"Artificial Intelligence will be vastly smarter than any human and will overtake us by 2025." - Elon Musk
We are witnessing how AI is changing the digital environment of businesses. It’s leading us to a future where monotonous tasks are automated with effective artificial intelligence solutions. The widespread adoption of artificial intelligence in human resource management (HRM) is diversifying the way organizations appoint, recruit and retain talent in the workspace. To simplify the HR processes and tasks, the HR department is leveraging the algorithmic HR that amplifies productivity, boosts efficiency, and minimizes the load of manual workflows. For instance, algorithmic HR can fasten the hiring process by filtering out the candidates that match the job requirements. Alongside this, the HR team can also evaluate the productivity and performance of the employees.
Now as exciting as it sounds, AI tools have faced severe criticism. There is also an underlying fear that AI might replace HR professionals soon. The fact is, AI can be best put to use and mold it to work for you. Instead of having a full-fledged HR team, a single HR professional can manage the functioning through AI-backed HR software. This begs us the question, will AI be a gamechanger in the HR industry? This blog will discuss this and help you understand the different spheres of AI in HR and what the future holds in the HRM space.
“The future cannot be predicted, but the future can be invented,” says Nobel prize winner Dennis Gabor, the inventor of holography. He is true. Here, with AI, the human resources workflow is going to be re-invented.
What Role Does AI Play In HR?
As the world is pioneering technological advancement, many organizations have paced up their HR processes through the assistance of artificial intelligence. While AI certainly bifurcates the processes in easier steps, organizations should keep an eye that the technology is not thriving on biases and discrimination.
At the core of the algorithm HR lies data. This data can be fetched and used for unethical practices, which could eventually hamper the reputation and limit the ability to attract potential candidates. Hence companies should track and analyze whether AI and automation are working in favor of the business by conducting ethical HR practices. The team should also ensure that the AI software in usage is not collecting data about gender, race, religion, disability, and other personal information. As technology continues to advance with new innovations, HRM is adopting AI with the objective of hiring talent and automating core administrative functions. The chief human resource officer (CHRO) should execute the best algorithm HR practices to preserve the brand image and boost organizational performance.
“Advances in technology, especially artificial intelligence (AI), can help HR teams overcome the ongoing talent shortage and record-high turnover,” says a report.
Hire or fire, HR gets a step ahead with AI. The following sections will give you a break from this point.
Bridging the Gap Between Talent and Employers
As much as there’s a rising demand for talent and opportunities, employers are struggling in finding the ideal fit for their job. Here’s where AI can bridge the gap between talent and employers. Artificial intelligence guides the HR team in attracting top talent and navigating through the hiring process. With AI, HR can fetch the right candidates who have shown interest in the job posting.
AI can recognize specific patterns in the data and then short-list the candidates. This will assist in arriving at a hiring decision and employee retention. For instance, by measuring employee performance, the HR team can identify some of the traits of the employees and consider them during the hiring decision.
Applicant Tracking
As soon as the recruiter posts about the hiring alerts, depending upon the demand of the job profile, the HR team receives ample applications. The HR team has to collect applications from a centralized platform, view, and filter out the final applicants that meet the job requirements. That’s easier said than done, as it consumes time and effort. There are high stakes of missing out on a potential candidate in the talent pool. The effective usage of an AI-based application tracking system (ATS) takes the lead for a seamless hiring process. Through AI-based ATS, the entire hiring process is automated, which will benefit the recruiters and hiring managers. The software will extract the candidates based on keyword parsing. Once shortlisted, it will automatically send the email and screen information. An added advantage of AI-based ATS is that it will give updates on whether the candidate is chosen for the next round or not. This saves time for both parties.
Banking and Tax Details
For an HR team managing the banking and tax details involves a lot of attention and paperwork. With every new candidate on board, the HR team has to collect banking information, tax details, and many other financial documents for monthly remuneration. Apart from that, the HR manager also keeps track of the employees and their tax filing during the financial year. Overall, it’s a challenging task for the team to manage the financial details and crunch numbers. With AI-enabled banking software, the process paces up the entire process -starting from opening a bank account, receiving monthly statements, and setting monthly payments and reminders to automating the tax dedication based on the income slot.
