Recently, Paskpartnership hosted a fascinating and timely ppl Radar® [1] round-table event with 23 Chief People Officers, under Chatham House Rules, on the topic of “The AI-fluent People Leader.” We posed three questions for the group discussion:

1. How do People Leaders keep up with AI and its implications, opportunities and risks?
2. What are the right questions to be asking? Is AI all about efficiency or should we be asking what VALUE it creates – or destroys?
3. What are you doing to stay ahead of this – or at least not too far behind?

This article captures some of the key insights that were shared.

Early Days

According to the McKinsey report, “The State of AI in 2024”, adoption of AI in the last 12 months has risen from 55% of companies to 72%, largely driven by the use of Generative AI tools such as ChatGPT. But these are still early days and most business are still experimenting with this new technology. As the opportunities and threats of AI technology advance at a break-neck speed (through GenAI, robot workers, malinformation etc), we take a look at the key questions people leaders are asking and what learning and skills they need to stay on top of this.

Despite this being such a complex issue, there is no time to lose in getting to grips with the big issues. Some recent research by SurveyMonkey produced some worrying statistics:

• 54% of workers don’t feel comfortable with HR using AI
• 45% say they are worried about job security
• 41% say their company has no AI policy in place
• 70% say they haven’t received any training in AI

[1] ppl Radar® is both a learning and a networking space for CPOs and their colleagues. Sometimes virtual, sometimes in-person and supported by useful content, it is the channel where we explore the edge of uncertainty in people leadership – what is on the horizon, that no-one has the answers to, yet. The agenda and the content is driven by our community. This is not a space for lectures and declared truths, the style is to facilitate learning amongst peers, working with what is emerging in a spirit of curiosity and enquiry.

The first statistic may shock you, just as it shocked our guests. Many are already using AI in HR processes and wondered if they could be doing more to communicate the value it was adding – and how they were managing the risks.

The Challenge for Job Design and Organisation Design

What is clear from our discussions with CPOs is that AI will impact the whole business, not just the HR operating model and HR processes. And business leaders will look to CPOs and their teams to help them work out the implications on the future of work, job design, organisation design, talent development, employee experience and ethics and risk.

One key tension is already “on the table”. There is a great deal of focus right now on the potential of AI to improve efficiency and save time. But before you give away all the savings, one of the key questions CPOs can already be asking is, “How can we reinvest those savings to create additional value for the customer – either an internal customer or the end-user of our products?” This may be additional technology or more likely it will be new human-driven interventions from the employees you have freed up and reskilled.

We also discussed what value AI could destroy if used in the wrong applications. Should some roles be ring-fenced from being too AI-influenced? For example, Judges in a Court of Law, or physicians who are evaluating the patient holistically not just their individual symptoms. Even within purely HR applications, this question is a valid one and one that speaks to the fears of employees and applicants. How comfortable are you with the data-sets your AI has been trained on, so that is doesn’t have blind-spots, and built-in discrimination?

Those who grasp the full potential of AI early will quickly encounter complex challenges around job design, organisation design and employee experience – as AI disrupts traditional jobs, workflows, customer journeys and the employee journey. We are already seeing a demand for greater organisation and job design skills in new CPO hires, with CEOs looking for those who can envisage new ways to design the enterprise and new models of work in response to a tidal wave of technological, social and environmental shifts. The rapid rise of AI will only accelerate this requirement.

But when you set this against a desire amongst Generation Alpha for more human interaction, and a growing demand for training in interpersonal social skills (such as holding a casual conversation), the answer is not necessarily more automation in every aspect of working life.

The future of Generative AI technology is multi-niche rather than one that will come under the guise of a generic enterprise tool. Think ecosystems of solutions rather than one monolithic enterprise system. In every sector you will already find growing numbers of specialist applications being developed focused on very specialised Chat GPT plug-ins or proprietary LLMs (Large Language Models). Eventually, we could see every aspect of work using a different AI tool to support different tasks

At the same time, we are seeing a growth in the niche freelancer market – this Human Cloud is predicted to experience a CAGR of 14-15% over the next few years. Does this mean that we will we see a world of Task Designers and Task Doers (with some tasks allocated to AI bots) rather than employees with pre-defined roles? Will our organisations become Human Clouds themselves, with porous boundaries that deploy fractional specialists as needed? This would certainly push organisation and job design towards capabilities and skills rather than jobs.

