Keeping up with the AI revolution
The use of AI and generative AI is expected to touch nearly every aspect of organizational functioning, but human resources will likely be among the areas most affected by the expansion of this technology. Currently, one in four organizations have HR departments that use AI in some capacity.
Gartner. Top 5 Priorities for HR Leaders in 2024. Gartner, 2024
All aboard the AI train
Rx reset
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Sources: SHRM. HR Adopts AI. SHRM, 2024
Four generations, one workforce
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HR leaders are cautiously optimistic about the arrival of AI, and see clear use cases for its implementation in the hiring process, learning and development, performance management, and benefits administration.
believe that their companies risk compromising organizational success if they fail to adopt generative AI in the next 1-2 years.
Source: Gartner. Top 5 Priorities for HR Leaders in 2024. Gartner, 2024
Emerging uses for AI in HR
AI Revolution
HR Revolution
AI Revolution changing to HR Revolution
76%
of HR leaders
All aboard the AI train
Predictive Analytics for Turnover and Other Employee Metrics
Skills Gap Analysis
Personalized Career Pathing
Bias Mitigation
Immersive Training with Virtual Reality Simulations
Enhanced Learning and Development Programs
Sentiment Analysis Tools
Continuous Feedback Loops for Performance
Evaluating Market Trends for Performance
Compliance Analysis for Compensation, Retirement Plans and ACA
Scenario Modeling in Workforce Situations
Predictive Analysis to Aid in Retention
Employee Well-Being Programs
Predictive Analytics for Turnover and Other Employee Metrics
Rx reset
The arrival of new legislation, the growth of biosimilars, and increased scrutiny of Pharmacy Benefit Managers (PBMs) are giving employers the opportunity to “hit reset” on their approach to prescription drug spending.
Source: Mercer National Survey of Employer-Sponsored Health Plans
Average annual change in cost per employee
2023
2022
2021
2020
2019
2024*
Year
Prescription drug cost
Total health benefit cost
Prescription drug cost is driving overall health benefit cost
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The (ever) rising cost of care
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Keeping up with the AI Revolution
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*Projected
4.9%
3.0%
6.4%
3.4%
7.1%
6.3%
6.4%
3.2%
8.4%
5.2%
7.2%
5.2%
The dawn of a new (pharmaceutical) era?
Pharmaceutical costs are the biggest driver of healthcare costs.
Pharmaceutical costs are the biggest driver of health care costs.
The (ever) rising cost of care
Health insurance premiums are increasing at a faster rate than inflation and wage growth. 1 in 5 employers anticipates their premiums will increase by over 10% in the coming year.
Sources: CAP. Federal Solutions to Address Rising Costs of Employer-Sponsored Insurance. CAP, n.d. KFF. Employer Health Benefits: 2023 Annual Survey. KFF, 2023.
Impact of chronic conditions
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What’s driving up healthcare costs?
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Source: MMA Planning and Analytics for Total Health
Chronic MSK conditions
Diabetes
Behavioral health conditions
Chronic MSK conditions
Diabetes
Behavioral health conditions
In addition to inflation, rising prescription drug costs, and gene therapy expansion, individuals with chronic conditions can lead to higher utilization rates and medical costs that drive up an employer’s overall health care costs.
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Members with behavioral health conditions (per 1,000 members)
What’s driving up health care costs?
Traditionalists
Boomers
Gen X
Millennials
Gen Z
Gen A
163
133
193
281
273
150
Traditionalists
Boomers
Gen X
Millennials
Gen Z
Gen A
306
253
157
44.8
12.2
12.14
Members with diabetes (per 1,000 members)
Traditionalists
Boomers
Gen X
Millennials
Gen Z
Gen A
526
355
237
115
55.2
13.3
Members with chronic musculoskeletal conditions (per 1,000 members)
Members with behavioral health conditions (per 1,000 members)