Benefits Management
Employee benefits management is a discipline managed by the HR team. The organization will offer extra perks/benefits to the employees additionally on top of their wages. The benefits could range from maternity/paternity leave, insurance, pension schemes, health and dental schemes, vacation and sick leaves, paid time-off leaves, and so forth. Offering certain benefits can attract candidates for hiring and retaining purposes.
The HR professional typically manages the employee benefits management process and adheres to the necessary government guidelines. Managing the benefits for the employees and training them to participate can be a mind-numbing task. The professional also has to timely review the benefits for the long-term employees and introduce the new set of benefits to the newly appointed employees. With AI coming into the picture, the process becomes trouble-free. The software will automatically set reminders to update the benefits of the employees. It will also track and maintain a record of the utilization of the benefits by every employee. The AI chatbot integration in the software can also give guidelines and policy documentation that saves time for HR during the onboarding process.
Compliance Management
Compliance management is the process in which the HR professional ensures that the employees and organization follow the rules and regulations. Now, this set of rules will consist of a range of entities like government bodies, industry-specific, that play a critical role for the organizations. Many times noncompliance can often create hurdles among the employees and damage the reputation of the company. Hence for the overall well-being, documentation, and audits are conducted regularly. Many companies to date use outdated versions of software, excel sheets, for compliance activities which can increase the risks of conflicts. Additionally, reviewing the conflicts can take days and miss out on the leading opportunities. Not backing up confidential data at times can cost legal actions.
With AI, the HR team can collect professional and personal data and keep it confidential. It also allows the HR team to shift focus to other strategic tasks for the betterment of compliance management.
Employee Management
Employee management is the process where the HR team ensures that the employees conduct their best performance and aid them with tools that will help them to grow in their respective fields. The team leaders and managers have to track the performance constantly and ensure that there’s a consistent workflow maintained. However, tracking the progress individually can take up a big slot of time, leading to personal one-on-one meetings and so forth. But with AI productivity software, managers can view their productivity status and compare their every day, monthly, or quarterly performance. The software will also generate reports that provide a brief overview of their work performance. It also bridges the communication gap and re-establish work expectations.
Recruitment and Talent Management
There are many core HR functions. Because of this, why every organization hires an HR staff to build a reliable team for the company. Recruitment and talent organization are two core functions for the HR department that can benefit at its best from AI. By deploying AI technology-based tools, the HR team is able to automate repetitive tasks. Additionally, AI-backed recruitment software can guide organizations in filtering out resumes, writing down job descriptions, and conducting interviews regardless of their demographics.
For a talent management team, AI can be the support system in tracking performance reviews and even offers constant learning by analyzing their growth in the company. Additionally, the AI can also perform other tasks like administration, employee engagement, payroll processing, and so forth.
Job Board Posting
Recruiters and agents can use different job board platforms like Indeed, ZipRecruiter, Monster, LinkedIn, and so forth to find out a suitable candidate for the job. The hiring manager has to narrow down the key responsibilities and the must-haves in the candidate, along with the job description. For this, curating the description individually can take up time. Using a tool like ChatGPT or Google Bard to write the descriptions and other necessary job profile descriptions.
Onboarding
A successful onboarding process will give a brief explanation of how to work within the company. It can swiftly dial the new employees into the working environment efficiently and with utmost ease.
One of the biggest challenges in the onboarding process is a lack of communication. Providing a mere handbook to the newly hired employees will not blend them into new surroundings. In fact, it can lead to an unsatisfactory experience. As per the Job Seeker Nation Report, 30% of the employees have left the job within the first 90 working days. Hence having a smooth onboarding process becomes more important than ever. One way of attuning this process is to have a mentor who will take the employee through the technical and cultural aspects of the organization. An AI-based HR software can assist employees in understanding their day-to-day activities and build strong ties between the employee and manager
Payroll Management
When we first mention payroll management, the person to spring our mind is the financial specialist. However, that’s a half-truth. There’s equal involvement of HR in payroll management. The HR builds an extensive compensation package for the individuals that comprises salary, allowances, taxes, and net payment to the employees. Maintaining an obsolete version of the payroll software will provide inaccurate results and stress in the year-end reports. An AI-based payroll management software will tighten data security and prevent intrusion from outsiders. The software will also manage the performance of the employees, which will assist them in the annual evaluation.
