5 questions every leader should ask before adopting AI in their department

AI offers simplified workloads and improved efficiency, but diving in without asking key questions usually creates more problems than solutions, writes Tracy Sheen.

If your HR department is considering AI adoption, you’re probably feeling equal parts excitement and overwhelm. With over 30 years of experience as a digital adviser, I’ve watched countless organisations either smoothly adopt and leverage the latest technology or inadvertently create longer-term headaches. AI offers simplified workloads and improved efficiency, but diving in without asking key questions usually creates more problems than solutions. Here are five critical questions every leader should ask, along with tips on how to tackle them practically.

1. What problem are we truly solving with AI?

Before investing in any AI tech, pause and ask yourself: “Is the best solution to this AI?” Often, what seems like an AI fix might be resolved faster (and cheaper) by streamlining processes or even targeted employee training. AI should amplify human potential, not replace critical thinking. For example, if staff are overwhelmed by repetitive tasks, automation might help, but does it need advanced AI, or just better software integration? Start by clearly identifying the issue, then evaluate all possible solutions before jumping straight into AI. Remember, just because you can use AI to resolve an issue doesn’t mean it’s the best response.

2. How will AI impact employee trust and engagement?

Trust remains the linchpin of any successful AI rollout. According to the 2025 KPMG University of Melbourne global study, half of Australians use AI regularly, but only 36 per cent trust it, well below the global average. And 78 per cent of Aussies are concerned about negative outcomes like misinformation or misuse. In the workplace, 57 per cent rely on AI output without verifying accuracy, and 59 per cent say they’ve made mistakes due to unchecked AI suggestions. To build trust, leaders must be transparent about AI’s data use, clearly define usage boundaries, deliver comprehensive AI training and consistently present AI as a helpful partner – not a monitoring tool.

3. Have we defined clear, transparent AI usage policies?

Let’s talk about organisational AI guidelines. While Australia scrambles to navigate what it means to operate a business with “voluntary guidelines”, our employees are navigating in the dark, risking inconsistent or even unsafe use of AI tools. All organisations should, by now, have crafted straightforward, jargon-free guidelines that outline approved AI tools, acceptable uses, privacy expectations and ethical considerations. This simple act can go a long way in building on the trust and engagement mentioned above. Regular training and updates not only keep policies relevant, but they also actively build transparency – critical for employee confidence and compliance.

4. Are we prioritising ethics, fairness and bias mitigation?

AI in and of itself is neither good nor bad. It simply learns from the information we feed it. Without proper oversight, this can inadvertently reinforce biases, particularly around hiring and diversity. Consider establishing an ethics committee responsible for vetting AI solutions. Regularly audit AI-driven outcomes, especially in sensitive areas like recruitment or performance management. Prioritising fairness isn’t just good ethics, it’s good business.

5. Is our leadership ready to invest in comprehensive AI upskilling?

A recent General Assembly survey shows that 80 per cent of HR professionals use AI for work, but only about 30 per cent have received targeted AI training. AI literacy is as critical today as financial literacy was a decade ago – it empowers your people to use tools effectively and responsibly. Invest in ongoing training – not just a one-off workshop. Equip employees at all levels with practical skills for interacting with AI. This maximises ROI and seamlessly embeds AI into your organisational culture.

Wrapping it all together: AI governance, shadow AI and change management

Remember, successful AI adoption involves governance and ongoing change management. Watch out for “shadow AI” – where unapproved tools slip under the radar – by regularly communicating with employees about which tools are authorised and why. Consider appointing an AI champion within your team to manage governance and maintain an open feedback loop. Approaching AI thoughtfully and transparently ensures your team embraces it as an ally, not a threat.

Tracy Sheen is known as The Digital Guide – a speaker, author of “AI & U: Reimagine Business” and a regular media commentator.