Is a Lack of AI Governance Making HR’s Job Harder?

According to the Society for Human Resource Management (SHRM), while AI is leading to significant efficiency gains in the workplace, the lack of governance could create challenges and inconsistencies for HR leaders working across multiple jurisdictions. 

Insufficient policies around AI deployment can cause a lack of trust in workforces, says the report, which calls for the development of a federal framework to provide legislation at a national US level. 

“AI is no longer emerging; it’s fundamentally transforming how work gets done across every sector,” says Emily Dickens, Chief Administrative Office of SHRM. 

“As adoption accelerates, employers face a fragmented and rapidly evolving policy landscape that lacks alignment with today’s workplace realities. 

“What organisations urgently need is a clear, risk-based federal framework – one that delivers consistency, fosters innovation and establishes robust guardrails.”

AI at work

Despite the lack of governance, the report finds that many organisations are seeing widespread success from their AI deployments. 

The research shows that 89% of HR leaders say they see greater efficiency from their use of AI, while 36% see lower hiring costs and 24% say their organisations have created new job roles due to the technology. 

This is also having a lower than anticipated impact on the job losses, with only 7% of respondents reporting AI-driven layoffs despite 15.1% of US employment –equivalent to 23.2 million jobs – now being at least half automated. 

With this change, more than a third of respondents reported shifts in worker responsibilities, while 57% of HR leaders saw an increase in upskilling or reskilling for employees.

A balanced national policy

As the adoption of AI accelerates across the US, the lack of a united federal framework is increasing employer risk and complexity across operations, says SHRM. 

The report recommends a balanced national national policy, which it says is “essential to protect workers, drive innovation and ensure consistent standards, especially as the workforce faces rapid shifts in job roles and skills amid uncertainty about the long-term impact of AI.”

While the report says aligning company innovation with workforce readiness and governance is a “challenge,” it recommends companies address AI concerns transparently with their employees to build organisational trust and accountability while supporting business objectives. 

On a federal level, it asks policymakers to better align regulations with wider workforce needs to help prevent bias and guide responsible AI use. 

Some state-level legislation is already coming into play – such as the Safeguarding Human Intelligence and Employment in Labor Displacement Act (HF4369) in Minnesota. 

This proposed bill would require employers to issue a notice to their employees’ labour representatives, the Minnesota Department of Labour and Industry, local officials as well as the regional office board, informing them of the layoffs 90 days in advance.

Under this legislation, employers would also have to explain what technical progress is being made and highlight programmes in place to retain employees within the company. 

While this could improve AI governance in organisations, there is no indication it this could eventually be deployed on a national level.