Saturated with ever-increasing amounts of data and robust and affordable computing technologies, artificial intelligence is branching out into more and more diverse industries and areas of life.
Business-wise, AI has the capability to improve almost every sector and almost all business functions and operations.
Helping employees and business owners make crucial analysis-backed decisions, AI software also automates workload and boosts efficiency. But can the same be applied to HR departments, which, most of all, rely on the human factor? Let’s see what AI in HR software can do.
What Is Artificial Intelligence?
Artificial Intelligence is the use of algorithms that mimic human intelligence to perform cognitive functions and solve problems through interaction, visual perception, learning, reasoning, natural language processing and planning.
Or in simpler words, AI makes computers capable of learning from data how to process it and adapt according to the changes in that data.
"Artificial Intelligence is an umbrella term for terms such as machine learning, deep learning, neural networks, image recognition, predictive analytics, and many, many more."
The algorithms used in AI software remodel themselves automatically based on data analysis to provide more and more refined results to suit their designated function.
Depending on the business objective, one subset or a combination of many AI branches can be used to achieve specific operational goals.
Artificial intelligence and all its subsets can be used wherever tasks call for intelligent, analysis-based behaviour. Currently, however, AI seems to prevail in three industries: telecom, high tech, and financial services.
According to a 2018 McKinsey study on AI adoption, 47% of businesses “have embedded at least one AI capability in their business processes.” Conversely, in 2017, only 20% of respondents used a form of AI in their organization.
According to Forbes, 85% of enterprises consider adopting AI in 2020 in production and McKinsey's Global Survey on the subject has shown 25% yearly increase in use of AI in standard business processes, with many companies observing cost reductions and revenue spikes.
The early adoption years of AI are long gone—the technology is now shifting toward the mainstream. And here’s how it is distributed among different sectors, including HR.
Even though HR appears to be lagging behind in the adoption of AI compared to other company business functions, such as service operations or marketing and sales, HR departments can considerably leverage the power of AI.
How AI Influences Human Resources in Modern Enterprises
With data at their core, HR departments offer a huge opportunity for AI software. Datasets with potential job candidates, past candidates, and current employees all create a very fertile environment for artificial intelligence to yield analytics-backed insights into various HR-related processes.
The Oracle study on advanced analytics in HR departments identified areas where AI is being used the most among respondents.
The results of the study show that HR departments most often turn to AI-fortified software to determine which employees are likely to leave. In-depth analysis of many variables, along with AI’s ability to predict outcomes, might be helping recruiters curb talent attrition. Respondents also use AI to source the best talent through résumé analysis and predict which of the candidates has the potential to generate the most valuable output for the company.
Let’s further explore those three areas as well as other functions in which AI could aid HR departments.
#1. Recruitment (Talent Acquisition)
One of the biggest benefits that AI offers hiring managers is the ability to identify suitable candidates.
AI can work like a charm in the first stage of the recruitment process, because it can perform a preliminary analysis of a candidate’s résumé to cross-check his/her declared skills against the skills of successful employees with the same job title. For example, a chatbot can ask all kinds of basic, routine questions about age, location, experience, education, etc., while letting the HR professionals do more detailed candidate screening.
This greatly speeds up the recruitment process—when there are hundreds of applicants for a single opening, sifting through all the submitted résumé can be very time-consuming. AI, on the other hand, can do it in a fraction of the time it would take humans.
"Naturally, this isn’t a solution for every company—in some positions, a candidate’s inherent flexibility and creativity are worth more than past experience and skills, and that’s something that AI still has trouble gauging."
AI helps eliminate human bias—the algorithm looks only at the relevant elements included in the résumé: skills and experience. Removing human bias from the recruitment process encourages an inclusive workplace.
"Humans are intrinsically biased. If we could come up with a tool for eliminating bias, we would be millionaires by now."
With a rich database of past applicants, hiring managers can use AI to look for applicable candidates for new job openings. Candidate filtering and tracking additionally streamline and speed up recruitment.
A study found that companies using AI-augmented software increased their effectiveness in making a competitive advantage of the talent acquisition process by 16%. Using AI to sift through résumés also increased efficiency in reducing applicant screening times.
#2. Automation of Administrative Processes
Automation of standard HR processes and repetitive tasks is another key area where AI-based software has the potential to improve HR operations.
For example, pre-screening questions or interview scheduling can be easily delegated to AI to speed up the recruitment process. Allocating office space or providing the right equipment, too, are tasks that don’t have to be performed manually by HR staff but can be taken over by an appropriate application.
An Eightfold study found that HR personnel using AI software performed administrative tasks with 19% more effectiveness, compared to HR departments where no form of AI was implemented.
