Generative AI is leaving many businesses in a fix.
On the one hand, the potential of the technology is strikingly obvious. Since ChatGPT debuted to the public in late 2022, AI has made extraordinary advances. Coding tools can spin up micro apps from a simple prompt. Chatbots can produce instantaneous research. Video models can create studio-grade clips. Tools like these can supercharge all kinds of work, whether it’s helping create a whole marketing campaign or simply assisting an individual reason through a thorny problem. One estimate sizes the corporate opportunity at $4.4 trillion globally.
Yet it can be bewilderingly hard for enterprises to realize those gains. Studies show that generative AI is having limited impact on productivity. Many organizations find themselves either stuck in pilot purgatory, or rolling out initiatives that fail to deliver ROI. Others don't even know where to start.
This issue is especially pronounced for smaller enterprises. In fact, research suggests that AI is seen as the number-one challenge by four out of five small business leaders in the UK. Small firms are half as likely to have implemented it compared to larger companies. And within the small companies that have adopted AI, usage is often uneven. Seventy three percent of senior managers use it at least once a month, compared with only 32 percent of entry-level employees. This creates what Kevin Fitzgerald, UK Managing Director of the all-in-one employment platform Employment Hero, calls the “AI advantage gap.”
“AI is only delivering productivity gains for some, and that’s a huge problem,” he says. “For technology to drive meaningful change, it needs to be in the hands of everyone.”
Human resources (HR) departments are uniquely positioned to help manage some of the challenges around AI adoption. That’s because taking full advantage of the new AI tools available to organizations is more than just an IT project. “AI is all about job redesign, new skills, new organization structures, and new roles for leaders,” says Josh Bersin, a respected HR industry analyst and CEO of HR consultancy The Josh Bersin Company. “HR people are essential as part of companies’ AI transformations.” In practice, this kind of project tends to be easier for smaller businesses, which have fewer employees and less organizational complexity to disrupt.
Bersin says that Chief Human Resources Officers (CHROs) now frequently lead AI-based organizational redesigns. Going further, almost two thirds of IT decision-makers expect their HR and IT teams to merge in the next five years, according to a recent survey. This is already happening at companies such as Moderna, the biotech firm with more than 5,000 employees, which now has a single leader covering both.
“HR has a once-in-a-generation opportunity to reshape the future of work,” says Fitzgerald. “And it’s important to get this right. Bad AI rollouts can slash personal productivity in half.”
So what does HR-led transformation look like in practice? Here we spotlight three ways HR leaders can set their organization up for AI success…
1. HR as pioneers
Leading on AI transformation means deeply understanding training needs, integration challenges, employee resistance and—fundamentally—how and where AI offers value. This means HR professionals need real experience of those things themselves.
There are many HR tasks to which both traditional machine learning and generative AI is well suited. Much of the press buzz is around recruitment—using AI to source candidates, screen CVs, and automate parts of the application process—but its impact can be much broader. The creative and communication side of the job is a natural fit for the capabilities of large language models (LLMs), which excel both in summarizing and expressing information. Whether it’s drafting job descriptions, communicating complicated policies in plain language, or managing the team’s internal knowledge, there’s plenty that an LLM can help with (so long as it offers appropriate privacy assurances). There are a range of options for deployment, from buying tools that package up an LLM for delivering on a specific use case—such as offering AI training programs or building FAQ chatbots—to simply subscribing to a frontier AI assistant like ChatGPT.
The most immediate benefit is the potential gains for the HR team itself. Handing off repetitive tasks to AI can free up time. But it’s also the baseline for any HR team that is planning on leading the way in a business’ AI transformation, because credibility will be vital.
That’s not to say that it should only be HR leading the charge on AI—Bersin says that more often than not having a dedicated committee with representatives from HR, legal, and IT is most effective—but it’s a necessary criterion for playing a central role. “It’s about leading by example,” says Fitzgerald. “People don’t want technology forced on them—they want to see its benefits, and be given the freedom and encouragement to explore it.”
Of course, much of HR’s AI usage will be internally facing, so there’s a comms job to be done. “My advice to the HR leader would therefore be: share,” says Fitzgerald. “Share the wins that you've had, and actually put them out there to the broader business.”
