How is AI Being Used in HR?

With the ability to automate tasks, provide data-driven insights, and enhance decision-making, AI is transforming HR processes and increasing overall efficiency. In this article, we explore the various ways in which AI is being used in HR, its benefits, and challenges, and how AI can improve HR operations.  

The rapid development of artificial intelligence (AI) has transformed the human resources (HR) department, allowing HR professionals to use algorithms to expedite their workflows, contain biases, and enhance decision-making and analytical capabilities.  

In this article, we will talk about some of the ways AI is being used in HR, along with its benefits, challenges, and future prospects of this technology. 

What Is AI and ML for HR Professionals? 

AI refers to the ability of devices and software to carry out tasks that usually call for human intelligence. This can include recognizing images, understanding languages, decision-making, and even learning from previous experiences. Machine learning is what makes AI algorithms more adaptive and able to adjust and grow with new datasets. 

AI renders computers and machines more intelligent and capable of executing complex tasks that might have been challenging or unattainable for them. AI is present in many facets of daily life, including AI-powered assistants or social media algorithms. 

Now, coming to the question of how AI is being used in HR, it can be used at both the strategic and operational levels, offering analytics-based insights into enterprise and employee performance while expediting administrative tasks. 

How AI Can Improve HR Operations 

Human resources (HR) processes are the procedural and strategic tasks that HR professionals perform in order to support an organization's workforce. This includes a plethora of duties. It involves recruiting, induction, training, employee engagement, management of employee benefits, and performance management. 

The objective of human resources management is to keep employees engaged and productive at work. AI strengthens HR operations by enabling HR teams to avoid poor/ineffective recruits, elevate the candidate experience, increase efficiency, and open up their time to serve the workforce. 

Using artificial intelligence and automation, HR operations such as candidate experiences and orientation can be interwoven. It eliminates manual processes and enables employee self-service. 

Here are the three key ways how AI is being used in HR operations: 

• Conversational AI is a formidable tool to enhance HR operations. These chatbots have the ability to revolutionize HR service delivery and enhance the experiences of new recruits and current staff members. 
• Additionally, AI can automate repetitive and time-consuming duties, like organizing paperwork and letting HR professionals devote themselves to other tasks. 
• Driven by artificial intelligence, HR analytics can further enhance decision-making to boost hiring efficacy as well as appraisals. It accelerates the evaluation and selection process, as well as succession planning. 

Learn More: AI in HR: Benefits, Challenges, Best Practices, Trends  

Benefits of Using AI in HR Operations 

Now that we have explained how AI can improve HR operations, let us look at the reasons to integrate this technology into the HR technology stack. It can help HR teams: 

• Make more objective decisions: In HR, artificial intelligence helps in making decisions based on data in key processes like recruitment, performance management, and leadership development. AI ensures that HR ignores a candidate's background when making hiring or promotion decisions. 

• Increase HR process efficiency: The HR departments of businesses using AI will be far more efficient. AI automates a majority of repetitive tasks, including attendance or leave management, and minimizes manual documentation. 
• Enhance the employee experience: With AI, you can personalize the employee experience. Using AI-powered bots along with other self-service tools, their inquiries are resolved expeditiously. Additionally, AI can help employees with career planning, which vastly improves their experience. 
• Save effort and costs: AI engines offer HR teams accurate data and computations, lowering the costs associated with rectifying errors in processes like compensation and performance management. As you devote less effort on manual processes, your overall costs are reduced. 
• Make decisions based on more comprehensive datasets: With a clear focus on synchronization and collaboration, AI tools save data in a single centralized data repository. The information is readily accessible to various constituents, and having accurate data on hand is always beneficial, powering advanced business intelligence. 

How is AI Being Used in HR? 14 Key Use Cases 

Since artificial intelligence is a type of statistical algorithm, you could configure it for application in virtually any HR operation. The key ways to use AI in HR are: 

1. The recruitment lifecycle

Recruitment and hiring have been among the very first HR tasks to be augmented by artificial intelligence. By outsourcing manual tasks, AI has substantially decreased the time required to recruit new employees, from posting openings to sending job offers. 

AI can sort through hundreds of resumes far more quickly than an individual can. It can rapidly compare a candidate's skills to those of the highest-performing staff members in the same position. 

With the support of chatbots, it is possible to rapidly collect supplementary candidate information, thereby accelerating the recruitment process. Also, it can sift through an archive of previous hires to discover someone who might qualify for a new position. 

2. Payroll processing

As payroll constitutes one of the most important and intricate HR processes, artificial intelligence can significantly enhance its efficiency. AI can automate the retrieval and monitoring of data from various systems, like attendance management systems and time-tracking applications. 

