Executive
Perspectives

Unlocking Impact from GenAI
Human Resources
July 2024

Introduction
As part of our ongoing series of C-suite conversations on AI, we are sharing our mostrecent learnings in a series designed to help navigate the rapidly changing world of
AI. After working with over 1,000 clients in the past year, we've found that AI is at an
inflection point: in 2024, the focus is on turning AI's potential into real profit.

In this BCG
Executive Perspective,
we show you how toleverage AI to transformand create value in HR• What will my HR organization look like – both how we are structured and whattools and skillsets are required?
• How can we achieve near-term performance gains with AI and GenAI whilebuilding the necessary capabilities?
• Given the sensitivity of our work, how can we proactively address ethical andemployee/candidate experience risks?
• How can we drive adoption, engagement, and adherence to capture value?
This document is a guide for CEOs and CHROs to cut through the hypearound AI in HR and understand what creates value now and in the future.
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Copyright © 2024 by Boston Consulting Group. All rights reserved.

In this edition, we discuss the future of human resources (HR) and the role AI
will play in turbocharging the function's capacity to deliver on unprecedented
demands. We address key questions on the minds of HR leaders, including:Executive summary | Unlocking impact from GenAI in human resources

Foundational
investments will
be required tocapture value

HR leaders must
act now

To meet these demands, HR can leverage Generative AI (GenAI) to become more productive, effective, and engaged(e.g., ~20-40% productivity improvement)
In the near term, many leaders are starting with significant opportunities inrecruiting (e.g., 20-25% near-term cost
reduction) and admin
HR organizations are investing in key enablers to re-imagine the function, including:• Org and op model: Reorienting around employee experience, with new roles to shape and govern GenAI• Talent and skills: Up/re-skilling and hiring specialists to address 55-75% skill disruption in key HR roles• Data, tech, and partnerships: Preparing data and infrastructure, partnering to assemble portfolio of tools• Risk and responsible AI: Addressing potential bias and ensuring compliance with regulatory requirements• Change management: Taking a science-backed approach to change behaviors and drive adoption
Most leaders are already taking action with GenAI in HR (e.g., among enterprises already deploying GenAI,
70-80% are using it in HR)
To get started, HR leaders must build integrated implementation roadmaps, upskill fellow leaders, andprepare HR data and guardrails to ensure reliability, compliance, and sustained value capture2

Copyright © 2024 by Boston Consulting Group. All rights reserved.

GenAI will
enable HR todeliver against
new demands

The changing nature of work is placing unprecedented demands on HR, e.g., organization-wide upskilling andbehavioral changeHR organizations face unprecedented demands
as the future of work unfolds
Requirements of HR

Personalized strategies toattract and retain top talent ina cost-constrained environment• Dynamic, more competitive rewards/benefits• Personalized L&D1 pathways and career journeys• Deep focus on DE&I2 – on people and tech fronts

Skill disruption and humanmachine teaming• Up-/re-skilling of non-tech talent to address GenAI
disruption (e.g., 86% expect need in near-term)• Continual re-design of ways of working, teams, roles• Behavioral change and human-machine trust

Rising need for – and lagging
supply of – tech talent• Dynamic talent planning to address technical skill
gaps via hiring and re-skilling (e.g., to address >3x
increase in demand for data scientists in past 5 years;
future demand may vary with GenAI)

1. Learning & Development; 2. Diversity, equity & inclusion; Source: BCG skills disruption index; How to Attract, Develop, and Retain AI Talent (2023); BCG experience3

Copyright © 2024 by Boston Consulting Group. All rights reserved.

