The Human Resources department combines the need for soft skills and interpersonal interactions with a heavy need for data-literacy and the ability to process vast amounts of information. Artificial Intelligence may be a perfect tool to stand in between these all too often contradictory requirements.
According to a survey by SHRM, 75% of surveyed HR professionals say that the introduction of artificial intelligence increases the importance of human intelligence. And maybe that is the key to gaining all the benefits.
A Workable survey shows that 62.5% of companies have used some form of Artificial Intelligence in their hiring processes in the last year. Also, the AI HR trends delivered by Workable show that this technology is used in screening (58.9%) and candidate matching (43.1%) among others. Also, the SHRM study shows that 61% of HR professionals are optimistic about using AI in their organizations.
On the other hand, concerns do exist and people have started to feel insecure about their jobs. So how will AI affect human resources? What are some AI in HR examples to follow?
What is Artificial Intelligence (AI)
Modern Artificial Intelligence (AI) is a set of techniques and technologies that enable machines to perform tasks that require some form of reasoning, making data-based decisions and dealing with information that the system was once unfamiliar with.
Machine Learning (ML) is currently a dominant branch of AI. It allows artificial neural networks to learn how to achieve a desired outcome by processing vast amounts of data related to the task the machine has to learn.
Natural Language Processing (NLP), Image Recognition, Time Series Analysis, and Reinforcement Learning are only examples off the top of our head of Machine Learning applications.
What is generative AI
Generative AI (sometimes genAI) is a sub-branch of AI that has recently surfaced due to the explosion of popularity of Large Language Models (LLMs), specifically ChatGPT. The service debuted in November 2022 and gathered its first million users only five days after launch.
The key aspect that differentiates AI from traditional AI-based solutions is the output. GenAI produces content from an input called a “prompt.” It can, for example, deliver a text from another text, an image from text, a video from an image, etc.
Possible applications of generative AI are expanding, with the potential to transform whole industries. Currently, 37% of companies from the Marketing and Advertising segment are using genAI solutions, with adoption rising. According to Goldman Sachs, this tech has the potential to increase global GDP by up to 7%.
This growth comes from multiple real-life applications, including AI in HR case studies. According to Gartner, up to 4% of companies invest in implementing generative AI in HR, making this area a fertile ground for building a competitive advantage.
Benefits of AI in HR
Human Resources can be a challenging part of running a business that requires a unique mix of skills. These processes involve not only administrative tasks but also highly creative aspects that require a great deal of cunning and a lot of soft skills, like negotiation and sourcing candidates.
Multiple processes in this field can be supported or otherwise transformed when combining HR and AI.
Efficiency and Accuracy
AI-based solutions may streamline and support multiple processes seen in HR departments. This may include smoothing recruitment or onboarding processes with an AI assistant or chatbot, or automating repetitive tasks like data management. If an HR specialist does not need to oversee a calendar or manually transfer information from documents into the system, their time (and by that – money) is saved.
Enhanced Decision-Making
As mentioned above, HR processes require a lot of soft skills, yet the HR department is heavily reliant on data. Also – there is a lot of data to process, store and analyze. A good example of AI in HR is in spotting hidden correlations and patterns in candidate backgrounds and sources – for example the system may spot that employees with particular interests or educational backgrounds are more likely to stay with the company longer as compared to others.
Also, with artificial intelligence in human resources, the team can design better evaluation and feedback processes for potential candidates. This may include supporting the writing process during the feedback preparation process, or preparing automated report descriptions from the raw data.
Improved Employee Experience
Also, using Artificial Intelligence in Human Resources management is a powerful employee experience booster. Chatbots can be used to handle simple tasks frequently encountered and where response time is crucial. This may include exchanging information about the recruitment process or about remaining days off. But not only this.
- Enhanced engagement through AI-driven communication tools – a good deal of day-to-day communication and activities are done in a repetitive and convention-based manner. AI-based solutions may facilitate these processes by either summarizing messages or writing them in the way that fits the established narrative.
Key Applications of AI in HR
The advantages listed above can be found throughout various processes and contexts in Human Resources. With the flexibility and adaptability of AI-powered solutions, any list of applications will never be complete – but the following one is a great starting point.
Recruitment
Recruitment is not only the bread-and-butter of HR depts (or HR industry at large). It is also a repetitive and time-consuming process. AI tech can support this process in various ways.
- Chatbots for screening – an AI enhanced team can leverage LLMs and chatbots to screen candidates. The process itself requires repetitive questions and elements – for example, the recruiter needs to ask about motivations for changing their job, or test a candidate’s language skills. From the candidate’s point of view, this process is comparable to filling in a form, yet it can be a game-changer for the team members who save hours of work.
