This is the future of HR podcast, Episode 155. Many people analytics teams do people analytics as research. So we're going to do research on the workforce. We're going to give descriptive information to our leaders who help them understand facts about our workforce. But they are not explicitly told or taught. You should be doing work that enables the business to run more effectively, make more money, produce less waste, produce at a higher quality, make more sales, what happened. And so I've explicitly been trying to give a playbook for people analytics teams but HR more broadly of how to pivot from being just strictly a cost center to a profit center. What that means is there's really three ways to pay for yourself. So I always tell teams, pay for yourself 10 times over every year. So add up all the costs of your function, whether it be people, technology, processes, conferences, what have you. Add them all together and then multiply that times 10. And then say this is the amount of money that are projects that we need to go through this year. That's the amount of money that we need to bring back. How can people analytics shift from being a cost center to being a profit center? Why is it critical for HR leaders to transform workforce insights into concrete strategic initiatives? Hi, I'm your host, JPL8, and this is the future of HR podcast. The only podcast whose mission is to inspire the next generation of HR leaders. On each episode, I interview successful HR executives and thought leaders who are reimagining, rethinking and leading our field into the future. During our candid conversation, you will learn about their career journeys, their lessons learned along the way, and their insights on how to take our field and most importantly, your career to the next level. Since launching the future of HR podcast in late 2022, I've been fortunate to have meaningful conversations with over 150 HR thought leaders in world-class CHROs for around the globe. These conversations have given me a unique perspective on where HR is today and where we're heading in the future. And because of this vantage point, over the past year, I have had the privilege and opportunity to be a keynote speaker at 16 internal HR conferences for Fortune 500 companies like Collar, Abvy, Corning, Nike, LabCorp, and more. And what am I talking about? More often than not, I'm asked to give my signature talk. Future proofing HR, creating value by unlocking the capabilities of tomorrow, which is designed to help your HR team shift their mindset from being a strategic business partner to a value creator. And these aren't just presentations, they're interactive sessions that equip your HR leaders with practical frameworks to challenge conventional thinking and move beyond the traditional HR playbook. If you're playing your next HR conference career week or leadership gathering and water provide your team with insights that drive immediate impact, I'd love to connect and explore how I might help make your event a big success. Feel free to reach out to me at
[email protected] to start the conversation. And with that, my guess this week is Cole Napper. Cole is a globally recognized people analytics thought leader and the VP of research, innovation, and talent insights at Lightcast. Cole's on a mission to shift HR and people analytics from a cost center to a profit center for data, AI, and scalable solutions. He's led strategic HR transformations at Global Fortune 500 companies like FedEx, Toyota, Texas Instruments, and for venture capital back startups. Cole is also the owner and principal consultant at Directly Correct LLC, where he hosts the number one people analytics podcast and newsletter in the world. He's a keynote speaker, a tech advisor, a leader in Syop and SPA, and his expertise spans labor market intelligence, workforce planning, and gerryter AI, all backed by a PhD in IO psychology. Cole is a guest in our podcast in 2023, episode 63 if you want to check it out, and I'm so glad he's back because he's going to discuss his first book, People Analytics using data driven HR and GNI as a business asset. It was great to spend some time with and learn from Cole as we discussed how junior AI is democratizing data driven decision making in HR. Like Cole believes more people analytics leaders could rise to the CHR role in the next decade. Why people analytics teams need to intentionally link their work to tangible business outcomes? Why gerryter AI will disrupt traditional HR operating models? And why business acumen isn't just a nice to have, it's a fundamental requirement for all HR professionals including people analytics. I'd love to hear your thoughts on this episode as you listen, so drop me a line and link in and say hello. And now let's jump into my conversation with Cole. Cole, welcome to the future of HR podcast. How are you buddy? Good. It's good to be back here, JP. Thanks for having me. Yeah, it's exciting. Have you back your episode the first time you're here is one of our most popular episodes. I think it's the top 10, 15. The topic resonated, but I think you resonate as well. And we're super excited back because you have written your first book. So congratulations on that. That is not easy. But thank you. And I'm curious to know what made you decide to write this book. Who'd you write it for and what do you hope people take away from it? Yeah, frankly, we know the multi year journey on