AI and Blockchain Set to Boost HR Productivity

It’s early days in the adoption of AI and blockchain solutions in HR. See where the greatest potential lies, and learn 5 steps HR leaders can take to select good use cases.

By 2022, more than 40% of large organizations will be piloting or using HR solutions enabled by artificial intelligence (AI) or blockchain, and every major HR process will include AI- or blockchain-enabled components, Gartner analysts said today at Gartner ReimagineHR Conference in Orlando, FL.

Today, more than 70% of early adopters report significant gains in HR productivity due to AI or blockchain

“Our research shows that although HR AI and blockchain solutions are far from mainstream, they are definitely emerging and developing — and are here to stay,” said Gartner Senior Director Analyst Matthias Graf

“We are entering the realm of blockchain and AI-augmented work and decision making, and we are beginning to receive value from it,” said Seyda Berger-Böcker, Director Analyst, Gartner. “Today, more than 70% of early adopters report significant gains in HR productivity due to AI or blockchain.”

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Where AI can have the greatest impact in HR

AI use is most mature in areas like employee engagement monitoring and talent acquisition, but to date, is most commonly adopted in learning and development and workforce/skills management.

AI can help most, however, in process areas where there are:

  • Large volumes of repetitive, nonroutine, and time-consuming tasks that are not yet automated and thus still operated by human labor
  • Massive amounts of unstructured data and data sources that take enormous HR capacity to analyze or from which it’s difficult or impossible to derive insights
  • Many complex decisions driven primarily by human judgment or intuition and vulnerable to a degree of bias
  • Numerous or a critical amount of employee and or candidate touchpoints

AI use case in talent acquisition

One promising use case for AI is talent acquisition. Online applications make it easy for candidates to apply for multiple jobs. As a result, organizations are awash in resumes, so it takes longer to plow through all the applications — and especially to find qualified candidates.

AI-based processes offer highly scalable levels of improved efficiency, effectiveness and candidate experience. A variety of point solutions are available: Chatbots, virtual assistants and AI-enabled sourcers. Increasingly, solutions are end-to-end offerings. For example, AI can help to source candidates across several platforms, filter out all but the most qualified candidates, screen the applications and narrow down the interview pool.

But AI in talent acquisition goes beyond mere process automation. For example, AI-based assessments combine advanced neuroscience and data-driven techniques to analyze candidate responses and thus inform decisions about the degree of candidate fit. Based on an ever-growing body of data, AI can “learn” over time to better predict a candidate’s degree of fit and performance.

Where blockchain can have the greatest impact in HR

Blockchain-based solutions are also being piloted widely, particularly in HR analytics and reporting and HR policies and governance/workforce management. The most mature applications, however, are found in payroll, time and attendance, and compensation and benefits.

Still, blockchain technology can help most in those process areas where there is/are:

  • High volume of decentralized data
  • Single version of truth required
  • Multiple entities involved
  • Dispersed authority

Use cases around data for blockchain

Blockchain solutions have a clear use case for organizations that are challenged to manage growing volumes of employee data, adhere to data privacy regulations, and stay compliant with employment and taxation regulations.

With blockchain’s underlying distributed ledger technology, organizations can store all payroll-relevant data as a growing list of cryptographically signed, irrevocable records shared by all participants in a network. Each record contains a time stamp and a reference link to previous transactions. With the help of the ledger, payroll data is stored more effortlessly and can be shared more easily across a defined network of organizations, employees, vendors and institutions. 

Ten years ago, we struggled to find 10 HR areas supported by AI and or blockchain; 10 years from now, we will struggle to find 10 that don’t

Blockchain helps drive efficiency and effectiveness in data processing, because every entity involved along the process life cycle is given access to any data stored at any point in time or from any place in the world. All changes are tracked and made available immediately, but the ledger makes the data more secure.

All in all, blockchain helps to reduce complexity in data management, providing tangible value to early adopters.

5 action steps for HR leaders

Clearly, early AI and blockchain solutions have limitations, so It’s important strategically and tactically to choose the right use case to drive successful adoption and utilization.

HR leaders can do five things to smooth their AI/blockchain journey.

  1. Embrace new technologies with all their current limitations. Don’t let technological immaturity stop you from exploring the potential of these technologies. Understand and acknowledge that today’s AI and blockchain solutions are still nascent, and you may need to experiment first with “point” solutions for narrowly defined use cases.
  2. Focus on business problems, not on technology solutions. Your HR process-related problems should determine technology requirements, not the other way around. Establish clear links between technology solutions and business value. 
  3. Experiment with clearly defined, narrow-scope use cases. Start by narrowly focusing on new technologies to solve known problems. Ask what business problem you face, what you want to achieve and whether you can achieve it by using AI or blockchain.
  4. Acknowledge the importance of data for successful adoption. Data is the nucleus that enables successful AI and blockchain solutions. Ensure that you have enough high-quality, relevant, consistent data, as well as data management capabilities. Collaborate with your HR IT department to build a robust data strategy and discuss the capabilities of potential technologies. 
  5. Integrate new technologies into your strategic HR agenda. Position new technologies as productivity drivers in your organization. Integrate AI/blockchain capabilities into your strategy development and define the objectives, results and KPIs that guide your new technology projects.

“The potentially transformational impact of AI and blockchain technologies is slowly exceeding the mitigating risk of fast, early failure,” said Graf.

“Ten years ago, we struggled to find 10 HR areas supported by AI and or blockchain; 10 years from now, we will struggle to find 10 that don’t,” said Berger-Böcker.

This article is based on insights that are part of an in-depth collection of research, tools, templates and advice available to Gartner clients.

 

Gartner for HR clients can read the Gartner Hype Cycle for Human Capital Management Technology, 2019 and Expectations Versus Reality in Recruiting AI, and they can watch a webinar on HR Technology Innovations and Best Practices

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