- Chatbots for scheduling – as with every business activity, the recruitment process requires the coordination of many people’s efforts and calendars. Using an automated scheduling system with access to all team members’ calendars can streamline the process.
- Predictive analytics – when launching a recruitment process, the company has a (sometimes blurry) vision of the perfect candidate. With AI-powered predictive analytics, this vision may become less blurry. The system might spot more obscure circumstances or less obvious elements of the picture.
Talent Management
Recruitment is only the first step in the process. The talent pool the company has on board is one of the key resources to be managed. This is also a great use case for Human Resources AI tools.
- Personalized career development and upskilling – Artificial Intelligence can be used to analyze data about a particular employee and provide the HR department with information about suggested paths of development or training. With AI’s ability to gnaw through vast amounts of data, the tool may see an employee not only as an individual, but also in the context of their whole team.
- AI tools for feedback mechanisms – AI in Human Resources can also support the feedback process. The system may find patterns and give the HR department the data necessary to provide meaningful feedback.
Performance Management
Performance management involves evaluating and improving employee performance through ongoing feedback and objective tracking. It ensures that employee activities and outcomes align with the organization’s goals.
One example is automated OKR (Objectives and Key Results) tracking and performance evaluations. These systems streamline the process by automatically tracking progress against set objectives, providing visibility and regular updates on performance metrics. Another critical aspect is real-time feedback and coaching systems. These systems allow managers to deliver immediate feedback and support, fostering continuous improvements and development by addressing issues and recognizing achievements promptly.
Employee Engagement
Employee engagement refers to the emotional commitment and involvement that employees have towards their organization, significantly impacting their performance and satisfaction.
AI-driven tools enhance employee engagement by fostering a strong remote work culture. These tools facilitate communication and collaboration among remote teams, helping employees maintain connections and stay engaged despite physical distances. Additionally, AI-backed gamified training and development programs increase engagement by integrating game-like elements such as badges, rewards, and interactive simulations into learning activities. This approach makes training more enjoyable and encourages active participation, leading to continuous skill development and higher engagement levels.
Employee Wellness
Employee wellness encompasses the physical, mental, and emotional well-being of employees, which is crucial for maintaining a productive and healthy workforce. Integrating AI-enhanced wellness platforms with HR systems allows organizations to provide accessible support for employee health initiatives. This integration enables seamless tracking and management of wellness programs, making it easier for employees to engage with and benefit from wellness resources, ultimately improving their overall well-being.
HR Administration
HR administration involves managing various HR-related tasks and employee data efficiently. AI-powered self-service portals for employee data management empower employees to access and manage their own information, such as personal details, benefits, and leave requests. These portals can streamline administrative processes, reduce the workload on HR departments, and enhance employee autonomy and satisfaction by providing easy access to essential HR services.
Challenges and Ethical Considerations
Artificial Intelligence in HR is a truly fertile field. Yet it is not a field ready to be seeded and produce profits. There are several challenges and difficulties to overcome, or at least to be aware of.
Integration and Technical Difficulties
First and foremost, the HR department needs to be tech-savvy enough to handle this type of solution. In the ideal world, an AI system would be incorporated into a holistic and comprehensive tech ecosystem. But the real world is way more complex and implementing AI usually requires a prior data audit and AI discovery phase.
Bias and Fairness
Bias and solution fairness are two sides of the same coin. The solution trained on a biased dataset is not only ineffective – it may cause damage to the company. A great example comes from Amazon, where the AI solution was trained on the resumes of current employees.
As a result, the algorithm automatically rejected female engineers, who constituted a minority of Amazon engineers, reasoning that if females are in the minority, they are less worthy. This resulted not only in missing out on many talents, but also in a PR catastrophe.
Job Displacement Concerns
With task automation there always is – not always asked aloud – a question about the fate of the people doing the job before the machines came along. The response is always challenging. Companies are looking for ways to optimize spending. On the other hand – losing talent is nothing to be taken lightly in the highly competitive and globalized world.
Privacy and Data Security
Companies need to keep compliance with data privacy and security regulations on various levels – from international (for example, the EU’s GDPR) to local, state-level regulations. Also, the AI world is currently on its way to being regulated and some solutions may raise concern regarding ethics.
For example – how to ensure that the AI-based selection algorithm will not take a candidate’s sensitive information into account during the process. Implementing AI in Human Resources Management will require a great deal of caution and skill, as can be seen in experienced tech partners like Tooploox.
Conclusion
Despite all the risks and concerns, the adoption of AI in HR comes with way more advantages than disadvantages. Companies may reduce costs, improve effectiveness, and boost the employee experience.
If you have any questions regarding the use of AI in HR, don’t hesitate to contact us now!
