AI-Powered Employee Experience: How Organisations Can Unlock Higher Engagement and Productivity (2024)

Employee Experience (EX) is informed by six core relational attributes that an employee interacts with: the work they do, the places they work, the diversity of people they work with, the technology they use, the organisation they work for, and their personal well-being and inclusion. EX may have become a mainstream focus, but organisations are still struggling to capitalise on the benefits. Deloitte's Employee Experience and Emerging Technology team use human-centred design to understand the voice of the employee and ensure it is put at the heart of any organisational transformation. To attract and retain employees in a competitive and unpredictable market, employers need to think, design, and deliver experiences that are human.

The rise of Artificial Intelligence (AI), and specifically Generative AI (GenAI), has been rapid since ChatGPT’s launch in Nov’22. Deloitte research into Generative AI for work found that more than four million people (32 per cent of respondents) in the UK have used GenAI for work purposes¹. AI is quickly changing how we live our personal lives, and organisations are exploring how it can augment working lives. According to Deloitte’s global State of AI in the Enterprise report, 94 per cent of business leaders agree that AI is critical for success². This same study also found that over 60 per cent of business owners believe AI will increase productivity and 42 per cent believe it would streamline job processes³. This is increasing the use and adoption of AI tools and technologies.

Currently, 79 per cent of leaders in the UK report full-scale deployment for three or more types of AI applications¹. 76 per cent of respondents also reported plans to increase their investments in AI to gain more benefits. Whilst this looks like a high number, the increase in investment is slowing slightly (down from 85 per cent than planned increased investment in 2021). This is because organisations are struggling to achieve the expected outcomes from AI due to challenges in proving business value, lack of executive commitments, insufficient funding, lack of technical skills, and choosing the right technology¹.

The focus for many organisations has shifted from mere AI adoption and process automation to maximising its potential for transformative business outcomes, empowering employees, and unlocking societal opportunities. This point of view covers our experience working with various organisations that are using or starting to use AI to improve their employee experience and key considerations that organisations need to keep in mind to sustainably harness the power of AI.

Transformational AI opportunities across the employee lifecycle

There's a growing trend of organizations using AI to augment the workforce instead of aiming to replace jobs. In a recent global Deloitte survey, only a small minority (30 per cent) of organizations expressed a strong preference for automating as many tasks as possible². This shift in perspective highlights how AI is increasingly seen as a tool to handle repetitive tasks, freeing up time for employees to focus on what matters most.

According to Forbes, 73 per cent of American businesses use or plan to use AI-powered chatbots for instant messaging. Moreover, 61 per cent of US companies use AI to optimise emails, while 55 per cent deploy AI for personalised services. AI is also expected to allow organisations to become more productive, with 64 per cent of respondents expecting AI to improve the experience and drive growth⁴. The future of work is evolving, and organisations are supporting a human – machine collaboration strategy. We have seen significant progress in the adoption of AI within key areas of HR but there are still further opportunities to be realised as organisations continue to introduce new solutions. Below is an overview on where we have seen evolving use of AI across an employee’s lifecycle, namely:

