AI adoption is rising.
According to McKinsey’s latest global survey, 72 percent of organizations now regularly use AI—a significant leap from the plateauing 50 percent over the last six years.
Even more striking is the rise in generative AI usage, which jumped from 33 percent to 65 percent in just one year.
These numbers tell a clear story: Organizations are investing in AI and reaping the benefits across various business functions.
But the truth is that AI adoption is complex and multifaceted. While it opens up a world of possibilities, it also introduces a host of risks that could place businesses in legal jeopardy.
Without careful implementation and strategic oversight, the very tools designed to propel businesses forward can become sources of significant risk.
In this post, we’ll dive into the pros and cons of AI adoption, and how you can maximize its potential while staying on the right side of the law.
The benefits of AI adoption
Businesses are no longer dabbling in AI—they’re actively investing in it and embedding it across multiple functions, transforming operations, says McKinsey.
And businesses are reaping the benefits of this—enhancing efficiency, reducing operational costs, and increasing revenue.
From automating repetitive tasks to providing deeper insights through data analysis, AI tools are helping organizations operate more efficiently and make better-informed decisions.
According to the same McKinsey report, HR departments, in particular, are benefiting from reduced costs thanks to the adoption of generative AI. Generative AI allows HR teams to automate repetitive tasks and analyze their people’s data to create more effective initiatives.
It’s undeniable: The benefits of AI extend to almost every aspect of business.
Organizations that enjoy the most success with AI are adopting it at higher rates and implementing emerging practices to minimize challenges.
These top performers understand that to fully capture AI’s value, it’s essential to address potential risks head-on.
The risks of AI adoption
One of the most significant risks associated with AI adoption is the potential for inaccuracy. Generative AI tools, for example, are powerful but not perfect—they come with the risk of occasionally producing content that’s misleading, incorrect, or even plagiarized.
This inaccuracy can expose businesses to legal risks, particularly surrounding intellectual property infringement. AI can also unknowingly generate content using copyrighted material which can result in an organization facing costly legal challenges.
This potential for inaccuracy also poses a threat to decision-making processes. Businesses that rely heavily on AI without enough checks and balances might find themselves making critical decisions based on faulty data.
As AI integrates more deeply into business operations, the risk of cybersecurity breaches increases—with the potential for cybercriminals to manipulate AI systems and produce skewed results, steal data, or disrupt business functions.
Besides external threats, professionals within your organization can use AI tools to falsify information or even work for multiple competitors at the same time.
Many business leaders are excited about the benefits of AI and are pushing their organizations to adopt it faster. But the rapid pace of enterprise AI adoption has led to a growing skills gap that organizations are struggling to fill—leading to inefficiencies and missed opportunities.
It’s important that organizational leaders are equally aware of the risks and benefits of AI adoption to safeguard their businesses.
Minimize the risks and maximize the benefits of AI
Successfully adopting AI and reaping its benefits requires more than just enthusiasm for the technology’s potential—it demands a strategic approach that carefully considers the risks involved, with measures to minimize them.
Here are some key strategies to keep in mind:
Leverage HR expertise
AI adoption is a cornerstone of digital transformation for modern businesses. But it’s critical to include HR leaders and teams in AI adoption plans to ensure smooth adoption, higher success rates, and compliance with the latest laws and regulations.
Stay compliant
With new AI regulations emerging around the world, companies are at greater risk of facing legal challenges and receiving substantial fines for non-compliance.
To stay compliant, you can:
- Keep up to date with the latest legislation. The European Union’s AI Act, set to fully come into force in 2025, imposes strict requirements on AI systems and data privacy. In the United States, Colorado and other states are enforcing regulations around AI and hiring practices. By staying in the loop, and adapting your AI strategies accordingly, you can avoid potential legal pitfalls.
- Create a comprehensive AI policy. An AI policy outlines the use of the technology within your organization. This policy can define the scope of AI applications, establish clear boundaries for its use, and ensure all AI activities align with relevant legal requirements.
- Carry out regular audits. Regular audits of AI-driven processes can help detect any unintended consequences and ensure your people use AI in a way that’s compliant with local laws.
Train your people
As AI systems become more prevalent and the skills gap grows wider, the need for continuous learning and development becomes more pressing.
By training your people to integrate AI workflows into their daily processes, you’ll be maximizing the benefits of the AI tools your organization uses—reducing workloads, enhancing efficiency, and promoting greater innovation within your organization.
HR can help close the skills gap by providing professionals with the necessary training to work effectively alongside AI. By prioritizing upskilling and continuous learning, you’ll maximize the potential gains while minimizing disruptions.
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Maintain human oversight
One of AI’s significant benefits is its ability to enhance human efficiency. It’s essential to maintain a balance between the efficiency AI can introduce and the need for human oversight. Because without human oversight, AI systems can unintentionally perpetuate biases, provide false data, or violate AI legislation.
To achieve this balance, it’s critical for organizations to integrate AI in ways that complement human intelligence rather than replace it. This might involve using AI to automate routine tasks but reserve more strategic activities that require human judgment and empathy for your people.
Because, after all, AI can’t replace your people—but it can help them perform better than ever before. When we view AI as a tool our people can use, rather than as a replacement for them, we’ll be able to reap the full benefits of the technology, helping our organizations stay ahead of the competition while still complying with the law.
A human way forward
As AI continues to reshape the business landscape, its adoption brings both immense opportunities and significant challenges.
Paradoxically, the organizations that successfully adopt it are those that recognize the irreplaceable value of human intelligence, insight, and creativity.
This entails an AI strategy that involves HR from the outset, implements comprehensive AI policies, ensures compliance with emerging regulations, nurtures a culture of continuous learning, and preserves human oversight of AI systems.
By thoughtfully integrating AI into their operations and maintaining a strong focus on human judgment, businesses can unlock the full potential of AI while protecting their integrity, their people, and their future.
