How Will AI Impact TR’s Roles and Strategies Over the Next 5 Years?

“There is an exciting future for the total rewards function and the total rewards professional to play a more strategic role in the organization. It will be about linking data around pay, performance, skills, developmental opportunities and training — it’s going to be connecting the different people of HR, but total rewards can be at the center.”

— Gordon Frost, global rewards solution leader, Mercer

From optimizing the nutrients in soil or analyzing the effects of climate conditions on sea levels to predicting patient health risks, artificial intelligence (AI) is proliferating in most industries.

But while AI has frequently been described in the past as a supplement or enhancement to many roles, the World Economic Forum paints a different picture in its latest Future of Jobs Report — AI as a job replacer rather than helper. Unlike in its earlier reports, the World Economic Forum did not predict in its latest analysis that technologies such as AI would be a “net positive” for job numbers.

In fact, 41% of surveyed organizations anticipate reducing their staff due to certain skills becoming obsolete, according to the 2025 report, which offers insights into the jobs landscape in the next five years. The report also found 51% of polled employers have plans to transition employees internally from less-relevant jobs to burgeoning roles, and 70% are looking to hire new workers with new in-demand skills.

Access a bonus Workspan Daily Plus+ article on this subject:

AI and the Skills Evolution: Where the Total Rewards Function Fits In

These changes will bring new realities for workplaces. Upskilling and reskilling workers will be key, competition for new talent will be fierce, and total rewards (TR) strategies will need to evolve to keep up — often with the help of AI.

“There is an exciting future for the total rewards function and the total rewards professional to play a more strategic role in the organization,” said Gordon Frost, a global rewards solution leader at Mercer. “It will be about linking data around pay, performance, skills, developmental opportunities and training — it’s going to be connecting the different people of HR, but total rewards can be at the center.”

Recalibrating Wage Strategies

The five-year outlook for job automation and role shifting is accelerating rapidly, said Marta Turba, the vice president of content strategy at WorldatWork.

“As roles and job functions become increasingly automated, the shift in job structures will significantly impact pay systems,” Turba said. “Rewards professionals must adapt to this pace of change while designing pay strategies that support it.”

More than half of organizations surveyed for the World Economic Forum report anticipate they will allocate a greater share of their revenue to wages in the next five years, with wage strategies driven overwhelmingly by promoting worker productivity (77%), followed by talent retention (71%).

It will be more important than ever for TR professionals to demonstrate a tangible impact on business performance and worker productivity through the rewards programs they create, Turba said.

One aspect of that evolving role will be to develop new standards of productivity related to emerging AI-related jobs — for whom success may be measured more by effectiveness rather than time spent, for instance, said Niloy Ray, a shareholder and member of the AI and Technology Practice Group at Littler Mendelson P.C.

How TR Can Harness AI

Frost cited three areas in which TR leaders should explore leveraging AI:

Streamlining core processes. Assisting with or automating tasks such as creating or updating job descriptions, generating new-hire offers, or managing the annual compensation adjustment process.
Improving decision-making. Digging deeper into data and completing more sophisticated analytics to identify drivers of inequities in pay programs — areas in which the TR spend is suboptimal or the extent to which certain rewards are driving expected business outcomes.
Optimizing the employee experience. Offering compelling benefits packages and personalized rewards recommendations based on individual employee data or their past use of programs.

“The role of the total rewards professional is to understand that AI will change certain jobs, and then to use AI to more effectively do what they were doing before to satisfy people with proper career growth trajectories that align with the business’ objectives,” Ray said. “It’s fair to say that total rewards professionals really need to upskill themselves, too.”

Address Potential Risks

While the use of AI technologies is expanding in many job roles and departments, human resources and TR professionals often have been hesitant to implement those tools in their own work due to concerns about data and confidentiality, legal risk, and potential bias.

When implementing AI tools in TR processes, it is a leading practice to undergo — and document — a due-diligence process that includes risk assessment, conversations with experts, testing, staff training and alignment with regulations, Ray said.

“You have to know enough to know that you don’t know enough about AI to date,” he explained. “Every new AI use that comes in front of you, you have to understand what technology it is. Is it predictive, generative, an AI agent, natural language processing, computer vision? You don’t need to know what all of those are, but you at least need to have someone who can help you understand what the risks are, because the risks of AI are not homogeneous. They may overlap, but different AI tools and technologies bring very different buckets of risk.”

Lay the Groundwork Today

AI and its use will evolve rapidly during the next five years, including through technology-supported rewards decisions — but TR pros should get started today by taking a fresh look at their job data, job architecture and various systems to get them “AI-ready,” Frost said.

Incomplete or outmoded data can’t be fed into an AI model, he noted. At best, it simply won’t provide the organization with useful insights. At worst, it may amplify existing biases or inequities.

“Instead of improving fairness, these systems could entrench discrimination while appearing data-driven,” WorldatWork’s Turba said.

In some instances, AI tools can actually help TR professionals lay the groundwork by identifying unexplainable pay gaps or elements of bias. In a key example of how, when it comes to pay and rewards decisions, AI can enhance the total rewards function but should never fully replace the human professionals in those roles, Frost said.

“Then you can go address those risks — that’s the role of the human — before deploying AI more widely,” he said.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics: