Generative AI and Other Technology Are Key
to Improving HR Efficiency and Effectiveness
As companies face significant uncertainty, including the
potential for stalled global economic growth, high interest rates
and possible labor and skills shortages, human resources (HR) teams
expect to feel increased pressure, including a growing workload and
the need to enable the success of business stakeholders, according
to new HR Key Issues research from The Hackett Group, Inc. (NASDAQ:
HCKT). HR leaders also see generative AI (Gen AI) and other
technologies as key to improving 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 The Hackett Group®. The need to create and maintain a
high-performing organizational culture climbed three spots in 2024
to become priority No. 2. As organizations navigate these
priorities, it is crucial to recognize the emerging need for HR
business partners to incorporate leadership coaching at the highest
levels. The Hackett Group’s research recommends that organizations
carefully deliberate on how leadership development is integrated
into the broader HR operating model. In light of these trends, the
research calls for HR organizations to take proactive measures to
align workforce planning and strategy with business planning, and
enhance the experiences of employees, managers, and candidates –
both critical considerations newly introduced to the top 10
priorities list for 2024.
A complimentary version of The Hackett Group’s 2024 Human
Resources Key Issues research – The CHRO Agenda – is available,
with registration, at https://go.poweredbyhackett.com/ush.
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 operations digital
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 The Hackett Group Senior Research Director Tony
DiRomualdo, “A pressing need to equip managers to guide the
organization through the challenges posed by continued business
disruption and workplace transformation has made leadership the top
HR issue for the second year in a row. The people skills of leaders
can make a difference in today’s volatile markets and disrupted
workplaces. To succeed, leaders must sharpen seminal competencies
while mastering new management techniques.”
“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 The Hackett Group Principal and Global HR Advisory
Practice Leader Harry Osle, “HR organizations are placing
increasing focus on using technology to improve efficiency and
productivity, with a 19% growth rate expected in the adoption of
cloud-based human capital management applications and significant
growth expected in adoption of HR point solutions, generative AI,
and agile orchestration.”
“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.
About The Hackett Group
The Hackett Group, Inc. (NASDAQ: HCKT) is an IP-based strategic
consulting and executive advisory firm that enables Digital World
Class® performance. Using AI XPLR™ – our AI assessment platform –
our experienced professionals guide organizations to harness the
power of Gen AI to digitally transform their operations and achieve
quantifiable, breakthrough results, allowing us to be key
architects of their Gen AI journey.
Our expertise is grounded in unparalleled best practices
insights from benchmarking the world’s leading businesses –
including 97% of the Dow Jones Industrials, 89% of the Fortune 100,
70% of the DAX 40 and 55% of the FTSE 100 – and are delivered
leveraging our Digital Transformation Platform, Hackett Connect™
and Quantum Leap®
For more information on The Hackett Group, visit:
https://www.thehackettgroup.com/; email info@thehackettgroup.com;
or call (770) 225-3600.
The Hackett Group, Hackett-Certified, quadrant logo, World Class
Defined and Enabled, Quantum Leap, and Digital World Class are the
registered marks of The Hackett Group.
Cautionary Statement Regarding “Forward-Looking”
Statements
This release contains “forward-looking” statements within the
meaning of Section 27A of the Securities Act of 1933 as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Statements including without limitation, words such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” or other similar phrases or variations of such words
or similar expressions indicating, present or future anticipated or
expected occurrences or outcomes are intended to identify such
forward-looking statements. Forward-looking statements are not
statements of historical fact and involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual
results, performance or achievements to be materially different
from the results, performance or achievements expressed or implied
by the forward-looking statements. Factors that may impact such
forward-looking statements include without limitation, the ability
of The Hackett Group to effectively market its digital
transformation and other consulting services, competition from
other consulting and technology companies that may have or develop
in the future, similar offerings, the commercial viability of The
Hackett Group and its services as well as other risk detailed in
The Hackett Group’s reports filed with the United States Securities
and Exchange Commission. The Hackett Group does not undertake any
duty to update this release or any forward-looking statements
contained herein.
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version on businesswire.com: https://www.businesswire.com/news/home/20240229387661/en/
Gary Baker, Global Communications Director (917) 796-2391 or
gbaker@thehackettgroup.com
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