The challenge for HR? 'Many overcomplicate AI by fixating on its technical complexities and striving for an ideal solution,' says expert
There has been a “dramatic rise” in generative AI (Gen AI) adoption across key business functions, as companies move from cautious exploration to rapid integration, according to a new study from the Wharton School of the University of Pennsylvania.
In talking to more than 800 enterprise decision-makers across the U.S., they found a rapid evolution of AI usage across business functions.
Notably, AI adoption in Marketing and Sales tripled, from 20% in 2023 to 62% in 2024, with AI usage in Operations, HR, Purchasing, and Procurement doubling.
“Generative AI has rapidly evolved from a tool of experimentation to a core driver of business transformation,” said Stefano Puntoni, Sebastian S. Kresge Professor of Marketing at the Wharton School and Co-Director of AI at Wharton. “Companies are no longer just exploring AI’s potential — they are embedding it into their strategies to scale growth, streamline operations, and enhance decision-making. The novelty phase is over. We’re now starting to see the integration of AI into various business processes, as companies look to unlock its long-term value across the enterprise.”
However, many HR teams are split in their approach to AI adoption, according to Monir Azzouzi, tech leader and author of ChatGPT-Powered HR: The Ultimate HR Playbook.
"[There are] two groups, the HR people who are concerned about AI and the many risks, typically the same group who resisted cloud systems... and then there [are] those who are embracing new tech, including AI," he explains.
For forward-thinking teams, AI represents more than a system upgrade, says Azzouzi.
"The transition from process digitalization to data-driven decision-making and predictive capabilities represents a major advancement. This evolution enables the integration of diverse datasets from various systems, facilitating rapid analysis and the creation of valuable insights at speed we’ve never experienced before."
For Azzouzi, many HR teams get caught in “unnecessary complexities” when adopting AI.
"Many overcomplicate AI by fixating on its technical complexities and striving for an ideal solution. Instead, they should adopt an iterative approach, concentrating on addressing the inherent risks and biases of AI rather than the technology itself," he notes.
The focus often falls on technical aspects while overlooking human elements: "Meanwhile, where they under think is the cultural implications, like employee trust, data privacy, the bias in the systems... We have to remember we need to train the [AI systems] and when we train them, we are humans. And humans are biased, whether we like it or not."
AI's real value lies in freeing HR from routine tasks, Azzouzi says.
“Ninety per cent of HR operations and 50% of what traditional HR business partners (HRBPs) are doing can be done by [Gen AI], if you train the bots properly."
This automation creates space for strategic work: "Today, HRBPs are always complaining [that] a lot of their work is focused on transactional very low value adding work. [However,] if AI is implemented correctly, they can do much more value-added work moving forward."
Before implementation, Azzouzi emphasizes clear objectives and quality data.
"First of all, you need to have clear objectives... then you move on to the next critical area, which is the data. Do you have the enough and the right data? Is the quality of the data good enough to rely on?"
He warns against rushing without preparation: "You can't do a company-wide adoption without a clear strategy and objective. A lot of companies lack the understanding of the technology, and they just want to do it because they don't want to be left out."
On managing AI access, Azzouzi recommends a practical approach.
"Restricting AI access on work laptops often leads employees to use personal devices, which can compromise data security. Instead of imposing blanket prohibitions, implementing an enterprise AI solution ensures that data remains under organizational control."
His experience shows structured implementation yields better results, by providing comprehensive training on leveraging generative AI, emphasizing both its advantages and associated risks.
Rather than centralizing AI implementation, Azzouzi advocates wider ownership.
"I've consistently opposed centralizing digital initiatives within a single department. Each department should identify the most effective areas for digitalization to enhance their specific operations."
He recommends mapping user journeys: "I evaluate every moment that matter. For the candidate journey I would look at the journey for recruiters, candidates, hiring managers and others involved. Yes, even the forms, systems and tools used to ensure the best experience for everyone involved."
Azzouzi outlines essential competencies for HR professionals in the AI era.
"We need to embrace a product manager mindset. We don’t need to have deep technical understanding, but we need a mix of AI literacy and basic technical understanding combined with skills to get insights from data to make the correct strategic decisions."
He emphasizes that “our job will be to filter the information we receive and ask ourselves ‘Is this really correct? How can I use this to maximize business impact?’"
Change management and communication also become vital, says Azzouzi.
"We need to become much better at not just guiding but driving and enabling organizations through digital transformation... [and be] great at explaining the value and impact of AI in the workforce."
Design thinking further plays a key role, he says.
"Integrating human-centered design with technology is crucial for creating optimal experiences that advance the company's strategic objectives. This approach goes beyond engaging initiatives; it involves streamlining processes by eliminating bureaucratic obstacles, rethinking organizational structures, refining decision-making procedures, and adjusting management spans of control."
While embracing AI's capabilities, Azzouzi stresses the importance of human judgment in HR.
"AI operates based on algorithms and lacks the capacity for empathy. For instance, if an employee's performance declines due to the recent loss of a parent, it's essential to recognize and accommodate such circumstances. AI systems are not equipped to understand or respond to these human factors."
He advocates for continuous learning and adaptability: "As AI continues to advance, it's critical to proactively consider the evolving nature of work. We must identify new roles that emerge as AI assumes certain tasks and focus on reskilling employees for positions that AI cannot perform. This approach ensures a workforce that remains adaptable and valuable in an AI-driven environment."
Azzouzi maintains perspective about AI's current state.
"AI systems often function as ‘black boxes,’ meaning their internal processes are not transparent. They can also produce ‘hallucinations,’ generating outputs that appear plausible but are factually incorrect. These issues highlight the need for caution and critical evaluation when interpreting AI-generated information."
Reflecting on AI's pace of evolution, Azzouzi shares an example from a conference where he presented after a speaker presenting about future-proof jobs according to the World Economic Forum.
"I started off saying, whatever research they did is more than six months old... In the meantime, one of my friends started up an AI company, and that AI company is having capabilities that are taking over jobs that the previous presenter said [were] safe jobs."
“HR leaders and management must grasp workforce planning by identifying the roles and capabilities required now and in the future. This understanding enables effective reskilling and upskilling of employees, ensuring organizations remain agile and competitive."
"We need to foster a culture of experimentation as AI continues to advance. AI is only becoming more advanced. We must continually adapt our roles, embracing the iterative approaches that HR has advocated for over a decade," Azzouzi adds.
The ethical implications of AI adoption also require careful consideration, he says.
“The ethical implications of AI adoption require careful consideration. We need to evaluate these implications, focusing on bias and ensuring transparency. Privacy considerations are also paramount. Many employees may feel that implementing such tools is a means to monitor them. Therefore, it's essential to engage in thorough communication to ensure proper implementation."
For HR professionals, Azzouzi concludes that success lies in balancing technological advancement with human relationships.
"We must cultivate trust within our organization by maintaining a human-centered approach. This ensures that, even when technology falters, our humanity remains intact."