Key trends in the future of workTo deliver against these demands, HR of the
future must be fundamentally different…
Business
partners

The skills portfolio manager

Work rhythms

The conductors oflearning and innovation

CHRO
The CEO’s strategic
partner for a futureready organizationHRfunctionof thefutureStrategic consultants andorganization architects

Strategy and digital
function of the future

20-40%

90%+

Increase for HRBPs andrecruiters

Boost for someadministrative workflows

Speed and effectivenessProduct owners
Guardians of AIenabled employee
experience

10X

50%

Faster content
creation

Decreased time to hire

Engagement

HRIS
HR-IT experts of the newstrategy and digital function

Productivity

Ethics and bias
The champions of integrity
and tech bias prevention

Source: BCG workforce diagnostic; BCG 'toil v. joy' diagnostic; BCG experience

Shared services
Short-term heroes ofstandardization, longterm role divergence

3X

25%

Growth in employee
engagement

Rise in HR retention
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Talent ecosystem

HRBP…leveraging GenAI forstep-changes in…

E2E process re-imagination is critical for HR to break the historicalcompromise between productivity and employee engagement
Attract

DevelopEngageHR strategy
and planning

Recruiting
and resourcing

HR admin/shared services

Compensation
and benefits

Learning anddevelopment

Performance andcareer mgmt.

Employeeengagement

Employeerelations

From:

Manual data
producing static
results

Losing top
candidates due tolengthy process
and human bias

Siloed teams
providingfragmented
service andlong wait times

Information stored
in different places,time-intensive to
get answers

Time-intensive
content creation,
fragmented
employeeexperience

Highly reliant on
human opinion,often providing
feedback too late

Reliant on
employees toraise issues/concerns

Manual andtime-intensive
documentation
and reportingTo:

Dynamic
forecasting of
future workforce
needs andre-designingworkflows

HumansStreamlined,
augmented withfaster support
automatedfrom 'hire to retire'
sourcing support,
freeing up time

Chatbots and selfservice tools to
help employees
find information
quickly

Personalized
L&D journey andclear career path
to increase
engagement andretention

Delivering realtime feedback
and objective
performanceinsights analysis

Predicting issues
by monitoring andanalyzing
employeesentiment

Automating
admin to enable
time for humanengagement
around inquiries

Productivity increase:<10%~10-25%~25-50%Engagement increase:

Low

MediumHigh

Productivity
increaseEngagement
increase

Source: BCG workforce diagnostic; BCG 'toil vs. joy' diagnostic; BCG experience>50%
5Copyright © 2024 by Boston Consulting Group. All rights reserved.

Anticipate

Early adopters of
GenAI in HR are
starting with lowhanging fruits that
present lower risk andoffer higher near-term
productivity gains

Recruiting
Content
creation
12%
18%

Admin
HR chatbot
5%
25%

Talent/L&D
Interactive Engagement
workforce
Employeeplanning
listening
28%

44%
70%

70%
28%

40%

36%

24%

Examples follow

1. Have you started experimenting on the following applications?
Source: BCG survey of CHROs or direct reports to CHRO, n=64

We are not considering it
We are considering it
We are implementing, piloting, or scaling
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Productivity impact

Sensitivity and risk

Where did they start?

What are they doing?

Value identified

Professional services firm facing significant
changes in demand for talent, including:• Greater quantity• Broader range of skillsets• Increased diversity

From 2020-2022:• Diagnostic including identification ofpain points and differentiators• Partner diligence and selection• Future architecture definition• Experimentation and pilots, including
workflow re-design and standardization,
training, RAI guardrails, change mgmt

75%+ solution adoption to date driving
impact at scale, including:In parallel, candidates and recruiters
dissatisfied with talent acquisition tools,
putting brand and ability to capture top-tiertalent at risk
Firm had formulated an organization-wide
recruiting vision and made progress on
quick wins, e.g., virtual recruiting tools
As next step, desire to pursue E2E digitaltransformation featuring GenAI toaccelerate performance, unlock time fordeeper human thinking and engagement
Source: BCG experience

