Management." He is credited as one of the first people to make a case for the better treatment of employees. He laid the foundation and tenets on which HR departments are built on.  

Another contributor to the development of this sector was Abraham Maslow and his famous “Hierarchy of Needs” in the 20th century. 

These needs were in five levels. One, Psychological needs; this one was the call for comfortable environments to facilitate employee productivity. The second need was that of safety. According to Maslow, productivity would suffer if people were worried about their personal and professional security. 

The need to love and to belong is another critical issue for employees. A strong sense of belonging is the backbone of building an engaged staff culture. The need for esteem is the fourth level of the Hierarchy of Needs. This is as simple as the rest. Recognition of a job well done boosts the admiration of employees, which serves to make them more productive and engaging. 

Finally, the need for self-actualization is the belief that someone can maximize their potential on a job. A good manager will help employees explore their strengths and give them a sense of self-actualization.

Even without in-depth scrutiny, it is easy to see that these needs embody the practices of HR departments in modern times.

Present Structure

From 1990 to 2019, the roles of HR have become more complex than just the administrative arm of a company. Forward-thinking HR departments now focus on managing employee engagement and strengthening company culture. They are charged with a more hands-on role in managing employees to make sure they are happy and willing to continue working. 

The Future of HR Industry in the Era of AI

The workforce evolving from being labor-based to services-based has led to it becoming even more competitive. Understanding this dynamic change, HR now retains high-performers, thus accelerating the battle for top talents. The competitive business environment makes it essential for workforce change initiatives to be based on and integrated into business strategies. This, in itself, is giving more HR leaders a seat at the C-Suite table.

What is the Future of HR?

The Future of HR Industry in the Era of AI

The change that the HR department has witnessed, especially during the pandemic in 2020 with the widespread acceptance of remote working, will continue to metamorphose over time. 

This change will catalyze the rise of new HR roles to address the switch in market dynamics from hybrid to fully automated.

How will AI affect HR?

The effect of AI and other technology on HR is inevitable. In fact, AI had already been manifesting itself in the past year. HR software defines all the tools that HR representatives use to handle their responsibilities.

The central HR software terms are Human Resource Management System (HRMS), Human Resource Information System (HRIS), and Human Capital Management (HCM). All these can be used interchangeably.

Here are the services they offer:

  • Talent management (recruitment, learning, performance, compensation, succession.)
  • Service delivery (employee and manager self-service.)
  • Workforce management (time and attendance, scheduling.)
  • Core HR (employee records, payroll, benefits, etc.)

Why Use HR Software?

In the line of how technology is making everything possible and smooth for us, these HR tools help in simplifying the way we keep records and communicate. 

Recruiting, payroll, compliance regulations, attendance, and more will ultimately move from paper to computers where they can be better managed. This automation will, in turn, reduce labor costs and streamline the activities of HR, thus making the department more effective.

And like we all know, time is money. Removal of redundant tasks improves productivity, which affects the bottom line. Selecting the right software to use for your HR department will require the need for certain employees who, before, were not employed in the company.

Here are some roles to expect in the future:

First to select and use the above-discussed software is the selection manager. The senior HR manager most usually occupies this post. However, this manager will have to be aided by a selection advisor. This advisor is typically an outside consultant. 

Subject Matter Experts (SMEs) will also have to be hired to make this software perform as required. This is because, as the title denotes, they are experts in the chosen software.

The HR Business Director, post-pandemic, there will be issues about medical safety in the workplace, meaning the HR department will have to work with various CXO’s to ensure this safety. It’s at this point that this position will become necessary.

The Head of Work From Home Development is also a direct result of the COVID-19 pandemic. Given the increase in remote workers, this role is all but inevitable. HR software will play a huge role in executing the responsibilities of this position.

The Position of Chatbot Facilitator will also emerge as more companies embrace AI initiatives. Guidelines to maintain and enhance employees’ experience with AI will become necessary for a seamless chatbot experience.

Without saying, this is a direct result of AI in HR. Since the future of work is data, the emergence of the HR Data Director role is expected. The need to understand employee nuances to ensure products will be the responsibility of anyone in this position. Achieving this is impossible without data.

A key result of AI is the increased interest in virtual reality. Another new HR role to expect is that of the Virtual Reality Trainer. VR Training will become an essential part of the department given the rise in remote working and communication with computer interfaces.

Learning development programs, onboarding, and other traditional HR responsibilities would be virtual. There will also be the rise of a Gig Economy Manager. This position will be in charge of short-term work gigs. Manually keeping track of employees in this sector would be as frustrating as possible. 

Having an electronic bank for them and their workflow is much more effective and efficient. With the concentration on the world going green, a Climate Change Analyst would also become a significant role in organizations. This role involves researching and analyzing climatic factors that can examine an organization's operations.

The Future of HR Industry in the Era of AI

Seeing how the future trend of HR roles is to grow, it's safe to say that it's a department that won't go away any time soon. It is important to pay attention to diversity and inclusion metrics when recruiting.

The Black Lives Matter demonstrations of 2020 gave a much-needed push for corporate accountability, despite the discrimination prevention programs since the 1960s.

Due to this, many firms have gone beyond simply changing employment policies and created a separate role from HR responsible for ensuring compliance. It is impossible to talk about AI without mentioning the use of robots in organizations. The notion of this is no longer a far-fetched idea. It is, in fact, already happening. 

Will HR be replaced in the future?

No, robots will not replace HR simply because HR tasks require creativity, decision-making, and problem-solving abilities. But is AI the future of HR? Yes, it is. That AI is not taking over HR is quite an exception to other roles that will soon become obsolete and should make HR employees happy.

The Key Takeaway

The idea of AI taking over organizations and their responsibilities is no longer an idea but a reality. The future of the HR department raises a lot of questions. And this article answers two of those questions: the future and how AI will affect HR.

We all know AI is the future, and understanding how it will affect a department is real. Having read this, what new roles do you expect to see in the future of HR? - Type your thoughts to us via e-mails.

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