Don't Fear the AI Reaper

Unless you are incredibly lazy, mediocre, or both

It’s worth noting that the people who are most outspoken against the use of artificial intelligence in its various applications tend to be either a) the most obviously useless, or b) the most wildly overpriced.

A recent incident at a company has led to the dismissal of half its HR team after a manager discovered a significant flaw in the applicant tracking system (ATS) used for hiring. This system, intended to improve the recruitment process, was automatically rejecting all job candidates, including the manager's own application.

The manager, frustrated by the difficulty the HR department faced in finding suitable candidates over three months, decided to investigate further. Using a pseudonym, the manager submitted a modified resume to test the system. To his surprise, he was auto-rejected within seconds. He shared his experience on Reddit, stating, "I've created myself a new email and sent them a modified version of my CV with a fake name to see what was going on with the process and guess, I got auto rejected."

Despite possessing strong qualifications, the manager's application received no human review. The situation revealed that the ATS was dismissing candidates without any evaluation, leading to major hiring issues.

The manager expressed frustration over the HR team's handling of the situation. He mentioned that they consistently reported having candidates who did not pass initial screenings, which he later found to be untrue. He criticized the HR professionals, stating, "People who work in HR are incredibly mediocre and lazy."

And, of course, as has been copiously demonstrated in Corporate Cancer, Human Resources are not only filled with incredibly mediocre and lazy employees, but the entire department is an openly anti-productive element of the corporation that despite being of negative value, add thousands of dollars of cost per employee. In fact, in smaller companies, HR eliminates more than half of the profits just on the basis of its operations alone.

The only HR employee a corporation needs is an outside Reaper.

The following section is an excerpt from CORPORATE CANCER, a business book that explicates how convergence literally kills corporations and predicted the current failures of companies like Intel, Disney, and Boieng on the basis of their observed social justice convergence.

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There are two departments where convergence first develops inside the average corporation:

• Human Resources (HR)

• Marketing

Of the two, Human Resources is by far the most dangerous. This is because it is the main point of entry into the corporation and it serves as an easily-controlled choke point for employees whose values and objectives are not in line with those of the corporation’s executives and shareholders. For example, social justice warriors in HR use execrable Codes of Conduct to drive out stubborn white males who insist on working in a meritocracy instead of an unproductive social justice collective.

Human Resources is a more significant contributor to corporate costs than most executives realize. It is collectively a $400 billion annual industry, of which approximately half is spent on HR salaries, 42 percent is spent on external services, content, and contractors, and the remaining 8 percent goes to HR tools and technology.

On the salary side, there are 1.4 HR department staff members for every 100 workers in corporate America, and these employees are slightly more expensive than the average employee, as they account for 1.6 percent of the average corporation’s total operating cost. These costs are particularly expensive for smaller companies, as those with less than 250 employees spend, on average, $2,375 per employee on their HR function.

That may not sound like much, except that the biggest and most successful companies in the world, the Fortune 500, only average $31,560 in profit per employee. In smaller companies, the cost of Human Resources can easily exceed half of its net profit per employee.

But isn’t HR necessary? Even if it doesn’t produce any corporate income directly itself, doesn’t it act as a vital force multiplier that more than justifies its costs by improving the quality and productivity of the employees who actually produce revenue? Well, according to the human resources specialists themselves, HR does materially improve the quality of the employee base. As to whether that amount of improvement is justified by the expense, that is, to put it mildly, questionable.

We are reliably informed by a human resources expert that “the data shows a huge disparity between well run and poorly run HR teams” and that HR teams can be divided into four kinds: Level 1 (compliance driven), Level 2 (fundamental), Level 3 (Strategic), and Level 4 (Business-Integrated). Level 4 is deemed to be the most effective, as per the Human Resources Maturity Model:

• Level 1: Compliance-Driven HR Services. No HR strategy. “Personnel” function mostly separate from the business and talent needs. Line managers perform HR activities as they see best.

• Level 2: Fundamental HR Services. HR strategy partially or fully defined. Siloed HR functions. Some standardized processes and policies and core services managed well. Some automated talent systems but little integration of data.

• Level 3: Strategic HR Department. HR strategy aligned with business strategy. HR business supports business needs. Initiatives split between HR process improvements and talent needs. Some system integration.

• Level 4: Business-Integrated HR. HR strategy part of the business strategy. HR helps to drive business decisions through people, data and insights. Business and HR systems integrated and advanced.

Level 4 companies spend almost twice per employee on HR than Level 1 companies ($4,434 vs. $2,112 per employee) and they are getting much better business outcomes. Their voluntary turnover rates, for example, are 30% lower than those at Level 1 (8% vs. 11%). This is a striking difference: these Level 4 companies are investing much more heavily in management training, employee development, coaching, productivity programs, and programs to promote wellness and work-life balance. The result is happier employees, lower turnover, and a much stronger employment brand.

—Josh Bersin, founder and principal at Bersin by Deloitte, leading provider of research-based membership programs in human resources (HR), talent and learning

Keeping in mind that $4,434 per employee represents 14 percent of the net profit for the most successful corporations in the world, and may exceed the total profit per employee of a typical small or medium-sized business, is that really worth a three-point reduction in annual employee turnover?

In fact, wouldn’t simply paying an additional $4,434 to each employee as an annual bonus likely reduce your company’s voluntary turnover rate even more?

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Note that the HR expert was attempting to establish the value of HR departments on their ability to keep the mediocrities they hire, not any reasonable metric that actually proves a material benefit to the corporation or helping it meet its business objectives.

When someone tries to sell you on the basis of a nonsensical metric, you can be certain that what they’re pushing is worth less than zero.