AI in HR – How AI and machine learning are changing the HR industry

Artificial intelligence (AI) is predicted to significantly transform nearly every industry, including human resources. Many HR and talent acquisition teams have begun incorporating AI into their daily workflows to enhance efficiency and to avoid falling behind competitors who have already adopted AI-technology.

76% of HR leaders believe that by not adopting AI in the next one to two years, they will not be as successful as organisations that have embraced it. With these numbers and predictions in mind, this article explores the ways AI is changing the HR landscape and offers insights on how HR teams can incorporate AI and machine learning into their day-to-day operations.  

How AI can be used for human resources operations 

Artificial intelligence can add great value to HR processes and simplify activities related to both recruitment and employee management. Apart from being used in administrative and operational tasks, AI can also provide valuable strategic insights. Despite the general acknowledgment of AI's potential to improve HR operations, there's still uncertainty about how exactly to incorporate it and get the most out of its capabilities.

While concerns persist about job displacement due to AI, some argue that it represents a shift in roles rather than a net loss. Instead of viewing AI and emerging technologies as threats to daily work, a more constructive perspective is to consider them tools for enhancing performance and productivity. In the context of HR and TA functions, there are many tasks that are well-suited for AI and automation, thereby freeing up time for the tasks that are better-suited for human brains and competencies. 

In our report on Navigating 2024’s Recruitment Trends, AI and talent expert Hung Lee from Recruiting Brainfood encourages HR leaders (and all workers, for that matter), to “aggressively apply AI to our own workflow today because it's going to happen regardless of our desires or not." However, Lee cautions against using AI to simply generate more output but suggests strategically investing the saved time and resources in areas that bring tangible value to the organisation.

AI as a driver of organisational success 

There are several important aspects to take into account to make artificial intelligence as beneficial as possible to your company and in your HR and talent acquisition functions. But a crucial first step is to understand your specific needs as a business. Understanding why, how, and where different AI-tools and solutions can be applied is necessary in order to make AI-technology a truly valuable asset to your organisation. 

A common solution for HR departments today is to invest in software that integrates AI and machine learning. These platforms can automate and streamline various aspects of their daily operations. While features may vary, they often cover tasks such as job posting, candidate sourcing, selection, and analytics.

Large language models, such as ChatGPT, are examples of AI-tools that can be used to make certain HR processes more effective. However, it's important to research and compare different AI-tools and solutions to choose one that best matches your company’s needs and challenges.

Key AI in HR stats:

• 81% of HR leaders are exploring  or using AI to improve efficiency in their organisations
• The top barrier (37%) for HR leaders to adopt AI is the lack of integration into existing systems 
• 93% of HR managers that use AI tools believe it helps save costs
• Screening and assessment is the capability that HR leaders most want AI to improve in the hiring process

Benefits of using AI in HR

There is no doubt that AI can benefit HR departments. Here are some of the key advantages:

Time efficiency

Time efficiency is one of the major benefits of using artificial intelligence and automation in daily HR activities. AI and automation solutions can help with time-consuming tasks and give HR-professionals time to focus on activities where their professional and human skills are necessary.  

The recruitment process is a prime example of how AI and machine learning can significantly save time. Instead of manually sifting through piles of applications from hundreds or thousands of candidates, AI-integrated softwares can sort and recommend candidates with the relevant abilities and experience for a specific job opening. While AI is excellent for processing large amounts of data, human overview and oversight  is always recommended when it comes to any AI-supported activities, especially hiring decisions. 

Cost effectiveness 

AI tools can be used to do tasks at a fraction of the time it would take humans. Large amounts of data can be crunched and summarised and patterns can be identified in a matter of seconds. AI can determine the most effective sources to find top talent and give your indications for where to focus your efforts and budget. By speeding up tasks, AI can help organisations save money and better allocate human and material resources. 

Bias reduction

Another beneficial aspect of using artificial intelligence in HR is to reduce bias in the recruitment process. By prioritising qualifications and skills first, AI can enable a more inclusive hiring process. Filtering out personal information such as age, gender, address, and other private data from applications enables HR professionals to make decisions based solely on qualifications.

However, the topic of bias in AI remains a subject of debate. There are studies that show that AI can show biases in the selecting process, potentially resulting in less diverse teams as it tries to match the "ideal candidate profile." There are different underlying theories on the reasons for AI biases. The perhaps most established one has to do with the training data. If the training data contains biases, there is a risk that AI may replicate and perpetuate these biases in its decision-making processes.

Improved employee experience

AI tools and solutions can be used to make the employee experience better and increase employee retention. Employees can offload repetitive admin tasks, streamline their overall work, and gain new, relevant tech skills. Investing time and resources in the employee experience is good for workers wellbeing, but also strengthens your employer brand and brings benefits that naturally come with a thriving staff.

How HR teams are using AI 

Artificial intelligence can be used across a range of tasks and areas within the field of HR. Below are some of the most common use cases.

Recruitment/talent acquisition 

The use of artificial intelligence for recruitment and talent acquisition is among the most widespread applications in human resources. A modern, AI-integrated recruiting platform is an example of a solution that can enhance the efficiency of the recruitment process. AI-enabled solutions can streamline the entire recruiting process, as illustrated below:

• Sourcing: AI and machine learning technology can identify suitable candidates by searching databases and online platforms for relevant skills and competencies. This helps discover passive candidates who may not have applied otherwise.
  
  
• Interviewing: AI-integrated and automated solutions streamline the logistics of scheduling interviews and can generate relevant interview questions.