writing a book, which I'm not going to bore your audience with. But I'll give you the kind of the culmination. What ultimately led to me doing it is I realized that I consider myself to be an early AI adopter in the people analytics space. And I was using AI to do a lot of things in my role. And it would give me what I considered to be bad information on people analytics. And I said, these aIs are trained with quote unquote trusted sources as their corpus of knowledge and books are one of those things. And I was like, why don't I write a book on people analytics? And then that will become the trusted source of knowledge that these aIs are trained on. Some people feel like a book is a thing of the past and maybe it's fading into oblivion. I don't personally feel that way. But I think some folks do. But also it could be the thing that frankly is my legacy that lives on forever is how AI thinks about people analytics will be somewhat based on those book that I've written. And that's the reason for it. And I'm glad to be back here for me books. While sure I guess books are going to go away. We're going to watch YouTube videos or just read tweets on LinkedIn or whatever that isn't really how people really deeply learn. And I think books have a place for sure because number one, when someone writes a book like yourself, you research it, you think about it deeply. It's not something that's put out there very quickly. And I think that's a big differentiator and I read the book and I think it's terrific. And I think it's great for people analytics leaders, but also HR leaders because all HR leaders need to become people analytics leaders with AI in the fact that making data drift decisions is so critical. And so one thing you talk about in the book call is that you suggest the people analytics could become the centerpiece for HR decision making. Or would have to change for that actually to happen. I think you kind of hit the nail on the head a second ago. I think people analytics is undergoing somewhat uncomfortable process right now of having been a centralized function to the knowledge the insights, the ability to make decisions to your point about being a centerpiece of HR decision making. Being decentralized back into the HR function itself. And I think that was always the goal of people analytics. It was just there was always a capability or skill gap to make that possible. But one of the things that is coming about right now with the introduction of genera AI is genera AI in that technology is going to be able to bridge that skill and capability gap to put decision making in the hands of the people who are fundamentally closest to the work or in the right place at the right time. People analytics teams need to take first take stock of that. But second of all, think differently about their strategy about because this book is a book for HR leaders and frankly it's a book for how to do data driven HR more effectively. That makes sense. So what you're saying I guess the old ways hey I want to make sure I understand the people analytics whether it's turnover predictive analytics, etc. I'm going to pull my people analytics team in getting a white room whiteboard this and then wait six months when you guys build the algorithms to do that now AI is allowing people to make much more just in time decisions around data. That could be really helpful. So you're seeing the people analytics needs to start figuring out how do you build that capability and help people think about decision making versus just getting the data to make that decision. I'll give you a lens to think about this. What I'm not saying is that people analytics teams go away or go away today. Maybe they go away 10 years from now. I don't know. The reality is though I was talking to somebody earlier this week about if you had a hundred dollars of incremental new HR spend and you wanted to spend it on people analytics where would you spend it. And I said I would spend 99 of those dollars on building the right data infrastructure to be AI ready. And then I would spend one of those dollars on an AI wrapper to put on top of it to do that decentralization I was talking about before where I think people analytics should be spending its incremental time is on getting the right infrastructure to empower the future that we're doing.
that we're talking about here. Because those leaders, whether they be in the business or in HR that are wanting to look at their head count, wanting to look at their turnover, wanting to look at their diversity, what have you, they wanna be able to do that on the fly, and the only way they're going to be able to do that using AI is if you have the right data infrastructure in order. - That makes a lot of sense. And so do you feel like in the future that people analytics, I guess, is part of the HR, IIS teams, is it moving to IT? Because if the rule becomes more about data infrastructure and getting that cleaned up, is that where people analytics, is the strongest place to play, or does other folks sort of pick that piece up? - I think there's two competing notions out there about this right now. A colleague of mine, Richard Rose now talks a lot about the workforce systems leader, which is you're starting all the way down at infrastructure and you're moving all the way up to people strategy and the whole stack in between, and that being the role of the future. I recently published an article