The Benefits and Challenges of Using AI in Human Resources

December 12, 2023
By Nelson Connects

Everyone everywhere is talking about artificial intelligence, and new, more powerful AI solutions have the potential to continuously improve HR processes. At the personal level, AI tools can empower human resources professionals to make more accurate and data-driven decisions.


While AI-assisted solutions promise greater efficiency, they also pose challenges of particular concern to human resources teams, including privacy, transparency, and cost. This article looks at both the potential upsides and downsides of introducing more AI to the HR department.


AI in Action: Using AI in HR


Innovative and time-saving AI tools are firmly rooted in the everyday business of talent and employee management and increasingly used by HR teams at every phase of the employee lifecycle.


1. Recruitment


For many organizations, AI tools are standard operating procedure for talent recruitment and acquisition. HR teams use AI-powered software to screen resumes, analyze candidate responses, and evaluate job fit. While not without its flaws, AI technology can reduce hiring biases and increase candidate diversity. And, very significantly, automated recruiting tools can enhance the candidate's experience by simplifying the application process, automating interview schedules, and customizing communications that help retain top candidates during the recruitment phase.


Employers are also inserting chatbots into their hiring strategies. For example, chatbots can handle initial candidate screenings and respond to straightforward inquiries, taking a heavy burden off of busy HR teams. Chatbots can also schedule phone screenings or video interviews, relieving human recruiters of the need to handle these repetitive and time-consuming tasks.


2. Employee Engagement and Retention


AI offers impressive solutions to bolster employee engagement and retention. For instance, algorithms can analyze employee data, such as service history, performance evaluations, training, and feedback, to identify trends and predict potential issues. With the fast delivery of this type of AI-generated data, HR teams can better focus on analyzing the information and proactively addressing employee retention.


Managers can also anticipate employees’ needs and offer support through training opportunities, assigning work that aligns with employee interests, or creating personalized work schedules.


HR teams also use AI options to personalize employee engagement programs that enhance employee well-being and on-the-job satisfaction. Other tools have the potential to improve the employee experience through more efficient, automated feedback cycles, personalized guidance, reduced bias, and improved employee performance.


3. Compliance and Risk Management


Human resources teams are responsible for managing compliance requirements, such as regulations related to diversity, data privacy, health and safety, hiring, and ethics. HR teams often leverage AI’s capabilities to generate predictive analytics, produce compliance reports, identify potential risks, and develop mitigation strategies. AI-powered systems have the power to monitor workforce compliance with existing policies and regulations and also keep HR teams informed on legislative changes and regulatory mandates.


4. Onboarding


Many companies use AI tools to speed up the onboarding process, which often includes tedious, repetitive administrative tasks related to employee tax forms, handbooks, payroll requirements, and other processes and procedures. Employers are also using AI technologies such as chatbots and interactive learning to help new hires acclimate to their new surroundings, learn the company culture, and integrate with their team. Automation can give HR teams more time to focus on strategic decision-making and interpersonal relations.


5. Employee Performance Management


AI-powered performance management systems gather data from employees’ performance metrics to assess trends and aid in employee development. These tools can quickly identify learning and skills gaps and help managers assess employees’ advancement potential. Automation provides a structured approach that supports employee growth and ultimately strengthens the organization’s performance.


6. Offboarding


AI tools can effectively streamline and improve the offboarding experience for both the departing employee and the organization. For example, HR teams can automate various offboarding steps, such as collecting employee feedback, tracking exit interviews, and managing knowledge transfer. Some companies use chatbots to answer departing employees’ questions or provide resources as deemed necessary.


But companies should weigh the value of automation vs. human interaction during offboarding. A sincere human-to-human interaction at the point of departure can actually build rapport and set the stage for a future relationship, whereas a fully automated process can lack sincerity or transparency.


AI in Question: Benefits and Challenges


AI presents both benefits and challenges of particular significance to the HR function. Before adopting a new system, HR leaders must evaluate both sides of the technology.


Benefits of AI

  • Efficiency: AI streamlines HR processes, making them faster and more efficient.

  • Personalization: AI enables HR to offer more personalized experiences to candidates and employees which can boost brand loyalty and employee retention.

  • Scalability: AI can process and manage large volumes of data and multiple tasks without a proportional increase in resources.

  • Data-Driven Decisions: HR teams can leverage AI-generated data insights to make informed decisions, from talent acquisition to workforce management.

Challenges of AI

  • Privacy and security: AI creates serious risks related to data privacy and security, especially when sensitive employee information is at stake.

  • Bias and fairness: Like humans, AI-influenced systems can impart bias in the hiring process. HR professionals must objectively oversee decision-making processes and outcomes to measure fairness and equitability.

  • Ethical issues: The use of AI in HR can create challenging ethical situations. Companies must carefully evaluate how their technology choices impact accountability, transparency, discrimination, and the organization’s mission and values

As AI technology progresses, we can anticipate more improvements to HR methodologies and operations. By combining smart AI applications with meaningful human interaction, HR teams can leverage AI in positive ways to develop motivated and high-performing teams who build the brand and drive organizational success.


For more information on employment trends or assistance with your hiring needs, contact the experts at Nelson Connects today.

Know now, read later.

Sign up for notifications, and we’ll let you know when we publish new articles and resources. So you can read now, or later.

Sign up for notifications

Know now, read later.

Sign up for notifications, and we’ll let you know when we publish new articles and resources. So you can read now, or later.

Subscribe Now!