By Charlie Coode, CEO and Founder of Culture15. Culture15 was shortlisted in the ‘Best SaaS Product for Business Intelligence or Analytics‘ category at The 2024 SaaS Awards.

When most people think of artificial intelligence (AI), they envision cold, calculating robots devoid of emotion or empathy, ready to steal our jobs.

Conversely, human resources (HR) is traditionally regarded as a field in which human touch is paramount – with feelings, motivations and relationships all being nurtured and brought to the fore. As such, they make an unlikely pair.

But what if AI could make HR more human? The notion might seem paradoxical, but AI-driven management tools could actually make workplaces more empathetic and responsive to employee needs if used ethically and responsibly. By generating data-driven insights surrounding culture, for example, AI eliminates the guesswork, allowing leaders to understand and address what truly matters to their teams.

Empathy in Business

Research from EY Consulting, conducted in 2021, revealed that mutual empathy between employees and company leaders increased efficiency by 88%, with creativity and job satisfaction soaring by 87%, idea sharing growing by 86% and innovation going up by 85%. Company revenue was found to be 83% higher as a result, highlighting the central role that empathy plays in company performance.

Keeping teams happy is central to a healthy business, ensuring that employees remain engaged and passionate about what they are doing. This translates into much higher loyalty, lower retention rates, and more effective output and production. In other words, leaders that understand their teams get much more out of them, perhaps explaining the heavy onus that’s been placed on things like employee satisfaction and engagement surveys over the years.

The Engagement Fallacy

Whilst it’s positive that more and more companies are starting to look into things like employee engagement in order to run more ethical, empathetic, and culture-rich companies in light of this importance, a Gartner 2023 survey found that only 16% of employers use technology to boost their results. This suggests a significant gap between intention and action, pointing to the need for more robust and systematic approaches.

Traditional engagement methods, such as annual surveys and feedback sessions, can fail to capture the dynamic and evolving nature of employee sentiment. What’s more, whilst these methods provide a snapshot in time, they miss the ongoing fluctuations and underlying issues that can affect engagement on a day-to-day basis. For instance, an employee might report feeling highly engaged in a survey conducted just after receiving a promotion, but might feel differently a few months later when faced with new challenges or work stressors.

The Current State of AI in HR

AI applications in HR are already transforming the way companies operate. For instance, IBM uses AI to predict employee turnover, identifying those at risk of leaving and suggesting interventions to retain them. Similarly, Unilever leverages AI for recruitment, using algorithms to screen candidates and match them with suitable roles, significantly reducing time-to-hire and improving candidate experience.

However, AI implementations are not without their challenges. For example, one multinational had to scrap its AI recruitment tool due to bias against female candidates, highlighting the importance of ethical considerations in AI deployment. Indeed, this case underscores the need for ongoing monitoring and adjustment of AI systems to ensure fairness and avoid perpetuating existing biases.

From Guesswork to Go

There is, nonetheless, a more human-friendly side to this AI revolution. In traditional HR models, employee needs are often understood through the subjective lens of direct feedback. Engagement surveys and open-door policies, whilst useful, can be fraught with inaccuracies and tainted with underlying, institutionalized discriminations or tendencies towards a particular interpretation. Moreover, employees might not always articulate their real concerns, instead focusing on surface issues. For instance, they might complain about the cafeteria snacks, failing to recognize that the root of their dissatisfaction is really a lack of colleague support. Oftentimes, this is a subconscious process that people aren’t even aware of, but it can lead employers along the wrong path, causing them to implement changes – such as better snacks – when task distribution and a sense of community is what they should really be working on.

By way of example, a company that relies solely on engagement surveys might receive feedback from employees reporting high levels of satisfaction. However, ongoing issues, such as a lack of career progression opportunities or inadequate leadership support might go unreported. This can lead to a situation where surface-level indicators suggest a heathy workplace, but deeper issues continue to affect productivity and morale.