that I called the Tree of Value. If that's a verticalization, this would be a horizontalization. It's about people analytics combining itself with HR technology, but also with talent intelligence, workforce planning and behavioral science, as showing these are all the branches of the tree of the ability to produce value for organizations, and by combining the resources together, because they all draw off in the same roots, the value of human capital labor data, those roots populate all of the tree, and I think that is going to be, whether it's the horizontalization or verticalization, the future's gonna look somewhat like that for different organizations. - Yeah, that's really helpful. I'm glad you talked about the way you think about your tree, having behavioral science, and because there's a discipline behind here, we're not just talking about data and data infrastructure, we're talking about personal people data that has implications, and there's ethical implications with that with AI as well, and there's real science and how we hire and how we think about that. Now, one of the things I wanted to ask you, Cole, 'cause I'm a very big believer in people analytics, but when I've looked up the research around this, it says about 35% of people analytics leaders today report to CHROs. We don't, I'm not sure if that's 100%, but that's the only report I can find this most recent. It just feels so low to me, and I believe that more in the future, more people analytics leaders will report to CHROs directly instead of being underneath a VP of talent or another function. Do you think that's gonna happen, or what do you think needs to happen to have people analytics leaders reporting to a CHRO more often? - I think if you would ask me four or five years ago, I would have been, frankly, a little concerned about that statistic and I would have wanted to drive it higher. So increase the representation of people analytics who you're reporting to the CHRO. I'm just of the mind right now, if you don't skate where the puck is, you skate where the puck is going, and I'm looking at where the puck is going, and I see that HR itself is fundamentally going to be completely transformed in the next few years. And this whole concept of who reports to the CHRO and who doesn't is gonna come of a lesser concern and it's going to be like, what is the work that humans do and what is the work that technology does in our service delivery model for HR? And that's going to change rapidly. One of the kind of provocative notions I put in my book is, let's say you fast forward 10 years into the future. So we're getting kind of radically far into the future where basically all predictions are wrong. If you look at that and you say HR at that point is likely a fully AI native function by that point in time. Who's leading that function? And I say there's really only two current fields in HR that are well positioned to be able to do that effectively. And it's because not only were they digitally native, they're already AI native functions, and it's HR technology and people analytics and people probably bristle at that notion somewhat because I say people analytics leaders never lead HR. Why would that be the case in the future? And the reality is you would have to have leaders who are capable of making the transformation to that future that we're likely to see. As far as I can tell, HR technologists have no interest in that. People analytics on the other hand, leaders in that field, whether they are able to or not of that 35% who are reporting to the CHRO, those are people with ambition who have a great concern about HR strategy and implementation and adding value and making strategic changes to the function. I think that those are gonna be well equipped to lead these functions of the future. So the CHRO and the future might be a people analytics person. And again, in the past, I probably wouldn't have said that, but I think now it might be the case just that of necessity. - I think it's a really provocative point of view. I can see both sides of it, we can argue both sides of it a little bit right. I think that's what makes it provocative. I know you talk about this idea of shifting from a cost center to a profit center that you're kind of under the line that there that people analytics can help drive, profit and be more business focused. When you think about a people analytics leader becoming a CHRO, I know it's 10 years out, what are the barriers, what are the challenges, what are the obstacles that people analytics leaders have to face and improve upon to achieve that? - Yeah, you've seen it in other functions. So there was a point in time where accounting is an older discipline than finances. Most departments that dealt with the money of a firm started out as accounting departments, then finance as a discipline kind of came up and then it became finance and accounting. And now it's just called finance. And accounting is a sub function there. HR is gonna go through a similar transformation where some of the compliance components and I would say like human relations components or employee relations components of HR led the existence of HR, but also the transformation of HR. And eventually it's gonna be like employee relations and strategic HR. And then eventually you're just gonna start thinking of it as data driven strategic HR from its onset and you'll have a sub function who their sole responsibility is doing with a quote unquote human components of the work that are still going to be necessary as we move forward. There are future branches of the tree where this doesn't occur but I think that's a likely branch of the tree that you could see happen in the future. - I can see it a little bit. I think we have very limited examples today. People and analytics leaders that have become CHROs or I would say the biggest gap in my mind if we play this out. As you're a people and analytics leader, you have to actually go be a journalist. You have to go actually be an HR business partner. 