Taking stock of human capital in the age of AI

Turnover has always been a concern for employers, but in a recent PwC report, an increasing number of employees worldwide are looking to move within the next year in light of many things, but mostly because of opportunities afforded by the rapid pace of technological change.

“Technology is fundamentally changing the way work gets done and the skills employers seek,” said Pete Brown, global workforce leader at PwC UK in the report, adding that employees value organizations that invest in their skills growth, which enables them to thrive in a digital world.

Upskilling programs and focusing on the employee experience are also crucial for businesses looking to hold onto talent and drive innovative transformations, and recruitment for tech talent is much more effective when IT leaders are actively involved in the process. But many CIOs still underestimate the challenges HR faces in grasping and describing the unique roles and skills within IT. The ideal approach, some say, is to make AI as much a part of HR strategy as it is part of IT strategy.

In Italy specifically, more than 52% of companies, and CIOs in particular, continue to struggle finding the technical professionals they need, according to data by Unioncamere, the Italian Union of Chambers of Commerce, and the Ministry of Labor and Social Policies. Lack of properly trained candidates is the main cause of delays, and for this reason, IT and digital directors in Italy work together with HR on talent strategies by focusing on training.

Offering smart, or flexible, working has also become crucial, especially to attract younger candidates. Despite that since April 1, there are no longer simplified remote working measures in Italy requiring employers to accommodate this, the number of remote employees this year remained virtually unchanged, at 3.5 million compared to about 3.6 million in 2023, and is expected to grow by 5% in 2025, equal to 3.75 million.

In the event of eliminating or reducing agile work, 68% of Italians would remain where they are but would start looking for a new job, and 7% would leave immediately even without an alternative, according to recruiting company Hays Italia and law firm Daverio & Florio. Plus, 45% would like it to be a right, while 31% see it as a company benefit.

“Today, remote working allows you to work for foreign companies and benefit from higher salaries,” says Luca Balbo, executive manager of the ICT and digital division of Hunters Group recruiting. “Faced with the difficulty of attracting talent, the CIO must study the market and offer flexible working conditions to candidates. Work flexibility is truly the most requested and appreciated benefit.”

But another fundamental factor of attraction and retention is offering a technologically compelling project. “You have to be innovative,” adds Balbo. “People choose a job because it excites and stimulates them, and they leave jobs where they feel they have nothing more to learn.”

Case in point was the high turnover rate at road and highway maintenance company AVR Group, and the solutions enacted by its CTO Pierangelo Perdomi to remedy it.

“People stay if they see a future in their career and professional growth,” he says. “When I joined AVR, the CEO asked me to take on the role of innovation manager to improve the company’s ability to attract and retain talent. We had high turnover, not so much in the IT part, but in software development and engineering operating units, so innovations in human resource management started from here.”

Together with the management, Perdomi intervened by aligning an offer with market demands, not only based on positioning and remuneration, but also on welfare and work-life balance.

“Smart working is sometimes a must,” he says. “I don’t like working completely remotely and the company still requires moments of meeting in person, but if smart working is applicable as a resource, it must be granted.”

So smart working was introduced at AVR last year in the technology business unit with a different supplementary contract for different groups. Starting next year, Perdomi plans to extend it because the division has grown from 9 to over 80 people, and a booking and rotation mechanism for workstations will be created. 

“For a company like ours, it’s not necessary to always be in the office,” he adds. “We have a traveling IT team, and for these people, smart working isn’t always possible. Instead, for those who work in development, we’ll continue to provide up to three days a week of remote work.”

Retention through innovative projects and training

A second direction of intervention for HRM at AVR was reskilling and upskilling resources, with training and certification courses to develop web apps and adopt Agile. 

“We provide continuous training and have also introduced Learning Friday as a half-day dedicated to training,” says Perdomi. 

A further element of the strategy was introducing performance management through objective evaluations, and to valorize those who have distinguished themselves to earn career growth. This program has its own planning and also a dedicated budget.

“These initiatives combined have reduced turnover as well,” Perdomi adds. “Today we’re able to be more attractive to the market and effective in corporate communication. For example, we’ve renewed the language we use in advertising open positions, indicating specific information on activities and on the company’s work-life balance.”   

The role of AI to support HR and the CIO

Achieving work-life balance is essential. Antonello Spinetti, founder and CEO of IT services company Begear, says they also had a very high turnover rate. “We managed to mitigate it with a simple strategy by being more present and closer to our employees, listening to their needs, and turning them into opportunities,” he says. “For a company like ours with 200 employees, this is no small task, but it’s really turned the tide and consolidated people’s loyalty.”

And while giving a raise can convince someone to stay in the company, it’s a bigger incisive to have people who feel integrated and who embrace the company philosophy.

AI is also a contributor, and for Begear, training in it has been fundamental to tackle turnover. “The adoption of our AI product helps us because it maps internal skills and offers ad hoc courses to expand those skills or fill gaps,” Spinetti says. “Having opportunities to learn is a great factor in engagement and retention.”

AI can also provide important support to HR in the search and selection of personnel. Begear has been using AI in this area for several years, Spinetti points out, and through one of his initiatives, an internal AI factory was created, which develops software to speed up CV search and selection.

“With an algorithm, the CV data is extrapolated and the candidate’s skill set is reconstructed,” he says. “This helps us screen about applications 5,000 per hour. The AI ​​also creates an avatar capable of interviewing the candidate, and testing both hard and soft skills. This process is invaluable to our HR and CIO.”

The software also allows Begear to act proactively whereby CV analyses help to understand which experts are most in demand. And based on these indications, the company can identify a series of key themes and training courses to offer candidates to complete the preparation on technical skills.

The future of work

For Spinetti, the main point in tackling the problem of talent shortages is to respect the dynamics of supply and demand, and plan hiring accordingly.

“Human resources are on the market, and it’s the market that decides how much a programmer, cloud expert, or data analyst costs,” he says. “Talents must be paid. As for scarcity, the first solution is planning. You need to know in advance what talents a project needs, and not start looking for people close to the start. This helps to find resources in time and at a fairer price. AI allows you to understand what skills are missing in the company and to act before finding them becomes urgent.”

This means that the CIO must be proactive and work closely with HR colleagues, including sharing AI tools to support talent management, from software that automates CV screening and analyses of skills gaps in the company, to the planning of training paths. Plus, AI tools that help with talent searches must be well understood and embraced by the CEO.

“There’s no single recipe for who should evangelize the staff on the use of artificial intelligence in the company,” says Spinetti. “Each case is different. Sometimes the CIO intervenes, sometimes marketing does, and sometimes it’s the CEO. AI must be culturally accepted.”

While AI is being used in several business functions at Begear, it doesn’t make programmers disappear. It simply makes them evolve into professionals who control the work of the AI.

This scenario of transformation — not replacement — ​​ is shared by most analysts. For example, the IDC Future of Work Employees Survey found that, in the face of automated jobs, others will rise to support any new needs that accompany the use of AI, such as AI ​​prompt engineers or AI ​​ethics specialists. For this reason, the task of the CIO is to continuously update internal skills to remain competitive and avoid being caught unprepared in the face of changes.