Unleashing Organizations’ Human Capital Potential in AI Age

Over the last decade, artificial intelligence (AI) has made an unquestionable impact on the world, hence AI is acknowledged as one of the most important agenda items for executives. According to the survey that was conducted in 2018, %41 of respondents mentioned that AI is the highest ranked agenda item for them. (Deloitte, 2018) On the other hand, human capital management practices of organizations have still not acknowledged as a reality and started to find ways to embrace AI as part of their organizations. Adopting AI systems in human capital management should be deemed by HR professionals as one of the next “ big things ”. This adoption is gaining momentum across the spectrum, although it is still in the early age of its full potential. Organizations should prepare for the potential of AI in their businesses. Human Capital is the Main Engine of the Organization Human capital is the engine of organizations that will enable them to move forward, achieve their objectives and be part of the future. Everything is being changed and transformed rapidly. New technologies are emerging across all the industries, functions. While these changes are happening, organizations seek to lower cost and increase its productivity. How will organizations move forward with the inclusion of future based human capital management principles? It is unquestionable that, without understanding the change in the nature of work and shifts in demand for the human capital skills, there is no way for the organizations to have successful outcomes. Boards’ Human Capital Management expectations are increasing According to the survey, the top three (3) challenges and focus areas were identified by board members. These are clearly depicted as recruitment, leadership capability and employee engagement (Nash, 2018). As a result, board members have human capital professionals to find out new ways to enhance capabilities in these domains with inclusion of AI. Resource: Harvey Nash, 2018 Understanding the Demand Change in the Human Capital Skill Set It is inevitable to say that automation and AI will change the skills needed in the human capital skill set. Understanding the change in the demand of skill sets and embracing them into organizations’ DNA are the vital success factor in order to secure a place in the future. This adaption will hasten skill set shifts for human capitals, workplace set-up and the structure of organizations; not only human capital management functions, but also entire C-suits should start thinking about the way they can evolve their organizations. (MGI, 2018) The impact could be bigger than we think. In terms of the scale, AI and automation revolution could be bigger than the move away from agricultural labor during the 1900s in the United States and Europe. (MGI, 2017) It is obvious that the skill set shift will be drastic. An assessment for the required skill sets between 2016 and 2030 with inclusion of five (5) categories in US labor market is shown below: Resource: MGI, 2018 Given the fact that other researches are mostly focused on 2018 and 2019 in terms of understanding human skills and AI exposure, there is a clear consistency with the findings of McKinsey’s framework that was shown above. Skills such as technical abilities, complex problem solving and cognitive abilities will be demanded by the human capital management of organizations. Resource: Deloitte, 2018 The bottom line is that organizations will need to make significant organizational…