AI and HR: Building Engagement, Retention, and Performance

June 19th, 2024 – SkillCycle

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If you’re running an organization today, you’re likely evaluating how AI can impact your operations and efficiency in every department. And what about AI and HR? Integrating AI into your HR practices makes sense from a business standpoint. 

However, it’s wise to pause and consider how introducing AI into your company will impact your employees, who you can bet are also monitoring AI in relation to their jobs.

Three in four Americans think AI will negatively affect the U.S. job market by decreasing jobs over the next decade, according to Gallup

“Whether you’re a knowledge worker or a frontline worker, if you’re not already feeling the impact of AI in your job, you sense it coming,” says Jeff Reid, Co-Founder, COO & CPO of SkillCycle. 

In this article on how AI may impact your employees, especially from an HR perspective, we’ll explore:

  • Connecting AI and HR to improve employee experience
  • The impact of AI on employee engagement and retention
  • Transforming performance management with AI
  • How leaders can help integrate AI into their organizations


Connecting AI and HR to improve employee experience

In most organizations, employee responses to AI range from curiosity and a desire to explore it to trepidation and concern. That’s natural, but there are ways leaders can help ensure the introduction of AI in their company brings positive impacts. 

The secret? Look beyond efficiency for ways AI can be helpful in enhancing the employee experience. The technology is here, and adoption is only going to accelerate.  

“The basic principles of change management apply here, too,” says Reid. “Everyone has to understand the reason and rationale for change and to feel supported through the process.”

For example, generative AI and other technologies could potentially automate work activities that currently occupy 60 to 70% of employees’ time, according to McKinsey

How your organization handles these transitions will impact your employees’ job satisfaction and trust in the company, which means AI and HR are intertwined. While AI will bring change, it can also play a role in how your organization builds progress toward HR goals like employee engagement, retention, and performance. 

Bringing your team on board and giving them room to learn and experiment can be very valuable to helping them get curious about AI. 


The impact of AI on employee engagement and retention

AI can be used to reduce friction and repetition from workloads, freeing up your talent to spend more time on high-value tasks that require more creativity and innovation. These are important conversations to have with your team.

“If you assume there is an opportunity for leveraging AI for efficiency and automation, you should bring your people into that process,” says Reid. “Empower them to help find some of those efficiencies, so they have some autonomy.”

With open dialogue around AI and how it can be integrated into workflows, you may be able to remove some of the tasks that hold your employees back while freeing them up for work they enjoy. 

Empower your employees to develop their own levels of mastery so they can help define the solutions. The result? Highly engaged employees who do work they enjoy, understand how they contribute, and feel connected to the organization’s larger goals. 

“If you’re using AI to allow your people to be more creative and explore mastery of new skills, then it’s likely to lead to better engagement and better retention,” says Reid. 


Transforming performance management with AI

Your people — and their performance on the job — have the potential to fuel your organization to reach and surpass its productivity and profitability goals. Managing their performance in a way that empowers consistent growth and development could have significant impacts on your company’s success. 

AI can elevate how you collect HR data in your company, how often, and how much of that data can become actionable insights that strengthen your business. It can help you deliver real-time performance management with ongoing, consistent feedback.

“AI has a tremendous ability to synthesize information,” says Reid. “For example, while it can’t replace feedback collected in a 360 performance review process, it can identify trends, patterns, and blind spots that can help tell a more complete story.”

While a human element in performance management will always be essential, AI can also deliver feedback in a more palatable way for an entire team. Imagine an employee or manager reading through multiple feedback surveys from their peers or direct reports. That feedback may be taken more personally or be harder to turn into behavior change. 

On the other hand, feedback that is collected regularly and delivered in ways that communicate areas for growth based on patterns, along with a plan to support development, would likely be received very differently. 


These capabilities for consistent performance improvement can be combined with AI’s enormous capacity to collect data and then leveraged into a more comprehensive performance management process. 

How leaders can help integrate AI into their organizations

While AI can drive positive results in enhancing the employee experience and performance in your company, there will be growing pains and transition periods. 

It’s important that leaders are very clear on their goals for AI within the organization. Introducing AI into any workflow changes how work gets done and how we manage the people doing that work. 

“The first step is to understand what your goals are,” says Reid. “Is it to achieve pure operational efficiency? Automate a process? Accelerate in a particular area? It’s more effective to have a specific problem you want to solve with it.”

Beyond clear goal-setting, it’s essential to develop ethical guidelines before using AI at work. Create opportunities for discussion around safety guidelines, ethics, and bias so your entire team can navigate it as smoothly as possible.

Finally, bringing AI into your HR practices and everyday workflows will require you to support your people in new ways. Transparency about goals and why you are rolling out a change can help, as can listening and responding to concerns. 

“If employees are empowered to leverage AI in their own roles so they can be more productive and spend more time in higher-level thinking work, they’re going to feel better about their jobs and trust the organization more,” says Reid. 

Integrating AI into your HR practices and other workflows will take effort, but it could be a wise investment in a more capable and engaged workforce. 

Ready to learn how AI can impact critical employee outcomes such as engagement, retention, and real-time performance management? Schedule a demo today.