5 Ways AI is Changing HR

Given the recent surge in popularity of generative AI tools like ChatGPT, it’s hard not to think the future is here and the robots are taking over. Rest assured, we’re far from R2D2 stealing your job, but savvy human resource departments are already taking advantage of AI to improve processes and productivity.

In fact, according to a recent survey, 92% of HR Leaders plan to increase their use of AI in at least one area of HR over the next 12-18 months. Here are 5 ways AI is changing HR and some of the challenges to keep in mind when using AI for everyday tasks in your business.

1. Recruiting

You may already be using AI and automation tools in your recruiting processes. Applicant Tracking Systems (ATS) are softwares that scan and analyze resumes for keywords that match the job posting. They then pull relevant applicants to help recruiters identify the most qualified candidates for the position. AI is driving an evolution in ATS by moving beyond analyzing just keywords to assessing themes and sentiment in applications to ensure the systems are not overlooking qualified candidates who may not have used the right keywords. 

In addition to identifying qualified candidates for open positions, HR Leaders are also leveraging AI to interact with those candidates throughout the interview process. HR chatbots such as Humanly.io and Eightfold automate tasks like screening candidates, scheduling interviews, checking references, and more. Given that the average corporate job opening attracts 250 resumes, AI certainly saves recruiters valuable time in the recruiting process.

2. Onboarding

We’re not just talking about pre-recorded videos and guided orientations. AI is changing the employee onboarding experience by helping HR leaders ensure all the new hire paperwork is completed correctly. These tools scan documents for signatures and they can even track if your new hire actually read and reviewed important information contracts such as security policies, legal agreements, employee handbooks, etc.

Some companies are beginning to use generative AI chat tools akin to ChatGPT to personalize the onboarding experience. New employees can access training materials 24/7 and get instant answers to questions about the company or their role. Some automated onboarding processes even offer employees recommendations for additional training and learning opportunities based on the role.

3. Employee Engagement & Productivity

It’s no secret that generative AI tools now aid employees in their day-to-day responsibilities. AI has crept into popular tools lately such as Canva for images and design, GitHub Copilot for coding, and Grammarly for writing. And now managers and HR leaders can use AI tools for managing employee performance and feedback. 

Employee monitoring softwares became popular with the surge of remote work after the onset of the global pandemic. These tools monitor employees’ technology usage (websites visited, language used in chats and emails, etc.) so employers can see if their employees are actually watching internet cat videos on YouTube all day rather than working. AI is transforming these practices by compiling and analyzing data about employee engagement to actually predict if an employee is about to quit your organization. Managers can use tools such as BetterWorks to track their employees’ progress towards goals and to generate automatic feedback and recognition.

4. Diversity, Equity & Inclusion (DEI)

For the most part, humans still program the algorithms that power AI tools, so some tools still have a long way to go before they are completely removed from unconscious bias. Many companies, however, implement AI in their recruiting and talent management processes to remove unintentional biases that occur during candidate selection or when evaluating employees for a promotion. 

Other ways companies use AI to further DEIB initiatives include analyzing company operations data, such as compensation strategies or department diversity, to identify places they can drive improvement. Tools like ChartHop analyze DEI data and compare it to other factors like pay history and performance to help managers make informed, equitable compensation adjustments.

5. Benefits Management

One of the most costly and time consuming areas of human resources is benefits management, but AI is changing the game here too! AI-powered cost estimators allow HR leaders to easily compare plans and identify cost savings. Some benefits management systems use AI to help process billing and automatically fill out the necessary paperwork associated with qualifying life events, freeing up time for HR leaders to focus on evolving their benefits strategies.

Chatbots and generative tools help employees during open enrollment season by offering instant answers to questions and generating personalized plan recommendations to save the employee and the employer money on healthcare costs. Some platforms also send personalized reminders to employees about important updates related to their health and wellness. HealthJoy, for example, programmed their chatbot to remind employees to get a flu shot and offered personalized recommendations about providers and locations for each employee.

Challenges of Using AI in HR

AI-powered tools can be incredibly helpful to your HR team, but it’s important to remember the limitations and challenges of relying on AI. We asked Wellhub’ Chief Legal Officer, Ellen Hochberg, to weigh in on some of the popular concerns with using AI-based tools for everyday tasks. 

Issues with Training Data

AI-powered tools are only as good as the data on which they are trained. For example, solely relying on AI tools to eliminate bias in resume screening assumes that the training data for the tool is free of such biases. If the training data was inaccurate, the results will be untrue. Using this data as gospel could have implications on important business operations and decisions, so it’s important that users fully understand the limitations of the results produced by AI tools. Additionally, it is important to be aware of the fact that information produced by the generative-AI tool may not be able to be freely used based on copyright, data privacy or other legal restrictions on the underlying training information.

Data Privacy Compliance & Security

As we stated above, AI-powered tools rely on quality data to work correctly. Some tools utilize facial recognition, biometrics, and other personally identifiable information (PII) such as health information and social security numbers to offer the best recommendations. Companies that implement generative AI tools in their processes need to ensure these tools are compliant with personal data protection regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act. If your tool utilizes health-related information from your consumers or employees, you should also ensure it does not pose a risk to HIPAA violations. HR leaders should work with internal and external security partners to regularly audit how their AI tools protect privacy and what steps they take to mitigate risks. 

The more popular generative AI tools become, the more likely they are to become a target for (or a tool to aid) cybersecurity threats. Companies should implement security trainings and policies that guide employees on how to use these tools to help prevent security threats such as phishing attacks or the exposure of critical confidential company, employee, and consumer information. 

Legal Restrictions 

Various jurisdictions, including the EU’s proposed AI Liability Directive and US state and city laws, are regulating the use of AI tools in hiring and recruiting, as well as in management of critical infrastructure. Generally, these laws require disclosure that such tools are being used and human oversight of the decision-making, with serious penalties for violations. Before you implement AI-based tools in your business, be sure you fully understand the legal restrictions and regulations in your jurisdiction. 

Generative AI tools can benefit HR departments by helping them automate many of the routine day-to-day tasks to free up time, allowing them to focus on driving forward bigger strategies. Despite incredible advancements in the technology, several critical limitations with oversight, security, and privacy still exist today. While HR leaders should take steps to help automate specific processes within their departments, we’re still far from companies not needing the “human” in human resources.

One of those bigger strategies could be a corporate wellbeing program. According to Paychex research, sixty-three percent of employees say wellbeing support programs will be a top priority when applying for their next job.

Talk to one of our specialists today to find out more about Wellhub’ platform, and how we can help you launch your wellness program!