From 2023-2024:• E2E scaling using agile approach (e.g.,
2-week sprints, dedicated product owners)– Consolidation from many complex
workflows to three global standards– Streamlining from 5x ATS tools to 1
• Continued RAI guardrail refinement• Iteration of candidate communications toensure ongoing transparency

20-25%

Decrease in time andexpense20-25%Overall recruiting cost
reduction

10-15%

Lift in offer conversion
per recruiter

Plus higher data fidelity, global KPI
standardization, and better recruiter +candidate experience
Lessons learned informing broader goforward HR opportunities
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Example 1 | Recruiting - Multi-year journey re-imagines recruitment
as part of broader professional services HR transformation

Example 1 | Recruiting – E2E re-design unlocks time
for more strategic, engaging work
Plan hiring
needs
Manually assess
and forecast talent
needs

Current
state

Align stakeholders
on forecast

Attract and source
candidates
Consult hiring
manager and otherstakeholders on
profile requirements

Manually develop,
review, and post
job ads

Future statewith GenAIAI predicts
workforce need withhuman involvement
HR verifies withstakeholders

GenAI createstargeted job
postings
HR review andapproves posts

Screencandidates

Facilitate
interviews

Manually review
resumes and cover
letters

Lead interviews foreach candidate

Select priority
candidates
Schedule interviews

Summarize andscore eachcandidate postinterview

Conduct phone
screenings

Send candidate
follow-ups

GenAI automatesresume synthesis,
highlighting
competency basedon specific skills

GenAI enables
video/text-based
interviews

HR develops
shortlist based on
GenAI output

Hire and onboard
candidates

Avg. duration andengagement1

Negotiate andextend offers

Illustrative

Iterate onboarding
process as needed

25-30%
30-35%

Oversee onboarding
for new hires

HR selects
candidates fromshortlist, meetspriority candidates

GenAI generates
personalizedcompensation andonboarding plans

1. Based on BCG 'toil v. joy' diagnostic responses to: How much do you agree with this statement "I enjoy this task"? From (1) - Strongly disagree to (5) - Strongly
agree; Source: BCG workforce diagnostic; BCG 'toil v. joy' diagnostic; BCG experience

Up to 50% reduced
time to hire

10-15%
35-45%

HR welcomes,
oversees
onboarding

Engagement level:35-45%

45-50%
Low

MediumHigh

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Recruitment andresourcing journey

Where did they start?

What are they doing?

Value identified

Global airline carrier running organizationwide improvement program as part of path
to recovery from COVID-19, which significantly
impacted flight crew staff:

Conducted holistic assessment acrosscorporate functions including:• Activity and time allocation• Potential GenAI impact, including
productivity, cost, engagement, and skills
disruption

In HR, two priority opportunities• Shared services center (focus of thisexample)• Recruiting and hiring

Impact on morale

Aligned focus opportunities: Finance and HR
Highdemands
on employeesHighattrition

Seeking to break this cycle by reestablishing employee satisfaction andoperational stability, exploring how GenAI
can help achieve these strategic goals

Source: BCG experience

Prioritized shortlist of workflows based on
pain points, and assessed data capabilities
for transversal use across organization
Detailed target state and business cases forpriority opportunities, including cost savings,
investment, and skill requirements
Developed implementation roadmap
including quick wins to fund the journey andlong-term investments

55-60%Of requests eliminated(e.g., due to errors,
missing information)

20-40%

Faster response time forremaining requests< 1 yrBreakeven point… Plus more efficient, consistent, andhigher-quality responses

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Example 2 | HR admin - Global airline carrier enhances
service speed and quality with GenAI in shared services

Example 2 | HR admin - Streamlined shared services workflow
enables faster, higher-quality service
Initiaterequests

Validaterequests

Employees sendquestion throughemail

Currentstate

HR adminconducts acompletenesscheck

Employee sends
question through
GenAI chatbot

Future statewith GenAI

1 Source: BCG workforce diagnostic; BCG experience

Chatbot engages
with questioner,
requests missing
info or redirects tocorrect
department asneededGatherinformation

