Clarion’s partner Sarah Harrison
It is no secret that national insurance contributions and changes in national minimum wages, which came into effect in April, will have a major impact on businesses, forcing everyone to check their operating model and reduce costs. Those who were already running on thin rims are most pressured to adapt to survive.
The natural response for many people is implementing cost-saving strategies such as redundancy, hiatus recruitment, delayed investment decisions, and the hot topic of the day is whether artificial intelligence (AI) can come to rescue to close the gap at a low cost.
Companies in almost every sector are researching and implementing AI tools to automate daily tasks and reduce overhead, from chatbots and content generators to integrated agents that control the entire process.
However, as we readjust our business models to adopt technology efficiency, it is not important to lose sight of the fact that people are still at the core of our business. Employees are not just line items in your account, they are the source of creativity fountains, drivers of innovation, emotional intelligence and culture. Businesses that underestimate their people’s long-term value are at risk.
While AI promises 24/7 efficiency and HR issues, it offers an attractive solution, it’s important to realize that AI is not a magic bullet and may not be as cost-effective as you think. In addition to the price of the product itself, there will be an initial cost of training the system and training staff for the system integration and/or migration system, making upfront spending potentially important. If the product cannot provide the efficiency you wanted, the return on investment may not be what you expected.
There are also many legal considerations to consider, from data protection and other regulatory obligations to complexity regarding intellectual property ownership. While seduction is solving your own challenges to turn to AI, you might argue that ChatGpt and other large-scale language models can answer these questions for you, the answers often contain inaccuracies and hallucinations that can lead you on the wrong path.
The challenge for today’s business leaders is to carefully manage the AI transition and carefully manage sensitivity, taking into account where AI can be used as a capacity improvement rather than as a replacement for people. In particular, businesses must engage with people to manage role change and encourage them to alienate their employees and accept AI rather than risk losing AI profits by failing some of their profits.
The most successful business is probably the ones who balance it out. Reposition your energy into roles that are more focused on innovation, brand differentiation, and customer loyalty while using AI to free employees from common or repetitive tasks. Ultimately, in many companies, people buy people, and trust is still a major component of commercial relationships.
It’s easy to focus on short-term profits, but business owners also have to think about their long-term future. Who is your future business leader? Hopefully, many sci-fi movie predictions prove to be false and machines will not take over the world, so if you fail to invest in the development of the next generation, your successor may leave you without continuing to move your business forward.
Whatever your business’s future plans, if you want to sell it to trade buyers or management teams, it’s important to identify key individuals in your business to help you get there, whether you’re going to pass it on to the next generation of families or perhaps moving into an employee’s owning model.
The Industrial Revolution lasted for about 150 years, giving business owners plenty of time to adapt to changing labor practices and attitudes towards the workforce. However, AI is changing the world at an exponential pace, so you don’t have the same luxury for years to slowly change your strategy. It is clear that companies need to think quickly to decide how best to employ AI, but we must hurry and remember that the heartbeat of all great business is their people.