AI-backed HR Analytics
Those were the days when the HR team would save the candidate’s data in an Excel sheet. As we look back, it’s only because of the smart technology we have come a long way. Today, every firm has HR analytics software that processes huge amounts of data and picks the best employee for their firm. The HR metrics will also provide other metrics like diversion, inclusion statistics, and other workforce planning information.
The machine learning algorithms will predict patterns and analyze the current job market trends that otherwise might go unnoticed. This can consist of recognizing the high-performing candidates for career development or other necessary areas where training and development are needed for improvement.
An important point to consider over here is that HR analytics is solely based on the data. Hence, the company has to be mindful of the collected data and store it on the cloud for employee privacy.
Performance Management
Businesses implement performance management to remove the barriers between the departments and find ways to boost future growth. The HR team is the facilitator for performance management. The team identifies the gaps and plans different actions to fulfill the talent gaps. Now, be it a small business or large enterprise, tracking individual progress is a critical and challenging task. Maintaining the log for the daily and monthly activities to analyze who performed extra throughout the week, called in for sick leave, and so forth - a traditional performance tracking system can cause a load on the respective team leader and HR professionals. An AI-based performance management software will break down the silos and align the measurable objectives of the employees. Further, there are productivity tools available that can analyze the performance of individuals and reward them for their results.
Recruiting Management
Recruiting an employee is more than just hiring a talent for the desired position. There are a lot of behind-the-scenes activities that HR has to undertake for the finalization of the candidate. From sourcing new employees, deciding the long-term and short-term goals, minimizing employee turnover, and so forth - these are some of the processes that are involved in recruitment management. For an HR team, it becomes increasingly difficult to navigate through the entire process manually. The job boarding platforms might provide information on the talent pool, but what proceeds further is gauging the candidates and communicating for the interview screening. What AI does over here is automate the process by sending emails, filtering out the candidates through data insights, and even scheduling the interviews for efficient processing.
Reporting & Analytics
HR reporting is primarily all about analyzing the full-time employees vs. part-time employees, gender ratio, job openings, hiring new candidates, etc. HR analytics refers to measuring the overall business performance and finding out the missing facts that will lead to improvement. In today’s competitive world, the HR manager should possess the necessary skills to make data-driven decisions for the organization.
When data is widely spread across different systems, there are high risks involved. Insufficient IT resources can increase the labor tasks among the HR team. To leverage and enhance the recruitment management process, shifting to high-tech recruiting software will aid in making better decisions for the organization. The tool consistently alarms the data and reports in hand. The HR manager can also filter out the data quarterly based on convenience for the best output.
Ethical Considerations
Yes, AI has the capability to perform multiple functions in an effective manner. However, there are some ethical considerations that the HR team should consider in the account. For example, the use of AI in talent management can be biased for the ultimate decision if it’s not programmed or monitored ideally. Even the collection of employees’ personal data can result in privacy infringement. Hence, for the HR team, it becomes vital to be responsible and consider all ethical aspects of AI in HR so that it aligns with the values and ethos of the company. Ultimately, if transparency in communication and fairness in hiring is maintained during the process, the company boosts its position in the market.
Social Recruiting
Social recruiting is the process where the HR team utilizes social media platforms in hiring candidates. As per the Social Recruiting Employer Branding report, 96% use social media for recruitment purposes. LinkedIn and Facebook are the two most used platforms for recruitment. Through social recruiting, the talent team can coordinate with the candidates and check their postings and their professional working experience. Using these platforms, recruiters can:
- Identify the candidates on LinkedIn.
- Sending messages or connection requests.
- Networking in the industry group for the hiring purpose.
- Post about the new employee joinings or celebrate the work anniversaries for boosting morale.
- Create videos that will highlight the working culture of the organization.
