Hackett: HR Organizations Feeling Increased Pressure in the Face of Global Uncertainty
Generative AI and Other Technology Are Key to Improving HR Efficiency and Effectiveness
In 2024, developing effective leaders remains the top priority for HR, marking its second consecutive year in the top spot, according to
A complimentary version of The Hackett Group’s 2024 Human Resources
While HR workload volume is expected to rise by 7%, cost reduction is also a focus. The research found that both HR operating budgets and staff are expected to drop slightly in 2024, creating significant efficiency and productivity gaps. Technology spending, which is expected to rise by 4%, is one way HR organizations are hoping to bridge those gaps. More HR work will also be apportioned to fully automated and self-service systems’ functionality, and HR executives expect global business services (GBS)/HR shared services units to handle 3.5% more work, while centers of excellence, corporate HR and business unit HR will see over 2% increases in overall workload.
The research recommends that HR organizations explore generative artificial intelligence (AI) as part of their HR operationsdigital transformation efforts. Although adoption is still maturing, generative AI has huge promise. Our recent research found that generative AI could yield a 40% reduction in selling, general and administrative (SG&A) costs and a 40% reduction in SG&A staff over the next five to seven years. The research found that 41% of HR organizations have implemented pilots or small-scale generative AI deployments, and a 7% growth rate is expected in 2024 – higher than any other emerging technology.
According to
“HR executives clearly see the importance of this objective,” continued DiRomualdo. “The percentage of study respondents with a major 2024 initiative planned to address this objective is 65% – higher than for any other objective in the top 10. HR executives not only must commit resources to leadership development but also sustain their focus to achieve this objective. But the opportunity is significant. Our functional HR benchmarking results show that Digital World Class® HR organizations – those that perform in the top quartile in both business value and operational excellence – spend 27% more HR business partner time focused on organizational and leadership development.”
According to
“Adoption of emerging technologies enabled by AI is picking up, albeit at a smaller scale for now,” Osle continued. “As part of their digital transformation efforts, HR organizations are already cautiously trying out generative AI, particularly for low-risk activities such as answering common HR-related questions, chat-bots and creating consistent job descriptions. But the areas where generative AI will be used to streamline HR are numerous and include talent acquisition, onboarding, learning and development, employee engagement, and communications, which will free up HR resources to expedite strategic initiatives aligned to business needs. The effect is going to be tremendous.”
The Hackett Group’s 2024 Key Issues research is based on results gathered from more than 375 executives in finance, procurement, supply chain, HR, information technology, and GBS at a global set of midsized and large enterprises.
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