2. HR as culture definers
Establishing the right culture around AI is vital. “It’s the missing link in AI adoption,” says Deepali Vyas, Global Head of Data & AI at global talent advisory firm ZRG.
There are two crucial reasons for this.
The first is that when a company chooses to roll out AI, it can create ill feelings. People can fear it’s a prelude to cost cutting and job losses. Of course, an organization may be planning to downsize—but equally it could be planning to do more with the same number of people. Whatever the plan, be transparent. If nobody needs to worry about their jobs, tell them. If a restructure is likely, fair dealing and honesty can go a long way to attenuating resentment. HR has the authority and the skills to lead on conveying this information in the most effective and appropriate way.
The second reason concerns “shadow AI.” This is where employees use AI tools of their own without telling management, either because they fear for their jobs or because they view AI as a shortcut and don’t want to pull back the curtain on how they get things done. Shadow AI is already widespread; the security firm Varonis estimates that up to 98 percent of employees use shadow AI or shadow IT in some capacity, with employees hiding their AI use out of fear of their employer's reaction.
While the primary risks of shadow AI are to do with security and privacy, there is also a more systemic drawback. Top-down AI tool implementation can be important, but companies that don’t also tap into the wisdom of the crowd will miss out on AI opportunities. Generative chatbots are general-purpose tools with the most open-ended interface possible: there are countless different ways to use them, and the people best placed to figure out how this kind of AI can help your business are the people who work there. But you can’t enjoy the fruits of their experiments if they are unwilling to share how they’re using it and what they’re discovering as a result.
“You really need to bring shadow AI use to the surface,” Vyas says. “In any case, banning or ignoring shadow AI is not going to make it disappear. It's only going to drive it further underground.” Bringing it out into the light is, again, a question of culture. If IT owns guardrails and platforms, and the C-suite owns vision and accountability, HR owns the people and behaviors piece. In addition to quelling fears that revealing AI usage will jeopardize jobs, HR needs to create forums to encourage sharing across all teams. This could take the form of workshops and hackathons or simply dedicated channels on Slack. There should also be incentives, so that individuals who come up with approaches that create meaningful value are well remunerated for their contributions.
“There's a lot of fear versus empowerment,” says Vyas. “HR’s cultural mandate is building a culture of AI fluency, normalizing AI as a partner in work and to build trust around its use.”
3. HR as organization designers
AI transformation is not just about rolling out the tools. You need teams with AI literacy, skills and mindsets—teams that are open to new ways of working and to reimagining workflows that have perhaps remained unchanged for decades. You may also need to create new roles like a Chief AI Officer, or hire specialist software developers.
“It's about building that future-ready workforce,” says Vyas. HR’s expertise in recruitment and training will be crucial in this effort—only half of employees in SMEs believe their company has done a good job instilling technological know-how—and AI itself can play a powerful role in making a success of it. Forward-thinking organizations weave AI into workforce management, from how workers move internally to how they train and learn, Vyas says. “There’s personalized learning journeys, there's internal mobility recommendations, there's workforce planning tied to all of these business scenarios.”
As they scale, companies may wish to rethink their org charts in light of AI. The traditional triangular org chart has been a mainstay since Brigadier General Daniel McCallum unveiled the first example in 1855. But many commentators believe that new architectures will coalesce to reflect how people work best with AI. Microsoft’s Work Trend Index Annual Report 2025 argues that the org chart will be replaced with a “Work Chart,” which it describes as “a dynamic, outcome-driven model where teams form around goals, not functions, powered by [AI] agents that expand employee scope and enable faster, more impactful ways of working.” In practice this means a flatter, more flexible operating model. Firms that have harnessed AI in this way report having more satisfied, more optimistic employees.
HR will need to play a pivotal role in managing any such transformation. “That’s not only because most savvy HR leaders are also very good at change enablement,” says Bersin, “but also because this clearly would have implications for pay models, reward systems, and leadership pipeline.” What’s more, Microsoft argues that in a Work Chart world, orchestrating the interplay between humans and AI agents—and getting the balance right—is going to be an emerging area of responsibility for HR. In discharging this duty, they will need to collaborate more closely than ever with technical teams.
This shift may seem radical. But, as the aphorism has it, it's easy to underestimate the long-term effects of new technologies. Vyas believes this kind of business architecture will just be “the new normal—and sooner than we might think”.
