HR professionals can lead their organizations in AI use. And it all starts with a compelling case for budget.
Finding ways to work AI into your budget, and ultimately adopt AI technology, is about more than being on the forefront of new technology; it’s about empowering your HR team to focus on what they do best.
As HR budgets continue to shrink or remain flat year over year and HR departments are tasked to still accomplish more, AI can handle a lot of the heavy lifting.
And there is a lot of heavy lifting. Consider the factors facing HR departments next year: the uncertain political climate, a state of constant technological upheaval, new compliance laws, a largely disengaged workforce, 6 generations in the workplace all with different needs, macro-economic forces that could result in organizational changes, and so much more.
AI can lend you and your team a hand in key moments next year.
How can you build a strong case for AI budget for 2025?
TL;DR: your argument for why your department needs AI next year should be data-driven and aligned to your company’s top goals for 2025. Plan in a strategic way that considers the savings of replacing systems or manual processes with AI, and build strong relationships with key decision-makers to ensure their support.
1. Consider your company’s top goals for 2025 and how you can support them
As with any budgeting process, start with the “why.” Understand what matters most to your organization by reviewing your company’s 2025 objectives and identifying how HR can drive or support those priorities. Then, identify your department’s goals, ensuring they directly align with broader business strategy. This goal alignment will sharpen your focus on high-impact initiatives and later, it’ll strengthen your case when presenting recommendations to your exec team.
This is the time to think about the employee lifecycle, macro trends and shifts, your team’s operating cost, and the specific elements needed to achieve your business’s objectives.
Tip: Get inspiration from other companies using AI in their HR-led processes. Chipotle communicates with candidates as it ramps up its fall hiring season. Target’s AI chatbot answers employees’ questions while they work.
2. Needs assessment: Create space for AI in your HR budget
Now begins the real fun: assessing your department and organization’s needs and building a case for your spend. HR plays a crucial role in every company, and it’s time to link your activities to the bottom line.
Ask yourself and your HR teammates questions like, which manual workflows take up too much time? Do we have all the data we need? Are there any “good enough” processes or systems that would greatly benefit us as a business to upgrade? By identifying these gaps, you’ll uncover areas where AI can make a tangible impact.
SHRM recommends you start with the following data when in the assessment phase:
- Number of employees projected for 2025.
- Benefits and salary cost increases or projections.
- Projected turnover rate.
- Actual costs incurred in 2024.
- New programs planned.
- Any other changes in policy, business strategy, law or regulation that may impact your costs.
Start building a story for your CFO and stakeholders
Tell a story about what’s happening in your business. What’s the business challenge in focus, and how can HR, aided by AI, become the hero?
Imagine your company was struggling with retention with your engineering team. You might start your story discovery by investigating the cost associated with the retention issue. Calculate the time needed to train new engineers. How many hours are needed to train and onboard employees from that department, on average? Multiply that figure by the average hourly pay of those employees, and you begin to approach the real cost of retention to your business.
Can AI help with retention in some way? As you answer this question and uncover facts and figures, you’ll begin to shape the strategic narrative you need for your budget.
“Once you can start putting metrics to that [issue]… that’s where you really start to build a story. Because if you have a team of 1,000 employees and you have 30% turnover, now we’re really looking at a story we’re your CFO is listening, where your business leaders are listening,” Danielle Balow, Director of Digital Implementation, Click Boarding, said in a recent Guusto webinar.
She continued, “Once you can put data to the problems of manual processes, engagement, turnover, compliance, risk, that becomes a matter of budget planning and selection and creating space for it in your P&L.”
Tip: Engage your C-suite partners early in the process. Consider the needs and desires of your CFO, CIO/CISO, and/or CEO so you can align your proposed investment to be mutually beneficial and preempt any objections. Anticipate that privacy and security will come up. Here are a few questions your leadership team will likely ask:
- How does the model handle privacy?
- Does the AI tool respect appropriate permissions? What steps does the tool take to ensure content isn’t exposed to the wrong person?
- Does the tool require supervised use to ensure content generated is quality and aligned with company strategy and initiatives?
Zero-in on high-impact business objectives
To make the most of your AI budget, focus on high-impact goals. If, for instance, your company plans to expand its software offerings and you need to hire top engineering talent to build cutting-edge products, then you might argue for an AI recruitment platform to professionalize and polish the talent acquisition process so you can offer a straightforward hiring process that caters to top talent and leads to long-term retention.
3. Building a data-driven AI budget
Leverage data from past performance to build a strategic budget
Begin with your own budgetary data to establish a baseline for your AI budget. Audit your past programs to uncover what’s working and where AI could add value.
Add industry benchmarks to the mix and research AI companies’ pricing models to understand what your potential commitment could look like; pricing structures will vary. Some companies charge per employee per month, and others will charge on a “work delivered” basis.
Tip: Speak with industry peers to see how other companies are thinking about their AI budgets. This could help you make a case for your company’s AI investment as a competitive imperative.