Talent Management
Good talent management will bring out the best in the employees. It will nurture valuable candidates for their contribution to the organization. Alongside this, the talent management team also helps the employees in building their career paths and constant learning to achieve the targeted goals. As per the State of Global Workplace 2022 Report by Gallup, businesses that have engaged workers portrayed 23% higher profit than those of businesses with poor and miserable employees. With the assistance of artificial intelligence-backed talent management software, HR can trace:
- Which department is behind its targeted goal?
- Which profile matches the job descriptions?
- What skill gaps need to be harnessed among the employees?
- What type of courses will help them elevate their skills for the best results?
Time Management
"It's about [being] efficient, effective, and productive" and thinking about how we spend our time. "We do not find time in big chunks. We find it in small pieces—it's minutes here and minutes there," - Julie D Burch
Time management is a skill that every individual needs to hone to achieve professional/personal goals. It helps in prioritizing the work and meeting the deadlines. For HR professionals, time management is an effective skill that they need to possess in order to streamline their work process. Gone are the days of using pen and paper for time management schedules. Today, advanced and tech-built time management software guides in achieving daily, weekly, monthly, or quarterly goals. Through AI-backed time management software, HR professionals are able to stay organized in their daily activities. It also gives you reminders frequently for the completion of the tasks. Some software also provides rewards after uninterrupted working hours. An online calendar integrated into the time management software can schedule meetings or check the calendar of employees to understand their daily scope of work.
Eight Ways AI is Changing The Dynamics of Talent Acquisition and Recruitment
The impact of AI is huge on talent acquisition and recruitment. Here are eight ways AI is changing the dynamics of the talent lifecycle.
#1. AI-based Sourcing & Screening
AI has shifted the dimensions of the way organizations approach talent acquisition and recruitment. Through AI, it is now possible to automate the sourcing and screening process. One of the major benefits of automating the entire process is that it saves the time of the HR team; it's quicker, more efficient, and has top-notch accuracy.
The AI algorithms are fed vast amounts of data from a myriad of resources like online job portals, social media profiles, and an ample resume database that gauges in finding a qualified candidate.
Another added advantage of utilizing AI is that the technology enables companies to find suitable and skilled candidates within their specific budget. Rather than going through a heap of profiles and comparing the applications, the AI sets the matching skill set requirement, education, experience, and other criteria factors in sourcing the candidates.
For the recruitment team, AI-based Talent Management Systems (TMS) acts as a savior as it optimizes their time without the need to spend hours screening and shortlisting the resumes. This allows the HR manager to step out of the time-consuming process and focus on building a strategic talent pipeline.
#2. Improved Candidate Experience
The current job market is highly competitive. Candidates are consistently looking out for new opportunities that will enable them to showcase their best capabilities and talent. Candidate experience is one of the key factors that will weigh an organization's ability in attracting the best talent for the respected designations. As AI is gathering attention, especially in the recruitment and talent acquisition field, companies should leverage AI-integrated Human Capital Management (HCM) in offering to enhance the candidate experience.
- Personalized Communication - If you think that AI chatbots communicate like a robot, then you are highly mistaken. The latest innovation of AI chatbots goes for personalized communication in the recruitment process. The chatbot can find out the nitty-gritty in the resume and even schedule the interview call. HR chatbots offer numerous benefits.
- Real-Time Assessment - Now, depending upon the basic requirements, the AI algorithm is fed the data. Upon submitting the application, the AI-based Human Resources Information Systems (HRIS) will conduct a real-time assessment and give immediate feedback. It will highlight the matching criteria and address the other factors that do not match their application. This will give them a real-time evaluation of whether the application will move forward or not.
- Job Matching - AI-integrated job portals or applications can match the candidates with jobs that offer high stakes of getting hired based on their skills and experience.
- Efficient Recruitment Process - AI certainly warrants a faster and more efficient recruitment process. It helps in globalizing the HR processes. This means that the candidates will not have to wait long to hear back from the recruiters about the job posting. This also gives clarity to the candidate in finding another opportunity and saves time for the recruiter.
