Key Takeaways
- Data and AI are full of potential for HR, but take-up is low so far
- Data and AI can transform HR decision-making, onboarding and employee engagement
- Challenges around ethical use of AI, data privacy and workforce buy-in need to be addressed
- Now is the time to get on board, with more innovations in the pipeline
The demands on HR teams as part of successful modern businesses are perhaps bigger and more varied than they’ve ever been. A well-run HR function goes beyond employee processes and services, and incorporates training, workplace culture, employee wellbeing, and efforts around diversity and inclusion.
All this means that many HR teams are actively on the lookout for ways to increase efficiency, and artificial intelligence is making a real difference in that area. The ability to use chatbots to automate employee-facing procedures, transform onboarding processes, and develop more engaging and immersive training programmes can all help HR take their operations to the next level.
While many organizations have started using AI for HR-related activities in the last year or so, SHRM has found that take-up is still only around 25%. As this blog will demonstrate, there are plenty of upsides for early adopters who get on board with the role of AI in HR now.
The Benefits of Data in HR
As well as the buzz around AI in HR, the value and insights present within detailed employee and organizational data have an important part to play, too. Among many important functions that data in HR supports, two stand out in particular:
Enhanced Decision-Making
HR naturally possesses large amounts of detailed data, and putting that data through analytics tools can uncover important insights, such as employee motivations, and key drivers behind talent retention and acquisition. For example, HR analytics can spot patterns in employee turnover, evaluate the effectiveness of talent management, and assess the effectiveness of compensation and benefit strategies - suggesting actions for improvement.
The importance of these insights can’t be overstated, especially when it comes to talent management improvement. According to CareerBuilder, 75% of employers have made a bad hire within the last year, costing them an average of $17,000 each time.
Predictive Analytics
The use of analytics and data in HR can go further, to suggest ways of mitigating issues before they even emerge and enhance the overall employee experience. Predictive analytics tools can forecast potential outcomes in the future, and suggest ways for the HR team to put the organization on the right track and optimize the working environment.
For example, analysis of employee engagement surveys, performance data and behavioral trends can identify opportunities to boost job satisfaction and well-being. This proactive approach allows the HR team to take action to support employees and cultivate a positive workplace culture. Interventions could range from offering growth opportunities and recognition programs to implementing more flexible working arrangements, ultimately creating an environment where employees thrive and contribute their best work.
AI Applications in HR
With AI making so many headlines around the world, it can be difficult to pin down exactly how it can be applied in the most productive ways - including in AI for HR. But several practical use cases are already emerging:
AI in Recruitment
AI recruitment tools can streamline the process in a number of key areas, including screening of applications and resumes, automating pre-employment assessments, and suggesting which candidates are the best-qualified and most suitable for the organization’s culture. Removing human subjectivity from the process can also help reduce unconscious bias, therefore improving diversity and inclusion.
AI-Powered Employee Onboarding
When new hires are made, AI can help enhance the onboarding process by enabling personalization to the employee’s job role and preferences. Supplying resources and information most relevant to them ensures they can get up to speed with their jobs as quickly as possible. Popular AI-driven onboarding tools include HiBob, Enboarder and Pendo.
At Ciklum, we have supported a leading food delivery app in recruiting drivers, and verifying their credentials through AI-supported background checks and processing.
AI in Performance Management
AI can capture, collate and analyze data from many different sources to measure and benchmark employee performance, from emails and instant messaging to social media interactions. Not only can this help the HR team spot areas where employees can improve, but it also makes it easier to identify and nurture the best talent within the organization, in order to retain them long-term.
AI for Employee Engagement
Similar to the previous point, AI built into HR through experience engineering can be instrumental in supporting and maintaining positive employee experiences. Being able to monitor employee engagement and performance metrics in real-time means HR teams can take quick and decisive action to address any issues. This helps prevent employees becoming disengaged from their jobs, or suffering burnout, when problems are picked up too late.
Challenges and Considerations for Data and AI in HR
While there are plenty of upsides around the use of data and AI in HR, these have to be balanced against a number of potential issues along the way. Having the right training data in place is fundamental for a successful AI deployment, but there are other associated challenges, too:
Security and Data Privacy in HR
The data that HR handles and uses is highly sensitive in nature, and is used in a variety of different ways, from background checks to risk assessments. Keeping this data safe and using it properly is therefore paramount, not only for regulatory compliance, but also to build and maintain employee trust in HR operations. Regular audits of HR and data handling processes are essential to ensuring everything is above board in this area.
Considerations for Ethical AI in HR
The surge of interest in AI in particular has sparked a global conversation about how it can (and should) be used ethically. From a HR perspective, this should include transparency in processes, so that employees can understand how AI is being used; and fairness so that bias is prevented and all employee groups are treated fairly, irrespective of characteristics or background. Additionally, HR should prioritize comprehensive AI literacy training to ensure employees are equipped to understand, navigate, and effectively utilize AI tools in their roles.
Workforce Challenges
It’s vital to ensure employees feel positive about the use of AI. This applies to the wider workforce in how their data is being used, and the HR team itself, who won’t want to feel like AI will ultimately render their jobs obsolete. This is where workshops, seminars and other educational programs are fundamental to achieving workforce buy-in, so that employees understand the real-world benefits of AI-supported HR.
In Summary: What Does The Future Hold in Data & AI for HR
With AI for HR developing so quickly, there are likely to be more changes and innovations on the horizon in the months and years ahead. These include (and are not necessarily limited to):
This means that all organizations need to be prepared to constantly evolve and improve their data and AI solutions, in order to maximize their HR capabilities and meet the rising demands of the workforce. Working with an expert partner is key to achieving this, especially for businesses who may not have the specialist in-house expertise in data and AI for HR. If you're ready to take your HR capabilities to the next level, talk to our experts!