AI can also verify payroll data as per predefined compliance criteria. This eliminates the need for HR teams to go over it multiple times, sparing you the effort and time required. 

3. Employee development and training

Traditional training settings can be altered by AI-powered learning platforms. These platforms allow the customization of training content according to the demands, tastes, and learning patterns of individual employees. 

By analyzing a vast quantity of employee data, like performance metrics and skill deficits, AI recommends individualized educational materials and development opportunities. During training sessions, AI may also be employed to provide real-time feedback and mentoring. This removes any need for workers to await periodic reviews or rely solely on self-evaluation. 

HR teams can assess employee competencies while comparing them to current and prospective business requirements using AI analytics. This can influence succession planning techniques and identify opportunities for reskilling and upskilling. 

4. New employee onboarding

Using AI tools, HR professionals can share onboarding data with fresh hires and streamline the process in its entirety. Typically, this involves exchanging organizational and employment-related data, like regulations, descriptions of jobs, group member data, assignments, employee handbooks, etc. 

In place of handwritten checklists, AI software can automatically guide new hires in the appropriate direction and notify stakeholders of the next actions. Moreover, chatbots and AI assistants can answer the questions of new hires all through the induction process.  

5. Employee engagement tracking and analysis

Thanks to AI’s ability to ingest massive datasets, it helps in evaluating employee interactions, behavior, and feedback. This technology enables HR teams to recognize trends, prospects, and areas for improvement. When employee engagement is at an ebb, for instance, they can implement a new recognition and incentivization program. 

With the use of natural language processing (NLP), AI algorithms can analyze tens of thousands of comments, recognize patterns, and carry out sentiment analysis. They can generate findings in a language comprehensible to humans. 

Learn More: 20 Examples of AI in HR You Can Learn From  

6. Automated and standardized rewards and recognition

Artificial intelligence is a great tool for developing exceptional R&R systems. For example, an AI engine can predict the appropriate recognition cadence. It can encourage employees to recognize and appreciate one another through virtual platforms. 

The application can also automate milestone rewards along with other regular recognition processes so that your HR department does not have to remember all of the details for each individual. It can additionally automate nominations according to authorizations, making things in the workplace more transparent, streamlined, and social. 

7. Productivity monitoring and compliance

Human Resources managers and employers can identify challenges in worker productivity and performance with monitoring solutions powered by artificial intelligence. The tools can be used to monitor online activity and send alerts when it diverges from company policy. 

These AI solutions could offer HR professionals and administrators valuable insights into employee engagement or the absence thereof. Also, it can identify malfeasance and early signs of exhaustion so that they can be resolved before they intensify.  However, privacy and compliance are important considerations when using AI for this HR use case. 

8. 24/7 employee support

HR chatbots enabled by AI can help workers 24/7. They use conversational search and can analyze vast quantities of corporate documents, like company rules and regulations, to offer accurate responses to employees' inquiries. 

Chatbots can help HR teams with leave management, recruiting processes, expense reimbursements, and internal communications. During interactions with employees, a chatbot can be programmed to ask for feedback. Instead of relying on lengthy feedback surveys, they can actively request real-time employee feedback. 

Moreover, conversational AI platforms recommend strategies and solutions to enhance the daily lives of employees and achieve work-life balance. 

9. Referral management

AI can help your HR department when it comes to employee referrals. In particular, AI technologies can: 

• Analyze performance data for all past referrals 
• Empower HR personnel to engage with and enhance applicant and employee experiences. 
• Offer insights when distinguishing between two comparable employees. 

This process can be hard for humans to complete manually. Even the most seasoned recruiters face problems deciding if a potential employee will be a decent long-term fit for their company. However, with AI-powered employee referral analysis, recruiters can assess a candidate's potential more accurately. 

Learn More: Future of AI in HR: Latest Trends and Tools  

10. Employee flight risk prediction

By analyzing data, including satisfaction with work surveys, employee engagement metrics, and employee attrition costs, AI algorithms can predict which staff members are most likely to depart from an organization. The HR department can then take preventive measures to retain these employees, like offering further learning and growth opportunities or adjusting their compensation and benefits packages. 

11. Career pathing

Career advancement and fresh possibilities for promotion are among the primary factors why employees choose to remain with an organization. By tracking employee performance for signs of stagnation, AI plays a crucial role in career progression planning. 

This facilitates the planning of new learning and development (L&D) projects for managers. They could also use AI to discover lateral growth opportunities. 