'Cause now we're talking about the human trusted advisor, political side of this. How do you build relationships? How do you understand the business? How do you influence? Sometimes when you're in a COE, like a people analytics leader or a talent leader, you are a little removed from what's going on. That's gonna be this biggest gap of, do you wanna be in the weeds with a leader? And do you know what that's really like versus when we go and people are like, "Well, next we might design a really great system, technology, same thing for a program for talent or learning development leader." But you don't know what it's always like being a business partner. So I think that's the biggest gap I would see. - I'm in total agreement with you, JP. The thing I would say is if you read through the book and as people who buy it read through the book, one of the things I'll notice is that why is this people analytics guy talking so much about influence, about persuasion, about getting buy-in, about adding value? This isn't the book I thought I was going to read. And the reason why is because I've been kind of giving this same thesis around how people analytics should change, even pre-AI, for a few years now. The one thing I noticed about that I needed to change personally is I was triting the field, saying, "You need to become an HR business partner. You need to know the business code. You need to build these strategic relationships." And I was kind of triting them. And one of the things I realized is they were never given a guide on how to do it effectively. I realized that I needed to go write that guide, give it to them and then build that capability myself, much like we need to build the capability of data-driven HR, more in HR leadership and out in the business. - What's a fair point? And I do believe my thesis is that all HR people need to become business leaders first with HR expertise. Like we all can appreciate that, whether you are a talent COE, you're an HR operations, people analytics, I've never seen the business is really, really important, but that's a prerequisite to really being a great business partner for sure. I need to build that relationship. All right, so we'll find out 10 years from now we're going to figure out, we have flying cars, Delta robots, AI agents and people analytics, CHROs, so it could happen. Let's talk a little bit more about advice you may have for people analytics teams that want to demonstrate ROI and sometimes struggle to connect their work to the business outcome, right? 'Cause that's the first step for people analytics team is can you connect your work to business outcomes? What's your advice there? - Well, I think the first step in this, this may sound like defining a word with a word, but it's actually try to do that. We're going to give descriptive information to our leaders who help them understand facts about our workforce, but they are not explicitly told or taught, you should be doing work that enables the business to run more effectively, make more money, produce less waste, produce at a higher quality, make more sales, what have you? And so I've explicitly been trying to give a playbook for people analytics teams, but HR more broadly of how to pivot from being just strictly a cost center to a profit center. Add the ingredients.
them all together and then multiply that times 10 and then say this is the amount of money that are projects that we need to go through this year. And you can do that indirectly, directly, and frankly through leaders liking your work and through processes associated with that. So let me explain what each of those are. Directly is, imagine you're able to do analysis with your sales organization to prove that sales went up because of the analysis and the actions you took based on it. That would be a direct example. An indirect example, which is probably the most common because only if you're working with very customer facing type of roles, do you get those direct examples? It would be through improving sales leadership. So you improve the concept of sales leadership. All the sales people who report into that sales leadership end up selling more things. You can show the relationship between that between the analysis and the actions that you took and you indirectly show the ROI of the function. The last in terms of people liking your work and the processes is there's a lot of really good people analytics work that goes into just improving how systems work, improving how processes work. And if you think of like every time a transaction occurs, if you can attribute one cent of that transaction to the effect that people analytics had and improving the value for an organization, then you go through hundreds, thousands, millions, tens of millions of those transactions. That number can add up very quickly. You want leaders to