How AI is transforming HR departments

Artificial intelligence (AI) once conjured up imagery of futuristic robots and Terminator-style takeovers. However, its applications today are far more practical - whether it’s in automating words and visuals, acting as a virtual assistant, or transforming manufacturing. It can even respond to questions better than some CEOs. 

When it comes to the workforce, experts predict the roles that AI will replace are those that don’t require human qualities such as critical analysis or judgement. 

So what does this mean for the future of human resource (HR) departments, the linchpin of organisations across the board? While some doomsayers are lamenting over AI coming for their job, forward thinkers are eagerly asking: Where can I upskill and leverage this technology to stay invaluable?  

Below, we’ll explore how AI is changing the face of HR and what HR professionals need to know.

What are the applications for AI in HR management?

The primary goals of human resource management (HRM) are human-focused. HR managers seek to attract and retain talented employees, as well as nurture a work environment and culture that empowers these employees to perform at their best. The tasks required to meet those goals are as vast as the industries who require HR, and some are more easily automated than others.

Many essential HR skills, such as problem solving, conflict management and strategic decision-making, still require a human at the helm. However, a number of other tasks can be automated for HR managers, allowing them more time for other tasks. 

Beneficial applications for AI in HR include:

Administration and repetitive tasks

AI in HR can automate repetitive and time-consuming tasks – such as onboarding new employees, responding to employee requests and automating benefits management. Many companies are already using online portals that leverage AI for administrative HR processes. In these organisations, HR managers are free to focus on more demanding areas in their role such as HR strategy and staff development.

Performance reviews

AI can help HR managers complete performance reviews with far more efficiency and accuracy. Custom-built AI programs can automate the collection and analysis of performance data from a number of sources like email, calendars and project management tools, as well as write performance reports. Some AI-powered software also has the ability to offer real-time feedback for personalised growth and development.

Recruitment

Automating recruitment is one of the most useful AI applications in HR. AI empowers recruiters to make data-driven decisions with far more ease, in far less time. It can write targeted and engaging job ads, source and screen candidates and job applications to save shortlisting time, and even analyse cultural fit.

Employee training, development and offboarding

AI has the ability to customise training programs to each employee’s experience level, department, and individual strengths and weaknesses. It can also automate onboarding and offboarding tasks such as managing user identities, permission and access levels, and completing exit interviews.

Chatbots

Chatbots have a number of applications for AI in HR, including providing payroll and policy information, managing leave requests and schedules, assisting with hiring and screening processes and responding to employee reimbursement requests. Notably, chatbots can also collect and store data that the business can recover at any stage.

Examples of AI in HR management

A number of forward-thinking organisations are already leveraging AI to improve their HR performance.

Sydney-based HR startup Employment Hero launched an AI-powered hiring tool, ‘Swag’, which can write job descriptions, predict future hiring needs, match candidates with compatible roles, post to job boards, and more.

Australia’s largest telecommunications provider, Telstra, built a cross-platform AI interface that enables its 28,000+ employees to ask questions and perform tasks across any company system. Their virtual HR assistant, ‘Darcy’, helps employees answer common HR questions without cutting into their HR departments’ time.

NAB has taken AI in HR further into the future by introducing ‘people analytics’. The bank has consolidated its customer research and people management data to identify high performing individuals, teams and branches. Now they’re using the insights to drive training within the organisation.

Challenges of using AI in HR management

While AI has the potential to revolutionise the HR industry for the better, it also presents a few challenges, which HR leaders of tomorrow must factor into their performance strategy. These include:

Unintended bias

One of the major risks AI can bring to recruitment is an unintended bias. One study reported that “algorithms trained on historic data carry significant risk for bias”. One high profile example saw Amazon find out this bias the hard way when its automated recruitment tool graded potential candidates against a model built from a 10-year survey of successful applicants. Unfortunately, most of them were men, so the AI removed any applications from women.

It’s worth noting that AI tools are always improving and, if used correctly, have the potential to make hiring more inclusive. To mitigate the risk, experts recommend implementing safeguards to avoid algorithmic bias, implementing AI with ‘attention to diversity and inclusion’, and leaving the final hiring decision to the humans.

Inability to replicate business intelligence

Currently, AI can’t provide the same level of business intelligence enjoyed by marketers or hedge fund managers. 

For comparison, marketers have access to multiple data points from every interaction in the clickstream of information that’s provided to consumers. Investors analyse thousands of data points of location data gleaned from mobile phone apps to predict human behaviour.

Meanwhile, employees provide HR managers with far fewer data points that can be plugged into AI. In some cases, it’s possible to have only one valid datapoint for AI in HR, particularly when you’re looking at churn or compensation.

Data quality, privacy and trust

For AI programs to produce reliable reports and recommendations, they must be fed reliable and valid data sources. For a number of organisations, this presents a challenge if the foundations for such data were not in place previously.

In the same vein, having ethical and legal frameworks in place to protect the data and rights of your employees is an essential but often overlooked step for many businesses. Without these frameworks and/or adequate transparency, employees may not develop the trust required to utilise the programs properly.

How HR managers can prepare for the future of AI

While AI may replace humans when it comes to certain administrative and automatable tasks, it is not currently able to replicate the human empathy, understanding and original thought that is essential in HR. Rather than fear its impending adoption, successful HR managers will embrace the time it frees up for more strategic thought and action.

Some experts say that AI won’t necessarily replace HR roles, but will certainly transform them, while others say it will replace some roles but also create new ones. 

The best thing you can do to future-proof your HR career is to fully embrace the possibilities AI presents, and upskill to increase your value to prospective employers. Here’s how:

Stay up to date with latest technology

Futurists across multiple industries have predicted that humans won’t be replaced with AI - they’ll be replaced by humans who know how to use it. 

Staying up to date with advancements in the sector by reading relevant news and reports, learning from industry leaders and experimenting with it yourself will put you in the best possible position to not only keep up with cultural shifts, but drive them.

Upskill to future-proof your HR career

As our workplaces and wider societies become increasingly dependent on technology, certain attributes will become even more valuable to organisations. Two major competencies HR specialists should focus on upskilling in include: 

Research

The ability to research trends, behaviours and predictions about the impact of AI in HR  and how to implement it effectively will be a strong differentiator of HR candidates. As the capabilities of AI evolve rapidly, HR managers will be presented with complex new challenges. Possessing the expertise to explore these issues from multiple perspectives and develop innovative responses is an essential strategic skill for future HR leaders.

Delegation

Delegation is pivotal to the efficiency of any organisation. It’s a key skill that requires exceptional communication skills and a high degree of emotional intelligence – both of which can be learned. They are also qualities that set HR specialists apart from AI and enable them to excel in the human-centred aspects of people management.

Learn what’s now and what’s next in HR

RMIT Online’s Master of Human Resource Management enables HR specialists to consolidate their skills and lead the way in an evolving field. 

Developed by industry experts for HR managers of tomorrow, students can gain top-tier qualifications without compromising on work or life commitments. Future-proof your HR career, on your terms. Learn more about our online Master of Human Resource Management.