Every job role is being impacted by artificial intelligence (AI). This trend has accelerated since the introduction and rapid growth of generative AI, such as the ChatGPT chatbot. Human resources (HR) is particularly affected – in fact HR expert Josh Bersin has said that “AI (and generative AI in particular) is going to radically change the HR Tech landscape”.
So how is AI changing HR? This blog looks at the impact of artificial intelligence in human resources management (HRM), the benefits it delivers and the challenges it brings.
How is AI being used in HR?
AI can be used across human resources, covering the whole employee lifecycle from recruitment through onboarding, training and engagement.
Recruitment and talent acquisition
Currently the recruitment process can be complex and time-consuming, with no guarantee that the best candidate will be selected. Introducing AI in talent acquisition streamlines the process, fills roles faster, and helps remove individual subjectivity and bias.
AI helps your recruitment and talent acquisition in multiple ways:
- Using generative AI to write better job specifications that cover all the skills required, making it clearer what the company is looking for
- Automatically screening CVs against these specifications to create shortlists for humans to review. This is particularly useful for roles that attract hundreds of applications as it dramatically reduces review times
- Going beyond traditional CVs by analyzing unstructured data (such as social media) to find evidence of particular skills or competencies. This helps widen access as candidates are shortlisted based on what they have achieved, rather than simply on their education or qualifications
- Conducting pre-interviews, such as through short questionnaires to gather information that can then be used by human interviewers
- Creating relevant, personalized and unbiased questions for interviewers to use
- Analysing interviews, whether text, recordings or videos, to provide added context to hiring decisions
- Providing personalized responses to candidates throughout the process. For example, responses can be more specific on why they haven’t been offered a particular job but suggest other roles that might be more suitable. This helps build ongoing engagement with candidates and strengthens employer brand
- To analyze and optimize the overall process, highlighting areas for improvement
All of these use cases make the recruitment process faster and more personalized for candidates and the company itself, eliminating bottlenecks and delivering a seamless, consistently high-quality experience.
Ensuring that new recruits have a strong, engaging onboarding experience is crucial in two ways. Firstly, it ensures that they are up and running quickly, contributing to the company and its objectives. Secondly, there’s a clear link between a positive onboarding experience and how long people stay in a role, making a good start to their company career vital.
AI supports the onboarding in the following ways:
- Through the ability to handle the administrative side of onboarding, such as verifying documents and credentials, issuing ID cards and providing access to equipment and citizens
- Being able to instantly answer any questions new recruits have 24×7 through specialized HR chatbots, delivering reassurance
- To provide access to induction training, with AI highlighting the key training courses that new recruits need to get up to speed
- To quickly transfer knowledge to ensure they understand policies and procedures, making them more productive more quickly. Research from Stanford and MIT found that AI boosted productivity for contact center workers by 14%. However, new starters were 35% more productive as they were able to get up to speed faster. Essentially, employees with two months of experience who used AI performed as well or better than agents with over six months of experience working without AI.
Training and development
Ensuring that your people develop their skills is crucial to remaining competitive – and to keeping them engaged. The problem: Today’s generations want to learn and develop in different ways. HR teams must therefore meet the different requirements of multigenerational teams.
AI assists this process by:
- Automatically suggesting relevant courses and skills to employees to help them develop
- Using intelligent chatbots to act as a personalized mentor to individual members of staff. It can work with them to address any gaps in their skills, from when they join a company to when they leave.
- Providing access to training courses in the right format. As AI learns about the employee’s learning style, information is tailored to their specific needs and time constraints
Understanding and predicting the talent needs of a business or specific team can be difficult, particularly in fast-moving industries. AI talent management is able to both analyze existing skills and predict those that will be needed in the future, enabling companies to:
- Identify future skill profiles by analyzing the market and how it is developing, and then put in place a strategy to acquire or develop these skills
- Analyze the capabilities of existing staff across the business and suggest them for relevant roles and opportunities, driving greater internal mobility and collaboration
- Predict when and where new hires are needed, reducing stress and workload for existing staff through faster, more timely recruitment
Day-to-day HR management currently involves a large amount of manual administration that can be delegated to AI, enabling staff to focus on higher value activities where they can use human skills such as empathy to improve the employee experience.
Uses of general HR and AI include:
- Answering routine questions via personalized For example, employees can find out how many days of holiday they are due, check overtime or eligibility for training sessions without needing to speak to someone in the HR team
- Automating payroll and benefits administration, based on the individual staff member’s contract and needs
- Creating new policies and procedures, job descriptions and contracts. While these need to be reviewed and signed off by HR staff or lawyers, AI can do the heavy lifting to create near-final drafts
- Analyszing employee feedback, both from surveys and through unstructured channels, using text analytics to highlight areas for improvement and to predict potential problems that need to be addressed. For example, AI can help identify employees at a higher risk of leaving and provide recommendations on how they can be persuaded to stay.
