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AI Cracks the Employee Retention Code for Small and Midsize Businesses

Feature Article | April 12, 2018 by Simon Bouchez Hot Story

Employee turnover is a costly problem, especially for small and midsize businesses. For every position left vacant, the time and cost associated with identifying, acquiring, and training the right person can lessen a business’ impact on what’s truly critical to its survival – revenue growth and brand expansion.

To reverse the downward spiral of poor employee retention, businesses must first automate processes and streamline everyday tasks, according to the IDC report, “HR Transformation and the Digital Journey: How Small and Medium-Sized Businesses Can Deliver Strategic HR,” sponsored by SAP SuccessFactors. Doing so improves retention by allowing employees to feel more fulfilled at work as they spend less time on mundane tasks to focus on using their strengths for more strategic tasks and building up their skill sets.

For decades, an overwhelming flood of technologies, tools, and processes have promised these fundamental capabilities. While some of them may have their merits, a vast majority are not supported by a level of intelligence that addresses the needs (and expectations) of an increasingly digitally empowered workforce. Maybe it’s time to look under the hood of your technology investments.

How Artificial Intelligence Can Revolutionize Employee Retention

From the boardroom to the stockroom, chatbots, robots, virtual assistants, algorithm-powered analytics, and other forms of artificial intelligence (AI) are increasingly empowering businesses to engage customers in personalized and productive interactions. The technology spots patterns found in historical data to predict future behavior, identify risks, and uncover opportunities. It intelligently listens and responds to customer feedback and makes connections at a speed that eludes most humans.

If we apply this same scenario to the HR organization, it becomes clear that a distinct, yet connected, customer experience overlaps with the needs of today’s workforce. For example, AI technologies embedded in employee feedback tools can automatically channel concerns to the HR team member with the right emotional background, expertise, and leadership role needed to resolve them quickly. Equipped with every employee’s history and recommendations on how to best engage them, HR can provide real-time counseling that is relevant and matches the perceived gravity of the situation in tone, word use, and urgency.

Forward-looking companies are also considering AI-enabled capabilities to simplify the overall work experience. AI can prompt follow-up questions that help employees detail a customer or business issue, analyze the data in isolation and aggregation, and recommend potential resolutions – all within a matter of minutes. Plus, this intelligence can be passed on to relevant business functions to let managers know where improvements are needed and how to capitalize on their success.

Beyond workplace efficiency, AI can help the HR organization understand employee performance, job-related attitudes, and the health of the broader business culture. By opening all forms of internal communication, the technology creates a systematic, deliberate, and continuous flow of insight to detect which employees could be a candidate for promotion or when and why they may choose to leave.

Why AI Is a Natural Step to Evolve Talent Management

By connecting the dots of truth along the entire employee experience, employers have an opportunity to track and understand their workforces better. HR teams can – and should – take advantage of the predictive capabilities of AI to carefully analyze why employees become disengaged, how to convince them to stay, and when to further develop their skills for the future.

But more importantly, AI provides a platform that allows employees to engage as co-creators of business success and a strong, unified workplace culture. This fundamental shift in talent management changes how employees view their jobs, their relationship with their employers, and their contributions to the bottom line.


Find out the key trends and actions that make employee retention a key source of digital transformation in small and midsize businesses. Read the IDC interactive report, “HR Transformation and the Digital Journey: How Small and Medium-Sized Businesses Can Deliver Strategic HR,” sponsored by SAP SuccessFactors.

Simon Bouchez is head of Product Innovation for SAP SuccessFactors.

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