The Challenge for Transforming HR with AI

So how do CPOs and their teams prepare for embracing AI in their own function, as an enabling tool across the whole employee lifecycle and HR operating model? The experience of those CPOs who are already experimenting with AI was clear:

• First start with clear baseline data and mapped out processes, so that you know what all the tasks are and how much time is devoted to them by your teams and employees. This way, when you begin your experiments, you can quantify the efficiency and quality implications of AI on these tasks.
• Second, create some hypotheses about the intended impact e.g. will it improve the employee experience or will it free up HRBPs and Centre of Expertise Teams from repetitive tasks?
• Third, start small to get big. Run experiments with existing products, set-up hackathons with AI start-ups, rapidly develop and test prototype applications before investing heavily in them. Use these experiments to test your hypotheses and capture the risks.
• Fourth, talk to each other – in your networks, across your sector, with employees and applicants, with your leadership team colleagues – adopt a stance of curiosity and learning so that you can keep pace with the changing technology and changing attitudes towards it. One company in our group has a regular AI Forum where business leaders come together to discuss AI issues and opportunities.
• Finally, who in your HR team can bring real-world experience of AI from other organisations or settings? Our CPOs felt that every team needed access to someone who already had experience of deploying AI in live applications, whether that is AI for customers or employees.

 

Some Final Thoughts

Employee’s experience of using AI outside work will colour how they perceive AI in work. People are fearful, and some are overly optimistic, so make sure you listen to them and their expectations and fears. Many people are still suspicious of the Cloud, never mind AI.

If everyone is using AI, how do you retain the very essence of what makes your products and services unique? Where is there room for creativity, innovation, the human experience and personalised interactions?

Here are some resources to tap into to help your learning:

• Josh Bersin has a podcast on his website about early applications of AI in HR – it is worth following.
• The IMF have just released a report on the impact of AI on jobs.
• Watch this video interview with Professor Hod Lipson, the director of Columbia University’s Creative Machines Lab, talks with CBS Professor Oded Netzer, offering reassurance on the technology’s dystopian risk and urges us to embrace its potential.
• Read this blog by Microsourcing for a broad sweep on how AI is impacting different industries and business functions.

As you can see, the discussion was wide-ranging and only just scratched the surface. Hence, this group want to keep talking and sharing. If you are a CPO and want to join in, let us know at pplradar@paskpartnership.com.

 

Like many children I used to suck my thumb.

So much so, my parents said it would turn square. And it kind of has. My left thumb is shaped ever so slightly differently to my right.

Aside from dashing any hopes of a glamorous hand-modelling career, my quirky left thumb bears no influence on my life whatsoever. Sucking my thumb was a childhood phase I grew out of. End of story.

But for the fast-growth tech and e-commerce start-ups I work with, early habits can be much more damaging.

In these rapidly expanding companies, misdirected pressure prevents managers from channeling energy and effectively developing teams. Too often, leadership is compromised.

Add to this the challenge of recruiting fiercely in-demand skills, the changing demands of a young workforce, and the rapidly evolving backdrop against which all this is happening, and you have a perfect storm.

A storm that can shake the foundations of the most committed workforce and result in waning motivation, falling productivity and your best people leaving.

What to do?

Moving from a flat structure to a progression culture

So your start-up is suddenly 500 people plus. Email addresses have surnames and you have people based in multiple locations. For your founding team members, there’s one burning question: what happens now?

Transforming the relatively – and often necessary – flat structure of a start-up into one that nurtures progression, leadership and succession is crucial if you’re to retain talent and keep your core team.

Remember, the world has noticed you and those people who made the start-up such a success.

This is where your new HR leader can step in and build the all-important infrastructure that will take a hardworking, but nebulous workforce and transform it into one that’s better motivated and better engaged.

So who is this HR professional? An experienced all-rounder is crucial here: you’ll need someone who’s willing to roll up their sleeves, get their hands dirty and delve deep into the detail. Someone who can happily implement and oversee routine processes and focus on the wider strategy.

