The future of AI in HR: Opportunities and challenges

Artificial Intelligence (AI) can usher in a new era of human resource management, leveraging data analytics, machine learning and automation, which has the potential to deliver operational efficiencies and provide improved outcomes. Not just that, it can also provide information, insights, and data in real-time, which will support HR practitioners in quicker decision-making.

As per recent global research, it is estimated that 40% of the workforce will need to reskill within the next three years owing to advancements in AI. This transition represents an expansion in job opportunities. It is also interesting to note that 87% of the respondents believe that roles are more likely to be augmented than replaced by AI, with the potential impact varying depending on job function.

This transition will have a direct impact on HR departments, as it will create roles that require different skillsets that complement AI technologies, and as employees seek new jobs as their own roles change. The integration of AI into HR technology creates more possibilities for HR teams in this new business climate, driving innovation and automation, allowing HR practitioners to think about HR more strategically while still providing a human touch.

Today, companies are deploying machine learning (ML), natural language processing (NLP) and other AI technologies to automate human resources tasks and support decision-making. It enables a data driven approach to hiring, promotion and retention, which eliminates bias and enhances the job seeker and employee experience. This will also offer more tech-enabled, personalized, and productive hire-to-retire processes.

AI tools can support HR departments in a few broad areas which include the following -

• Recruitment and Hiring Processes: It can enhance recruitment using data-driven and tech-enabled recruiting and onboarding processes. It can also generate dynamic job descriptions for various roles, flag any bias in language, create social media content for campaigns, develop pipeline analytics with suggested interventions, create summary views of candidates and propose next steps, and support logistics such as interview scheduling, among other things.

• Talent Management & Learning: AI tools can forecast and identify talent/skill gaps, predict future skill requirements based on corporate strategy, highlight candidates for open roles or next-gen succession planning, assist with L&D content creation, recommend training-course content, or even create new training and learning materials. It can even tailor learning journeys and adjust content according to employee performance and company competencies.

• Employee Data Management: HR departments can leverage AI tools to analyse vast amounts of data, which will help identify patterns, and generate predictive insights. Using these insights, HR professionals can make informed decisions about recruitment strategies, employee development programmes, and talent retention initiatives.

• Payroll Processing: AI tools can help automate payroll tasks and improve accuracy and efficiency. It can process large amounts of data quickly, and machine learning algorithms can analyse historical data to predict and adjust for tax changes, currency exchange rates, and trends. This can help reduce errors and streamline payroll processing.

• Employee Engagement: Such tools can also be used to conduct sentiment analysis in order to identify potential needs for emotional or personal support. It can also share with managers suggested interventions to enable more data-driven manager coaching, and personalized communication with employees.

• HR Support or Service Desks: Conversational chatbots with new GenAI capabilities can be used for faster resolution of employee queries and grievances. It will also allow managers to complete tasks via a conversational workflow - such as approving job requisition, compensation increases, performance ratings, etc.

Clearly, AI can offer a whole host of HR related benefits, but it also poses a few challenges.

With the surge in data collection, HR departments need to ensure that they are compliant with the local regulations and data protection laws, like GDPR and others. It’s also critical for maintaining trust with employees, business leaders, and the ecosystem. Non-compliance can lead to financial penalties and reputational damage.

Companies must ensure that employees understand what and why data is being collected, how that information is being used, and how their privacy will be safeguarded. Data breaches are quite common in today's digital age. Compromised data can leave people open to identity theft and can break the trust between the company and its employees. Organizations must continually refine their strategies to keep data safe and ensure its integrity.

As AI technologies continue to evolve, it’s imperative that HR practitioners continue to understand, acknowledge, and adopt such tools, to augment the current processes and policies. Organisations that are quick to embrace this change will begin to see improved efficiencies, cost savings, and employee retention in the long term.

The author, Rency Mathew, is Global People Leader - APAC at Sabre.

DISCLAIMER: The views expressed are solely of the author and ETHRWorld does not necessarily subscribe to it. ETHRWorld will not be responsible for any damage caused to any person or organisation directly or indirectly.