Createresponses

From
From
original
otherrequester employees

HR adminpersonalizes
template andmanually writes up
a response,
sometimes
resulting in
discrepancies
between different
employees

HR admin sends
response

HR admin creates
response using
chatbot inputs andchecks forcompletenessHR admin sends
response

HR adminlooks uprelevant
policies

Ask forinput ifneededEmployee interacts
with chatbot in realtime; chatbot redirects
to HR admin as
needed for complex
inquiries
HR admin humanvalidation(during training only)

Send
responses

Avgerage responsetime

Up to 3days

20-40% reduction
in response timewith current tech

~2 days10

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Shared services
request processOrg designand op model

Talentand skills

Data, tech, andpartnerships

Risk and
responsible AI

Changemanagement

Restructuring HR,
including new roles
to address
governance, data
maintenance, andbias

Developing
professional skillsets
in HR to execute
against new roles
and requirements

Evolving data to fully
leverage GenAI and
expandingecosystem ofpartners to assemble
tool portfolio

Ensuring all
solutions arecompliant withGenAI regulations,especially those thatare HR-focused

Taking a sciencebacked approach tochange behaviors
and drive adoption,
engagement, andadherence
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To unlock value, HR leaders are investing in foundational enablers

Org design and op model | Today's siloed HR organization
will evolve to re-orient around the employee experience
CHRO

North
Star HR
Strategicalignment
aroundemployeeexperience,
including
new rolesthat shapeand govern
GenAI

Source: BCG experience

TalentecosystemWorkrhythms

HRBP

Product
owners

HR digitaland data

Ethics andbias

Unified E2E talentacquisition andmanagement
professionals
trained in dynamic"segment-of-one"skills analysis

Owners of highly
personalized,
behavioral scienceinformed, "in theworkflow" L&D
journeys andhuman/GenAI
collaboration
modelsManagerialcoaches working
shoulder-toshoulder withbusiness to drivechange, continuallyredesign work andteam structures for
optimalperformance

Specialized, techoriented
professionals who
shape solutions toincreaseengagement andretention(e.g. well-being,
compensation)

Strategic, dataoriented professionals
who link data flowsof business strategy
to dynamic strategic
workforce planningand advise on HR
technology, including
data maintenance

Governing roles thatwork across HR,
legal, and IT toproactively identify
and mitigate risk,
oversee compliance,and monitor models/algorithms for bias

Shared services
Critical forcing mechanism for short-term process/tool standardization, mid- to long-term evolution based on organizational strategy
Existing HR role

New HR role

Degree of change:

Low

Med-low

MediumHigh

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Co-leads transformation office to define case for change,
drive organization-wide initiatives, and ensure ROI

Talent and skills | Up/re-skilling and new hires will be required
to meet the demands of these highly evolved and net new roles
Across three HR roles with the highest business impact,
deep up/re-skilling required amid 55-75% skill disruption…plus hiring of new profiles

Extent of skill disruption and example upskilling required for top 3 roles by business impact
HRBP
65%
10%
25%

Exampleupskilling
required••Interpersonalcommunication•

Problem solving•

High: Upskilling required
Source: BCG analysis LightCast skill taxonomy; BCG experience

L&D

Recruiter

45%

45%

10%

10%

45%

45%

Behavioral
science
L&D strategy

For new roles to govern,
shape, and build GenAI…
• RAI/ethics experts• HR/IT experts
For evolved roles requiring
more specialization,
advanced degree holders in
topics including…

•

Talent sourcing• Behavioral science•

Relationshipbuilding• Programming

Moderate: Less important• Data science

Low: Keep and adapt
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Not exhaustiveData, tech, & partnerships | For HR organizations lagging in data foundations,critical to address upfront and factor into GenAI investment priorities

1

Data silos

HR data often housed across different, siloed
systems – need to centralize in unified platform
2

