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AI, THE HR FUNCTION & THE FUTURE OF THE WORKPLACE

19 June 2018     London
Hosted by theHRDIRECTOR.
Chaired by Jason Spiller.

AI - KPMGThis debate was kindly sponsored by KPMG and its focus is on what is unquestionably the most controversial, divisive and potentially disruptive subject facing HR, organisations and society today. We debated the impacts that AI is already having on the workplace, why if employees are receptive to AI, employers are failing to communicate what the future will hold, and how the HR Function must be a driver of technology and change its service provision to support a very different looking workforce, as AI continues to encroach on the traditional human workplace.

DELEGATES
Cheryl Allen, HR Director – Atos Origin UK Ltd
Joseph Arakji, Deputy Group HR Director – Post Office Ltd
Robert Bolton, Partner – KPMG
Stella Dixon, Head of HR Operations – Associated Press Television News Ltd
Catherine Holmes – Head of HR Operations – Hitachi
Mike Hood, UK HR Director – Kone
Joan Theresa James, Manager Of HR, Infrastucture – Bechtel Ltd
Dianne Mcgowan, HR Director, Change Management – Ricoh Europe Plc
Dimitris Tsouroplis, Group Head of HR – Libra Group
Karen Rooney, People Director – Boden

The speed at which Artificial Intelligence has travelled from the dark, dystopian imaginings of Sci-fi writers to a real-time Boardroom agenda point has taken businesses by surprise. Organisations must urgently prepare for how new technology will impact on human resources and change the way the business operates.

How prominent is the AI agenda on your business radar and what is its current status in playing a role in operations?

Stella Dixon: We have bureaus all around the world, and where we are using AI a great deal is in verification of citizen-gathered content, because everybody who has a camera is potentially a journalist these days and we constantly monitor social media – we do not put out any news that we have not thoroughly verified and checked.

Mike Hood: There are two mega-trends that are impacting the industry in which we operate. That’s urbanisation, with more people living in cities, and technological disruption, which enables us to learn new ways of working and serving our customers. Worldwide, we have more than a million lifts and escalators in service and we’re in the process of connecting all of those units to the Cloud. That gives us the opportunity to monitor performance, diagnose equipment issues, plan when we need to intervene and present real-time data to our customers about how the equipment in their premises is actually operating.

Dimitris Tsouroplis: Our company is definitely investing in innovation, especially in the hotel and hospitality area, and everything is going to become automated and maybe impersonal in some cases. In shipping, the other area of our business, there are so many things that can happen, because this industry is completely behind in technology. We might even see the equivalent of Uber in all transportation forms, and AI will eventually replace some of our activities in Human Resources.

Cheryl Allen: We have a Digital practice within our organisation which very much focuses on AI, Robotics and Analytics etc. It’s not good enough for Ricoh to just know technology, we actually need to know what’s going on in shipping, we need to know what’s going on in retail, so that we can help serve our customers across sectors. To keep at the forefront, we have our scientific community, where we have experts writing the white papers, looking at future of work and business.

Dianne McGowan: Data analytics, automation, and robotics impact our organisation’s ability to access, guide and serve customers and it is increasingly vital in sales and marketing to anticipate customer needs, as well as being able to anticipate and respond through efficient supply-chain planning and operations, and ensure agility in customer service.

Catherine Holmes: At Hitachi, AI is at the top of our agenda – we’ve developed our own open IOT platform, which turns data into intelligent action and what we call Social Innovation – bringing together Information Technology with Operational Technology.

Joseph Arakji: Post Office recently opened an Innovation Centre to accelerate our ability to develop digital innovation and better understand our customers, and make transactions quicker. We’re working on a number of exciting technologies including some really original apps which use augmented reality.

Joan Theresa James: The opportunities for data-centric execution of our projects exist across every stage of a project lifecycle at Bechtel. In engineering, our teams focus on design, whilst procurement teams focus on estimating and materials requisitions, then construction planning, and installation occurs, and ultimately commissioning and ongoing operations. Then we integrate the various information systems to allow for a more robust sharing of information across the entire project teams. We can also actively identify streamlining opportunities for our work processes. The hand-offs, between siloed teams, is where the problems can arise, so we’ve actually created a new job family of Information Managers that facilitate the integration of multiple systems, to support a team approach to delivering a job.

Robert Bolton: I was at an event in January and Paul Clarke, the CTO of Ocado, said something at this event and so you’ve all passed his test right now. He said, “If your organisation is not investing in AI already, you’re dead, you just don’t know it.” What I find interesting is it’s such a diverse group of organisations in this room, but you are all investing in AI, as we are, on the basis that this is happening now, not in ten years’ time.