• Talent Acquisition (TA): Talent Acquisition (TA) has been a leading area of HR in its technological progress and introduction of AI. GenAI HR Market size globally is expected to be worth around USD 1669.3m by 2032, greater than 50 per cent of which is expected to come from TA (largest market share across all HR use cases⁵.) TA experts across the world see the biggest opportunity with GenAI in automating repetitive tasks (74 per cent), sourcing candidates faster (67 per cent) and engaging with candidates easily (59 per cent) . GenAI is also being leveraged by candidates to optimise their job applications (e.g., refine application material, generate practice interview questions, cross compare resumes to job descriptions, etc.). GenAI has the potential to re-imagine the hiring process and we expect advancements to be accelerated in this space (especially in enhancing the candidate experience). While GenAI's applications in TA are constantly evolving and emerging, organisations must carefully evaluate the specific value proposition of each use case before investing in GenAI in TA.
• Training and development: AI has been used to create personalised learning experiences for employees with specific development areas based on individual skills gaps and provide real-time feedback. For example, virtual reality/augmented reality (VR/AR) captures reactions in real-time to deliver adaptive learning tailored to the individual (A new approach to soft skill development). AR wearables are being leveraged to overlay learning on top of physical reality to provide on-the-job training and feedback. Other new innovative AI-powered tools like Deloitte’s NeuroAvatars create profiles adjusted to employees' implicit needs across emotionality, background, age, pronunciation, voice, etc. to convey information in a way that will best reach the individual. Such technologies can help employees to develop their skills and knowledge in a more personalised way. Other vendors help in skill gap assessment by building a comprehensive skills taxonomy specific to an organisation and mapping them to individual employee profiles. This creates a clear overview of available skills and potential gaps. The presence of these solutions in the market is rising and there are opportunities for organisations to introduce such technologies, underpinned by complementary policies and processes.
• Talent and Performance: Organisations’ ability to track the outcome of human performance and understand what drives it relies on the ability to collect, measure and analyse data with help of machine learning or human judgement . AI is being used by some organisations to track employee performance and identify areas for improvement (for example, Customer Relationship Management tools analysing sales data for employees and highlighting success against targets, Project Management tools that adjust individual workload based on real-time task completion, etc.). This can help managers to provide more insights-driven and targeted coaching to better support their team members while helping employees in progressing their career journeys. While advancement is there, the majority of global respondents (53 per cent) agree that their organisation is in early phase towards identifying better ways to measure workers performance . While AI can be a valuable tool, it can also damage reputation and performance if not used appropriately to manage talent and performance.
• Well-being and engagement: Deloitte’s 2024 Global Human Capital Trends report states that most workers say their well-being has either worsened or stayed the same with 59 per cent of the global workforce ‘quiet quitting’ . Many organisations are taking steps to address this issue and create an environment to make humans better at work by relying on new technology and AI. AI is embedded in many technologies to collect data from employees (through sentiment analysis). This information is used to understand the pulse of the employee and identify areas where the company can improve with targeted initiatives. Organisations are also leveraging wearables and accompanying mobile apps that offer employees suggestions for increasing feelings of happiness (e.g., personalised meditative sessions, health tracking, customised workout, and meal plans) that positively impact their well-being . While these are examples of well-being programs leveraging technology through wearables and apps, it's crucial to remember that these tools aren’t the sole solution to achieving a happy and healthy workforce. These solutions should complement policies, processes, and practices (i.e., leadership and culture) that actively support well-being.
• Leadership Skills: Few organisations use internal social network analysis to identify the presence of cross-functional leadership teams and list out leaders’ strengths. Video and audio analytics are also referenced to infer leadership qualities (e.g., learning mindset, talking pace, tone of voice, etc.). AI-powered tools are also being leveraged to provide feedback on communication style, and team dynamics, enabling leaders to adjust their behaviours and leadership style in real time. These solutions should be viewed as supportive of leaders but are not expected to fully replace the role of the leader given the importance of human input.

AI-powered solutions are being seen across the HR function as well as the wider business and are not new to the workplace. Many AI solutions have already been introduced and are demonstrating the benefits that can be obtained from AI. Some more familiar use cases include chatbots answering employee questions; and reducing time to complete tasks (e.g., scheduling interviews; taking meeting minutes, and summarising actions, etc.). However, there are still unexplored areas where the HR domain is behind the wider business, and even further behind society, in the adoption of AI. This represents a real opportunity for the HR function to gain further benefits from technological progress and lead an AI-enabled enterprise. The best uses for AI vary from one organization to the next, and there are many compelling use cases for AI beyond the ones highlighted (and more in our research here).

