AI in HR is no longer just for simple automation—it’s a driver of business transformation.

To meet evolving business demands, improve efficiency, and streamline processes, HR leaders need to take full advantage of the newest AI capabilities. Successful organizations have found a way to integrate AI into foundational HR solutions and move their HR teams from reactive to proactive, strategic enablers.

But where do HR leaders start? A new report provides a pathway. In Maximizing the Impact of AI on Core HR, Time Management, and Payroll, the experts at The Josh Bersin Company provide compelling examples of how companies are using AI to structure data, elevate insights, and transform foundational HR management systems (HRMS). The report also includes critical AI case studies that HR leaders need to know—for employees, managers, and HR teams alike.

Where AI and human resources meet

To realize the full potential of AI, high-performing organizations should first understand how AI uses data within foundational HRMS. The new report looks at three key areas:

1. Core HR systems contain employee data like job roles, career history, and personal information. This data can now be used to streamline HR transactions with advanced automation, help recruitment efforts with AI analysis, and improve career development with AI assistants.
2. Time management systems include data on employee work patterns, attendance, and overtime. This data can now help improve workforce efficiency and keep an eye on employee well-being with AI analysis and evaluations that proactively identify burnout risk. It can also optimize scheduling with AI tools that balance availability with new business demand.
3. Payroll systems provide data on compensation, benefits, and deductions. This data can now help detect and mitigate payroll disparities with AI analysis, predict employee attrition with machine learning, and improve payroll accuracy with AI-assisted anomaly detection.

The biggest HR challenges today

Despite the possibilities of AI, many leaders see core HR, time management, and payroll systems as nothing more than necessary administrative tools—not catalysts for transforming their business. This limited view causes leaders to focus solely on implementing human capital management (HCM) solutions from a technical standpoint. But that can lead to—or simply not address—major challenges for HR, including:

• Increased HR workload with decreased headcount and budgets—which inevitably lead to gaps in productivity.
• Disconnected HR processes that cause inaccurate or untimely payroll and reduce employee satisfaction.
• Complex legal and regulatory requirements when operating in multiple geographies that increase the risk of noncompliance.
• Less transparency in HR data that hinders decision making, alignment with goals and budgets, and true measurement of HR’s business value.
• Legacy HR technology that struggles to keep up with both current and future business needs.

Preparing for AI with an integrated approach

So, what is HCM’s role in overcoming the biggest challenges HR faces? With the latest AI innovations integrated into HR software, the possibilities are virtually endless. To turn HCM challenges into success stories, HR leaders need to think bigger—and comprehensively—about how to approach implementing AI. As the report stresses, taking on core HR, time management, and payroll systems in silos won’t work: Successful organizations take a step back and follow a systemic approach that touches on key business imperatives.

SAP SuccessFactors HCM can help, with AI-enabled solutions that allow HR leaders to manage an entire workforce from a single cloud platform:

• Streamline your HR technology landscape with connected solutions for core HR, time tracking, and payroll—to reduce manual HR tasks, accelerate payroll processing, and streamline operations.
• Create memorable employee experiences that drive workforce engagement with a single platform that helps you manage every stage of the employee lifecycle.
• Make informed workforce decisions with actionable insights from across the organization—including HR, finance, procurement, and more.
• Balance employee needs with regulatory requirements using localized cloud solutions that help strengthen compliance and reduce risk.