Do you think it’s a race against the clock for businesses?

Robert Bolton: It is a race, and some organisations have already failed and some are in the process of failing. The organisations that aren’t already reshaping their workforces, rethinking their business models, experimenting with alternative versions of their traditional business, will fall further behind. Many businesses in many sectors are facing declining margins. It’s a race to the bottom because their only answer is to cut costs. That’s not the sustainable answer. You have to innovate out of this if you’re to survive, it’s a perfect storm.

How can humans and ai interactions find a balance so that the world of work doesn’t descend into a battle of human versus machine?

Stella Dixon: In terms of what the business is going to look like a decade from now, I do think we will have less staff, but maybe those staff will be doing more interesting things, because I think we’ll be looking to utilise the technology to enable us to verify things quicker, without having to put a lot of physical resource into doing that.

Joseph Arakji: I would like to think machines are not going to replace every job, but yes I think we will continue to see work currently performed by humans replaced by machines through developments in artificial intelligence. We can’t escape this evolution or what’s been described as the next industrial revolution. The good news is that at the same time, we’ll also see new roles emerge that previously didn’t exist.

Is it a case of finding synergies or is AI going to find the solutions for us?

Dimitris Tsouroplis: Oxford University said that 47 percent of jobs will be replaced by artificial intelligent machines by 2033. Harvard University came back and said it’s not that bad because it’s mainly going to be computer versus computer. Mike Hood: What you’ve got here is, I think, AI offering a continuum from direction to enablement and it’s important that we make the right choices. The challenge is that we equip our people with technology that can make them more productive and help them do a better job for the customer, but to also ensure a role for human experience and judgement.

Joan Theresa James: There are indications that today’s educational institutions are not keeping pace with advancements in technology that the employee of the future will need to grasp in order to succeed. That has to change. Different types of jobs are being created as organisations and industries continue to evolve, and so new opportunities will present themselves.

Robert Bolton: Successive governments have failed to grasp the nettle and reinvent education for the 21st Century and we’re heading in the wrong direction. Our education system assumes we can all be identikit, and so we have to learn to think and be comfortable with ambiguity and learn to nurture people again.

Cheryl Allen: Everyone, no matter what job role or industry, should be responsible for keeping their own skills up-to-date with technology, and businesses need to connect with education so that evolving technology awareness has practical alignment with the world of work.

Stella Dixon: Technology has always replaced humans going right back to the industrial revolution, it’s part of the same journey of our evolution.

Dianne McGowan: We’re balancing the tension between local unions who say; “we need to protect jobs”, and pan-European representatives who say; “we can see how our lives are changing, we can see how the business is changing, and we need you to help us prepare to be employable for the longer term, either inside or outside this organisation.” They appreciate some of the technology and automation changes that make their jobs easier, but they don’t know how to keep their skills relevant going forward, and that’s where I see we have the challenge in HR.

Joan Theresa James: I have confidence in the next generation of talent that’s joining our professional workforce. They are fearless! If it doesn’t work, try something else. Our vision for the impact of technology on the HR profession is, that if we can move from the more transactional work activities to low-cost centres via AI, then the role of HR becomes much more strategic.

What should they be teaching in universities in the future?

Robert Bolton: I’m not sure we need universities to focus primarily on early adult education. I think what will happen is, through our entire adult life a blockchain of evidence will be nurtured and developed. There’s a famous systems thinker who said of secondary education: “Schools are perfectly designed to allow teachers to teach, but not to allow students to learn”, and that’s where we are at the moment. There’s a threshold level of learning, but it must go further.

Do you actively discuss the potential future impacts of AI with employees and how are they reacting to the perceived rise of AI in the workplace?

Cheryl Allen: I have responsibility for a transformation programme called ‘Future Fit’, to help engage with our employees around what are the skills they may need for the future, what do we need to serve our clients in the future and how we support them to make that transformation. And, supporting them to make that transformation. I’d say it’s a culture journey, I can’t tell you that everybody’s fully engaged and on board, but we have groups now joining and recognising that they’re in a role that could be changing in the next six months. It’s really important that employees understand some of the changes that are coming up to help them adjust.

Dimitris Tsouroplis: Our global internship programme brings the young generation into the businesses, who work with the previous generations – the older will pass on experience and culture of the company, while the younger will provide the knowledge of new technologies and how to better make use of it.

Mike Hood: AI is an enabler of change and it’s about talking to people about the purpose of that change and what it means for them. The best advice I’ve ever had on change is that you have to create a sense for every impacted group in your workforce, of what’s in it for them, to buy into the change you are looking to implement.