This person will possess enough experience to command respect, and know how to bend the rules. After all, fast-growth companies thrive on being disruptive. HR should be no different.

Your new HR leader will have experience of working with younger workforces whose drivers are often different to their older colleagues. He or she will know how to harness these differences and find the best methods of nourishing them.

If there isn’t room for everyone to progress upwards in the company, how else can a person be motivated, for example? (The short answer is through things like training and development, work-life balance, flexibility, and opportunities for volunteering – but that’s for another blog.)

Making HR commercial

For most fast-growth tech and e-commerce companies, in the early stages at least, HR begins and ends with talent acquisition. All too often the setting up of effective and efficient HR processes and operations is left too late.

The company has missed an early opportunity for HR to have a strategic influence across all aspects of the business; for HR to be run like a commercial enterprise. But it’s still not too late, and again, this is where a senior generalist – with exposure to all specialisms within HR – is needed.

This HR professional will be responsible for the delivery of HR services to local teams: from employee relations to recruitment, reward and recognition, through to performance management, organisation design, training and development.

Your new HR professional will be commercially minded, of course. This is absolutely critical: strategic decisions around outsourcing functions and bringing in interims, or launching company-wide reward and recognition policies and incentive plans for sales people, will all result in considerable performance improvements.

Performance improvements, staff retention and streamlined processes – all of which are the hallmarks of high functioning HR services.

And all of which can overcome the most stubborn of young habits.

This is the fifth of six articles on how to identify HR candidates who are truly commercial. In these articles, I explore the difference between those who are just strong on delivery and those who really understand what difference they make to the company. Previous articles can be found on www.paskpartnership.com

This month, we look at the Head of OD.

The OD role is one of those few roles that are mysterious and misunderstood, mostly by those who have never had one in their organisation. In fact, your organisation is either one that is committed and passionate about OD or…… it doesn’t have such a role and probably never will. You tend to find these roles in European or very large and complex companies but if you are recruiting a Head of OD for the first time, it is most likely that you have used consultants to perform this role to date.

So what does a Head of OD do? What does OD actually stand for? Is it Organisation Development, Organisational Development or Organisation Design? And how does this differ from Organisation Effectiveness? One of the first challenges in appointing a commercial Head of OD is defining what you want the role to do. This may seem obvious but given the confusion about OD it is worth spending some time on being clear what they will deliver and how they will interact with other functions.

There are many definitions of organisational development and even the website www.ODportal.com admits there is no single definition. In my experience, the most common outcome of the OD function is a workforce that works more effectively and productively together in furtherance of the company strategy.

With this definition in mind, what makes a Head Of OD truly commercial?

Firstly, they must be able to articulate the company strategy in terms of the workforce design, culture, behaviors and working practices and processes that will drive the strategy. They should know how to analyse the gap between this desired state and the current state. They should be able to design, plan and cost the interventions that bring about the desired change and they should be able to place a financial value on the target state e.g. how it will affect sales, what costs it will save, what financial risks it will mitigate.

Finally, they must have actually implemented these interventions and produced the desired result, or something close to it, both in human terms and financial outcomes.

One of the key attributes that sets commercial Heads of OD apart is their ability to combine their belief in human potential with a focus on business outcomes. They understand how human endeavour and organisational purpose can be combined to create mutual benefit to the employee, the customer and investors. They won’t flinch about recommending tough actions that make the company more effective but neither will they lose sight of how the manner in which these actions are decided and implemented will impact on employee engagement.

Being a commercial Head of OD requires courage – the courage to challenge divisive and damaging decisions that pursue short-term or personal goals at the expense of the overall health of the organisation, the courage to recognise when an organisation has lost it’s way and to help steer it away from disaster, the courage to act in the company’s interest rather than any one person’s interest. Such courage is based on a desire to make the organisation great not just successful.

Every company fulfills a role in society, depending on the desirability and utility of its products and services. However, the one thing they all have in common is that they also provide a means of channeling the potential of its employees to produce meaningful and valuable work. The truly commercial OD leader knows how to bring these two purposes together to create mutual success resulting in specific and lasting performance outcomes for the company. This is what makes companies great – the ability to create a win-win for all involved and sustain it over time.

