Artificial Intelligence (AI) promises to transform how business teams work, from streamlining everyday tasks to nurturing big-picture innovations. A new SAP report, however, reveals that HR leaders face major obstacles in preparing their workforce for AI. Surveying workers across different regions and industries, the findings show that widespread fears, practices, and policy barriers around the technology are inhibiting AI readiness.

The report surveyed over 4,000 full-time permanent employees, including over 2,600 people managers, about AI in the workplace. An additional poll of over 480 HR professionals examined AI usage among their departments. Interviews from 79 HR and IT professionals from 59 SAP SuccessFactors customer organizations also offer in-depth context behind the survey numbers.

Combined, the results provide important insights for HR professionals getting their workforce AI ready. Preparation has become a top priority for the industry, especially as more companies plan to explore and launch enterprise AI systems in their operations. With this in mind, we break down four key factors impacting employee AI readiness from the report, so HR professionals can incorporate effective strategies into their talent management programs.

1. Low AI literacy leads to fearful attitudes toward AI

Employees with low AI literacy levels expressed far more negative views toward AI in the workplace. These respondents were six times more likely to feel apprehensive and seven times more likely to feel afraid of using AI at work. They were also eight times more likely to feel distressed about using AI when compared to more AI-savvy employees surveyed.

The less AI-skilled group also had lower expectations about the technology’s benefits, even when asked about the specific AI tools they wanted the most. They expected use cases to have a 1.4 to 1.5 times less positive impact on their work experience compared to respondents with higher AI literacy.

These findings suggest that employees who don't understand AI are less likely to feel positively about and use the technology. To encourage stronger AI literacy among employees, HR leadership can help reframe these negative feelings by offering educational exposure to AI.

2. Employees aren’t following responsible AI practices

Content created using generative AI should be clearly marked and checked by experts to reduce potential AI bias and inaccuracy. According to survey results, however, employees in practice weren’t as up-front about how they use AI-produced material. Only 23% of employees said they always report the use of AI-generated material in their work to supervisors, while 9% said they never do.

While these behavioral patterns may ring alarm bells, the report attributes this AI ethics issue to the absence of responsible AI codes of conduct at many companies. As the technology evolves, employees will need explicit and ethical AI guidelines from HR on when and how to apply generative AI solutions in their work.

3. AI distorts managers’ expectations of employees

Overall, surveyed managers expressed high readiness in leading teams that use AI solutions. Up to 85% of managers said they’re ready to adjust their approaches to the training, guidelines, and assessments of employees using AI. The report, however, flags feedback suggesting that expectations around AI warp managers’ opinions about fair employee evaluations and compensation.

When asked whether AI should influence performance reviews, many managers believed that employees who use AI should receive better performance reviews than non-users, even if their work is consistent. Many respondents also said it’s fair if employees using AI are paid less than non-users, even if both groups have the same performance levels.

In practice, these views devalue the work of employees who use AI. Expecting higher performance for less pay would only disincentivize workers from adopting the technology. Recent SAP research suggests these views have already influenced employees, especially those with low AI literacy rates. The survey found that 44% of workers with low AI literacy believed AI-using employees should be paid less than those who don't use AI.

These attitudes don’t reflect how AI solutions are designed to supplement rather than replace human expertise. Workers using AI will employ a different yet equally competent set of skills needing fair recognition and pay. HR professionals will need to work with supervisors to standardize how AI impacts internal mobility, performance management, and evaluations.

4. HR professionals need more resources and flexibility

HR professionals are already embracing AI to save time and improve their overall productivity. However, the research participants reported mainly using generic AI tools rather than specialized HR applications. Use cases focused on communication and content creation, including generating text and images, summarizing documents, and analyzing data. Participants said the largest barriers to broader AI adoption for HR professionals were:

• Organizational rules and restrictions around AI usage
• Limited knowledge of available AI solutions
• Limited time to research potential AI applications
• Lack of resources for paid AI tools

HR professionals will need more time and resources to explore and integrate specialized AI solutions. Purpose-built AI for HR systems can offer a broader scope of applications catering to recruitment, onboarding, and performance management. A recent SAP survey also suggests that employees respond positively to AI usage in HR, especially during the hiring process—despite their mixed attitudes toward using AI in their work.

AI readiness solutions for HR

Overall, the study shows how AI could impact many facets of human capital management, influencing how HR professionals approach training, codes of conduct, and performance assessments. The industry will need proactive solutions to accommodate these new conditions. For any business, strong HR leadership through these challenges is essential, as successful enterprise AI depends on technology and human talent working in harmony.

Take the first steps toward successful AI adoption by exploring our HR's Guide to Improving AI Literacy and AI Readiness Across the Business. Combining in-depth survey findings with responsible AI practices, these comprehensive guidelines will help empower your team toward an AI-enabled future.