#3. Predictive Analytics and Behavioral Analysis
Predictive analytics and behavioral analysis tools will give insights to companies in searching for the right candidate for the specific job role. HR recruiters and talent teams receive vast amounts of data. Manually, it becomes a tedious task in analyzing and finalizing the candidate for further interview rounds.
Hence, the integration of predictive analytics and behavioral analysis will present the past working records, educational background, and other factors that will predict their success in the particular job position. The entire process will assist the recruiters in making an informed decision.
Through behavioral and sentiment analysis, companies can predict the language, tone, and body language during their interview. This will give a peek into the individual’s personality for the working environment and minimize the turnover rates.
#4. Integration of Chatbots For Interaction
One of the most significant ways AI is changing the dynamics of recruitment and talent acquisition is through the integration of chatbots. These intelligent virtual assistants can be programmed with specific information to keep the initial conversations as empathetic as possible. The candidate can ask questions regarding the company, and the bot shall answer in detail. This continues vice-versa for consideration.
The smart AI virtual assistant streamlines the recruitment process and saves the time of HR staff in managing a high volume of candidate interactions, screening, and other interview rounds.
Chatbots cannot replace human connection as it is still in the growing phase. Some candidates might prefer to interact with a human recruiter over AI. That’s understandable! However, chatbots can be designed to build a human conversational tone that will aid in connecting with the applicant naturally. If utilized correctly, chatbots can save a big chunk of time in delegating tasks to the HR team.
#5. Diversity and Inclusion
It’s 2023, companies are welcoming individuals without any bias. AI-based HR software can improve diversity and bring inclusion to the recruitment process. Regardless of their background, AI-integrated HR software can find the best candidates. The algorithms can catch sexist language and attract, make it neutral, and attract a diverse range of candidates. This removes unconscious biases, strengthens the reputation of the company, and provides more opportunities to the talent pool.
#6. Virtual Interviews
Gone are the days when the candidate has to wait in a queue for lengthy in-person interviews. The AI-powered world offers us the facility of virtual interviews and online assessments. Companies from across the globe can virtually conduct interviews and source candidates without compromising the quality.
There are numerous benefits for both parties. For a recruiter, virtual interviews and assessment saves time and money by withdrawing the barrier of travel. The assessments will give a brief evaluation of the candidate without any human intervention or bias in the selection process.
Now for the candidates, the virtual interview provides a flexible approach to participate within the comfort of their own home or office. This reduces the anxiety of facing the HR recruiter in person and improves performance, which will bring a fair outcome for both parties.
#7. Job Recommendations
The AI algorithms will present job recommendations that will match up with the individual’s skill set. This will pop up relevant job openings for the candidate. For the employers, it will streamline the process and target specific talent that matches the experiences and interests of the company.
#8. Onboarding and Retention with AI
An ongoing challenge that recruiters struggle with is retaining top talent. With AI assistance on board, the retention rate can improve significantly. Besides, the latest tools can guide you through the onboarding process, provide other necessary materials/information, and track performance and progress. Over time, AI can guide managers in detecting the red flags in the initial phase. The recruiters can suggest/intervene with the employee before they decide to leave.
Pros and Cons of Using AI in HR
Latest AI-based Applications For HR Handpicked By GoodFirms
As per the discussion in the new whitepaper on AI architecture, Josh Bersin mentions the three families of AI solutions: those that have AI “added on,” those who built “AI features within” their platform, and those that are “built on AI.”
GoodFirms picked the latest AI-based applications based on three families of AI solutions. These software solutions can come in handy for HR professionals and used for head-hunting.
AI- Added On HR Software
Rippling allows you to compile employee data from across the world on a single platform. With a fully-tech oriented dashboard, HR managers can keep track of the employees within the company. By leveraging AI, Rippling provides accessibility to payroll, integration of third-party apps, time and attendance, and other customizable features.
Teamtailor is a one-stop solution for recruiters that are on the lookout for candidates. The software offers an application tracking system (ATS) that automates tedious tasks, aids in decision-making, and manages the application of candidates. The smart filters will allow you to source talent and achieve better results by setting personalized recruitment goals.