be bought in. You don't want to just be doing people analytics and the shadows and proving your quote unquote ROI and nobody is aware of it. I say it's really important to have people be aware and know and like your work that is important, but it has to be tied to business outcomes. And frankly, I can't tell you how many times in my career, I've been in a meeting with the business leader. And I take this as the utmost compliment, but at the time it was sort of jarring and they would say, are you sure you're an HR person? Because I was so much speaking in their language and so oriented towards tackling their problems and being perceived as a profit center that I was actually seen as a colleague rather than just let's say an advisor. Yeah, I think it's brilliant. What you're talking about there in my mind is what HR leaders and people analytics leaders have to do is get out of the office, get close to the business, get to the shop floor, bring finance, bring operations in. And as a team say, hey, how could we figure out a way to prove that that new train program for new hires is actually delivering a better quality product on on the floor and the shop room floor, et cetera. How do we do that together? Because when you start to get people analytics leaders, the business partners who understand the business and how that works finance or operations in a room, you can't actually think really tie people analytics and HR interventions to business outcomes. And I don't see people doing that very often. So that's where I've seen it work and I've done my past life where I bought the teams together and you get magic by doing that. I probably said this last time I was on the podcast, but I used to jokingly say, I have made a career out of answering one question and the question is, how do you know what you're doing is working, which gets exactly what you're talking about is like, we're doing a whole bunch of things. How do we know what we're doing is working? And can we quantify the impact of the things that aren't working? And can we sunset the things that aren't so much more simple? I love that question. That's a great question for people to ask. All right. So let's talk about what's your advice for non people analytics leaders? So HR business partners, talent leaders, HR operations, how do they partner with people analytics teams to connect the work to business outcomes? How do they approach them and how they bring them into that fold? I'll actually start with the C.H. Row here. Obviously your podcast, you've interviewed probably 150 C.H. Row's, but by the way, that's why your podcast is so great, JP is one of the complaints of the C.H. Row's I've talked to you in my career is, I feel like I'm the only person in the HR function who cares about HR and the value it creates in its entirety. Every other sub function or COE just cares about their COE and not the entirety of the function or adding business value. So the first thing I would say to those folks, whether they be the C.H. Row or the leaders of those functions is you got to orient yourself to solving business problems and you have to be willing to span boundaries and get out of silos to be able to understand those things because as a people analytics person, you can't afford to stay in your silo. And the reason why is because there's a million different data sources out there. And if you want to use data to make data driven decision making, you've got to go to the where the sources are at and very rarely are those within a silo. You've got to be willing to boundary span and get outside of your four walls. So that would be my advice point number one. Number two, I would say is take the perspective of the business leader you're helping because chances are you're not the only person who's thought about that business problem before. They probably have some wisdom and some guidance. And if you're just able to actively listen to give some pointers about where this analysis can help and how you could start and how you could frankly and this is the most important part, how you can take action based on the results of the analysis to ensure that change is adopted effectively. I can't tell you how important change management is associated with good analytics. And I know there are other folks like Alexis Fink and Alec Levinson who I credit with it saying that people analytics and OD or two sides to the same coin. I'm a true believer in that. I probably quote it 12 times in my book is that if you can only do the analysis, but you can't put that analysis into action in the workplace, none of the ROI ever comes about. Yeah, I love that last point. I mean, insight to action is what we really, our goal should be an HR is to figure out good insights. We had good actions that we did better outcomes. Let's talk about HR for a second. I mean, finance and marketing, they may have more foundational training and measurement or force analytics. It's just more kind of comes with the territory. How can HR leaders close that gap and get more comfortable doing people analytics or looking at workforce analytics? I'll give you another provocative point. The first one wasn't provocative enough. I don't think they will. I always call this a generational problem. There were generations of HR leaders that came about prior to people analytics and data being a relevant skill set in HR. And then there's a whole cohort of people who come about since that