Reimagining HR in

the age of GenAI

Keynote
October 2023

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“As machines get better at being
machines, humans have to get
better at being more human… So
human empathy, EQ, et cetera,
will all become more important
for employment”

Andrew J. Scott, professor of economics at

the London Business School

McKinsey & Company 2

What is Generative AI?
Generative AI (GenAI) enables the creation of new
unstructured content, such as text, images, etc.
GenAI is powered by Foundation Models (artificial intelligence models)
trained on a broad set of data that can be adapted to a wide range of tasks
These models are typically also better at interpreting / labelling unstructured
data than traditional AI

Customer
Content synthesis Code & software Creative content
engagement
Technical report query Code optimization Design ideation Always on chat bot

McKinsey & Company 3

Early adoption of Generative AI indicates the impact
of AI in day-to-day life is taking off
Time to 1 million users2
Chatbot passes US law and
24 months business exams
ChatGPT chatbot by OpenAI
answers exam questions and gets
passing scores on law and business
management exams1

6 months
Code assistant increases
productivity by 55%
2.5 months
5 days Github coding assistant Copilot can
auto-complete code and even turn
GPT3 GitHub Copilot DALL-E ChatGPT text prompts into coding suggestions

1. CNN Business: “ChatGPT passes exams from law and business schools”
2. OpenAI and GitHub data
McKinsey & Company 4
 Automation
Giving software the
human tasks that are
tedious and could not be
How will automated before
Augmentation
GenAI impact Enhance human
productivity to do work
organizations? Acceleration more effectively
Extract and index
knowledge to shorten
innovation cycles
enabling continuous
innovation

McKinsey & Company 5

Resulting impact on future of work and workforce
will be broader, deeper and faster

Broader Deeper Faster

80% 50% 10 year

of the workforce could have of tasks could be acceleration of automation
at least 10% of their tasks performed faster with same compared to pre-GenAI
impacted by GenAI level of quality using GenAI

Source: McKinsey Global Institute McKinsey & Company 6

What are your  How will GenAI impact the way work is
biggest people and performed?
organizational  What are GenAI’s implications on my workforce
questions? of the future?
 How will required roles and skills change due
to GenAI?
 How do I prepare my organization to capture
value from GenAI?
 How do I secure responsible use across the
entire employee population?

McKinsey & Company 7

Example: Leading Average time split of analyst/associate
(advanced level of education)
global investment bank
Bank decided to
shows GenAI potential 100% 15-25%
reinvest capacity
1-2%
to improve productivity Market research
for idea generation
~10%
13-20%
to augment role
of junior bankers 1-3%
75-85%

by 15-20% 8-9%

ILLUSTRATIVE “DAY OF WORK”

Material creation ~50%
30-37%

Meetings ~5% 2-4%

Other lower GenAI
impact areas ~35% ~35%

Today Time savings To be

McKinsey & Company 8

Example of augmentation: Lilli GenAI based conversational AI that
shortens weeks of research into hours

60k 50k
Internal knowledge companies’ financial
resources data and insights

10k 25
Publications from Data sources
McKinsey.com

McKinsey & Company 9

First estimates: GenAI has the potential to double the efficiencies
from automation in Hire-to-Retire value chain
Not automatable using current technologies Technically automatable but difficult to capture Capturable using Automation and GenAI
1. Talent
Planning 2. Attracting & Onboarding 3. Talent Development 4. Talent Management

HR Talent Talent Employee Learning and Performance Employee

categories Onboarding
planning acquisition management development management engagement

Example  Talent strategy  Talent Attraction  Location strategy  Capability  Role- and skill-  Performance  Diversity, Equity
activities and quantification  Employee value (including building strategy based learning management and and Inclusion
 Strategic proposition capability aligned to overall  Career path benefits  Succession
Workforce centers) business strategy development  Assessment and planning
 Hiring
Planning (assessment,  Onboarding  Capability journey progression  Retention
 Talent diagnostic selection, talent building delivery  Payroll, time management
win room) & infrastructure admin and  Labor & employee
reporting relations

Total automation
level capturable
using
10-15% 25-35% 25-35% 20-25% 25-35% 25-35% 20-25%
Automation and
GenAI