Joan Theresa James: I would say that we’re anticipating some pushback as we increase the use of AI in support of manager and employee selfservice. Instead of making a phone call or walking down the hall to HR, our employees are going to have to get used to the idea of managing their questions/issues on line. As long as the interface is user friendly and intuitive, I think that will be okay. I would anticipate that the new generation joining our ranks is going to be very comfortable with online services, but some of the more experienced employees might resist a bit.

Dianne McGowan: We need to keep challenging ourselves, have a learning mindset; the world is changing, and are we changing with it. We have an open door to facilitate this, and technology and relational aspects that are both important.

Catherine Holmes: I would say another big challenge is the cultural difference. People do very much see Hitachi as a job for life, particularly in Japan. So, that’s a major shift for us. We have an ageing workforce, so encouraging young people into the organisation, bringing different skills is a key priority. I think the whole employee engagement piece is very important, focusing on our vision and where we are heading with technology.

In what ways is AI already influencing workforce planning?

Joseph Arakji: We don’t really have rigid workforce planning, it’s more fluid workforce shaping at Post Office. We recognise we’re not an island, so as well as constantly developing our internal workforce, we’re always exploring partnerships with other businesses, universities and groups to plug those skills gaps quickly and effectively.

Joan Theresa James: When managing simultaneous projects, making sure we have employees in the right positions at the right time is a challenge. Failure to manage these moves effectively can have significant consequences. From an HR standpoint, we do use an internal tool that captures the lifecycle of an employee’s assignment, a start and an end on every project, and what they’re capable of, based on grade and classification. We include in that database prospective both work and staffing plans. So, what the HR community can do based on data, is facilitate the movement of people on and off projects.

Mike Hood: For us, it is principally about building digital skills in our existing workforce, and it’s about integrating human experience with the new technology to deliver better service and identify new opportunities.

Robert Bolton: Strategic workforce planning no longer delivers the answers for creating the workforce of the future. Now, if you think about demand, you see a gap three years out, and say, “right, we need to recruit that many people to fill that gap”. Complete and utter waste of time! Everything is disrupted and there are no boundaries with technology. The paradox is, more than ever, HR needs to think about what the future workforce is. So, we’ve coined the phrase workforce shaping, and the reason it’s different is, it’s based on business scenarios that are much further in the future. It’s actually quite different from strategic workforce planning, it is more scenario-based, more probabilistic. Our take on workforce shaping is the application of “superforecasting”. Also worth consideration is the impact of artificial intelligence on tasks, not jobs.

How is AI impacting on the hr function and how can it best be maximised?

Cheryl Allen: We have our first robot in the HR team now, which we have named, Freda. I would say we have ‘bots and bodies’ working together, not one replacing the other. How is at the moment? It has taken what I would term some of our low value activity away and freed up our time for strategic roles. It’s been a learning curve for us.

Joseph Arakji: We’ve just started to explore the benefits of AI in HR. We recently conducted a hackathon to identify potential opportunities. One emerging idea was the introduction of a chatbot that employees and managers can interact with to answer employment-related questions.

Robert Bolton: Microsoft at our Advantage Digital event spoke about the work they did with Unilever which is a good example with their bot, ‘Una’, which fields all sorts of questions, and then it takes you through processes.

Is HR behind the curve on digital technology?

Robert Bolton: A global CHRO, said to me, “It’s a Wild West of experimentation in our business”, and HR was the only function that wasn’t experimenting.

Stella Dixon: A lot of it is about the prioritising of finances – first in the queue is delivery of the business elements, then the back-office operations after that.

Mike Hood: We’re transforming our operating model to a much more networked global enterprise, deploying global strategies. We have called it HR Renewal, and it’s similar to an Ulrich model, with investment in improved HR systems and a consistent global structure with business partners, centres of expertise and shared services.

Dianne McGowan: HR is evolving with and facilitating transformation and automation for the business and employees. Being able to work in multidisciplinary ways and to understand the functions of the business – so we can advise and partner with the business on talent development, resourcing, learning, employee relations – that’s HR’s relevance.

How do we stop data building bias over time – ghosts in the machine?

Robert Bolton: Well, bit of a health warning – artificial intelligence is based on algorithms, algorithms are based on learning from data, and a lot of data has bias in it. I know some organisations that have deployed artificial intelligence in selection using data from humans making decisions and that has bias in it. The hope that it would be gender neutral and race neutral, is a fallacy. A higher level of capability and sophistication is, if you train the algorithm and you’re aware of that danger, then absolutely, I think, we can say that it is more neutral, fair and equal.

