The Benefits of AI in HR

Artificial Intelligence (AI) is propelling human resources (HR) into a new era.

When reduced to its components, AI combines data, algorithms, and machine learning to perform tasks. As it relates to HR, AI is changing the landscape by automating tasks, providing data-driven insights, and streamlining processes.

“At the intersection of innovation and strategy within Human Resource Management (HRM), the emergence of Artificial Intelligence (AI) stands as a beacon of transformation, poised to redefine the conventions of the field,” according to The HR Director's “Redefining Human Resource Management: The Pros and cons of AI Integration.”

“The path to integrating AI into HR processes demands a nuanced approach, tailored to the unique objectives, positioning, and aspirations of each company.”

The advantages of AI in HR can be seen throughout the employee lifecycle, from enhancing recruiting and onboarding processes to personalizing employee training and engagement programs. These coalesce to help improve the overall employee experience, which leads to increased productivity and business efficiencies for small and mid-sized bxusiness (SMB) owners.

However, AI is not a solution to every HR challenge or a replacement for experienced and valued HR professionals. It is a complex set of tools that should be analyzed carefully and strategically implemented in your workplace.

In this article, our HR experts deliver actionable insights on the following:

• What are the benefits of AI in HR?
• What are the negatives of AI in HR?
• What is the role of AI in HR?

These are some of the benefits of AI in HR for SMBs:

• Recruiting: AI-enabled technology tools empower HR professionals by automating repetitive and time-consuming recruiting tasks and enhancing processes so that HR employees can focus on finding, recruiting, and hiring top talent for your team. For example, AI tools can scan online data from job boards, assess resumes and seek out candidates whose skills and experience match job requirements. They can also craft keyword-focused job descriptions and employment ads designed to attract top talent.
  
  
• Onboarding: AI onboarding tools welcome new hires and set the stage for a mutually beneficial employer-employee relationship by guiding them through new-hire orientation, administrative tasks, and training programs. AI allows for a streamlined and guided process, ensuring new hires don’t miss a step. “AI can provide new hires with key contacts, training suggestions, essential information regarding benefits, policies, and anything else that will ensure a seamless experience,” states the International Association of Human Resource Information Management’s “How Artificial Intelligence Is Transforming HR” “It can create personalized experiences that help new hires adjust quickly to the new work environment and understand exactly what they need to do.”
  
  
• Performance management: AI tools can be used to help managers and employees perform goal-setting exercises, give and receive feedback, and conduct performance reviews. In addition, they can analyze performance-related metrics and cite trends in the workforce, giving leaders data they can use to make decisions.
  
  
• Learning and professional development: AI helps design professional growth programs tailored to where employees are and how and when they need them. Companies can also utilize AI tools to create custom training videos and personalized learning paths or courses specific to their business and industry. These programs can identify skills gaps during training courses, providing HR teams with real-time information to enhance training programs and strengthen employees’ skill sets.
  
  
• Employee experience: Employee experience platforms powered by AI help improve workplace culture with employee recognition tools that facilitate awards and appreciation programs and communication tools that provide an internal platform for company news, announcements, employee feedback, and surveys that measure employee sentiment on various aspects of their work.
  
  
• Hybrid workplace tools: AI-powered technology solutions keep hybrid or remote employees engaged and productive while ensuring protection for company data and systems. These include communication platforms like video conferencing tools, cloud storage, project management software, instant messaging apps, digital whiteboards, and secure remote access capabilities.
  
  
• Employee retention: AI programs can identify disengaged employees by detecting changes in their behavior and communication activities. This helps HR professionals amplify retention efforts through targeted programs that create higher levels of employee engagement and reduce turnover. According to Traction Technology’s “The Traction Five: How AI is Transforming HR,” “AI tools can analyze employee sentiment, predict potential turnover, and suggest targeted interventions to boost satisfaction and retention.”
  