So, when you next interview an OD candidate, have the courage to ask them what difference they have really made to both the company and it’s employees; how they made that company greater than before. But don’t accept vague answers and assertions that they made a difference, ask them for evidence of this impact. As we all know, commercial success is not built on good intentions alone.

If you need any advice on your search for your next truly commercial Head of OD, please contact me on 07760 777 931 or via email debbie@paskpartnership.com

This is the third of six articles on how to identify HR candidates who are truly commercial. In these articles, I explore the difference between those who are just strong on delivery and those who really understand what difference they make to the company. Previous articles can be found on www.paskpartnership.com

This month, we look at the Head of Resourcing. This article contains advice both for the candidate (on how to present their successes) and the recruiting manager (on what to look for in a CV and during the interview). Many of the tips below can also be applied to anyone looking to describe their achievements in more commercial terms.

Most of the candidates I now interview for Head of Resourcing roles are in fact very commercial. It is difficult to be in the recruitment business and not be commercial, given the focus in many companies on the cost effectiveness of the hiring process. It is such a visible expenditure category and yet is an activity that can’t be avoided, so the focus inevitably falls on doing it quicker, cheaper and right first time.

So why write an article on identifying commercial Heads of Resourcing if they are so common?

Well, the challenge is spotting the best ones in the crowd of candidates that come across your desk. The majority of CVs that I see from Heads of Resourcing do not do justice to their achievements; do not spell out what commercial impact they have made. And so it is difficult for the best to make themselves stand out from the rest.

The most common statements in CVs and interviews are quite general, for example:

“Introduced new recruitment service provider”; “Improved performance of recruitment team by 10%”; “Restructured PSL”.

The advice I give such candidates is to focus much more on the key metrics that define the cost-effectiveness of the resourcing process:

• cost per hire
• time to hire
• volumes of internal vs external hires
• quality and success of hires
• volumes and costs of direct hires vs agency hires
• fee structure of the PSL
• processing capacity of the recruitment team
• efficiency of starters process
• relevance of shortlisted candidates
• advertising spend

These are often referred to but rarely quoted as measurable achievements, which is key to demonstrating commercial impact.

One of the best tips I can give a candidate when referring to a measurable impact is not just to quote the percentage change in an activity or cost but to state what that actually saved the company in cash terms. This demonstrates the candidate’s financial awareness. But they should be careful only to quote savings that were realised by the company rather than hypothetical savings.

Let’s take a look at what these metrics might look like on paper as statements of commercial impact.

Performance Metric: Cost per hire How it should read: Reduced cost per hire by 50%, from £900 to £450, in 12 months, saving £3.1m. (You could also quote how this compares with the benchmark cost per hire for your sector, using benchmark data from sources such as PWC Saratoga.)

Performance Metric: Time to hire How it should read: Reduced time to hire in income-generating roles by 9 days, from 55 to 46, increasing revenue by 1.2%. (Some roles generate income and the longer the role is vacant, the less income the company generates.)

Performance Metric: Volumes of internal vs external hires How it should read: How it should read: Reduced external hires by 25%, reducing cost per hire by 35% (£1.8m) and increasing internal mobility by 110%. Attrition reduced by 2.5% as a result, saving £2.3m per year in recruitment spend. (If you increase internal recruitment you are probably reducing attrition as well, since more staff are developing their careers with the company.) Performance Metric: Quality and success of hires How it should read: Improved first year retention by 150%, from 30% to 45%, reducing cost of recruitment by £1.3m per year.

Performance Metric: Volumes and costs of direct hires vs agency hires How it should read: Reduced agency hire rates from 55% to 20%, reducing cost per hire from £900 to £350 in 2 years, saving £3.8m per year.

Performance Metric: Fee structure of the PSL How it should read: Reduced average agency fees from 25% to 18% in one year, saving £2.3m per year whilst maintaining shortlist success rates and time to hire. (It is relatively easy to cut costs with suppliers but you have to show that the business did not suffer as a result.) Performance Metric: Processing capacity of the recruitment team How it should read: Improved hires per recruiter from 90 to 120 per annum, reducing cost per hire from £400 to £360, saving £1.8m per year. (This is the number of hires that each internal recruiter handles per year. Benchmarks are also available for this figure from sources such as Hackett.)