Examples of 17% 14% 10% 14% 5% 18%

high GenAI 57% 64%
53% 58% 63% 56% 55%
potential 32%
activities 30% 28% 27% 30% 31% 27%
11%
Manage HR Programs Talent Acquisition Manage New Hire Manage Manage Emp. Manage Time Hire to Retire
and Policies Onboarding & Organization & Jobs Development Administration
Integration & Training and Attendance McKinsey & Company 10
GenAI use cases create opportunities to positively disrupt
HR domains across the entire employee journey
1. Talent
planning
Talent planning
Conduct labor market analysis
Create organization scenarios
4. Talent Management
Performance
management &
coaching
Aggregate performance input
from multiple sources for
manager review
Assist in developing specific
goals tied to business strategy
2. Acquisition & Onboarding
Talent acquisition
Draft skill-based job postings,
supported with automated
candidate sourcing and
screening
Draft customized candidate
communications and interview
hiring training
Benefits
Answer benefits eligibility
questions via advanced
chatbot
Assist in suggesting additional
benefits offerings for which
employees are eligible
Onboarding
Automatically create pre-
onboarding checklists and
documentation, for tailored
onboarding journeys
Virtual “buddy” to answer
common early-hire questions
Diversity, Equity, and
Inclusion
Aid in accessibility with multi-
model support (text, image,
language) – including
translation
Support DEI in implementation
of GenAI across other
elements of talent lifecycle
3. Talent Development
Employee management
Career co-pilot to uncover
career paths and draft
associated development plans
Develop learning and
employment records
5. Talent Experience
6. HR Operating Model
Employer and Manager
Self Service
Provide self-service through
improved interface for
administrative tasks
Auto-completion of forms and
documentation (E.g., medical
leave, proof of employment)
Deep dive next
Learning
Create simulation-based,
personalized learning
experiences
Develop multimodal learning
content (not limited to text)
Workforce productivity
Summarize / create first drafts
to save time and enhance
productivity
Summarize meetings and
send to attendees
McKinsey & Company 11
Condensed: Various vendors are starting to incorporate GenAI in
their offerings along the talent lifecycle
Vendor Talent Acquisition Employee Management Learning DEI
Recruiter Co-pilot assists recruiters Employee Co-pilot platform allows Talent Ingelligence Program delivers Talent Flex deploys diversity
through the talent acquisition employees to navigate career personalized reskilling and upskilling analytics with deep-learning AI to
journey development opportunities opportunities based on current skills support DEI efforts

TalentGPT leverages GPT- 4 to Provides internal career Develops skills through L&D Prioritizes strategies that drive
support managers, recruiters, and recommendations to employees based programs, mentorship and work engagement from
candidates on skill matching and connects them with projects underrepresented groups
mentors

Surfaces qualified candidates and

personalizes outreach emails to
these candidates based on job
description

Integrates all processes of Provides insight on employee skills and Delivers personalized learning based
recruitment from job browsing to professional aspirations on their Skills Graph and career path
offer signing. desires.

Creates tailored job descriptions, Provides visibility of existing and Create personalized recommendations Filter job descriptions and interview
and job specific interview questions missing skills and matches employee for learning courses, mentors and questions for biased language
skills to jobs internal jobs.

Provides managers with country specific

HR related information as a result of
natural language questions

Generates contextual relevant job Provide succession planning for high-

descriptions, highlights best fit performing employees, surfaces up-
external and internal candidates and skilling and reskilling opportunities,
sends personal emails flags employee flight risks

Example
companies

McKinsey & Company 12

Example: Industry-leading retailer positively disrupt HR domains
across entire talent journey through GenAI opportunities

Diversity, Equity Employer and

Talent Acquisition
• Optimized and skill-based
job postings
• Personalized candidate
engagement
Talent Management
• Synthesized learning and
employment records
• Uncovered career plans
and associated
and Inclusion
• Multi-modal support (e.g.,
text, image, language) –
including translation
• Supported DEI goals for
Manager Self Service
• Improved interface for
administrative tasks
through employee self-
service

• Personalized interview development plans career aspirations and • Auto-completed forms and
guides and questions • Identified high potential underrepresented documentation (e.g.,
internal candidates candidate sourcing medical leave, proof of
employment)

McKinsey & Company 13

Example: Q&A tool to enabler employees / managers to self-service
common HR-related queries

McKinsey & Company 14

Leadership teams should upskill themselves through a GenAI
capability building learning journey to deliver impact at scale

Initial skills survey Impact examples

Experiential workshop
30+ p.p.
Pre / post increase in digital
competencies
Field exercises / readings
40%
Experiential workshop Faster time to market (YOY) for
new products

Group learning session $60m+

Initiative pipeline generated for
AA transformation initiatives
Continuous learning

Source: McKinsey Academy McKinsey & Company 15

Any
questions?
McKinsey & Company 16