From Paper Trails to AI Pathways: Digital transformation of HR

Posted in : Supplementary Articles ROI on 25 June 2024
Preeti Dwivedi
Issues covered: AI; Recruitment; Employee support; Ethical considerations; Future of AI in HR

Last year I attended a HR tech conference to explore innovative solutions in HR and to stay updated in my field of HR. Our company was gearing up for a massive hiring spree and planned to double our workforce within six months. As the HR professional, I felt both excited and overwhelmed by the sheer volume of resumes and the challenge of swiftly and efficiently finding the right talent.

As prompted by our management, we decided to explore AI-driven solutions which could accelerate our hiring process. At first I was being sceptical, but curious - so why not give it a try? What we discovered was ground-breaking.

AI in recruitment

The AI system took over and sifted through hundreds of thousands of resumes within seconds and provided us with a list of candidates that matched our criteria, saving time and manual effort. Not only was the AI ​​system able to sift through resumes in seconds, it also identified top candidates based on our unique needs and cultural fit. One specific candidate, I recall as Patrick, initially failed to make it through the traditional selection process, but something told me he was still a good fit for this business. Understandably, AI highlighted him as an ideal potential match for a project management role due to his specific skill sets and past experiences. We interviewed him, and he turned out to be one of the best hires we had ever made.

Employee support

However, the impact of AI did not stop at recruitment. Our company’s new AI-powered chatbot supplied answers to the most common employee questions served as a first-line support, giving employees immediate response 24/7 and significantly reduced workload in the HR services team. As the chatbot gathered more data, it became more and more accurate. We also explored AI for predictive analytics which gave us insight into employee engagement and enabled us to quickly address employee issues.

This indicated to us that AI wasn’t just a tool; it was a game-changer for HR practices. It transformed our approach in HR, rendering our employee-related decisions to be guided more by data, and enhancing efficiency, thereby enhancing the overall effectiveness of HR. This article shares experiences and insights about AI in HR and elucidates how it is bringing transformative changes across various HR areas from recruitment to talent management, to employee engagement, as well as the future HR trends that are poised to redefine the industry. Irrespective of whether one is an HR practitioner keen on innovation, or a business executive prepared to adopt emergent technologies, this paper prompts an exploration into the substantial impact AI is exerting on HR.

So what are we waiting for? AI adoption in Ireland by HR

HR and AI are merging at a quick pace. In Ireland, 49% of organisations are using generative AI in some form or other as shown in a 2024 study by Trinity College and Microsoft. One of the key insights from the study is that Ireland stands at a juncture of AI technology, and seizing the opportunity to become a global leader in AI innovation would be vital for the future of the businesses. A recent IBM report states that 66% of CEOs expect that AI in HR will provide similar advantages, especially with respect to recruitment and employee engagement, while a study by McKinsey & Company indicated that 47% of organisations have already implemented AI in at least one HR function, with another 30% planning to adopt AI within the next year. Gartner's 2024 report suggests that 76% of HR leaders feel the urgent need to integrate AI into their operations to remain competitive. These figures highlight the growing recognition of the potential of AI to transform HR practices.

AI jargon explained

Let’s breakdown some AI jargon. AI in HR employs various algorithms and technologies to automate numerous tasks and processes. Narrow AI, which includes image recognition and chatbots, is capable of managing specific assignments such as resume screening and responding to queries. Additionally, Reactive AI, designed to respond to particular stimuli (without learning from past interactions), proves useful in filtering job applications and suggesting training initiatives. Limited memory AI, which utilizes learnings from previous experiences to make predictions, finds application within HR for predictive analytics, managing performance, and forecasting workforce trends. Collectively, these AI categories enhance HR operations, decision-making processes, and the overall employee experience. Moreover, Generative AI, a type of Narrow AI, provides significant benefits not only within HR but also across diverse functions. It assists in creating job postings and tailored communications, contributing to approximately 20% of value in talent acquisition and onboarding activities. It can enhance performance management by summarising unstructured data and providing insights, adding another 20% to its value. It fosters employee engagement through AI chatbots that can deliver personalised learning recommendations, accounting for 12% of its potential. Additionally, it can support people analytics by interpreting data and generating code, representing 15% of its value potential. Recruiting is one of the most powerful applications of AI today, because it uses a massive amount of data and can let the users build variety of models to identify who is a good fit for a role by looking at experiences, skills, job history, and more. These digital systems are considered to be less biased, mature, and advanced. Overall, generative AI presents immediate opportunities and potential to enhance HR processes across all sub-functions.

Challenges 

"AI is not a magic solution that can solve all our HR problems" as noted by Josh Bersin, founder of Bersin by Deloitte notes. While AI can significantly reduce human bias in the HR processes, HR executives must still exercise their judgment while using AI-powered tools and solutions to make decisions that impact employees. In technology, bias can be created intentionally or unintentionally, highlighting the potential challenges of AI. However, if the HR professionals are aware of it and are able to ensure that the data inputted into the models is complete and accurate, then the companies are in a better place to mitigate these risks.

Ethical considerations

HR professionals must also consider ethical considerations while using AI powered tools. For example, there are many ongoing debates on the idea of using AI for employee surveillance. A senior HR professional speaking at the conference mentioned "I think of AI as finding ways to do more, not finding ways to catch people doing less." This is highlighted by the example of AI technology that can predict if an employee is about to quit based on their behaviour. This could raise concerns around the GDPR in Europe. To tackle this, HR leaders must encourage for advanced research on ethical and bias free usage of AI technology practices and standards. It is also to monitor algorithmic bias through regular audits. Employees must also be trained on how to use AI with respect to their specific roles to optimise work and develop policies on ethical use of AI. By balancing the capabilities of AI with these considerations, HR function can leverage the best use of AI.

Future of AI in HR

It is essential to view AI as a tool that can aid productivity and enhance efficiency but not as a complete solution as of now. The developments in technology indicate a bright future for AI in HR and we can look forward to more sophisticated AI applications that will improve HR processes and overall decision-making as a result. Some of the emerging uses of AI will be:

  • More focus on Predictive Analytics: Development of AI models with the ability to predict employee turnover, performance outcomes, and training needs.
  • Enhancing Employee Experience: Customisation of employee journeys, from onboarding to career development through AI.
  • AI-Enhanced Leadership: Support of leadership development and decision-making through predictive insights and real-time analytics.

While concerns exist, in order to remain competitive, the organisations must explore AI for their business applications. 

This article is correct at 25/06/2024
Disclaimer:

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Preeti Dwivedi

The main content of this article was provided by Preeti Dwivedi. Email preetidwivedi07@gmail.com

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