• Screening: AI can help with sorting through a large number of applicants and can make assessments based on qualifications, identifying candidates who best fit the requirements of the job.

Administrative HR

Automating admin-related work not only increases efficiency but frees up time for tasks where professional expertise is needed. AI and automation can be beneficial in various administrative HR tasks:

• Data management: Managing large sets of data can be both challenging and time consuming. Automating tasks such as updating and maintaining internal datasets with correct information is an example where AI technology can be a great asset.

• Candidate communication: Candidate communication is an important part of the recruitment processes. AI integrated solutions can be used to automatically send candidates information throughout the hiring process, ensuring that candidates are not forgotten due to human error. 

• Scheduling: Coordinating meeting times can be a hassle. Automated scheduling tools can simplify the process by finding suitable times for both internal meetings and meetings with candidates.  

Employee management

AI can be used for various aspects of employee management, including supporting learning and development. By assessing individual needs and using personal performance data, AI can deliver a personalised internal upskilling or development program. AI technology can contribute to a workplace with better development opportunities and uncover opportunities for internal mobility. 

Another aspect of employee management where AI can be useful is for monitoring employee well-being. Tools and solutions can offer valuable insights regarding workload and overall wellbeing of employees, allowing teams to allocate resources better and support a safe and healthy work environment.

Insights and results

In today's data-driven landscape, measuring results and processes plays a crucial role in daily HR operations. Integrating AI and automation into recruiting and employee performance metrics can provide valuable insights, optimise processes, and boost results and efficiency. Modern AI and automation solutions can also make it easier to efficiently manage large sets of data, creating opportunities for better data handling and analysis.  

Concerns with using AI in HR

While AI and automation offer significant advantages within the HR field, it's important to be aware of potential risks and challenges associated with the technology.

• Role transformation: Integrating AI and automation into broader organisational strategy and operations may result in the replacement or transformation of certain roles. Therefore, it is important to reskill your staff and update role expectations to align with the evolving HR landscape. According to a study from IBM, executives estimate that 40% of their workforce will need to reskill as a result of implementing AI and automation over the next three years.
  
  
• Employee privacy: While AI solutions offer ways to measure employee performance, preserving integrity should be taken seriously. One strategy is to involve employees in understanding the data collection processes and its purpose. Additionally, attentiveness to employee feedback is crucial, and making any necessary adjustments based on their perspectives.

• Replacing human expertise: While AI serves as a valuable asset in improving overall HR efficiency, it's imperative to understand that artificial intelligence is not a substitute for human expertise. Instead, it should be viewed as a tool. HR-professionals’ experience and knowledge remain important assets for ensuring high-quality HR operations.
  
  
• Ethics and legality: As with most technological advancements, laws and regulations often lag behind. Progress is underway to address the ethical and legal concerns surrounding AI, exemplified by initiatives like the EU AI Act. As new laws are sure to emerge, it is essential that companies stay informed and follow developments to ensure their use of AI is ethical, legal, and compliant. 

Impact of AI on HR

It is fair to say that artificial intelligence has a large impact on HR, with the ability to reshape several aspects of the industry. The advantages of using AI technology in daily HR activities are many and can benefit companies and employees. 

AI's role is already broad in today’s HR industry and is expected to only grow. This means it will keep impacting how HR teams hire, engage with employees, and handle various processes. As AI becomes more and more integral to HR practices, staying updated on the development of AI, its adoption, and subsequent implications will be essential. 

Furthermore, as artificial intelligence becomes more integrated and used in HR, the expectations from customers, employees, and candidates increase for it to be used and used efficiently. In an industry embracing new technologies for faster and more accurate work, it's essential for your business to adapt and stay ahead.

How will AI shape HR in the future?

The future of human resources is closely linked to the  progress of artificial intelligence. AI is likely to keep transforming HR practices, making recruitment, talent acquisition, and employee management more efficient. HR professionals can expect streamlined processes and an increasingly data-driven focus, leading to a more dynamic and fast-paced HR landscape. As more HR departments integrate AI into their daily operations, organisations more or less have to adopt AI technology to stay competitive. 

It is important, however, to emphasise that AI technology won't replace the need for HR professionals in the near future. Human perspectives and experiences within HR plays a crucial role in maintaining a high quality HR-function and helping companies thrive and grow. 

Summary and key takeaways

Here are a few key takeaways of how AI is reshaping the HR industry and what can be done to make AI technology a natural part of your organisation: 

• Know your needs: In order to successfully implement AI in your HR organisation, it’s important to establish why you want to use AI and what you want to achieve with the technology. 
  
  
• Streamlined operations: Artificial intelligence can significantly improve HR operations, including recruitment, talent management, and reducing administrative tasks.
  
  
• Time and cost savings: AI can contribute to time efficiency and cost-saving by automating time-consuming tasks like resume screening and scheduling.
  
  
• Unbiased recruitment: AI, when used correctly, can foster a more inclusive recruitment process by prioritising skills and qualifications over personal information. 
  
  
• Data-driven insights: The integration of AI and automation in HR provides valuable data-driven insights, optimising processes and contributing to overall efficiency in data handling.
  
  
• Adaptation and expectations: Staying updated with the latest trends regarding  AI technology is crucial to ensure that businesses meet rising expectations in an evolving industry.

In conclusion, AI is here to stay and it is essential to know how best to incorporate it to improve HR processes. As AI becomes an integral part of the HR industry, it is crucial to leverage its capabilities while recognising its role as a tool rather than a replacement for human expertise. By taking advantage of its benefits and being mindful of its limitations, businesses can adapt to the evolving landscape and meet the rising expectations of using AI in HR.