We hosted a fireside chat with WorkTango CEO Monique McDonough and globally recognized thought leader and former Gartner Research Head Brian Kropp on "From Cost-Cutting to Culture-Building: Leveraging AI to Elevate the Employee Experience." The session explored a fundamental shift in how HR and business leaders can, and should, think about the AI revolution.

The conversation challenged the conventional AI narrative and offered HR leaders a practical playbook for navigating this transformation. Here are the key takeaways.

The big idea: focus on experience, not just expenses

The overwhelming focus on AI has been about cutting costs, reducing effort, or decreasing headcount. Brian Kropp and Monique McDonough urged us to look past that to something much bigger, something hiding in plain sight: elevating the employee experience (EX).

  • Look beyond efficiency: While a decrease in cost is a good thing, it's the smaller part of the value AI will create.
  • AI's real value transforms everything: AI will unlock possibilities like new business models, emerging industries, and transformed employee-employer relationships. The real potential goes far beyond what we can predict today.
  • Culture drives impact: Engaged employees who enjoy their experience drive significant impact for the organization. AI should be leveraged to build an environment where people want to come to work, feel inspired, and support organizational goals.

The new reality: what's actually changing (and why this is hard)

As AI takes on lower-level, repetitive tasks with clear right or wrong answers, the nature of all work will change. Here's what makes this transformation uniquely challenging:

  • We're all still figuring this out: Only 5% of companies are realizing real ROI from AI today. 30-40% expected an RoI. That’s a huge gap. . The technology is ready, but use cases and operating models aren't. This is why demanding ROI on every test is premature. Nobody has it completely figured out yet.
  • Hallucinations aren't going away: AI sometimes generates inaccurate or made-up information (called "hallucinations"). This happens because AI models have exhausted quality training data, and most new content is AI-created, which reinforces bias. You need a thoughtful human in the loop applying critical thinking to validate AI output.
  • Organizations will flatten, work will change: AI enables faster information flow, leading to flatter orgs and broader manager spans. Employee work will shift from 75% repetitive tasks to judgment calls, resource allocation, and emotional intelligence. The real challenge isn't technology, it's change management. HR must lead the experimentation on innovation and culture.

What HR should do: embrace experimentation and solve real problems

Throughout the conversation, one tension kept surfacing: AI can make work faster, but HR's role is to make it better. HR must ensure that AI strengthens, not replaces, the human parts of work: judgment, purpose, belonging, and learning. The real differentiator won't be the technology. It'll be how we lead through it.

With this new reality in mind, here's how HR leaders can successfully navigate the transformation:

1. Start with the pain points

Don't start by asking "What can AI do?" Instead, ask:

"What's hard right now?"

"What are the friction points?"

Begin by finding something annoying and frustrating for employees or customers, and then figure out how AI can reinvent it.

2. Fund the effort, not just the result

HR leaders need to give employees permission to experiment. Stop worrying about calculating the precise ROI of AI tools right now, because no one knows what it is yet.

Ask a Different Question: Instead of "Is it worth it?" ask, "Does it make things better?" If it generates a return, then you figure out how to do it effectively.

Reward the Process: Promote and recognize employees for their effort and experimentation, even if they fail spectacularly. Now is your chance to truly celebrate learning.

3. Lead your leaders

Senior leaders are inherently competitive. Use this to your advantage! Showcase those within your organization who are experimenting successfully with AI, getting recognition, and gaining brand value. Peer pressure can be far more effective than HR mandates in shifting the mindset toward adoption.

4. Use AI to strengthen connection and collaboration

AI isn't just about automating tasks. It can help surface invisible contributors and connect people working on similar problems across geographies. Consider using AI for "collaboration matchmaking" to pair employees by skill or project context. Recognition systems can use AI to amplify unseen peer-to-peer contributions, making sure great work doesn't go unnoticed.

5. Focus development on judgment capabilities

Since employee work is shifting from repetitive tasks to judgment-heavy activities, HR needs to focus development on judgment capabilities, using simulations and leadership training. No one says, "My leaders need worse judgment." Build that skill now.

Mitigating fear: employability is the new retention

The fear of job loss is real. The way you communicate your AI strategy can make that fear better or much, much worse. Here's how to navigate this successfully:

No cost-cutting mandates

Companies that communicate a goal of shrinking the workforce by a percentage using AI will struggle to attract and retain the best talent.

Own the transformation

There should be a new role in HR, a Vice President of Human-AI Workforce Transformation, whose job is to figure out how humans and AI agents work together ethically and effectively. This person owns the strategy, the communication, and the investment in people through the transition.

Shift to employability

This is perhaps the most important mindset change. HR's responsibility is shifting to ensure employees have the skills and capabilities for a great career that may or may not be here. Navigating this reality requires two commitments. First, be honest with your people about the changes ahead. Second, invest in their long-term employability, whether their career continues with you or takes them elsewhere.

A huge thank you to Brian Kropp and Monique McDonough for their incredible insights, and to our community for the great questions!