Data quality and inconsistency

Disparate systems often lead to inconsistent
data entries and formats – critical to standardize
and establish data governance3

Legacy systems

HR often using legacy systems that do not
integrate with GenAI tools – upgrades required
to enable data integration and security

Opportunity to invest in data readinessand GenAI solutions in parallel
Example GenAI opportunities to pursue inparallel to HR data preparation:• Recruiting and onboarding content: Writing
job descriptions, marketing emails, personalized
onboarding; relies on existing job descriptions/materials• Recruiting admin: Automating scheduling, andgenerating reminders and follow-up
communications; does not require employee data
• L&D recommendations and content: Suggesting
trainings and developing content; requires basic
employee data, training records, and existing
content that is easier to clean and maintain
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HR organizations commonly need toovercome 3 barriers to prepare for GenAIData, tech, & partnerships | ~80-85% of HR organizations are exclusively
buying or assembling built + bought solutions

Description
Advantages

Disadvantages

ExamplesCore systems (e.g., CRM)

Point solutions

Integrated platforms with GenAI intheir product roadmaps

Specialized GenAI-powered tools
designed for specific HR activities• Enterprise-grade technologies• Streamlined integration• Able to achieve step changes incapabilities (e.g., via acquisition)• Leveraging pockets of innovationthat are fast to market• Typically, flexible pricing• Often faster to implement• Typically, higher cost and longer
time to implement• Risk of lower quality in some
capabilities vs. point solutions• May "lock" into one partnership• Across E2E HR requirements, may
not be cost-effective• Risk of data fragmentation• Risk of partner being acquired bylean core players• Human capital management
platform• Skills-based talent development
tools

Source: BCG survey of CHROs or direct reports to CHRO (n=64); BCG experience

Five guiding questions for HR
GenAI partnership decisions
Compatibility

How well does the solution integrate with existing
HR systems and data?

Functionality

Can I afford to wait for my core system provider(s)to add GenAI functionalities? Or do I need to act
now (i.e., build)?

Data security/compliance

Does the solution provide adequate protections
for sensitive HR data? Comply with data privacy
and security regulations?

Scalability

Can the solution scale with our evolving needs?

Cost/ROI

What are the initial and ongoing costs, andexpected ROI?
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Spectrum of partner solutions available based onorganizational needs and priorities

Risk and responsible AI | Many emerging GenAI regulations explicitly
address HR given the high sensitivity around its data and responsibilities
Not exhaustive
July 2023

May 2024

May 2024

Expected 2024

NYC AI Regulations(Local Law 144
of 2021)1

EU Artificial
Intelligence Act3

Colorado Artificial
Intelligence Act(CAIA)4

EU, US,
Cross-border• Regulates how GenAI isused in hiring andpromotion decisions• HR must conduct annual
audit for potential bias
in automated employment
decision tools and provide
subsequent notice2• Given that GenAI tech for
HR falls into highest risk
category, HR orgs willneed to meet stringent
requirements (e.g., data
governance, transparent
candidate comms,
compliance obligations,
incident reporting)HR orgs will be required to:• More regulations are
expected targeting HR• HR must monitor ongoingcommissions & regulations on
the horizon including
No Robot Bosses Act(prohibits sole reliance on
automated hiring decisions),
AI Pact (network to support
organizations’ AI compliance)

Regulation

Potential
implicationsfor HR• Enact and report on riskmanagement policy togovern GenAI tool use• Conduct annual impact
assessments to identify
algorithmic bias
• Alert candidates of AI
use in hiring decisions

Disclaimer: For informational purposes only - does not constitute legal advice; 1. In effect as of Jan 1, 2023; 2. Defined as computer-based tools that use AI, machine learning, statistical modeling, ordata analytics to help employers make employment decisions; 3. Passed March, 2024, going into effect Summer 2024; 4. Signed May 2024, going into effect February 2026;
Source: City of New York; State of Colorado; European Commission; U.S. Congress; BCG analysis