Entelo is a platform that utilizes automation technology to provide talent to organizations globally. The software uses AI and other talent insights to attract the right set of candidates. By using predictive analytics and other data-backed insights, Entelo can be integrated into other HR tools to enable a seamless workflow and faster employment.
Built-In AI Features - HR Software
BambooHR
Bamboo HR is a software solution designed for small, medium, and large-scale businesses. It’s a single platform that provides all the necessary functionalities that an HR team requires for the optimal management of the organization. Starting from payroll, tracking hours, and confidential information to hiring and onboarding the talent- Bamboo HR has built-in AI features that keep you organized.
Harver Assessments
Harver offers a suite of automated solutions that enable organizations to hire faster and better candidates. Based on the scientific and data insights, the software ensures to present the right job roles to the right people. The tool offers automated interview scheduling, reference checking solution, and other suites of assessment tools that will save the HR professionals time.
ADP Workforce Now
ADP Workforce Now is a cloud-based HR management software that provides services to businesses of all sizes. It’s a modern-day platform that has built-in features like workforce management, payroll, HR services, and more that harness the power of the latest technologies for smooth functioning.
Built on AI - HR Software
Fuel50
Fuel 50 is an AI-driven talent marketplace platform that collaborates with talented individuals for gigs, vacancies, and opportunities and gives apt insights to organizations. The HR team can tap into the talent pool and find the best-suited candidates as per their skills and working experience. Additionally, the platform can also be merged with other application tracking systems (ATS) and learning management systems (LMS).
Hirevue
Hirevue offers a hiring intelligence platform that shifts the process of hiring, discovering, retention, and developing candidates. Through video interviewing software, AI, validated occupational science, conversational AI, and pre-hire assessments, Hirevue brings the best individuals for the hiring accomplishment.
TurboHire is an AI-powered automation platform that optimizes the recruitment process and drives top-line growth for hiring professionals. The software cuts out the manual bottlenecks that consume time and money. The smart tools customize your requirements and preferences to empower talent decisions while minimizing the workload.
Pymetrics
Pymetrics is a soft skills platform that helps companies in hiring candidates using behavioral science and audited AI technology for an efficient hiring process. From recruitment, employee learning, and development to internal mobilization - the platform has built an unbiased platform that optimizes every stage of the talent lifecycle.
Arya
Arya by Leoforce is the next-generation AI recruiting solution. It utilizes AI and helps recruiters in finding qualified leads. Irrespective of business size, type, or budget, Arya highlights talented individuals through their automation tool.
Final Verdict - Will AI be a Gamechanger in HR?
“Our intelligence is what makes us human, and AI is an extension of that quality. Artificial intelligence is extending what we can do with our abilities. In this way, it’s letting us become more human.” –Yann LeCun, machine learning expert and a scientist.
Humans have to be in the loop. But, AI can help in speeding up the processes involved in the human resources workflows and improving the quality. This is specifically applicable to situations or companies that require recruiting large skill pools at a time. After weighing the positives and negatives of integrating AI into human resource management, it is evident that there are both benefits and drawbacks linked with this technology. On one hand, AI can streamline the process, save time, and reduce human errors through algorithms. While on the other hand, there are several concerns, like AI is still not fully capable of accounting for cultural differences, where the end result could be discrimination against certain groups. Additionally, some of the job roles also demand human interaction, empathy, and creativity, which AI cannot fulfill.
Generative AI in the HR Market size is expected to be worth around USD 1669.3 Mn by 2032, says a market research report.
Collecting the data and analyzing the data is a major function of HR. AI can do this quickly. For instance, the HR teams can use AI-based Human Resources Management Systems (HRMS) to screen the resumes and shortlist the candidates. But the team should also conduct in-depth interviews that will gauge the candidate’s communication skills, analytical and problem-solving skills, and emotional intelligence. The tools will track employee engagement and productivity, but the team should regularly check in with the employees for the best support and motivation.
Today we have software vendors who specialize in HR systems that have added AI, a few that have built-in, and a few that are built on AI. By browsing the list of top HR systems that are flexible to adapt to the transforming changes, the HR team can pick the best tool that can help them leverage the benefits of digital systems and follow human insight and artificial intelligence for the best results.
