According to the latest edition of the Global Equity Insights Survey (GEIS), the world's most comprehensive study on market practice in share-based payment and employee participation, interest in the use of artificial intelligence (AI) in share programs and employee participation is growing. An interview with David Voggeser, GEIS Study Director and Partner in Strategic HR Management at hkp///group.
Mr Voggeser, in the most current GEIS report you state that there is increased interest in the use of artificial intelligence in share-based payment and employee participation – while at the same time there is hesitation regarding its actual use. How do you explain this discrepancy?
David Voggeser: I see two reasons in particular: Firstly, there simply aren't many mature solutions yet that could be considered externally, and internal development is often not efficient enough. The other reason is simply a general uncertainty with regard to the technology, but also a high level of skepticism about the reliability and accuracy of AI-supported solutions. Many companies have concerns about whether the technology is mature enough to take on sensitive tasks such as managing share programs. There are also data protection concerns, particularly in Europe.
According to the GEIS report, North American companies are leading the way in AI utilization in this area too. What are these companies doing differently?
David Voggeser: US companies in particular are often more innovative and willing to take risks. They are prepared to test and implement new technologies at an early stage. In addition, experience has shown that they have greater resources to invest in AI solutions if they have a corresponding mindset in corporate management - with corresponding competitive advantages later on, including in the design and administration of share programs and employee participation schemes.
What applications of AI in share programs have been observed so far?
David Voggeser: As in almost all other fields, AI is mainly used in internal communication systems such as chatbots for responding to enquiries from the workforce. Some companies are experimenting with AI in the context of analytics processes. However, its use in the latter area is not yet widespread. It is often still in its infancy.
What new AI-driven solutions can be expected for the management of share-based payment programs?
David Voggeser: Many companies expect new solutions, especially in the area of communication. For example, almost half of companies consider the use of chatbots for interacting with employees on share-related enquiries to be useful. These can be used to answer basic, repetitive questions quickly and efficiently – while at the same time relieving the HR function. That would be a low-hanging fruit. The other exciting opportunity is seen in the area of reporting, but also in the prediction of share prices and their influence on share allocations. Around a quarter of the study participants see potential here.
There is therefore a wide range of possible applications that could become relevant. What about concerns regarding the impact of AI on remuneration processes?
David Voggeser: Yes, almost half of the companies are unsure how AI will affect processes in the coming years. However, some are optimistic and see potential in areas such as reporting and analytics in particular. A third of companies believe that AI could have a positive impact, while only a quarter do not expect any significant changes.
Are companies aware of the applications of AI among their providers for managing shares as part of corresponding programs?
David Voggeser: A large majority of respondents are unaware or unsure whether their share administration service providers are using AI programs. Only a small proportion reported using chatbots. Other functionalities are either not communicated or not yet implemented.
What AI-based functions or features do companies want from their share administration service providers?
David Voggeser: The most sought-after functionalities are chatbots, process automation, advanced analytics and compliance checks. There is a clear need to maintain a balance between AI functionalities and human oversight. In any case, companies want transparency on how algorithms influence administrative decisions.
Thank you for the interview!
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