How can Artificial Intelligence and Disruptive Technology facilitate employee...
Posted by HR Tech Partnership on January 4th, 2021
A blog by Gabriel Barnes
As has been discussed in previous blogs in this series, the advent of the coronavirus crisis was a watershed moment for employee wellness, with business leaders putting the psychological, physical, and financial safety of their workforces at the heart of their decision making. The introduction of the Furlough scheme, the rise in voluntary executive pay cuts, and the implementation of changes to long term financial incentive plans have been just a few ways in which leaders have been grappling with the quandary that is employee pay and compensation. With the IMF now projecting global growth at -4.9%, it is clear that this is an issue that is here to stay.
The use of Artificial Intelligence and digital solutions to facilitate pay and reward schemes within an organisation has obvious advantages, as they are flexible, agile, and cost-effective. Importantly, they can integrate smoothly with pre-existing IT systems, but bring the benefit of being able to provide predictive analytics from real-time data.
How is AI currently being used in pay and compensation?
At its core, the organisation of pay and compensation has stayed the same, and it is unlikely that the world of HR will ever see a divergence from this at the structural level. Employee pay and compensation tends to be comprised of the following:
Despite this, Artificial Intelligence and disruptive solutions have been introduced, in a variety of forms, as facilitators of the decisions and the processes involved in pay and compensation.
The future of AI in pay and compensation
In the future of work, Artificial Intelligence and disruptive technology will begin to support and facilitate employee pay and compensation in even more advanced ways. This might include, for example, changes to the way in which pay equity is ensured. Tools based in Artificial Intelligence will be introduced to analyse cohorts of employees and report on behaviors and policies which are acting as barriers to pay equity. This will lead to greater transparency surrounding managerial bias during the hiring process. This is an example of an area of HR which is necessarily ‘human’, but which will no doubt be supported and simplified greatly by digital solutions.Another significant development for Artificial Intelligence in pay and compensation will be an improvement in the quality of data analysis. Currently, whilst predictive analytics are common, they are mainly based on historic data, and used primarily for administrative tasks. There will therefore be a shift towards the use of predictive analytics based on real-time and crowdsourced data, which will be employed to enable all aspects of pay and compensation. Other anticipated developments include –
Technology such as Blockchain, to enable flexible payment, and push notifications and gamification, to ensure and manage employee engagement, will become increasingly prominent as this evolution takes place.
Introducing AI in a practical way
Initiatives to introduce solutions based in Artificial Intelligence can have a transformative effect on the agility and efficiency of employee pay and compensation. The prospect of making these changes does not have to be intimidating. Once data science that supports the case for the implementation of these solutions is acquired, it is possible to pilot them on a small scale and in a low-risk way – for example, in small teams, or in one small area of pay and compensation.
The HR TECH Partnership (HRTP) runs a human capital digital innovation hub which can facilitate this low-budget innovation in HR so that leaders do not have to make large commitments in the first instance.
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About the AuthorHR Tech Partnership
Joined: May 14th, 2019
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