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  • Writer's picturePeter Sondergaard

The Skills-based organization and AI Skills

Updated: Mar 14, 2023

As AI matures, more and more tasks will be supported or taken over by software tools enabled by AI. This statement many will agree with. However, few consider how this profoundly impacts how jobs are structured in organizations, the evolution of skills, and how work is done. These changes will require CEO and HR focus over the following years as they will have varied impacts on the organization, its people, customers, and suppliers. Let's explore how AI impacts the way we manage organizational skills in the future. And how we need to manage both human skills and AI skills in combination? The emergence of AI skills coincides with many organizations moving to manage skills, not jobs.[1]. But as AI becomes able to replace skills in specific work environments, managing skills will become about combining human and AI skills. The term AI skills" is not a current term especially applied to general job skills. As we advance, we will use AI skills to describe software solutions involving one or more algorithms or ML environments that, combined, mimic a specific skill that makes up part of a job performed by a human. AI skills exist today in AI solutions for legal clerks, radiologists, and call center staff, to mention a few. As solutions mature, more human skills will be replaced by AI skills. Managing the combination of human and AI skills will challenge all managers in organizations and will place significant requirements on HR organizations to actively understand and manage AI.

For a few years, there has been a trend within HR of focusing on skills rather than merely on job descriptions. Understanding the organization's total skills or competencies has become more critical as work gets more complex and agile. Hiring for skills has become essential. Planning and managing the organization's skills allow for a more precise focus on learning & development and more accurate hiring profiles. In many organizations, spearheaded by HR, understanding the organizations' skills today and for the future has become a critical pillar of the overall strategy. Equally, individual employees are starting to appreciate that understanding and improving their critical skills instead of just focusing on their job description is a more accurate career development approach. Focusing on skills would force significant organizational shifts and the overall job market in a world without AI. However, with AI increasingly replacing tasks and skills, the organizational shift to managing skills becomes even more daunting.

AI's impact on skills, rather than on replacing jobs, is where CEOs and CHROs (Chief Human Resource Officers) should focus going forward. We have for some years discussed AI replacing jobs. And for some jobs, that may eventually happen.[2]. However, something other than the jobs, namely skills, will be replaced initially. Even if a group of people has the same job title, for example, a legal clerk, the job (or combination of skills) required may vary between law firms. This will be true for many different jobs. But specific skills needed to perform a job will often be comparable between organizations. AI will be far more effective in replicating and improving particular skills than entire jobs for many years to come. Strategically managing skills across the organization becomes one of understanding the future requirements and how these evolve from both a human and AI perspective. CHROs will need to dynamically monitor how AI software evolves and where it can replace human skills or, in other situations, augment them. All people managers will need to understand how to manage human and AI skills in combination and project how the balance of the two may change over time.

As CHROs consider the impact of AI skills on their skills-focused initiatives, they will need to consider a few specific things:

  • Evolving nature of AI skills: AI skills are not constant. The software evolves as the algorithms improve. Equally, with more data, the AI skill itself will improve. Most often at a much faster pace than how humans improve their skills. For example, AI skills software to handle paralegal work will rapidly improve based on increased data quality, improved AI training data, and constant fine-tuning of the algorithms. This will result in improvements in the outcomes of a particular AI skill and will likely also result in humans needing to change how they work. When some of the skills in a basket of skills (this basket of skills could be a specific job) improve faster than others, it changes the balance of work performed and will likely require humans to develop their skills more quickly.

  • The endurance of AI skills: AI skills don’t need a vacation. The point is that AI skills could run 24/7, thus addressing attrition, variability in productivity, and location independence, to mention a few differences with human skills. The variability between AI and human skills will lead business leaders to plan work differently. For example, suppose the analysis of x-rays can be done more accurately with AI skills than by a qualified nurse. In that case, this activity may be run at night, allowing humans to address the outcome of the analysis during the day shift. Or if the analysis is done instantly, the doctor can determine potential actions, minimizing delay for the patient. Business leaders will need to assume that a more constant or agile alignment of skills will need to happen because one skill category, AI skills, will change more rapidly.

  • Adapting your skills-based workforce model. Organizations are rapidly learning how to do skills-based workforce planning, but most assume that they are only planning for human skills. AI skills will require a different approach to skills-based planning. And the combination of the two will become highly complex for most organizations. In preparation for this, HR organizations should give a key HR executive the responsibility to track the evolution of AI skills and the emergence of new AI skills that may affect the skills-based workforce model of their organization. This work by HR must be done in close collaboration with business unit leaders and the IT organization.

  • Managing and leading an organization with AI skills. Managers and the executive leadership team in all organizations must prepare to manage human and AI skills in combination. This will entail developing management and leadership skills to understand Data and AI leadership capabilities (understanding your digital organizational capabilities can potentially be achieved through the methodology and survey tool created by DI2X). Without the ability to manage an organization with a combination of human and AI skills, little benefit will come from deploying AI skills. Organizations that master the joint management of both skills will see increased results. The emergence of AI skills forces CHROs to rapidly address the need to develop digital organizational capabilities of all managers.

For CEOs and the executive team of the organization, now is the time to start rethinking organizational skills and take a more strategic approach to better utilize and integrate AI skills with the human skills of the organization. While the broad adoption of AI skills will be slower than the headlines suggest, the ability of humans to change will also take time. Building a combined human and AI skills approach is essential now.

[1] Explore this Deloitte report on The Skills-based Organization [2] See the report published by Brookings Institution. The report details how many white-collar jobs will be affected and, sometimes, replaced by AI.

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