AI can cut through this noise for us, tracking and benchmarking – not small-scale complaints – but core company behaviors, to provide a clear, objective picture of employee sentiment, organizational culture, and what’s really going on. Nevertheless, many businesses tend to avoid artificial intelligence, erroneously believing it’s all about efficiency, leaving humanity lacking as a result. Colleagues that are well-versed in the art of AI might challenge this, particularly if they prefer to deal in quantifiable metrics, yet their suggestions often fall on deaf ears, with concerns ranging from low return on investment to the erosion of culture within the company.

It’s time to dispel this dichotomous attitude, however, recognizing that AI and HR – the pragmatics and the human, data and empathy – can actually work hand in hand.

Google’s ‘Project Oxygen’

One only needs to look at Google’s Project Oxygen to see the positive impact that AI can have in the world of HR. Launched to identify the key behaviors of effective managers within the company, the project involved extensive data analysis to understand what makes a good manager, aiming to improve managerial performance and, thus, employee satisfaction.

Google’s People Operations team collected over 10,000 observations about managers through performance reviews, feedback surveys and interviews, before analyzing this data to identify what differentiated the highest performing managers from the rest. The analysis revealed eight key behaviors of effective managers, including being a good coach, empowering the team without micromanaging, expressing interest in team members’ wellbeing and success, being results oriented and productive, being a good communicator, helping with career development, having a clear vision and strategy for the team, and possessing key technical skills that help the team progress.

The findings led to the development of training programs and resources to help managers improve these behaviors. After implementing the changes suggested by Project Oxygen, Google reported a significant improvement in the ratings of their managers, with the lowest-rated managers improving their performance by 75%, for example. The project also contributed to a decrease in employee turnover, as better management practices led to higher employee satisfaction. Teams with managers who adopted the identified behaviors also showed improvement in their performance metrics, including productivity and engagement, with the success of Project Oxygen leading to its practices being embedded in Google’s management training programs overall. In fact, the principles from the project were widely shared within the organization, influencing Google’s comprehensive approach to leadership and management and, more importantly, informing its culture in the long term.

Whilst a prominent example of how data-driven insights can lead to substantial improvements in culture, it’s worth noting that the characteristics and behaviors identified in this project nonetheless remain subjective – and the feedback/input methods could be more robust. For instance, if Google had focused on specific, quantifiable behaviors that could be assigned a numerical value, it would be much easier for the multinational corporation to benchmark current progress against its goals, all the while ensuring that employee desires and company aspirations remained aligned.

AI’s New Role

In this sense, though effective, the insights gleaned from Project Oxygen were limited in scope much in the same way that traditional HR practices fall short due to their reliance on subjective information.

This is where AI comes in. Capable of analyzing large, complex datasets, AI can provide a much more comprehensive view of the current reality, particularly when specific behavioral parameters relevant to the company can be continually monitored and analyzed, under numerical values, to ensure progress. AI can also track things like work patterns, communication frequency, and email tone to identify signs of dissatisfaction or burnout more easily, ensuring that companies no longer miss the mark. HR can then intervene proactively, offering support and resources before minor issues escalate into major problems – at which point they are usually reported.

Behavioral Points That AI Can Track

Unlike humans, who could take years to wade through information and could easily be swayed by biases and emotions along the way, AI tools analyze patterns and trends in an objective manner. They can also identify subtle signs of dissatisfaction that may be overlooked in casual conversations or misinterpreted in feedback surveys, as, unlike human team members, they are immune to vague and perplexing subtleties like passive aggression.

By analyzing work patterns, AI can detect employees who are consistently working long hours or late into the night, which might indicate burnout. It can also track productivity levels to identify times when employees are most or least productive, allowing for optimized scheduling as a result. It’s all about giving employers the right information to allow them to take proactive measures that prevent problems from blowing up.