was the case. And I say every day someone who came around before people analytics existed is aging out of the workforce. And every day they're getting replaced by another digitally native AI native data native HR leader. I always see it as generational shift that's going on because if you go talk to anybody and people analytics and you look at the surveys that they do of what are the most important topics for people analytics to face in an HR organization. Always number one or number two on the list is building capability and using data to make decisions in the HR function. It's always number one or number two. In companies have spent millions if not tens of millions dollars to try to address this issue for over a decade, possibly 20 years. And the reality is it's only going to change when you get an HR function that's ready for it to change. I look at functions like finance and marketing and by the way I've done enough and even been in finance and marketing functions myself to know that they're not all squeaky clean themselves. They have their own issues. I think it's good to take those lessons from other fields. But also I think we just have to have a data native HR function and leaders who have that capability from their onset and from their training. And frankly, and I think this is a point you would agree with JP. It's the professionalization of the HR function itself. If you take people that just used to do other things in a business and just plop them down in HR and say you're a people person, right? You can do HR. That's not a professional function. But we've done a really great job as an HR profession of training folks through master's programs and PhD programs to get more credible individuals to be if not every person in HR at least the mid-level leadership all the way up to the senior leadership. The most progressive organizations are starting to see this pay off for themselves. Yeah, interesting point. I see a little differently. I do think we've got some people that this is going to be a gap for a long time. This is a gap that's been in existence forever. We maybe moved in HR because we don't like math. We don't like numbers. We like people and reading more than that, right? I totally get that piece. But I do see organizations making some good advancements here. A lot of it though is becoming the technology becoming easier. AI is built in like you said. I can query using a chatbot and now I'm getting back turnover statistics for my business unit in a way that happened before. I think that part-- The AI better tell them what to do about you with that turnover data. Well, that's where I was going, right? Yeah, the problem is, hey, I got the data. But I think the critical thinking skills is still part of where HR has to continue to teach and help educate, but also transform how we think about business problems in a much more logical strategic way and thinking frameworks. I don't know yet. I think it's a great question. I'd love to see some data on that generationally and see if this new generation who you talk about being more digitally native if they were figuring that out much faster and better. Absolutely. This is not a new problem, by the way. You mentioned Kaplan and Norton, the balanced scorecard. I think that was written in like the '80s or '90s and that was like a really hot topic there for a while. And then in the HR space, there was like the whole HR scorecard series based on that. And everybody thought that the the scorecard itself was the in zone that they were trying to get into. And what every one of those organizations found is once they got the scorecard in place, they said they asked the question, now what? Now what do we do about it? Or how do we influence the number to get there? Yes.
technology and AR are going to play a role in answering that question of now what, but strategic thinkers and critical and analytical thinkers are really the people that are in tune with the business that can answer those questions and tie back all the way to your first question. That's why I wrote the book is how do you create the thinkers who can answer those really ambiguous and tough questions once you've got the data in front of you? Yeah, I think that is the big question. It's like it's the now what question. What do we do with it and how do we implement it? So it sticks. Cool. I want to go back to this question. We talked about generative AI, radically transforming HR functions. You've been talk about in the beginning of the book, you don't really underline this a lot. So I'm not going to say this is your entire premise, but the Ulrich model of HR won't survive. Which I think a lot of people are now kind of saying, hey, is this going to work, this Ulrich model in the future? But you believe that because of AI, we're going to shift a lot. Talk to just a little bit more about how AI shifts all the HR function in terms of the automation or what human loop is doing from your perspective. I know we're all pretending we know what the future looks like, but I'd love to hear your vision. I try not to make a lot of predictions, what I try to make are deductions. So knowing what we know now about AI and the rate that it is growing, what could you extrapolate from that if you were to look three years in the future or ten years into the future in its ability to transform a function? I will say there is a branch of the decision tree where nothing changes