It is not always easy to match employees with departments, so many companies tend to post job ads instead of thinking about existing team members for open positions. AI can perform this duty, letting you save money on hiring and instructing/training external talent. 

12. Performance management

Performance management is as critical as it is complex and effort-intensive. It must be performed at regular intervals and has to be objective for it to be effective. Unfortunately, the majority of companies execute assessments only a few times a year, which does not offer an exhaustive overview of employee performance. 

Humans are also susceptible to the 'Halo Effect' and 'Recency Bias.' Therefore, evaluations are frequently influenced by recent events or an individual's first impression. 

With artificial intelligence, HR departments and managers can offer employees equitable evaluations. Throughout the year, AI tools can monitor employee performance and offer objective, on-demand reviews. They can also automate performance scoring and approvals without human intervention. 

13. Compensation and benefits administration

HR managers can employ AI to determine employee compensation and benefits based on a variety of parameters. This includes industry standards for specific competencies, performance, and the need for specific skill sets 

AI can help ensure fair and objective compensation for all. 

Along with payments, employee benefits are essential for retaining the best employees. AI helps HR teams analyze personnel data and build personalized benefits plans, and also enhances benefits usage, helping employees with rewards selection, while also discovering benefits abuse. 

14. Diversity, equity, and inclusion (DEI)

Talent acquisition is one of the most important components of DEI in organizations. By eliminating human bias, AI can revolutionize the recruitment process. This does not offer the potential for more equitable employment, but it also expands the talent pipeline by discovering outstanding applicants who may have been overlooked by conventional processes. 

AI can also be trained to identify and correct prejudiced or discriminatory language in business communications, ensuring that both internal and external material is respectful and inclusive. Aligned with customized learning platforms, AI is also capable of responding to the unique requirements of employees. 

In organizations that already gather wage data, AI tools can be employed to evaluate the information and spot disparities according to gender, ethnicity, or other variables in a cost-effective manner.  

Learn More:  Top 5 Ways AI is Changing The HR Landscape in 2020  

Challenges of How AI is Being Used in HR 

In addition to the many use cases and benefits, companies also need to remember the challenges and pitfalls of using AI in HR: 

1. The risk of machine-generated mistakes

Sometimes, PCs aren't the best option for running analytical models. Errors in coding or the central AI model can also lead to misrepresentation of data. On the other hand, AI might consider irrelevant factors when classifying candidates. HR departments must be wary of entrusting vital reports exclusively to AI and it is usually better to have a human in the loop for strategic tasks. 

2. Inability to pick up on cultural nuances

AI is excellent at evaluating data and offering meaningful findings for decision-making, but it can't always identify non-technical nuances that are just as crucial. When assessing candidates, it cannot, for instance, analyze the company's ethos and values. 

If you rely solely on AI to make hiring decisions, you might end up with an assortment of prospects who are highly skilled but won't succeed in the position, as they fail to assimilate with your organizational culture. 

3. The possibility of bias arising from biased models

Using AI for screening candidates can result in unintentional prejudices and the omission of qualified, diverse candidates. If the program's initial parameters contain implicit bias, its findings will reflect this. 

Similarly, AI in HR can sometimes work on the basis of broad generalizations. For example, job boards leverage algorithms to display your openings to candidates. However, these algorithms frequently target candidates based on their probability of applying instead of their qualifications. This might reinforce certain role-based stereotypes. 

4. Increase in security risks

Chatbots powered by AI can be great tools for accelerating routine HR transactions. However, they also make easy targets for hackers, as they might use insecure APIs or allow access without passwords. Offering sensitive personal or business information through these apps could make you vulnerable to cyberattacks or identity theft. 

Learn More: Darwinbox X Microsoft | AI in HR - Here today or Here to stay?  

Conclusion 

There’s no one answer to the question, “How is AI being used in HR?” The integration of artificial intelligence (AI) HR operations has proven to be transformative. It enables HR professionals to streamline processes, make more objective decisions, increase efficiency, enhance the employee experience, and save time and costs. 

It is being used in various HR operations such as recruitment, payroll processing, employee development and training, onboarding, employee engagement tracking, rewards and recognition, productivity monitoring, and compliance. 

However, it is important to acknowledge the challenges and potential pitfalls of using AI in HR, including machine-generated mistakes, the inability to pick up on cultural nuances, the possibility of bias arising from biased models, and the increase in security risks. 

HR departments must carefully navigate these challenges and ensure that AI is used responsibly and ethically to truly harness its full potential for HR operations. 

Discover ethical, intelligent, and efficient AI applications in HR by scheduling a demo with Darwinbox.