A digital colleague: How Chemist Warehouse and Insurgence AI are rewriting the HR playbook

Working in human resources (HR) for a large retail business is not for the faint-hearted. The sheer volume of repetitive requests and questions can stretch team capacity, leading to reduced engagement and turnover.

This is an equation that Chemist Warehouse is acutely aware of. The pharmacy chain boasts more than 500 outlets, with approximately 30,000 employees and store owners who can require HR guidance at a moment's notice. Accounting for this level of demand was affecting the centralised HR Advisory Team, where turnover was sometimes as high as 30 percent.

"We have six people in the team trying to resolve up to 300 email queries a week, including investigations, grievances, and policy and award interpretations," says Melissa Bear, Head of People & Culture Advisory at Chemist Warehouse.

"I could see the team were doing a lot of lower risk repetitive work, and while this work is important to the organisation and employees, it is not necessarily the best use of HR skill and time when the demand is so great.

"There was a real need for change," added Bear. "I wanted to address our work volume, business and employee needs, and create space for the Advisory team to undertake higher value work that would build their skills and increase enjoyment in their role."

Fighting the deluge with AI assistance

That change need inspired the creation of AIHRA (pronounced - Ay-RAH and an acronym for AI HR Advisory). AIHRA is an AI solution developed with the support of Microsoft partner Insurgence AI, leveraging Microsoft Azure AI Foundry with Power Platform to build advanced AI logic within a secure environment.

AIHRA analyses a specific range of queries sent to the national HR Advisory inbox and drafts email responses for Chemist Warehouse's HR Advisors, rather than the team writing them from scratch or calling on a library of templates. The Advisors then review the drafts, adjust where necessary and hit send.

Partnering with Insurgence helped accelerate the path to change for the HR Advisory team.

"We began with targeted discussions to define the problems and scope solutions that fit our operational environment and stakeholder needs," said Bear. "We then worked in sprints with Insurgence which created space for us to surface ideas and refine our AI solutions."

For AIHRA, both Chemist Warehouse and Insurgence intentionally designed the system to keep a human in the loop. Integration with Microsoft Outlook enabled a low-friction rollout by enhancing existing systems rather than managing the change associated with introducing a new system.

"AIHRA integrates with third party data sources like Fair Work Australia to access modern award instruments applicable to our industry and enterprise bargaining agreements, as well as internal policies and procedures," says Jessi Barberio, Human Resources Business Partner at Chemist Warehouse, who speaks of the solution as a new colleague.

"She's (referring to AIHRA) built to answer various low-to-moderate-risk topics, like leave matters, probation period management, informal performance conversations, management of inactive casual employees and more," Barberio adds.

For Barberio, the immediate impacts have been profound, estimating that it will save the team about 1,950 hours a year, while she personally estimates saving 40 percent of her time in managing the regular and repetitive queries.

"Within thirty seconds of a request reaching the national inbox, AIHRA is working hard in the background to draft a response. The draft waits for an Advisor to review, and any relevant policies or forms are automatically attached," she says.

"It gives us more time for higher-value-add work or projects, supporting and coaching our leaders or developing and providing educational content - the latter being something we simply didn't have the bandwidth to do previously."

Retaining and incentivising talent

Chemist Warehouse introduced AIHRA at the start of 2025 after a short, 10 week development period, and has continued to evolve in fortnightly iterations since. Bear says her team has retained every employee since the system went live and believes it incentivises other talented professionals to join.

"In interviews, early-career prospects light up discussing this concept," said Bear. as their appetite to use AI is so significant, and we're seeing the benefits," she says. "We have a new starter who was able to add value much faster - by week 2 he was already drafting case correspondence. AIHRA is a brilliant tool to use as a reference point while learning, which reduces pressure and increases accuracy."

"In my experience, AI isn't killing off early career development at all. It's making it more interesting for them. The risk is becoming that if they move elsewhere, they probably won't have access to this kind of tool, and I really believe they'll miss it!"

Barberio notes it's taken time to train the system and learn how to extract results, but believes the effort is paying off in terms of performance, time savings and job satisfaction.

"AIHRA has allowed me to focus on more meaningful work, which is far more enjoyable for me," she says. "I'm focusing more on the strategic side of things and working with stakeholders to address their business needs in a meaningful and productive way."

Response quality has also been maintained. In fact, recipients have noted improvements in responses they receive from the HR Advisory Team.

"This is a testament to our commitment and investment in AIHRA, ensuring it delivers value not only to the Advisors, but also our wider stakeholder groups," adds Barberio.

"AIHRA has enabled and empowered the Advisors to be more proactive in their roles and deliver more meaningful advice to business leaders; it's both structured and concise. AIHRA can explain concepts in layman's terms, and we've noticed our managers and leaders are responding well," says Barberio. "The way it has been designed means it doesn't sound robotic; it sounds like the emails are coming from a member of the Advisory team."

Bear emphasises that, to achieve these results, the learning environment must encourage employees to explore and innovate, remaining focused on developing critical soft skills.

"Part of the vision was not to create an unhealthy reliance on AI or spoon feed answers to the HR Advisory team. I still want and require the team to take the initiative to grow their skills, capability and critical thinking - AI can't do that for them, but it can free them up to focus on the work that enables the building of those skills."

Watching with awe as AI matures

Bear and Barberio know the solution is far from its final form and are excited by the improvements they've already witnessed in their digital colleague.

"She has progressed from 'baby AIHRA' to 'intern AIHRA' - we've even got a digital image of her," says Barberio. "It's been fun to watch her grow and mature, and I'm constantly testing her to see what she knows and how we can continue to improve her capability and content.

"Through thoughtful investment, AIHRA has not only elevated our function, but has created space for meaningful work and improve our overall service to employees and business leaders."

The future of AI at Chemist Warehouse

The success of AIHRA has accelerated Chemist Warehouse's AI Strategic Roadmap. In collaboration with Insurgence AI and Microsoft, Chemist Warehouse is implementing a systematic approach to AI that balances long-term governance with immediate business impact.

This approach involves establishing a scalable framework for AI governance that evolves with the organisation's maturity, while simultaneously enabling rapid value capture across various business units. By targeting high-feasibility, high-value use cases, the team is already seeing quick wins that remain aligned to long-term strategic goals.