Smart chatbots that give employees instant access to loads of company-related information are another way in which AI can relieve HR staff workloads and provide them with knowledge and holistic view of the organisation. Employee doubts about policies and procedures can be resolved by way of simple queries with prompt answers. The same goes for the submission and processing of leave forms.
"Decreasing the number of low-value tasks helps HR staff focus on strengthening workplace bonds and developing relationships that facilitate employee engagement."
Onboarding is a crucial part of successful employment. According to Glassdoor, a strong onboarding process at companies improves new hire retention by 82% and increases productivity by over 70%. A study by Click Onboarding says that almost three-quarters of employees “are more likely to stay with a company for three years if they experienced great onboarding.”
With the use of artificial intelligence, onboarding can be customized to individual employees, their position and tasks.
AI algorithms can be used for:
briefing about job profile, tasks, benefits
informing employees about important company contacts
setting up company systems
identifying and answering repetitive employee questions
Time-consuming document verification or device requests don’t have to be manually performed by HR staff, but can be assigned to an onboarding app.
#4. Employee Training
Large datasets with information on past job profiles and skills are an excellent base for e-learning AI platforms to provide training suggestions and tailored training programs.
Company e-learning platforms can therefore leverage AI capabilities to improve employee job-related skills by planning, organizing, and coordinating employee training.
E-learning platforms can also create highly personalized learning pathways. By assessing employee skills and analyzing company needs, the e-learning platform can help the employee fill skill gaps, polish existing skills, or both—all at a pace and intensity that particular employee finds most comfortable and efficient.
AI also facilitates career pathing. Using an employee’s prior work experience, available career paths, and employee trends, an AI app can draw up possible career directions.
#5. Employee Retention
AI-based analysis of individual preferences and employee performance helps HR departments identify who should get a raise and who is likely to resign. IBM’s refined AI technology predicts which employees plan to quit with 95% accuracy. Knowing which workers think about leaving before they actually hand in their notice gives managers an opportunity to introduce retention efforts that decrease talent attrition.
Retention-oriented AI technologies let HR teams prepare individually adapted feedback surveys, reward systems, and recognition programs that further engage employees.
Popular AI Applications
The AI market is booming, offering more and more refined and sophisticated solutions. Below are five AI-supporting applications designed to improve HR operations.
TextRecruit is a customizable chatbot, designed to cut hiring time. TextRecruit uses IBM Watson, a powerful natural language processor, to provide bespoke tone and messages customized to suit a company’s needs in communication about recruitment.
GoHire is another recruitment-oriented application that offers hiring managers recruiting automation, including automated interview scheduling, text recruiting, and intelligent recruitment chatbots.
Workday, a popular human capital management software, also features AI algorithms in one of its newest products—Workday People Analytics. The software provides HR teams with detailed analytics on key metrics that aim to leverage employee potential.
Ascendify provides a variety of AI-infused software targeting different HR areas. Ascendify Aspire is an intelligent career assistant that helps employees visualize opportunities for growth. The software collects information on skills and cross-analyzes them to suggest matching job positions.
Everwise is a talent development software offering four solutions aimed at building and improving employee skills. Everwise identifies employee skill gaps and suggests learning pathways.
Should you use AI for HR?
The main value of using AI to improve HR processes is that, along with human intelligence, it enhances the candidate experience.
That said, the implementation of artificial intelligence in HR operations isn’t exactly devoid of challenges. Since AI means a lot of data, that data has to be properly stored and managed—transparency and appropriate governance guidelines should always go hand in hand when considering AI solutions. There’s also the matter of additional talent required to operate and maintain AI software. And with HR departments’ growing preference for SaaS solutions, the low availability of datasets, too, might be an obstacle in widespread AI adoption.
Many HR managers are also concerned with the dilemma of "how to introduce more human-centric management on the one hand, and automated scalability offered by modern software and AI on the other".
The key here is not to use AI to guide the actions of a manager. You should share the results of the analysis and let the decision makers still make the call. Their knowledge about the employee and the team, as well as empathy are crucial to making optimal decisions.
If you face this dilemma, perhaps discussing this issue with HR software companies could answer some of your questions.
Finding a good balance of these two aspects is never easy, but it would seem we managed to at least partially address this issue at the EQxAI in Team Management Software meeting held in Berlin in June.
So before making a decision about whether to implement AI solutions in HR, analyze your business thoroughly and think about the areas within HR that AI could improve. But the primary reason for implementing any form of AI should always be amplifying the employees’ overall experience. When that is achieved, increased company productivity and decreased operational costs will follow close behind as a natural result of high employee satisfaction.