  
• Data-driven decision-making: People analytics programs allow SMBs to probe data, gather insights about their workforce, and make decisions based on those insights. For example, business owners can extract data from their systems, such as an employee experience platform, and run it through people analytics software or programs. HR professionals analyze the outputs to determine action items and/or policies that can be implemented to impact the subject, whether improving employee retention rates, enhancing recruiting techniques, or boosting employee engagement.
  
  
• Offboarding: At the end of the employment lifecycle, HR teams can use AI-powered tools to schedule exit interviews, answer key questions about the exit process around the clock through chatbots, and help facilitate sometimes sensitive offboarding processes. “HR teams have many boxes to check to ensure compliance, confidentiality, and civility,” according to Zendesk. “AI can ensure this process is streamlined and consistent so nothing gets overlooked.”
  
  
• HR efficiencies: Many AI-enabled platforms have employee self-service tools that allow employees to set up and update account functions like direct deposit, benefits elections, or leave requests at their convenience. In addition to empowering employees, reducing internal costs and giving time back to HR teams, these tools allow HR employees to respond quickly to employee questions and requests and deliver more personalized service in the process.

What are the negatives of AI in HR?

As with all new tech tools, it’s best practice to comprehensively analyze the potential adverse effects of AI-enabled tech tools before embedding them in HR processes.

Addressing potential harmful impacts requires careful planning, ethical considerations, and a human-centered approach to AI implementation in HR.

Below are examples of disadvantages of AI in HR:

• Privacy and security issues: By their very nature, AI models are required to process and analyze large quantities of data to accurately perform tasks and predict trends, and most HR-related data is sensitive and private. This information is also sensitive to cyberattacks and hackers, even if protected by stringent security measures.
  
  An assessment commissioned by the U.S. State Department and published by Gladstone AI addressed the potential AI risks associated with safety and national security, in part based on discussions with employees at OpenAI, Google DeepMind, Meta and Anthropic, according to HR Morning’s “AI Risks: Is Your HR Department Aware and Prepared?” “Many indicated that safety and cybersecurity are being treated like afterthoughts as the technology continues to develop,” states the article. “AI-powered HR systems rely on vast amounts of employee data. If that data isn’t properly secured and private data gets breached by a cybercriminal, it can lead to major headaches including lawsuits.”
  
  
• Potential for bias: AI algorithms are based on data input, so if that data reflects existing biases, the AI model or tool can perpetuate those biases in hiring, promotion, and other HR processes. Also, AI technologies do not recognize human traits, such as personality or empathy, that could bring value to a job. This can lead to unfair or discriminatory practices and non-compliance with discrimination laws that protect workers.
  
  
• Overreliance on AI: AI is a tool that supplements HR work processes but should be implemented in an environment that includes human oversight. When teams become dependent on AI technologies for analyses, insights, and even decision-making, it can dehumanize HR processes, potentially eroding the personal connection between HR and employees. The outcomes that could result when HR professionals become too reliant on AI tools include reduced critical thinking, loss of core recruiting skills, a lack of flexibility or responsiveness to changing business needs, and increased vulnerability to AI errors and privacy violations.
  
  
• Loss of “human” touch: On one hand, AI-enabled tools, such as chatbots and video interview platforms, help streamline processes and improve the user experience for HR teams and employees/candidates. However, these tools can’t completely replicate the nuance of human interactions, such as reading facial expressions and body language during an in-person interview, answering unique follow-up questions posed by employees, and participating in conversations that require human empathy and judgment.
  
  
• Compliance concerns: As AI tech tools become more pronounced in the modern workplace, legislation will be introduced to protect employees and counteract the real – or perceived – risks AI poses.
  
  An example is New York City’s Local Law 144 of 2021 regulating automated employment decision tools (AEDT). “The Law prohibits employers and employment agencies from using an automated employment decision tool (AEDT) in New York City unless they ensure a bias audit was done and provide required notices,” according to the NYC Department of Consumer and Worker Protection (DCWP)
  

Though no specific federal regulations govern the use of AI in HR processes, anti-discrimination protections in Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) extend to AI technologies.