Performance Metric: Efficiency of the starters process How it should read: Reduced data processing times of new starters by 50% from 70 minutes to 35 minutes, reducing cost per hire by 5%, saving £800k pa.

Performance Metric: Relevance of shortlisted candidates How it should read: Improved offer ratios of shortlisted candidates from 1 in 5 to 1 in 3, reducing cost per hire by £80, saving £1.8m.

Performance Metric: Advertising spend How it should read: Redesigned careers website, increasing direct application by 80% and reducing media costs by 60%, saving £850k pa.

As you can see, commercial achievements need to be quite specific. When comparing two candidates together, if one is vague and one has examples like those above, it is easy to see how the latter comes across as more commercial and credible. Being vague cannot only disadvantage a candidate compared to others, it can also paint a picture of poor business acumen.

If you need any advice on your search for your next truly commercial Head of Resourcing, please contact me at www.paskpartnership.com. Email: debbie@paskpartnership.com. Mobile: 07760 777 931

Take a look through the current list of HR roles on Askgrapevine, Changeboard or Totaljobs and at least 99% of them will have job titles that reflect the process, the function or the relationship they are responsible for. So, a Head of Recruitment is responsible for the recruitment process; a Head of L&D for the learning and development process; an HR Director is responsible for the HR function; an HR Business Partner is responsible for developing a partnership relationship with the business. But is that how the success of the role is measured? By the efficiency of the process, the running of a department, the quality of the relationship? Well, of course these are important KPIs but what about all the valuable commercial outcomes we hear so much angst about – the successful resourcing of the business, the development of key skills, the growth of an effective workforce?

Very few roles are named for their commercial outcomes. A Director of Organisation Effectiveness is a well-known one and I’ve recently come across a Director of Productivity. What if all HR roles were given titles that described their commercial outcomes? We might have a Head of Ensuring Great Leaders Grow With The Company or a Director of Hiring Great Performers or an Employees Who Reflect The Brand And Win New Customers Manager.

So, given that job titles do not describe the commercial objectives of a role, how can you tell if a candidate has identified and delivered the right commercial outcomes in their previous roles rather than just delivering an off-the-shelf solution that made no real difference? How can you tell whether a candidate thinks and acts commercially?

A candidate may have the skills, knowledge and behaviours to perform the tasks of their role but this is not the same as their proven ability to identify and deliver relevant commercial outcomes. I have interviewed many perfectly competent candidates who deliver great processes but can’t explain what value they added to the organisation’s performance. Being commercial requires an HR person to understand the business strategy in people terms and then to determine how they can help deliver that strategy through targeted interventions, processes, policies, services and tools.

For example, if the company is trying to drive growth and margin improvement simultaneously, you would expect the Head of Recruitment to focus on hiring high quality employees who reflect the brand whilst reducing reliance on agencies; as opposed to slashing costs in recruitment that increase time to hire and drive down the quality of the hire. The latter intervention would increase margin but damage growth.

Key to choosing the right interventions is an ability to think outside the bounds of so-called best practice, benchmarks and fads. The commercial HR person is not constrained by their job description and chooses interventions or invents new ones that precisely deliver the current business strategy. Those who are less commercial will not be clear on why they chose a particular intervention or what difference they made to the company.

Many candidates will tell you of their achievements in the following terms: “Implemented RPO across the business in 9 months”; or “Introduced a blended learning strategy and increased e-learning uptake by 90%”. But what impact did these interventions have on the business? One would hope, in the above examples, that the introduction of Recruitment Process Outsourcing reduced the cost per hire and the new learning strategy had an impact on sales volumes or manufacturing quality. Adding such measures to the above statements would at least tell you that the candidate can talk the right commercial language. But were these the right interventions for the business at this time or just the hobbyhorse of a candidate wanting to make a name for themselves? Choosing the right interventions at the right time is what separates a truly commercial candidate from one who is just technically competent and strong on delivery.

Over the next five editions of Recruitment Insight, I will draw on my 24 years experience of recruiting HR people to explore how to spot a truly commercial candidate for five different HR roles. The first will be a Head of Learning & Development, a role that we have seen much activity on recently but few great candidates.