Is Human Resources Abreast of the AI Revolution?

Artificial Intelligence (AI) is transforming industries, reshaping business functions, and redefining traditional roles. From marketing analytics to financial forecasting, AI has embedded itself in nearly every facet of the corporate world. Yet, one domain where AI adoption has been tepid and fraught with challenges is Human Resources (HR). Is HR missing the AI revolution? If so, why?

AI’s capabilities in HR are present but remain underutilized. Tools like Applicant Tracking Systems (ATS) and AI-powered recruitment platforms are now commonplace. These systems parse resumes, match candidates to job descriptions and even automate communication with applicants. A 2023 LinkedIn report states that over 70% of large enterprises use AI in their recruitment processes. Yet, despite this adoption, the application of AI in HR often remains superficial, focusing primarily on recruitment and, to a lesser extent, on exit processes.

The true promise of AI lies in its potential to enhance employee engagement, predict turnover, and foster a culture of continuous learning and development. HR departments often face significant barriers that limit their ability to leverage AI in these areas.

Employee data, including performance metrics, feedback, and behavioural patterns, are deeply personal and sensitive. The General Data Protection Regulation (GDPR) in Europe and similar privacy laws worldwide impose stringent requirements on how organisations collect, store, and use such data. “The ethical and legal implications of using AI on employee data remain a key hurdle,” notes Josh Bersin, a leading HR analyst. Organisations fear privacy breaches could lead to reputational damage and legal repercussions, making them cautious about deploying AI in core HR functions.

AI systems use high-quality, integrated data to function effectively. However, HR data often exists in silos across disparate systems — payroll software, performance management tools, and engagement platforms. This fragmentation makes it difficult for AI to derive meaningful insights. Gartner’s 2024 HR Technology Survey points out that only 38% of HR leaders believe their data infrastructure is ready for advanced AI deployment.

HR has traditionally been a high-touch function, emphasising human connection and empathy. While efficient, AI often lacks the emotional intelligence required for nuanced HR scenarios. This cultural resistance to automation stems from the belief that machines cannot replace the “human” in Human Resources.

Despite these challenges, AI holds immense potential for transforming HR if leveraged thoughtfully. Here are some key areas where AI can make a significant impact:

According to a Glassdoor study, recruiters spend an average of six to ten seconds reviewing a resume. AI can optimise this process by analysing resumes for skills, experiences, and cultural fit far more comprehensively and quickly than humans. Advanced AI models, such as those offered by companies like HireVue and Pymetrics, assess candidates through video interviews and psychometric tests, matching them to roles based on behavioural data and predictive analytics.

AI-powered sentiment analysis tools can monitor employee communications (within ethical boundaries) to gauge morale and engagement levels. Platforms like CultureAmp and Peakon use AI to analyse survey data and flag areas of concern. This enables HR teams to address issues proactively, fostering a more engaged workforce.

High employee turnover is a costly problem. AI can analyse patterns in performance reviews, attendance, and even external social media activity to predict which employees might be at risk of leaving. Organisations like Workday and Oracle HCM are already integrating predictive analytics into their platforms to help HR teams take pre-emptive action.

When employees leave an organisation, their feedback often provides valuable insights. However, research from Harvard Business Review reveals that employees are more candid six months after their departure. AI tools can facilitate alumni engagement by maintaining ongoing communication, conducting post-exit surveys, and analysing trends across exit interviews. Such data can guide improvements in organisational policies and practices.

Continuous learning is critical as roles evolve due to technological advances. AI-driven learning platforms like Degreed and EdCast offer personalised learning paths based on an employee’s career aspirations and skill gaps. By analysing performance data and market trends, these platforms ensure employees stay relevant and motivated.

The dilemma of privacy versus progress is central to AI adoption in HR. Organisations must adopt transparent data governance policies and invest in anonymisation techniques to address this. Blockchain technology, for instance, offers a secure way to store and share employee data without compromising privacy. Moreover, involving employees in discussions about AI usage and obtaining consent can foster trust and collaboration.

For HR to remain relevant in the age of AI, it must evolve from being a reactive administrative function to a proactive strategic partner. This requires rethinking how AI integrates into the employee lifecycle. AI cannot and should not replace the human touch in HR, but it can augment decision-making, improve efficiency, and enable HR professionals to focus on higher-value activities.

As Dave Ulrich, a renowned HR thought leader, aptly puts it: “The future of HR lies in the ability to marry technology with empathy.” By embracing AI responsibly, HR can unlock new opportunities to support employees, drive organisational growth, and navigate the complexities of the modern workplace.

Is Human Resources abreast of the AI revolution? Not entirely. While recruitment processes have seen significant advancements, much of HR must be tapped for AI. Privacy concerns, cultural resistance, and fragmented data systems are real challenges but not insurmountable. By addressing these issues head-on and focusing on areas where AI can complement human judgment, HR can catalyse innovation and employee well-being in the AI era.

The time to act is now. Organisations that invest in AI-driven HR solutions today will improve their operational efficiency and position themselves as employers of choice in a rapidly evolving world. The revolution is here. HR must decide whether to lead it or risk being left behind.

This article was published on Medium: https://medium.com/@stevecorrea.com/is-human-resources-abreast-of-the-ai-revolution-d0d870b6ed29 ( Nov 18, 2024)

[i] Steve Correa is an Executive Coach and Author of The Indian Boss at Work, Thinking Global, Acting Indian

[ii] Ronald D’Souza has Corporate and Consulting experience and mentors new startups.