By: Danielle Levine
Artificial intelligence is no longer an abstract concept or a futuristic trend. From ChatGPT to custom-built enterprise AI systems, businesses are adopting new tools to increase efficiency, reduce costs, and stay competitive. But there is growing confusion around two very different types of AI: generative AI and agentic AI.
Understanding the difference between these technologies is critical for business leaders, HR professionals, and compliance teams. Just as important is knowing how to create policies that keep your workforce aligned, protected, and productive as AI adoption accelerates.
Generative AI is reactive. It produces new content—like text, images, or code—based on patterns in its training data. While powerful, it can only respond to prompts. It does not make independent decisions. Tools like ChatGPT, Midjourney, and GitHub Copilot fall into this category.
Agentic AI, by contrast, is proactive. These systems are designed to make decisions, plan actions, and interact with other systems. Agentic AI can act more like a team member, solving open-ended problems in real time. For example, if a supply chain disruption occurs, an AI agent might automatically identify alternative vendors, calculate costs, and alert decision-makers without waiting for a direct prompt.
Agentic AI is reshaping the workforce in ways generative AI never could. According to McKinsey, up to 30% of jobs may be fully automated by 2030, and 60% of existing roles will be significantly transformed. The first to change will be repetitive, routine jobs, which are the easiest to automate.
This shift does not mean humans are obsolete. Instead, it highlights the importance of defining new team structures where humans and AI agents complement each other.
Example: In logistics, a natural disaster delaying shipments could trigger an AI agent to identify new routes, notify suppliers, and prepare updated delivery estimates, all while human leaders focus on strategy and communication.
AI adoption is not simply about installing new software. It requires structure, clarity, and cultural alignment. Business leaders should:
Define clear objectives for how AI will work alongside employees.
Map out each step of the processes AI will support.
Build frameworks that reflect company culture, ethics, and compliance obligations.
Establish ongoing monitoring and training, much like onboarding and managing a new employee.
For agentic AI to succeed, trust must be built into every layer of the system. That includes:
Protecting sensitive employee and business data.
Avoiding biased or misleading responses.
Detecting when human judgment is required.
Without careful oversight, an agentic AI system could act unpredictably, creating both operational and compliance risks. Companies that prioritize transparency, data security, and employee trust will be positioned to lead.
AI is no longer a “future trend.” It’s already in the workplace, whether leadership has approved it or not. Employees may be experimenting with free AI chat tools, using AI features built into software, or even sharing sensitive information without realizing it.
A well-defined AI policy helps your company:
Protect confidential business and employee data
Reduce compliance and legal risks
Ensure consistent, ethical use of AI across teams
Build trust with employees, clients, and partners
Without guardrails, AI can open the door to serious issues, including:
Data privacy breaches: Employees might paste sensitive data into unsecured AI tools.
Inaccurate results: AI-generated content can be wrong or misleading.
Bias and discrimination: Using AI in hiring or HR without oversight can lead to compliance violations.
Intellectual property risks: Content created with AI may raise copyright questions.
As AI becomes embedded in daily operations, every organization should have a written AI usage policy. Your company’s AI policy should outline how, when, and where employees can use AI. Start with these steps:
Identify AI touchpoints – Where in your workflows are employees already using AI (HR, payroll, customer service, marketing)?
Define approved tools – Make a list of AI platforms employees are allowed to use and highlight which ones are restricted.
Set data protection rules – Clarify what information employees can and cannot share with AI tools.
Add human oversight – Require review of AI-generated outputs, especially in compliance, payroll, and HR contexts.
Train your workforce – Employees should understand not just how to use AI, but how to use it responsibly.
A written policy only works if employees know how to follow it. Training sessions should cover:
Examples of approved vs. restricted use cases
How to fact-check AI-generated results
When to escalate questions to HR or compliance teams
Why protecting employee and company data is critical
HR and payroll are two areas where AI can be both powerful and risky. AI tools can:
Automate payroll error checks
Speed up HR policy research
Flag compliance risks
But they also raise concerns around confidential employee data and changing labor laws. Employers should make sure their AI policy includes special provisions for handling sensitive HR and payroll information.
Even with an internal policy, companies benefit from outside support. HR compliance platforms can help by:
Tracking state and federal law updates as AI-related regulations evolve
Offering expert HR guidance for AI-related workplace questions
Centralizing workforce policies so employees can access them easily
Unlike generative AI, which can be adopted quickly, agentic AI requires continuous training, monitoring, and refinement. Businesses should approach agentic AI adoption as a long-term investment, much like building out a new department or expanding into a new market.
Companies that begin preparing now—with structured policies, compliance frameworks, and integrated HR technology—will be better equipped to compete.
The future of work is not just about using AI, it is about using it responsibly. Generative AI and agentic AI each have powerful applications, but without strong policies, leadership, and compliance structures, they carry real risks.
Companies that take proactive steps today by creating AI policies, investing in oversight, and building trust will not only stay compliant, they will gain a competitive edge.
Generative AI creates new content based on prompts, while agentic AI takes actions, makes decisions, and interacts with systems to achieve goals.
Some routine roles may be automated, but most industries will see a shift where humans and AI collaborate. This creates new opportunities as well as challenges.
Yes, even small companies benefit from having clear rules around how employees can use generative or agentic AI. Without a policy, you risk inconsistent practices, security gaps, and compliance issues.
AI can flag potential compliance risks, automate recordkeeping, and provide timely alerts on regulatory changes.
At a minimum: acceptable uses, data security standards, guidelines on sharing proprietary information, employee accountability, and approval processes for AI-powered tools.
Typically, a cross-functional group that includes leadership, HR, IT, and legal should draft the policy. HR often plays a key role in communicating and enforcing it.
AI evolves rapidly. A best practice is to review and update your AI policy at least once a year, or sooner if major AI tools or regulations change.
It reduces risks of data leaks, bias in decision-making, misuse of confidential information, and reputational damage.
Yes, by clarifying what’s allowed, employees feel empowered to use AI confidently and safely in their work.
©2025 - Content on this blog is intended to provide helpful, general information. Because laws and regulations evolve, please consult an HR professional or legal expert for guidance specific to your situation.