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In today's rapidly evolving digital landscape, generative artificial intelligence (GenAI) technology is no longer a futuristic concept but a present reality, and one that's delivering real business results. According to McKinsey, 65% of organizations are already regularly using GenAI in their work, which is double the figure from less than a year prior, and overall adoption has jumped to 72% in the past 12 months.

However, a lack of understanding of the technology at many levels of the organization, coupled with a lack of overall readiness, means that AI, while seen as a looming threat, remains largely intangible or misunderstood. Its successful application hinges on the ability of employees to understand and leverage this technology, and that calls for training.

The good news is that many employers are already ahead of the curve when it comes to investment in training programs to upskill their existing employees. According to Gallagher's 2024 Generation AI survey*, 49% of respondents said they had begun delivering AI training and on-the-job learning for employees to help them make better use of the technology, with another 36% saying that they had not started but planned to.

Reskilling for the future

However, there's still a fair share of apprehension to overcome. Employees across many industries are worried about job displacement, while their employers are challenged with the task of integrating these new technologies into their workflows effectively without further disruption.

The fear of GenAI's negative impact on the workplace is understandable. Since OpenAI's ChatGPT exploded onto the scene in November 2022, headlines have been full of dire predictions about the likely redundancies that will result from the use of GenAI. A survey released by the World Economic Forum found that 25% of CEOs expect GenAI to lead to headcount reductions of at least 5% this year.

Getting from a position where fear and misinformation fill the void of uncertainty to one where the risks and benefits of AI are seen in proper perspective will require education.

Preparing the workforce for the implementation of AI involves more than just retraining them on updated technical systems. It requires a cultural shift, framing AI's introduction in a way that enhances cooperation with the technology rather than resistance or resentment.

HR directors will need to work out the specifics of upskilling the workforce to plug the digital literacy gap, identifying needed skills, creating new roles and career paths, and fostering a culture of continuous learning. The challenge for the HR function is getting up to speed with the development and potential impact of AI on the workplace, as well as adapting policies and training procedures to mirror the new environment.

"Learning and development, and the upskilling of staff, needs to be far more proactive in terms of how you keep up-to-date with AI, and understand its development within your organization and your role," says Drew Munn, strategy partner, Future of Work at Gallagher. "Because as soon as you deliver that training, it could be out of date."

Understanding the limitations

That unspoken onus on employees to get to grips with AI if they are to remain effective in their roles imposes an equal duty on employers: To ensure that on-the-job training and induction processes are effective and are continually refreshed.

That said, employers should be realistic about people's limitations and the ability of AI to fix all workplace issues. For instance, according to Gallagher's research, younger executives under age 54 are more convinced that AI will have a "considerable to large" impact on their business than older respondents. Those aged 55 and above thought AI would have "little to no impact" on their business.

This points to the challenge for leadership in reskilling for this new reality. One of the key areas where transformation projects often fail is in their communication. The overall strategy needs to be clear from the outset, so that all stakeholders know what to expect from the implementation of GenAI. However, sometimes leaders need their own program of reskilling.

While there are some early adopters of AI who have bridged that digital literacy gap and are surging ahead with implementation, there are likely to be many laggards who are still at a stage of working out their own AI strategy. Before businesses can move forward with AI, there may be a requirement to coach the executive team in the concept, the details of available models and the process of adoption, as well as training the CEO on how to take an AI-enabled business forward.

An ongoing evolution

Ultimately, the hope is that GenAI technology will free up employees across many industries to add the human touch and focus on making better informed, more effective decisions in their work. For now, the technology is still far from replacing human labor, though that possibility continues to loom large.

Integrating generative AI into everyday business functions is the next logical step in the digital evolution of work. Companies that invest in upskilling their workforce will not only enhance operational efficiency but also create a more resilient and adaptable organization as the capabilities of GenAI grow and evolve in the years ahead.

*Gallagher's 2024 Generation AI survey took place during January 2024 and polled 800 senior decision makers in businesses across the following industries: manufacturing, technology, IT and telecommunications, financial services, construction, energy, real estate, retail and food production.

Published October 2024