AI In HR: From Tools To Transformation
There is huge curiosity about AI amongst CHROs – and a growing appetite to “learn what’s going on” with tools and agents.
But HR remains more cautious and conservative in adopting it than almost any other business function. 42% of CHROs are prioritizing investments in AI for HR – although only 5% of HR teams feel fully prepared to implement it effectively (Korn Ferry). Concerns about data sharing, compliance, legal sign-off, budget, and change management often hold HR back. Many HR leaders simply do not want to be the “first movers” in their organization’s AI journey.
That said, change is underway. Visionary CHROs are beginning to partner with Transformation Officers, CTOs, and CIOs to connect AI to broader business initiatives. Many start with low-risk pilots (often in employee engagement) that create visible “quick wins” and show progress without requiring a wholesale shift.
But the deeper, transformational work seen in technology or commercial teams – where AI is embedded into the design of work itself – remains rare in HR today. This will not last. As organizational transformation accelerates, HR will be expected to move beyond experiments and deliver AI-enabled impact at scale.
The AI Journey In HR: Three Levels Of Impact
The truth is that every department wants the same thing: to be more productive, to automate the mundane, and to spend more time on meaningful, strategic work. For HR, as with most functions, this AI journey unfolds in three levels – starting with general LLMs, moving into domain-specific productivity agents, and finally, advanced agent systems.
The deeper you go, the greater the transformation … and the rewards.
Level 1: General LLM Chat Tools
This refers to tools like ChatGPT, Microsoft Copilot, and Gemini. They support basic generative tasks – drafting documents, summarizing notes, creating slides, or conducting research. Gains are modest – often minutes or a few hours saved per day – but they form the foundation for adoption.
Organizations tend to expect 30-50% productivity from these kinds of tools. For most people, it’s likely closer to 5-10%. This level is not where productivity gains actually sit.
“More than half of organizations in our survey provide their employees with access to Generative AI tools to support HR and roughly one-third use AI Agents for HR service delivery. Most organizations that do not currently use Generative AI or AI Agents plan to within the next two years.” – UNLEASH & Talent Tech Labs, 2025
It’s worth noting that a lot of enterprise AI tools have been rolled out, but have not been adopted well within organizations.
Level 2: Domain-Specific Agents
Built on large language models but designed for specific, context-rich tasks, these “agents” include memory, logic, and workflow orchestration to complete entire tasks – like coding, reviewing legal documents, or creating client lists – rather than just assist. Examples outside HR include Claude Code (engineering), Harvey (legal), or Clay (sales).
Within HR, platforms like Nadia, Atlas, and Nova follow the same principle. While not traditional productivity tools, they combine contextual understanding, memory, and domain-specific logic to support specific HR functions. These agents can automate tasks such as leadership coaching, HR query resolution, and administrative work, boosting efficiency and effectiveness across HR teams.
At this level, work itself begins to change. Employees can complete tasks faster, workflows are reshaped, and organizations can see productivity gains of 30–50%. While these agents rarely replace full jobs (customer support is a partial exception), they free HR professionals to focus on higher-value activities, including skills strategy, workforce redeployment, and employee development.
Level 3: Agent Systems
This is where things get really interesting.
At the frontier of AI, agent systems combine multiple capabilities – multi-system integration, big data, coordination, memory, reasoning, generation, and agent-to-agent workflows. Together, these elements enable work that humans either cannot do, or could only do with significant effort, time, and cost.
Unlike Level 1 or 2 tools, which focus on individual tasks, agent systems operate at the business-unit level. They orchestrate entire functions and enable organizations to tackle challenges at scale.
Much of the progress here is being built in-house around core business competencies. For example, Ferrovial has created its own construction risk modeling system, while banks are building risk, fraud, and compliance platforms. Vendors such as Palantir (defense), Quantexa (fraud and compliance), ServiceNow (IT), and SAP (finance/ERP) are also advancing in this space – as is Beamery, for HR.
Beamery’s Ray exemplifies this approach. It can clean and structure workforce data, model scenarios, manage talent pipelines, run campaigns, and even communicate across systems like SAP Joule. At this level, HR leaders gain the ability to unlock entirely new types of organizational impact – solving problems that were previously too complex, too costly, or too time-intensive to address.
How HR Teams Are Facing the Challenges
Adopting AI in HR isn’t just about technology – it’s about people, process, and strategy. Challenges vary by level.
At level 1, everything is quite straightforward. Junior employees adopt these kinds of tools quickly, while managers and senior leaders may need a bit more guidance. They may struggle to see how AI fits in their workflows or worry about compliance. Training, concrete examples, and visible leadership support help overcome these hurdles.
When we get to level 2, encouraging adoption is trickier. Middle managers may resist workflow changes or lack time to experiment. Success relies on a combination of three approaches:
- “Carrot”: executives leading by example and showing value
- “Stick”: integrating AI into performance expectations
- “Podium”: celebrating early adopters
As noted, these agents rarely replace jobs – but they do reshape how work gets done. The positive framing of this is that AI tools aimed at productivity free up HR professionals to focus on strategic priorities like talent strategy, skills planning, and workforce redeployment.
On level 3, with agent systems, challenges are more strategic. Business and department leaders need to first identify the specific problems they aim to solve. Essentially: What do I want to do better, faster, or more cost-effectively? Why can’t I achieve that today?
For HR agent systems like Ray, organizations typically begin with questions like: Which tasks can be automated? Where is there overlap or consolidation opportunity? Where can productivity be improved using Level 1 or Level 2 tools?
Answering these questions requires accurate data – including the tasks required for each role and the skills of the people performing them. HR teams become central in turning workforce data into actionable insights and enabling large-scale organizational transformation.
Starting Small: Unlocking Big Impact
Leaders are being asked to transform their organizations at unprecedented speed and scale. They are turning to HR teams for guidance on where to start and how to execute the change.
“92% of C-suite leaders believe that HR is somewhat or very critical to the successful adoption of AI across the workforce.” – SAP
Transformation doesn’t happen all at once. Focusing on high-impact areas and demonstrating measurable results is key. HR leaders often start by asking:
- Which roles could be redesigned to make better use of people’s skills?
- Where is work duplicated or inefficient, and how could AI simplify it?
- Which skills gaps are slowing growth, and how can upskilling be targeted strategically?
- How can we better integrate teams, systems, and processes following M&A or operating model changes?
By selecting one or two high-priority questions, HR teams can launch pilots that deliver measurable results – redeploying talent more effectively, automating repetitive tasks, or accelerating upskilling programs. Early wins build confidence, provide proof points for stakeholders, and create momentum for broader transformation.
Reimagining HR: From Support Function to Strategic Driver
AI is not just a tool for efficiency – it is a lever for strategic influence. As HR teams move beyond small pilots to integrated agent systems, they gain the ability to:
- Make faster, evidence-based decisions about talent and roles
- Predict and close skills gaps before they affect the business
- Design work to unlock human potential, not just optimize processes
- Align workforce strategy with broader business goals in real time
The future of HR is one where people, data, and AI work together. Leaders who embrace this transformation can turn HR from a cautious, reactive function into a driver of growth, resilience, and innovation, ensuring the workforce of tomorrow is both capable and adaptable.