People Operations (People Ops) is a critical function within organizations, particularly in startups and scale-ups, focusing on managing and optimizing human capital.
It encompasses activities such as recruitment, onboarding, engagement, retention, development, performance management, compensation review, and manager development. In fast-growing companies, the pressure to scale quickly often leads to "people debt," a concept introduced by Matt Bradburn in 2019. People debt is defined as "the accrual of poor process, documentation, communication, decision-making, and employee relations through default, not design," analogous to technical debt but with added emotional and relational complexities that make it harder to address.
This report explores how Generative AI (GenAI) and AI agents can help People Ops reassess their work, adopt a product mindset, and add value by managing people debt effectively, without relying on paid Software as a Service (SaaS) solutions. The focus is on underlying approaches that create high value for the organization, ensuring alignment with commercial outcomes and addressing the challenges of scaling in modern, technology-driven workplaces.
People debt arises when organizations prioritize speed and efficiency over structured people operations, leading to a lack of clear processes, documentation, and communication. This is particularly prevalent in startups and scale-ups, where rapid growth can outpace the development of robust systems. The impacts include:
These issues compound over time, making people debt increasingly difficult to correct as the organization scales. The emotional and relational aspects, such as strained employee relations, add layers of complexity, making it a tougher challenge than technical debt, which can often be addressed through system upgrades.
Traditionally, People Ops follows a flow of recruit, onboard, engage, retain, develop, manage performance, review compensation, and develop managers. However, with the integration of GenAI and AI agents, these processes can be transformed to be more efficient and effective, addressing people debt at its core. Below is a detailed breakdown of how each function can be enhanced:
| Function | Traditional Approach | GenAI and AI Agents Approach | Example Tools/Applications |
|---|---|---|---|
| Recruitment | Manual resume screening, standard job descriptions, time-consuming interviews | GenAI generates tailored job descriptions; AI agents screen resumes, conduct initial interviews, predict candidate success | Benify’s Beni for personalized candidate communication; Findem for talent insights (AIHR) |
| Onboarding | Generic training materials, manual workflow management | GenAI creates personalized training materials; AI agents manage workflows, ensure timely completion | Diversio for inclusivity-focused onboarding analytics (AIHR) |
| Engagement | Periodic surveys, manual analysis of feedback | GenAI analyzes sentiment data to identify disengagement; AI agents facilitate communication, suggest activities | Generative AI chatbots for employee engagement, e.g., major global software company (McKinsey) |
| Retention | Reactive retention strategies based on exit interviews | GenAI predicts turnover risk using performance metrics; AI agents manage retention programs, send personalized offers | AI-driven retention analytics, e.g., Mastercard with Phenom (Lyzr.ai) |
| Development | Generic training programs, manual tracking | GenAI recommends training based on skill gaps; AI agents track progress, send reminders | Personalized learning recommendations via chatbots (McKinsey) |
| Performance Management | Manual goal setting, subjective feedback | GenAI sets objectives, provides data-driven feedback; AI agents automate reviews, ensure consistency | AI for feedback generation, e.g., ADP’s HR Policy Document Query Assistant (ADP) |
| Compensation Review | Manual market analysis, administrative updates | GenAI analyzes market data, recommends adjustments; AI agents handle administrative changes | AI for salary benchmarking, e.g., Visier’s generative AI prompts (Visier) |
| Manager Development | Generic training, manual scheduling | GenAI provides coaching based on leadership style; AI agents schedule and manage training sessions | AI-driven manager coaching, e.g., 365Talents’ MentorAI (365Talents) |
These transformations reduce administrative burdens, allowing People Ops to focus on strategic initiatives. For instance, RingCentral used Findem’s generative AI talent search solution to deliver detailed insights and automate candidate matching, improving hiring efficiency by 50% and enhancing diversity, equity, and inclusion (DEI) goals (AIHR).
Treating People Ops like a product involves applying product development principles, such as funnels, user research, and feedback loops, to people operations. This approach ensures that processes are user-centered, data-driven, and iteratively improved, reducing people debt by addressing inefficiencies at each stage.