Consider what might be spent on new headcount—and instead, allocate it toward AI
Think boldly. What if budget earmarked for adding headcount to your department could instead be strategically redirected toward AI?
AI investments can scale your team's impact exponentially, over the long-term. Hiring additional staff might address near-term needs, but it won’t future-proof your department. Think about AI tools like Wisq that automate your team's repetitive, time consuming tasks and elevate your team to an even more. strategic place in the business. By reallocating resources this way, you’re positioning HR as a driver of innovation.
Position AI as a strategic driver, not a replacement
When it’s time to formalize your budget, AI should be a strategic pillar within your HR roadmap. Showcase potential AI investments alongside other essential HR programs and initiatives, emphasizing their ability to amplify your team’s efforts. You could mention the “human in the loop” approach to AI, in which a person supervises the AI tool's output to ensure quality while still saving valuable time—as much as 12 hours per week over the next 5 years.
Determine your KPIs and estimate ROI
Think about what you want to get out of your AI investment. What will the technologies you want to invest in deliver to your company? AI can deliver potential gains in efficiency, productivity, employee experience, and much more. Clarify how much, exactly, your company stands to benefit from AI adoption.
Think about turnover, a perennial challenge for many companies. Imagine reducing turnover by 10% in a high-attrition department, with savings in recruitment, onboarding, and lost productivity.
Think also about time and cost savings. How can AI make your team more efficient? How much can it reduce the burden of repetitive but necessary tasks?
To quantify these upsides, start with your data and calculate potential impacts based on past performance. When data is combined with benchmarks and success stories from your industry peers, they become a map—not just to cost savings, but to the kind of growth that sets your company apart.
4. Collaborate with stakeholders
Get buy-in across your company
Feedback is a gift, so start by leaning on your colleagues for their expertise and ideas. IT can give guidance on technical implementation and help identify the resources needed for success. Finance can assist with ROI forecasting and aligning investments to financial objectives.
Talk with stakeholders at various levels of seniority and on a variety of teams throughout your company, so you can hear potential objections and prepare responses that address them.
Consider asking for anonymous ideas from the entire employee population. Ask employees which company-wide processes, if any, they find frustrating or time-consuming. By sourcing ideas at the employee-level, you’ll have first-hand information on inefficiencies, outdated processes that slow employees down, frustration with the employee experience and much more.
Bonus: you can use AI tools (like Wisq) to summarize this feedback and categorize it into themes for faster synthesis and action
Make your CFO and CIO think this was their idea
The best way to get your AI budget across the finish line: build a strong bench of supporters.
Premo Ojokojo, Chief People & Operations Officer, AZA Finance, recently said at an industry conference that first connecting with key stakeholders will make it easier to achieve your goals. She added, “I found out that my CFO was key, my Chief Risk Officer was key, and my CTO was key. I started working on those divisions. By the time I got them up to scratch, it then became easier to sell it to everyone else.”
Grease your path by selling key stakeholders on your plan and helping them understand why the investment isn’t just good for the organization and for HR; help them see why it’s good for Finance, IT, and other departments as well. Communicate how together, you could align your tool's use to their goals.
Looking down the road
Plan to be flexible and think long-term
Implementing AI involves not just deployment but also ongoing elements like testing, optimization, and refinement. Make sure your budget framework accounts for these elements. AI can be a transformative, long-term investment. Prepare your organization to think about it as such to ensure the initiative gets the time and attention it needs to thrive.
Become the interim CAIO (Chief AI Officer) at your company
Embrace the role of in-house AI expert by staying up-to-date on the latest technology and understanding its potential—not just within HR, but across the entire company.
In its 2025 predictions, Forrester says next year will be the “year of reckoning” for AI, with the number of organizations adopting AI tools set to jump from 35% to 50%. “Most users will still find themselves disappointed without a parallel shift in culture and governance to match the promise of the new tools,” says Forrester’s James McQuivey. This is an important point: the success of your AI plans will depend on if your organization is prepared to handle an AI investment. That means your people at every level will need to be prepared, as well.
Take a proactive, educational stance on the technology, and advocate for company-wide trainings on how to use and not use AI in the workplace. Consider forming a cross-functional committee to give employees a voice as you transition to new technology and share an AI readiness plan with them to lay out your vision for how and when your company can start using AI.
Consider what your HR department will look like over the next few years.
Advocating for an investment in AI will mean that HR and teams across your company are staffed differently, with an AI-augmented workforce. You can get ahead and prepare your department and your company for a reality where AI is embedded into many (or most) processes in large organizations.
AI in 2025: In it for the long haul
AI is more than a trend—it’s a fundamental shift in how companies operate. Drive value and set up your AI investment for success by taking a proactive approach to budgeting and planning.
Approach AI planning not as an expense but as an opportunity for sustainable growth. Your company and its employees will be better off for it.