Stella Dixon: It is crucial to recruit for attitude as well as skills, people with more digital skills who can cope with the ambiguity of fast paced change.

Where do you think hr has to adapt to optimise AI’s potential?

Robert Bolton: Going back to Unilever’s Una, it doesn’t just deal with human resource queries and questions, it will deal with technology queries and questions, it’s a frontend bot that can then take you to other bots. So, it’s a “bot of bots.” Actually, what potentially might happen is all sorts of corporate services could be run by a corporate services “supremo”, and HR service delivery may be one of those areas – so the whole service delivery side of HR may not be run by HR.

So bye bye HR? Does that mean all departments, divisions, silos… call them what you will, are a thing of the past?

Robert Bolton: Yes, because digital is borderless and flat. What’s left for HR? I think there’s an important role, but I don’t think people in HR are necessarily developed – it’s more an architecting role. It’s a blending of behaviour economics, Nudge, analytics, workforce shaping that creates a system of human performance. This is more than having centres of excellence because in so many HR functions, they don’t talk to each other to create that integrated system. They are deep SME experts but in their own area only. I think there is a future for HR, but I think it’s probably going to cleave into two to some extent on a day-to-day basis, and skills will have to evolve.

Dimitris Tsouroplis: It’s not just HR, a well-known sport shoes company has shut down two of their factories in China. With robotics and automation it was easy to replace the production line and move it back to Europe. No need for blue collar factory workers anymore, only a few white collar managers to support the new business. There is the impact, but you cannot stay behind, you cannot just stop evolution to keep existing jobs.

The heat is on: in what areas is your business actively or planning to invest in AI? Are you deploying AI or other forms of digital technology in your business, for example RPA, EPA, cognitive blockchain, IOT or augmented reality?

Mike Hood: AI is likely to have a major impact on our service business globally. When a service engineer turns up to repair or service equipment, they will be equipped with insights resulting from the equipment being connected to the Cloud and an AI engine that is monitoring its performance, and the training of that employee is likely to use virtual reality to prepare for different scenarios they’ll experience.

Stella Dixon: As a not-for-profit organisation, we are limited by the amount of funds that are available, so we’re trying to be creative, be involved with new start-ups and clever businesses, working closely with those business so we can guide them to help us.

Cheryl Allen: If I look internally and back to HR, where we’ve really been focusing is on the RPA.

Dianne McGowan: The aspect of corporate and shared services to bring expertise and external partnerships, buying the expertise on a more global business level, I do see a blend of that. The challenge for us is helping employees to see that we’re doing this to further our business. That’s a challenge, and I keep coming back to this aspect of relationship, being able to talk and communicate.

Catherine Holmes: We’re starting to look at the RPA, and AI and IOT is a key element of Hitachi’s strategy for deploying its Social Innovation Business globally, so we are investing heavily in this area in terms of resource and solutions.

Is there a greater understanding of integration?

Robert Bolton: Undoubtedly, there are lots of bad examples out there of organisations that have simply deployed things like RPA, plugged it into existing processes and, as one technology company said; “actually, we’ve made matters worse for the end user”. The lesson is, whether it’s RPA, EPA, reinvent the process first. The key starting point is think of the end user. Think of the customer. Think of the employee and work back from that, and then there’s plenty of scope.

Joseph Arakji: It does raise the question, if businesses use the same technologies in the future to create things like digital twins, where is the differentiation and competitive advantage going to come from? Maybe businesses will eventually turn full circle and seek that human touch.

Dianne McGowan: Agreed, we’ve not touched values and ethics, and aspects around that – human behaviour and creativity.

Robert Bolton: Yes. I like to think there will be a role for human creativity in 2038, and I’m sure that there will be – perhaps the competitive advantage strategies are going to be the ones that are most creatively human inspired.

If AI will increasingly take over mundane or repetitive roles, what type of work and roles will people be undertaking?

Joan Theresa James: At the business level, the HR strategic partner will be focused on aligning the talent strategy with the business strategy and being able to flex that talent strategy when market trends shift, the professional services team will, move away from HR generalist roles towards more specialist roles. Our vision is to create teams with deep knowledge expertise focused on HR sub functions like talent acquisition, project operations, total rewards, employee relations and learning… to collaboratively support our global business.

What about the wider field of the workforce, not specifically hr but right across the business?

Joan Theresa James: The wider field is driving towards a greater use of technology to improve and automate process execution in repeatable, consistent ways. This will enable cross-functional teams with robust data at their fingertips to work together collaboratively and deliver projects more efficiently.

Dianne McGowan: People will be working for one multiple companies and having specialised skillsets, bringing the knowledge and experience that’s needed at given points in time. We need to consider what this means for us in HR and how that is facilitated and managed.

