Gen AI, Culture, and Investing in Tech: How Are CHROs Dealing With Them All?

"Wildly Successful"

A Boston Consulting Group study found that GenAI has the potential to boost HR productivity by up to 30%, mostly by automating tasks or redirecting recruiters’ time toward deeper, more personal engagement and talent planning.

But not all of the four organizations on the CHRO panel were using the technology in the same way.

Freedom Mortgage’s workforce lends itself well to Gen AI, said Steve Widdoss, Chief People Officer. The company started some programs last summer in Marketing and IT before turning to HR for a pilot compensation program.

“The efficiency pickup that we saw was absolutely astounding when you think about writing job descriptions,” Widdoss said. “It was wildly successful.” Gen AI has now spread across Freedom’s entire HR organization, with several hundred use cases. 

Fear of AI stealing jobs “is probably miles off,” he added. “There's going to be certain roles that might ultimately be impacted, but right now it's a real accelerator and we're really excited about it.”

The situation is a little different at American Water, the largest publicly traded U.S. water and wastewater utility company. They’re looking at their processes to determine how and where technology can breed efficiency, said Melanie Kennedy, CHRO.

Utilities as a rule tend to be risk averse, but HR has been leading the way for the rest of the organization. For example, a virtual HR assistant helps employees out in the field get answers to basic questions. “It's Gen AI doing it behind the scenes,” Kennedy explained.

Empire, the flooring company with the catchy TV jingle, also has a low tolerance for risk. But AI could help solve challenges in two areas — its call centers and sales consultants, said CHRO Margaret Dinneny. Turnover is highest in Empire’s call centers, and Gen AI could support a core group of call center employees who can grow and develop long-term, reducing churn.

Sales consultants, meanwhile, work 100% on commission, so the quicker they get up to speed and are effective in selling, the better for them and for Empire. The company is considering using a chatbot so consultants can record their performance on a sales appointment.

“That will provide them with feedback about how they could have done better, from a product perspective as well as from a sales perspective,” said Dinneny.

Culture

Perhaps the single most defining feature of an organization is its culture, and that’s where HR’s impact is most felt. Culture has to be the underlying driver of how the workplace and the workforce are designed, said Kennedy of American Water. “We've built our workplace environment with our culture first. We're a collaborative, customer-facing organization.”

Half of her company’s employees are out in the field laying pipes. The company tried to offer them workplace flexibility that was on par with the in-office staff, but realized it couldn’t work, so they offered flexibility in other ways.

“Our field folks need to see people when they come in (to the office),” Kennedy said. “They have to have a workplace environment as well.”

Culture is especially important when global organizations are striving to strike a balance between efficiency and the human touch when Gen AI is involved, said Lothar Harings, the former CHRO of Kuehne+Nagel, the Swiss logistics and transport giant. Companies with offices around the world should introduce AI into the workforce methodically instead of all at once.

“If you try to push it at the same speed all over the world, you will fail” because of cultural differences, he warned. “Never underestimate the cultural differences of people.”

Prior to Empire, Dinneny was the Chief People Officer at convenience store operator Wawa during Covid. Wawa had an “amazing” culture but not everyone defined it the same way, she said.

The company undertook a culture study, more detailed than an employee engagement survey, to define what culture meant to rank and file employees (Wawa had about 55,000 people working in convenience stores and about 3,000 people in corporate headquarters in Pennsylvania during the pandemic).

HR went to leadership with the survey results and asked about the business reason  to have folks hybrid or not. 

“There are some jobs where we said ‘our developers do not need to be sitting in our office,’” she recalled. “Wawa is very collaborative, very family-oriented, but that wasn't necessarily the job. Our call center people were on the phone the entire shift.”

The takeaway — when using the word culture, really understand what that means, because people define it differently.

A Seat With the C-suite

The conversation pivoted to the topic of making technology decisions. The HR function was not as actively engaged in those discussions 20 years ago. What’s changed? And how are CHROs working with their C-suite peers to make those investment decisions?

At Empire, HR is very connected to the business. In addition to weekly meetings with the CEO, HR has a seat on an IT steering committee. “Our job is to support the organization to be successful so that the people can be successful,” said Dinneny. “I always approach it from the business first and then how it’s going to affect the people.”

Covid actually galvanized the role of HR at Freedom when homebound employees needed to work, said Widdoss. “I remember everybody turning to me and the HR team going ‘What do we do?’”

It’s natural for people to look to leaders for answers in times of crisis, but when it comes to day-to-day operations, leaders rely on their teams to bring solutions to problems. The folks at the top need to know why the team needs a certain functionality, what it will do to improve the business, and other answers.

“We can’t stay static,” Widdoss said.

For example, people aren’t buying houses the way they used to. Younger generations are more likely to rely on apps to search for a home and apply for a mortgage. That generational shift means Freedom is becoming less of a “mortgage company” and more “ultra high tech.”

So whether it’s Gen AI or technology investments, CHROs are making decisions they wouldn’t have made decades ago. And it’s a reflection of the evolution of HR from sleepy back office function (think payroll and benefits) to modern day strategic business adviser.

Curious where Fortune 500 companies are succeeding and failing in their use of AI? Check out our STATE OF CANDIDATE EXPERIENCE: 2024 BENCHMARKS REPORT