Unlocking the power of AI in HR: how Artificial Intelligence can elevate the HR strategy in knowledge-based organizations

Artificial Intelligence technologies are increasingly having an impact on organizations as well as individuals. AI technologies can support streamlining business processes and support employees move away from manual work towards a more fulfilling, value-adding tasks. To prepare for the AI disruption, organizations must understand the AI landscape to understand how these technologies can be utilized in their business processes and how can it support organizations in achieving their strategic objectives. Human Resources has evolved over the years from an administrative, day-to-day task function to a strategic business partner that can bring valuable and strategic insights to support the business. AI technologies can be used to strengthen the HR function’s position in the organization and they can help HR to achieve strategic objectives. The conceptual framework for this study covers the subjects of AI technologies, knowledge-based organizations, and Strategic Human Resource Management. These topics have not been overly researched through one lens before, so this research aims to do that to find connections between these and discover how AI capabilities can support the HR function and strengthen its role as a strategic partner specifically in knowledge-based organizations. During the research, a framework is developed as a supporting tool for HR professionals and the HR function overall. The framework can be used to evaluate the AI technology applicability when aiming to achieve HR function’s strategic objectives. The research is conducted as a case study, and development method is constructive research. The data was gathered with the help of semi-structured interviews and a feedback session with the case organization. The research sample for the interviews is 5 and covers a representative from the case organization as well as AI experts. The research sample for the group session is also 5 and all the participants are representing the case organization’s HR team. The research concludes that AI disruption requires intensive upskilling and reskilling of people, for organizations to be truly ready to utilize AI technologies and for employees to be open to the possibilities it brings. Data is the backbone of AI, so data structure needs to be in place when organizations want to utilize AI technologies. The framework, developed by the author of the thesis, can be used as an effective tool to start the discussion on utilizing AI solutions to achieve the HR function’s strategic objectives. This study can inspire future research in the areas of data and its importance in achieving strategic objectives, analyzing the developed framework’s applicability to different teams and industries as well as researching the cultural aspect of implementing AI technologies and capabilities in organizations