Leveraging Artificial Intelligence for Decision Making: Assessing Objectivity in Organizational Downsizing

Senior business officials across the United States are worried and worried right now. The economic environment in 2023 is uncertain, but one thing is certain - more layoffs are coming. In November 2022 alone, companies announced more than 80,000 layoffs, including technology giants such as Meta, Amazon, and Twitter, as well as traditional companies such as PepsiCo, Goldman Sachs, and Ford.

Layoffs have always been one of the most difficult things management has to do. How many people should you let go? When should you do it? Who stays and who leaves? What kind of severance package are you offering? How do you protect your diversity goals? How do you maintain the trust and productivity of those who remain?

Let too many people go, too quickly, and you risk undermining the organization's service and execution. Let too few people go, too late, and you could lose money. Let the wrong people go and you can create chaos within the organization. Getting this wrong can have a huge impact on profitability, productivity, brand reputation and stock price.

The author is therefore thinking, can artificial intelligence help solve this problem?

Artificial intelligence has boomed in recent years and can help human resources departments find, screen and interview candidates, and even reduce bias in recruitment. IBM and other companies use artificial intelligence to predict which employees are about to quit. The main thing here is attracting and retaining talent.

Can artificial intelligence be used for layoffs? Are there any artificial intelligence tools that can help guide corporate decision-making? It turns out there is. The author would like to share with readers here five ways in which artificial intelligence can make "organizational streamlining" beneficial to both employers and employees.

Organizational Streamlining: Five Magic Weapons for Using Artificial Intelligence to Make Decisions

1. Performance Evaluation

Department managers usually receive a headcount quota and are empowered when they need to lay off employees Choose who to cut. But for managers on the front lines, every member of the department seems to matter. Without adequate tools and experience to guide their decisions, the process can fall apart, which can be very damaging to employee morale.

Artificial intelligence can provide objective performance evaluation and help managers decide who to stay and who to leave. AI software startups like GoFusion Perfacto and Entomo can now leverage data from employee productivity, attendance records and other key performance indicators to help separate star employees from the rest based on objective performance indicators.

This method can provide department heads with reasons for layoff decisions, thereby freeing both leaders and teams from the drawbacks of purely subjective decision-making.

2. Skills List

It is natural for managers to make decisions that favor short-term needs when they are under pressure to lay off employees. In theory, it makes more sense to retain the talent your organization needs most for its core business activities. But following them all may leave you unprepared to take on those strategic initiatives for the future.

AI can help take stock of your organization’s skills distribution and compare it to market need forecasts and identify where skills gaps remain so you can factor them into your decisions. Tools like eightfold.ai and Seekout provide what they call “talent intelligence” that combines insights about employee skills with market and organizational needs to make data-driven talent decisions. This enables C-suite executives to consider the talent management requirements of the entire organization, not just those of individual departments.

3. Retraining potential

Layoffs mean fewer employees, and each person will have to take on more work. Organizations are restructured. Some functions were consolidated. Employees who remain often have to take on new roles and learn new skills. AI can help identify employees who are better suited to reskilling and make recommendations on how to help them expand or change their roles.

HR software like Pymetrics and Workday offer tools that can analyze data on the soft and hard skills of your current employees, as well as certifications, track records, past projects, and licensing And so on, to determine the strongest migration or role expansion opportunities. These results sometimes even include personalized course recommendations and training modules, so you have a clear path to reskilling your employees.

4. Avoid Prejudice

In good times, it feels easier to pay enough attention to an organization's sense of equality. But that resolve may start to waver when faced with the pressure of layoffs. How can you ensure that decisions are fair, objective and aligned with your organization’s equality goals? How can you sustain your organization’s commitment to diversity and equality?

Artificial intelligence can also help in this regard. For example, Onwards HR includes an "adverse impact analysis solution" that analyzes data across departments and allows HR and legal teams to understand potential bias in those who have been terminated.

5. Support for resigned employees

Artificial intelligence can play some role even for those employees who must be laid off. Helping your employees transition is not only the right thing to do, but it's also important to protecting your organization from reputational damage, both externally and internally.

Artificial intelligence can help laid-off employees identify their roles and companies to target next, and can also support them in acquiring the skills they need to successfully obtain new jobs. For example, FutureFit AI can compare an employee's skills to hundreds of millions of people. FutureFit AI can then use real-time labor market data to recommend career progression, suggest learning paths, and help laid-off employees succeed—all using AI.

AI from companies like BlueJ Legal can even help you determine the best severance packages to offer departing employees based on age, role, length of service and litigation case law.

I want to make it clear that I do not advocate leaving the decision-making power of layoffs entirely to artificial intelligence. While it might be a good thing to leave the dirty work of layoffs entirely to AI, humans will still need to step in to handle layoffs strategically and empathetically. But if used correctly, AI can certainly support leaders in making some of the toughest decisions any of us will ever have to make.

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