about HR. Ten years from now, you fast forward, AI is not that great. And frankly, it looks pretty much the same as it looks today. That is possible. However, if AI is as good and continues on the track that it's going on, here's an interesting thought experiment. What if AI didn't get any better, but it became faster and cheaper? How would that disrupt all HR technology? That's a fascinating question you could ask today because it has not broadly proliferated through HR technology, but mostly due to its speed and its cost deficiencies. So imagine you fast forward ten years into the future. It's not superhuman. It's not a demigod, but it's just as good as it is right now. And it's proliferated through every piece of HR technology we have. I still think that that would be a vastly, vastly disruptive thing to HR's operating model today. I'm not sure that the Ulrich model or any model would still look the same ten years from now into the future. But the thing that I think about, and I talk about in the book, is I put forward this notion of what I call the inquisitor in the change agent. If you look at people analytics, but frankly, all of HR, and you think about how does it do problem solving? It's really in its simplest form, it's three steps. It's asking a good question. It's analyzing and understanding the data. And then it's taking action in the real world based on that data. And right now, and historically, where we've had to spend like 80% of our time in our effort or more, was all in the analyzing and understanding the data step. So there's three steps. We spend half of our time on step two. And we spend very little on taking action and very little on asking the right questions. And what we see if you look into what AI can do effectively today, it's analyzing and understanding data. Like, it's like the number one thing it's good at and it can automate and it's only going to get faster and it's only going to get cheaper. But if you look at that and you say, okay, well, what's left for humans, it's asking the right questions and being in tune with the business. And it's taking action and making changes. And that's why I call the inquisitor asking the right questions and the change agent. So people who are putting those changes into effect in the workplace. And if you look and you go through all of the parts of the Ulrich model, they're all based on having specialists to do this kind of middle step. And if that middle step is highly automated, what do those specialists do? Well, I would say what that really does is it leads, it leaves digitally native AI native, HR business partner types, but probably folks that have skills and AI, skills and data, all the things that I mentioned earlier on the inquisitor side of the equation. And then it leads ODE change management professionals on the back end to put those changes into effect in the workplace and to answer the big questions like now what? That's what the HR model looks like in the future. Anything transactional, the entire shared services part of the model is going to be automated. Almost all of the COEs are going to be automated. And then you look at the HRBP role and it's going to be radically transformed but still exist. And so you have to say, who are the incumbents in that HRBP role who are going to manage the entire function? And I think that's probably a shell of what the HR function looks like in the future, even if AI doesn't get considerably better. Yeah, I think that's a great, great perspective and very well thought through. My take a little bit is I believe maybe less data oriented to more gut feel right now. I see a future where HR leaders have to be less business partners and much more value creators and problems, but I love that. It's really about shifting the mindset of, hey, how do we implement differently? Because the information is your point there. We can move faster. It's how you make good judgments and then create new solutions that we didn't have before. That's all these different areas. But it's been interesting. We don't know we're going to go with this. I mean, no one really knows. It's so early in the race of AI that we don't know if it'll keep up with the demand in terms of the progression it's had or it's run out of data. We don't really know. And I do think it'll take some time for organizations to build very detailed, best oak solutions that really we need to solve in HR at this point. I mean, we're talking about agents, but I think we're a little pretty far away from that actually. The more the hype is at some point we'll get there at my two three to four years and then you will have a lot of specific solutions that are solving that could potentially impact assured services function to the extent you're talking about. But that's how I see it and take it anywhere still three or four years away from really seeing a lot of this agent transformation happening truthfully. Let me build on that for a second because I agree with everything you just said and that's the points I put forward in the book. And if I come across this too much, I really like an AI optimist today. Just know that the book is much more balanced than that. And I'll give you an example of how is in the AI agent space. Anybody who has a background in leaner six sigma knows about the concept of defects and their influence on a particular process usually in the manufacturing context, but you can apply it in a lot of different contexts agents themselves have the defect problem from lean and six sigma. If you think about an agent when an AI agent does is a breaks down a task into sub components. If you think of an incredibly simple task, it still probably has 10 steps, but many might have 100 if not thousands of steps, then an agent is needing to go through. If you do just a basic chart from like lean six, some of probability of showing, okay, let's say at every step in that process of a task, it's 99% accurate versus 90% accurate. 