Joseph Arakji: It depends how far AI will develop and the level of social acceptance to the new technology. We might see it replace more complex, creative roles that we never thought was possible – inside or outside HR, the theme is the same.

Checkout tills without cashiers, electronic passport control – the consumer touchpoints with AI have not been a great exemplar for AI.

Robert Bolton: That’s because the technology has been deployed without enough design thinking and customer experience in mind. Self-service checkouts are a nightmare and a million miles from what they could be, because they have been deployed with a “technology first” mind-set. In all this there’s a period of painful transition. When the general population wakes up will be when we’re going to see large numbers of self-driving vehicles on the roads. All of a sudden you’re going to see an entire job category disappear. In North America, the biggest job type is “driver”. We need to talk to our employees – there’s both opportunity and threat. There’s no way we’re going to come through this unless we re-examine education and the structure of work.

Mike Hood: I’ve focused on our frontline workforce and how their role develops when equipped with AI enabled technology. I think the biggest impact in our organisation is going to be on the roles of leaders managing that technologically-enabled workforce. We’ll need to understand how their roles change and the skills they’ll require.

Dimitris Tsouroplis: Like any “revolution”, there are casualties. Yes technology is moving fast, but we are at a stage where we can create, develop and manage AI. With the right use of AI, I believe humans can become smarter. It’s important to embrace innovation and it’s equally important to bring the younger generation into the businesses to help us go through this new era.

What is heartening is, go to aston martin’s works and there’s a robot for heavy lifting. But the real perceived value is the human interaction; the leather stitching – not robotically perfect – it’s the imperfection that is desirable and perceived as valuable and bespoke.

Robert Bolton: Agreed, I will always cherish my Morgan – in the factory, everything is hand built, even down to things like the wheel arches. Not a robot in sight, and the point is, it’s about the human craft.

How is your business being disrupted by digital technologies?

Stella Dixon: It’s massively enhancing our business – we have a huge archive going back since print, photographs and film began. Digitising those products means that the customer can access it easily and quickly.

Joseph Arakji: The Post Office has social obligations. We’re taking the lead on some of the opportunities around the banking framework and being the last shop on the high street. So, we’re trying to hold that position and increasing digital technology is inevitable.

Joan Theresa James: One of the ways we measure customer satisfaction is the number of repeat customers. It’s a metric that’s very important to us. I think that digital innovation can absolutely make us even more cost competitive, but it’s the human creativity and expertise and frankly tremendous experience that drive a quality job, that’s the differentiator.

Robert Bolton: MIT carried out a study on what differentiates market leaders, and it’s changing. It used to be ‘profit per employee’, now it’s rate of innovation.

Mike Hood: AI is an enabler of competitive differentiation and in the built environment that’s already happening. An organisation with a much richer understanding of the customer experience is more agile and flexible – that enhanced capability is crucial.

Cheryl Allen: I think about my organisation, it becomes much more important as part of its ecosystem than the organisation on its own – how we tap into partners, suppliers, the gig economy, as well as our robots and our global and UK colleagues and how does that whole ecosystem work together?

Catherine Holmes: Agreed, and what will our business look like in a decade? I would say very different. We’re on a massive digital transformation journey, expanding further into the social innovation business. The agile piece is going to be very important to us, it’s a massive culture change and the whole diversity and inclusion part is critical.

Joseph Arakji: The HR role needs to push even harder that the investment in people is, if anything even more important. We’ve talked about the need for people to be able to flex into different specialities, but we need people with the right attitude and aptitudes, very foundational and then we can mould them and move them into different areas as we see fit. It will be things like stress resilience, handling change and good emotional intelligence. It’s those things that artificial intelligence can’t give us around creativity and I think HR needs to make sure they’re investing in innovative HR technologies including AI so they don’t get left behind.

Joan Theresa James: From an HR standpoint, our transition will result in an even stronger HR organisation, one with a global reach, but a local presence, that’s flexible, nimble and ready to respond to the needs of the business. We want to continue to focus on innovation, talent management, making sure that employee engagement is front and centre. There’s a new model for the HR professional of the future, I’m excited about that.

Robert Bolton: We should be okay by 2030! I think of the automisation of work, of tasks, the way that careers are not going to be as we’ve always understood them, and we’re going to need to feed and nurture people’s individual strengths much more. That’s what they will use in their adult lives and indeed in work and the economy. There’s hope it will be positive and the future will be ‘decidedly human’, with a premium on creativity and innovation – as well as ambiguity, systems thinking and complexity – with AI helping, working with us and for us.

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