AI isn't replacing humans - it's empowering them. It's the ultimate teammate, freeing up employees to focus on what they do best. This is providing benefits to employees and organisations by:

• Increasing efficiency and productivity by automating repetitive tasks, streamlining workflows and processes, and improving access to information. This alleviates the burden on employees for increased workload helping in maintaining better work-life balance while helping organisations to reduce costs.
• Enhancing personalisation and engagement by tailoring employee journeys with greater autonomy and flexibility that fosters a more positive and engaging experience.
• Improving decision-making and preferences through data-driven insights, enhanced feedback, and mechanisms for proactive problem-solving - AI pinpoints potential risks and engagement patterns, enabling proactive interventions for a better EX
• Empowering workers by creating a more supportive work environment, leading to increased engagement and performance. This also helps organisations focus on attracting employees and retaining top talent.

While the benefits and opportunities of introducing AI are often discussed, it is important to strike the right balance between humans and machines.

There is a greater need to understand what the impact of these technologies will be on the people who are interacting with them and where the role of the human is even more critical. It is also important to consider the outcome you are trying to achieve with the introduction of new technology and the subsequent impact of any change on the Employee Experience.

Considerations to keep in mind when using AI.

Organisations are at widely varying levels of maturity in their adoption of AI, but some key considerations are applicable no matter where you are along the AI journey:

• Establishing foundations: Technology's success hinges on a robust foundation i.e., data, processes, and operating model. Rushing deployment without solidifying these basics is a recipe for failure. Think of it as building a house; flawless brickwork won't matter if the foundation crumbles. Organisations need to have their data in place before deploying AI. AI is built on the essence of data. If the data is not available, disorganised, full of errors, or misleading – no matter what the AI solution is, the results will never be optimal.
• Existing assets: Before exploring new AI tools, organisations should take a fresh look at their existing tech stack. It can be surprising to see the hidden potential within. Leverage the AI capabilities of your current vendors and gradually build your AI maturity. It's also important to ensure your AI solutions blend with your existing systems, creating a smooth and efficient experience. Siloed tech is no friend of AI success.• Business outcomes: Organisations should create well-defined objectives before implementing AI. Organisations need to focus on their needs first (including addressing existing pain points). Defining what the goal for the organisations is and understanding the problem they are trying to solve is critical before choosing the solution (and if AI will be one). Let AI be the architect, not the blueprint.
• Biases and ethical concerns: There have been several concerns about intrusive monitoring and behaviour manipulation highlighting the need for transparency and responsible AI implementation. To build trust, organisations must actively mitigate bias through human oversight and open communication with their workforce. These steps can help to harness the positive potential of AI while mitigating some of the concerns around ethics.
• AI security & governance: Deloitte's global research on State of Ethics and Trust in Technology identifies data privacy and transparency worries as clear obstacles for AI implementation . To bridge this gap, organisations must prioritize secure data management and establish reliable governance frameworks for ethical AI usage. Addressing concerns goes beyond technical fixes; it’s important to educate employees about data handling and AI applications to build trust and paves the way for broader adoption.
• Reskilling: As we embrace AI solutions, acknowledging both the perceived and actual impact on jobs is crucial. We must move beyond anxiety and proactively explore how AI can reshape work, not replace workers. This can be done through thoughtful planning, investing in reskilling programs, and creating new opportunities that leverage the unique strengths of both humans and AI.
• Change management: While cutting-edge AI tools hold immense promise, their successful implementation relies heavily on an organisation's capacity for change, coupled with robust leadership support, a clear vision and a growth mindset that embraces AI as a tool to unlock new value for the organisations.
• Measurement and evaluation: It’s important to measure and evaluate the impact of AI solutions. This will help ensure that the solutions are effectively meeting the needs of employees and the business outcomes and are targeted for continuous improvement.

Numerous factors can impact experience across the employee lifecycle and it’s important to consider these when introducing AI technology to the workplace. These considerations are particularly important given the role that humans will have to play, sitting alongside AI to keep the human in the loop. Therefore, concentrating on these topics will lead to more successful adoption and improved Employee Experience.