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Geo…Underscoring the importance of HR complianceand proactive risk mitigation

HR mustproactively
anticipate
manypotential
risks,
including…

Changemanagement

Governancevs. speed

Data security
and model bias

Regulatory
conformity

Candidateexperience

Addressing resistanceto changes in ways
of working

Balancing compliancewith momentum

Avoiding exposure ofsensitive data andbiased outputs

Setting up to comply
with new HR-focusedlaws/regulations

Minimizing
performance issues
during rollout• Upskill early andcontinuously, startingwith leadership• Provide clear
decision-making
model on E2E work
re-design while
anticipating tradeoffs• Create new role(s)responsible forsystematic model
oversight, including
bias prevention• Start small withpilots to minimize theimpact of the firstrollout• Establish clear,streamlined
governance processes
with a focus onprioritizing security,
action, andproductivity gains• Prioritize redteaming and otherstress tests toactively address risk

• Ensure proactive
monitoring of GenAIspecific regulations to
inform partnerships,
models in use, andsolution design• Build personalizedchange journeys with
tailored behavioral
science interventions• Identify and measure
adoption and value to
track progress, inform
solution iteration

Source: BCG experience

Additional detail follows• Consider dedicated
HR-IT roles for data
oversight• Develop ongoingregulatory training
to ensure leadershipand workforce areinformed• Prioritize
transparency where
possible during pilot
and rollout, fostering
spirit of co-creationand ongoing
communication
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Copyright © 2024 by Boston Consulting Group. All rights reserved.

Not exhaustiveChange management | To ensure adoption, engagement, and adherence,a proactive change program grounded in behavioral science is required

Personalized change journeys

Closed feedback loops

2x adoption rate with personalizeduser journeys that leverageinterventions based on behavioral
insights, pain points, and psychologicaltraits

Always-on change monitoring, e.g., toinform feedback loops and respond to
90% of employees seeking regularleadership communication

Accuracy

Nudges
Subtly guiding behavior withoutforbidding options or significantly
changing economic incentives; e.g.,changing default options, highlighting
peer benchmarks to boost desired
behavior 55-60%
Source: Behavioral Science Lab; BCG workforce diagnostic; BCG experience

Trust
GenAI
adoption

Co-creation

Usage

For example, collaborating withrecruiters to re-design talentacquisition processes and develop
supporting set of GenAI solutions

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Four levers to catalyze the flywheel of behavioral change

Three steps for HR to begin the GenAI journey

Upskill leaders in HR and across the organization,
including ongoing hands-on experimentation (e.g., everyday
tools, custom GPTs, and agents)

Prepare data (e.g., mapping data sources, implementing
centralized HRIS platform, standardizing formats) anddevelop guardrails to ensure reliability and compliance19

Copyright © 2024 by Boston Consulting Group. All rights reserved.

Build an integrated GenAI roadmap, grounded instrategic HR goals, and collaborate with leadership tochart the enterprise-wide transformation journey

BCG Experts | Key contacts for HR AI transformation
NAMR
AllisonBaileyDavid
MartinJulie
BedardRenee
Laverdiere

Dylan
BoldenBill
BeaverFrank
Breitling

Tauseef
Charanya

Julia
Dhar

KristyEllmerSesh
Iyer

Matthew
Kropp

Juliana
Lisi

Vladimir
Lukic

Rajiv
ShenoyNithyaVaduganathanCharles
WestrinVinciane
Beauchene

Jens
Baier

Jaap
Backx

Nicolasde Bellefonds

Nina
Kataeva

Erik
LenhardJulia
MaddenTom
Martin

Dan
Sack

Ben
Shuttleworth

Marc
SchuuringSebastianUllrichAshishGarg

Sreyssha
George

Sagar
Goel

Chris
MatteyFang
Ruan

Jeffrey
Walters

APAC

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