Why human capital management is business critical in the age of generative AI
28 Jun 2023
ChatGPT reached 100 million users in only two months, so businesses need to make the most of this game-changing technology, but human resource departments must be invested to ensure people are developed and not demotivated.
So much has been written and said about generative artificial intelligence since it exploded into the mainstream when ChatGPT was launched last November. The release of ChatGPT by Open AI in late 2022 has changed the tone of the conversation about AI, which has, over decades, silently become ubiquitous.
ChatGPT, in particular, has captured the public imagination. Consider that it took just two months to reach 100 million users; by comparison, the internet needed seven years to hit that number.
In the heat of debate in an increasingly polarized world, some predict AI as humanity’s savior, others its downfall. The most likely outcome resides in a nuanced middle ground that demands in-depth analysis. Yet, one universal truth persists: human involvement remains integral to the successful development and deployment of AI. In the business context, this centrality of the human element takes on even greater significance.
Indeed, humans are at the heart of any AI developments – and from a business perspective, this is critical to keep front of mind. Generative AI’s ripple effect extends beyond the realm of tech enthusiasts; it is a pivotal issue for leaders, necessitating a clear understanding of its benefits, risks, and implications.
Generative AI empowers employees, enhances efficiency, and fuels creativity. It’s a tool for organizations to bolster their market reach and brand awareness while streamlining internal processes like report writing or information dissemination. Yet, amidst these opportunities lies the challenge of differentiating yourself in a marketplace where such AI is increasingly commonplace.
While AI’s potential is undeniable, apprehensions, particularly surrounding data integrity and implications on employment prospects, linger. According to the World Economic Forum’s Future of Jobs Report 2023, 60% of workers will require upskilling before 2027, yet adequate training opportunities are currently accessible to only half of the workforce. “The highest priority for skills training from 2023-2027 is analytical thinking, which is set to account for 10% of training initiatives, on average,” according to the report published in late April.
“The second priority for workforce development is to promote creative thinking, which will be the subject of 8% of upskilling initiatives. Training workers to utilize AI and big data ranks third among company skills-training priorities in the next five years and will be prioritised by 42% of surveyed companies.”
Integrated Business Planning (IBP), which Oliver Wight has been championing for decades, is the optimal approach to steer through these transformative times. Using IBP, human resources departments have a pivotal role to play. We advocate for their inclusion in initial decision-making stages and leading workforce strategy based on holistic data and long-term objectives.
This perspective revolves around the core premise of anticipating future capabilities, enabling timely upskilling, and preparing for jobs whose exact nature we are yet to discern.
I feel sorry for HR departments as they are suffering from workplace whiplash. In the last three years, they have needed to cope with and react to ever-changing trends. We have moved through the great resignation, the great reshuffle, quiet quitting, loud quitting, and now there is economic and technological uncertainty to contend with.
Investing in Human Capital
This predicament underscores the urgent need for investment in Human Capital technology today, allowing those responsible for human capital management to better support and develop tomorrow’s workforce.
People-centric planning is not just advisable; it is imperative for future success. The oft-repeated phrase “people are a company’s greatest asset” fails to capture the complete truth. People are the company. And instead of replacing humans, technology can remove mundane tasks, allowing them to embrace their human potential fully. Ultimately, tech developments enable workers to be more human.
In addition to embracing cutting-edge technology, businesses must take a data-driven and holistic approach to human capital management. This requires collecting and analyzing employee data, such as their skills, performance, and engagement. The HR department can then use that data to make better decisions about hiring, training, compensation, and other Human Capital-related matters.
This evolving landscape calls for courageous and open leadership. Leaders need to engage with their workforce, not just in communicating their approach towards new technologies and change management but also in co-creating the future of work.
It’s through this proactive collaboration between humans and machines that businesses can maximize their potential and navigate the uncertainties of the future. The time to prioritize and invest in Human Capital is now – those who do so stand the best chance of success in the rapidly transforming business environment.