These are just a few AI in HR examples. As the technology develops many more will be created, benefiting employees, HR teams and the wider business. The combination of AI and human resources will deliver transformational value to the business. However, it is important that AI is still monitored to reduce risk.
What are the benefits of AI in HR?
There are four key benefits of HR AI:
1. Improved efficiency
By automating processes and generating materials (such as interview questions or contracts) through AI, HR can operate much more efficiently. This speeds up processes, such as recruitment or staff development, meaning that any skills gaps are plugged more quickly, helping drive greater competitiveness.
2. Reducing cost
Automation reduces cost, enabling HR teams to do more with the same budget. 27% of HR respondents in McKinsey’s Global AI Survey said that AI and HR adoption resulted in a cost reduction of up to 10%. At a time of greater pressure on budgets, AI helps HR departments to justify their spend and focus it in the right areas.
3. Better decision-making
The volumes of data available to HR teams are increasing exponentially. From employee feedback to recruitment information, this all provides deep insight that can be used to make better decisions and to optimize operations. However, manually analyzing these growing volumes of data is difficult. AI helps by automating mining data for insights and providing these to HR managers to improve decision-making.
4. Ability to focus on more strategic, innovative areas
By reducing administration and providing HR teams with greater insight, they can take a more strategic role. HR departments can focus on the human side of their jobs, using empathy to understand and improve the experience, and putting in place innovative, transformational strategies that ensure the organization has the right structure and culture to meet future challenges.
What are the challenges and risks of AI in HR?
AI is not a silver bullet that will solve all HR issues within the company. It needs to be managed carefully to overcome these potential challenges:
- Bias. AI makes recommendations based on analyzing available datasets. If these are focused on specific groups or identify particular skills as desirable, they can lead to potential bias, with corresponding reputational and legal damage. For example, if AI analyzed the existing workforce to identify required personality traits, it could discriminate against those from particular backgrounds who are currently underrepresented within the organization
- Data privacy and security. Handling and using personal data, even if anonymized, requires strong privacy and security policies and frameworks. These need to be transparent and enforced across the organization when it comes to AI in order to ensure staff and candidates are comfortable with their data being used and analyzed.
- Hallucinations. Generative AI is known to suffer from “hallucinations” where it confidently provides false, but believable, data in response to queries. Answers therefore need to be checked and not automatically believed
- Unintended consequences. Linked to bias, AI can give excessive weight to particular factors, meaning that decisions ignore relevant factors. For example, in research conducted by Harvard Business School 88% of HR executives admitted that AI tools rejected qualified candidates, often because they did not have the complete skillset specified in a job description.
- Regulations. Countries and states around the world are scrambling to regulate AI, including its application to HR. As well as data privacy, they are looking to ensure AI is transparent and that decisions can be audited and justified. For example, the EU is looking to introduce legislation, while New York City has passed a law that requires companies to audit AI-powered recruitment software for bias.
Companies are increasingly turning to artificial intelligence to increase efficiency and reduce costs. What they often neglect is the relocation of jobs and the new challenges that arise with the use of artificial intelligence. Even though AI actually opens up new avenues, the increasing importance of automation and artificial intelligence is becoming an internal problem.
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The Future of HR: Will HR be taken over by AI?
Our Future of Work Report has already shown that AI changes the tasks of HR teams: Today, they must be able to analyze huge amounts of data in order to identify their employees’ problems fast and provide management with data and information. Probably the biggest task here: deriving and implementing appropriate measures from the increasing volumes of data.
Despite new challenges and the changing role of HR teams AI brings enormous value to HR, both in terms of automating basic functions and delivering a more personalized, engaging experience to employees.
AI will impact the structure and skills required within HR teams. IDC’s Future of Work 2022 research predicted that 60% of global 2000 businesses will deploy AI and machine learning in HR. Research by Willis Towers Watson suggested that almost a third of HR roles were at risk of being replaced by AI, with 24 out of 27 roles impacted by AI in some way.
Mastering AI will therefore require HR teams to learn new skills, especially around data and analytics, and to move away from more routine administrative functions where human empathy doesn’t add value. Ultimately though, the human side of human resources will still require the knowledge, skills, and experience of HR teams, assisted by AI, in order to meet current and future business challenges.
How Tivian helps your HR department
Tivian’s intelligent employee experience management software is designed to uncover insights and inspire action. Built on AI and machine learning delivered through an elegant, engaging design, it empowers HR teams to increase engagement, efficiency, and business value. Tivian’s technology uses advanced AI to improve and transform data collection, analysis, and follow-up through the power of machine learning.
For example, while the Employee Journey Software helps optimize the employee experience at every touchpoint, Leadership 360 is about taking your leaders to the next level. Instead of limiting leadership development to individual managers, Leadership 360 enables the democratization of leadership development. AI even helps to create their own action plan for improvement.