AI and outsourcing were supposed to make HR faster, cheaper, and better for employees.

For many organizations, that hasn’t happened.

Instead, we are seeing more employee complaints, growing compliance failures, increased litigation exposure, and HR teams stretched thinner than ever, often managing the fallout from systems that were meant to simplify their work.

Here’s the uncomfortable truth:
AI and outsourcing are not the problem.
Using them without strong internal HR judgment is.

Efficiency Isn’t the Same as Effectiveness

AI tools and third-party vendors can absolutely streamline elements of HR. They can reduce administrative burden, improve consistency, and create operational efficiency. When used thoughtfully, they add real value.

But they cannot replace an organization’s brain trust.

Companies still need experienced HR professionals who understand the business, the workforce, and the risk landscape. They also need to invest in developing the next generation of HR leaders, the people who will eventually step into these roles as today’s culture builders and company protectors retire.

I work with large, complex employers who rely on AI tools and outsourced vendors every day. When these tools are implemented with care, they create capacity.

When they are deployed carelessly, they do something dangerous: They strip nuance out of sensitive employee moments, push critical decisions away from trained professionals, create process without accountability, and increase burnout and litigation risk.

You cannot outsource your litigation risk.

Too often, what organizations are left with is an ineffective leave or accommodation program that fails the very employees who need support, while also leaving managers without the guidance they need to lead confidently. 

Leave and Accommodations Are Not Transactional Work

Some HR functions can be outsourced. Some tasks should be supported by AI.

But there are areas—particularly leave management, disability accommodations, and employee relations—where human judgment, institutional knowledge, and trust are not optional. They are foundational.

These are not transactional moments. They are high-risk, high-impact points in the employee life cycle where tone, timing, and decision-making matter. When handled poorly, they drive disengagement, complaints, turnover, and litigation. When handled well, they build trust, retention, and organizational resilience.

The idea of a fully outsourced HR function may look efficient on paper, but in practice it often creates distance, confusion, and unintended consequences. AI and outsourcing work best when they augment internal HR expertise rather than replace it.

HR Is Not Just Compliance—It’s Protection

HR is not simply about processing paperwork or ensuring that policies are followed. HR done well is about protecting the organization.

Strong HR professionals see patterns before they become problems. They speak truth to power. They help leadership understand how decisions made in the C-suite will affect employee experience, retention, innovation, operational continuity, and litigation exposure.

Every business decision has downstream consequences. HR’s role is to surface those consequences early so organizations can make informed, intentional choices rather than reactive ones.

Consider return-to-office strategies. When they are implemented poorly or without HR’s full involvement, organizations often see a surge in disability accommodation requests, increased leave usage, higher turnover, strained employee relations, and ultimately a negative impact on customer experience. Those outcomes drive cost and risk, and none of them are solved by a vendor alone.

This is not administrative work.

This is governance, judgment, and design.

The Organizations Getting This Right

The strongest organizations are not choosing between AI, outsourcing, or in-house HR.

They are making intentional decisions about:

• What must stay internal
• What can be supported externally
• How vendors are trained to reflect organizational culture and tone
• How internal HR professionals are empowered rather than sidelined by technology

They understand that efficiency is easy.

Thoughtful design is harder.

And that is where the real work—and real risk reduction—actually live.