Far from just a productivity tool, this ability can really supercharge an empathetic approach to leadership and culture. For instance, by analyzing email and collaboration patterns, including the frequency and quality of interactions between team members, AI can help CEOs and managers to identify isolated employees who may be dropping off and need more support or opportunities to engage with their colleagues. They can then check in with the affected individuals, with actions like this safeguarding mental health, ensuring adequate workplace support and potentially even saving lives, allowing the company to give much more empathy and compassion back to the people who keep things going.

The Ethical Implications of Working With AI

Of course, the use of AI comes with ethical considerations. It’s crucial that companies commit to responsible use, ensuring transparency, fairness and respect for privacy at all times. Employees must be informed about how digital tools are being used and consent to their data being collected, particularly under GDPR. Moreover, AI decisions must always be reviewed by humans to avoid errors and biases, ensuring that actions taken are always in the best interests of the people that matter: employees.

Companies should thus use trusted AI platforms that have already done the groundwork in terms of guidelines, ethical frameworks and compliance. This ensures that the deployment of AI tools aligns with best practices and legal requirements.

Overcoming Skepticism

Even with the best of guidelines in place, however, one of the biggest roadblocks to the adoption of AI in HR is skepticism towards new technologies in a human-facing field. Such fears often stem from concerns about dehumanization, job displacement and privacy invasion. However, these worries can be addressed through education and demonstration of the tangible benefits that AI brings to HR.

HR employees must learn, for example, that rather than making their jobs obsolete, AI is designed to augment their capacities. It is never a case of replacement. In fact, by automating repetitive tasks and providing faster data-driven insights, AI frees up HR professionals’ time, allowing them to focus on building relationships, supporting employees, and nurturing a positive company culture.

In this sense, educating teams on the practical benefits of AI is crucial. It can help HR teams to make better decisions by providing accurate and timely data and they need to know this. They also need to understand how it can enhance employee satisfaction by identifying and addressing issues early on. When teams can see how technology supports their values and goals, they are much more likely to embrace it.

Continuous Improvement

The major change that AI brings to the table is converting efforts towards employee satisfaction from a one-time project to an ongoing effort. Unlike surveys, which are issued once a year or once every six months at best, AI tools provide continuous monitoring and analysis of an organisation’s most telling behavioural parameters. This ensures that companies remain consistently attuned to employee needs and expectations, allowing them to adopt a more dynamic approach centred around timely adjustments and interventions. Ultimately, this prevents minor issues from escalating into major problems, making for a happier workplace.

The Role of SaaS Platforms

SaaS (Software as a Service) platforms play a critical role in integrating AI into HR practices. These platforms are not intended as replacements for traditional HR methods but as supports for them. When investing in technology, it may be worth forgoing simpler engagement-focused tools in favor of more comprehensive platforms that have greater influence over human methods and decisions.

AI By Numbers

Far from a futuristic concept, AI is already making significant impact in the field of HR. According to a 2023 study by Deloitte, companies that use it have seen a 30% increase in employee engagement and a 25% reduction in staff turnover. Moreover, a study by PwC found that 67% of HR professionals feel AI will help them make better decisions, highlighting a growing trust in AI-driven insights. It’s simply a matter of choosing the right, robust, behavior-focused platform.

Looking Ahead

As we move into the future, the role of AI in HR is set to expand, with trends including more sophisticated predictive analysis, enhanced employee wellness programs, and even AI-driven career coaching: all things that benefit humans. As technology advances, the potential for AI to transform HR for the better will therefore continue, offering new ways to engage employees and provide support.

The collaboration between AI and HR holds promise of workplaces where technology and humans coexist in harmony, driving both employee wellbeing and business success. By leveraging the right AI platforms to gather and analyze data, companies can move beyond guesswork, understanding and addressing the real-time, real-world needs of their teams.

AI and HR might seem like strange companions, but together, they create a more empathetic, responsive and supportive workplace. This data-driven approach not only enhances employee satisfaction but also fosters a more humane and inclusive company culture. However, it’s crucial to remember that AI should support, not replace, traditional HR methods. Combining the strengths of both approaches ensures that decisions are informed by data but grounded in humanity, empathy and understanding.