Total Rewards teams anticipate that AI disruption will lead to the elimination of in an average 3-5% of roles in their workforce !
Nicolas BEHBAHANI
Global People Analytics & HR Data Leader - People & Culture | Strategical People Analytics Design
🦾 Approximately 76% of companies are still at the "None" to "Understanding" phase when it comes to grasping AI's potential impact on Total Rewards.
🎯 They envision embedding AI into the core of their Total Rewards programs within the next two years, laying the groundwork for strategic transformation.
📆 Initially, AI is being leveraged to drive automation and facilitate data-driven decision-making, while future initiatives aim to harness predictive analytics, enrich the employee experience, and customize reward offerings.
💻 This disruptive technology is set to reshape Total Rewards programs, necessitating significant workforce reskilling to keep pace with change.
🤞 However, there remains a moderate level of uncertainty about how many roles might ultimately need re-leveling or face pay reductions as a result of AI adoption, according to a new interesting research published by Korn Ferry using data 📊 from more than 5,700 HR and Total Rewards leaders across 130+ countries.
✅ Impact AI on rewards processes
Researchers observed that the majority of companies (76%) are currently in the "Understanding" stage, reflecting an initial curiosity about AI and a growing awareness of its potential influence on Total Rewards.
This highlights that the integration of AI within this department remains in its infancy, with its transformative impact yet to fully unfold.
✅ Top challenges using AI in Total Rewards
Researchers revealed that doundational concerns of data privacy, security, and data integration, as well as the required cost investment, top the list of concerns.
Interestingly, Fear of job reductions, ethical considerations, and concerns around bias and fairness are of less concern.
✅ Organizational impacts due to AI within the next 2 years
Researchers also determined over half of organizations expect to reskill their workforce for roles impacted by AI within the next 2 years. More organizations anticipate AI positively vs. negatively impacting profitability. Impact on revenues is seen as neutral.
Also researchers uncovered that there is a very high degree of uncertainty relative to the expected incremental profitability increases due to AI. For those who have a view, organizations are, on average, expecting between a 3-5% incremental impact on profitability due to AI.
✅ Usage of AI in reward management
Researchers found that AI's influence on reward program management is most notably concentrated in three key areas:
✔️ Enhancing Communications and Transparency: AI is being used to improve how reward programs are communicated across the organization, ensuring greater transparency in how rewards are determined and distributed.
✔️External Pay Benchmarking: Advanced AI tools are helping organizations conduct more accurate and efficient comparisons with market salary data, ensuring competitive compensation structures.
✔️ Job/Skills Architecture Foundations: AI is contributing to the development and refinement of foundational frameworks that map job roles and skills, supporting more strategic talent management initiatives.
📣 78% of HR teams anticipate 2025 headcounts to be within +/-5% of 2024 levels, with a tendency towards increasing staff.
☝️ 𝙈𝙮 𝙥𝙚𝙧𝙨𝙤𝙣𝙖𝙡 𝙫𝙞𝙚𝙬: I find this research incredibly enlightening as it reinforces previous findings that AI’s impact in HR varies significantly across different departments. In particular, the Total Rewards function is still in the early stages of embracing AI. Emerging tools—designed to predict annual employee salaries and enhance forecasting accuracy—are already equipping Total Rewards teams with sharper insights. However, these technological advancements are far from signaling an imminent replacement of human expertise in the Rewards space. Instead, they serve to augment the capabilities of existing teams, providing data-driven support that complements human judgment.
Thank you 🙏 Korn Ferry researchers team for these insightful findings:
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Industry Veteran | Exploring Future of Work | Great Manager’s Coach & Mentor
6mo✅ Yes, Nicolas BEHBAHANI, the Korn Ferry research makes one thing clear - AI isn’t here to replace HR expertise; it’s here to turbocharge it 📈. 👌 The potential of AI in Total Rewards excites me, especially when it comes to Predictive analytics & Personalized rewards - a real game-changer. 🤖 Sure, AI might trim 3-5% of roles, but it’s also opening doors to a whole new era of workforce reskilling. After all, even the smartest robots need humans to guide their success. 🤖✨ 🧞♂️ Imagine receiving an email from AI (a Total Rewards Agent) saying: Your Total Rewards are 'X' based on current skills, BUT acquiring 'Y' skills could boost them by 'Z%'. Applying these skills could take rewards even higher & your Manager’s evaluation will seal the deal. 🎯 NOTE: It’s not a U-turn - it’s a partnership. AI will always rely on humans to drive meaningful impact. Legal cases & judgments have shown that human judgment is indispensable for fairness in sensitive scenarios.
Senior HR Professional | Chief HR Officer | HR Transformation
6moNicolas BEHBAHANI interesting study indeed. My view: HR doesn´t differ that much from other functions. Means indeed: Every part of HR will be touched by AI, but to a different degree. In Total rewards I expect three developments coming with AI: 1. Hyperpersonalization of Rewards (today not possible), 2. real-time linkage of Rewards to People performance and engagement (also not possible in real time today) and 3. change from "pay for what people do as a job" to "pay for how people do their job", so competency based pay. Why: Since we will have a constant work and skill trasnformation (AI capabilities keep evolving, AI2Human interaction will change in an evolutionary way and constantly adapt). The last one is the biggest shift: Due to AI jobs become skills.
CEO and Founder @ myCandr | Transforming Survey Data into Organizational Growth & Productivity Gains
6moNicolas BEHBAHANI great insights! It's clear that while AI is gradually making its way into this space, we’re still in the foundational phase. The focus on augmentation rather than replacement feels right as we're early days and ultimately AI’s true value lies in empowering human decision-making, not replacing it. Excited to see how this develops!
Fractional HR Partner & Startup Advisor: helping HRTech founders validate, refine and scale | Neuropsychologist & Researcher: Authenticity Index™ Assessment
6moRewards have always been a combination of art and science since I took my first steps there back in 2004. We can definitely leverage AI for the ‘science’ part of it to allow the rewards team to focus more on the ‘art’ side of it.
Thanks for sharing valuable inputs for AI disruption in roles of workforce. Upskilling is a right solution to stay ahead of AI or automation disruption. I afraid elimination average may be more than 5% of roles in workforce. Thanks Nicolas!