The critical role of HRM in AI-driven digital transformation: a paradigm shift to enable firms to move from AI implementation to human-centric adoption

Abstract

The rapid advancement of Artificial Intelligence (AI) in the business sector has led to a new era of digital transformation. AI is transforming processes, functions, and practices throughout organizations creating system and process efficiencies, performing advanced data analysis, and contributing to the value creation process of the organization. However, the implementation and adoption of AI systems in the organization is not without challenges, ranging from technical issues to human-related barriers, leading to failed AI transformation efforts or lower than expected gains. We argue that while engineers and data scientists excel in handling AI and data-related tasks, they often lack insights into the nuanced human aspects critical for organizational AI success. Thus, Human Resource Management (HRM) emerges as a crucial facilitator, ensuring AI implementation and adoption are aligned with human values and organizational goals. This paper explores the critical role of HRM in harmonizing AI's technological capabilities with human-centric needs within organizations while achieving business objectives. Our positioning paper delves into HRM's multifaceted potential to contribute toward AI organizational success, including enabling digital transformation, humanizing AI usage decisions, providing strategic foresight regarding AI, and facilitating AI adoption by addressing concerns related to fears, ethics, and employee well-being. It reviews key considerations and best practices for operationalizing human-centric AI through culture, leadership, knowledge, policies, and tools. By focusing on what HRM can realistically achieve today, we emphasize its role in reshaping roles, advancing skill sets, and curating workplace dynamics to accommodate human-centric AI implementation. This repositioning involves an active HRM role in ensuring that the aspirations, rights, and needs of individuals are integral to the economic, social, and environmental policies within the organization. This study not only fills a critical gap in existing research but also provides a roadmap for organizations seeking to improve AI implementation and adoption and humanizing their digital transformation journey.