90% sounds pretty good. If you go through 10 steps in a process, you're going to have, I believe it's 74% defects at the end of those 10 steps. If you have a 90% accurate process through all of those 10 steps. If you have 99%, I think it's still at 88% or of quality and 12% have defects. What you're going to have to see in the AI space for agents to really have the impact that we want them to have is they're going to have to get into the 99.999,999, like six sigma space of accurate and they're nowhere near that right now. Because again, many of these processes that an AI agent is going to undertake are going to have hundreds, if not thousands of steps that they're undertaking. Frankly, they're not equipped to do that effectively without sufficient defects at the moment. Exactly. And, Jeremy Bay, the one we're all having a lot of fun using hallucination is a feature not a bug. It's actually designed for creativity. That's why if you prompt the same thing three times, you may get three different answers. That's part of the design. So, that is also part of this challenge to your point, because I'm sure I want payroll for my leave benefits administration to get a 74% accuracy rate, right? I think it'll cause a lot of problems for HR. This is another prediction slash deduction that I think you're going to see is AI companies over the next two years are going to invest heavily in, let's call them, uh, cordoned off AIs. And what I mean by that is things that don't have the ability to hallucinate and can only draw upon a corpus of knowledge. You're going to see that especially in the HR technology space is that you're going to see the HR technology firms that really invest heavily in AI and go AI native. They're going to be ones that can't draw from the web can't draw from an open LLM. They're going to be a closed LLM or a very narrow or specifically targeted LLM. And I think that that's going to be where you're seeing a lot of again, where the puck is going rather than where the puck is right now. I agree. It makes a lot of sense. All right. Cool. Last question for you. I know we've asked this question before, but since you've written a book now, you may have changed your perspective. What's one word of phrase you believe will define the future of HR over the next five to 10 years? Yeah. I would say it's the subtitle of the book. It's using data driven HR and genera AI as a business asset. I'm saying that phrase, if I really get speculative, I'm not sure the term people analytics is necessary 10 years from now. But I think data driven HR and genera AI as a business asset is evergreen. One of the things I was worried about in writing the book is that if genera AI, if they release GPT-5 tomorrow, is this whole book going to be outdated and none of it's going to be relevant anymore? But the thing I'm realizing between when I've written it and when it comes out, our
August 26th that it's evergreen because it's focused on the things that matter that are going to continue to matter into the future. And I think it's that data-driven HR, Genevieve I, as a business asset. Absolutely. We'll call Thank You for writing the book and adding to a great library of knowledge for HR and people and Alex professionals. Always put a hang out with you and spend time with you. Yeah. Thanks for having me JP and I appreciate all the really great questions. Thank you so much for listening this episode of Future of HR Podcast. Thanks to Indicol for sharing his insights from his new book and how people analytics can shift from a cost center to a profit center. As always you can go to futureofhr.com to view all our past episodes and learn more about our mission to inspire the next generation of HR leaders. And if you enjoyed this episode of Future of HR I think you'll enjoy my Future of HR newsletter which is the only newsletter that is focused on helping you to elevate your career and business impact. So go to futureofhr.com right now and subscribe and be sure to download my HR leaders blueprint which is 18 pages of real-world advice from a hundred plus thought leaders with simple actual improvement strategies to advance your career. Moving back next week another amazing guest, Brandon Sammits. Brandon is the Chief People Officer of Zapier which builds software that empowers their customers to automate processes, build AI agents and apps. And Brandon and his team at Zapier are on the cutting edge of AI and HR and they've been building and sharing all they've been learning their journey so far. And on my conversation with Brandon we're going to go deep on the culture and talent strategies that bring an AI first company to life and we're going to talk about some of the amazing and innovative use cases for AI and HR. This is a great conversation and one you will not want to miss. Thanks for being part of the future of HR community.
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