The Future of HR: How AI is Changing the Way We Recruit, Manage, and Engage Employees

13 min readMar 1, 2023

Artificial intelligence (AI) is increasingly being used in human resources (HR) to streamline and improve various aspects of the employee lifecycle. As technology continues to transform the way we work, many organizations are turning to artificial intelligence (AI) to help streamline their operations and improve business performance. One area where AI is increasingly being used is human resources (HR). From recruitment and onboarding to performance management and employee engagement, AI-powered tools are helping HR professionals work more efficiently and effectively.

In this article, we’ll explore the benefits and potential drawbacks of using AI in HR, as well as real-world examples of companies that are successfully leveraging AI to improve their HR functions. We’ll also discuss some of the ethical and legal implications of using AI in HR and provide actionable insights for HR professionals who are interested in incorporating AI into their own organizations.

Whether you’re a seasoned HR professional or just getting started in the field, understanding the role of AI in HR can help you stay ahead of the curve and improve your organization’s overall performance. So let’s dive in and explore the world of AI in HR!

According to research by Gartner, only 17% of organizations use AI-based solutions in HR.

But by 2022, that number is expected to be closer to 30%

For those HR departments already using AI, these are their main objectives:

62% use AI to improve data-driven decision making
57% want to improve the employee experience
56% want to automate repetitive tasks
51% want to try and save costs

Recruitment and Candidate Selection: AI-powered tools can automate the screening process for job applicants, analyze resumes, and even conduct initial interviews. AI can also help identify the best recruitment sources for specific job roles.

Employee Engagement: AI can help monitor employee satisfaction levels and identify factors that may impact engagement. For instance, sentiment analysis tools can analyze employee feedback and sentiment, and identify common themes and concerns.

Performance Management: AI can assist managers in tracking employee performance and identifying areas for improvement. AI-powered tools can analyze employee data, such as work output and feedback, and suggest ways to improve performance.

Training and Development: AI can personalize training and development programs to meet individual employee needs, such as by identifying skill gaps and recommending appropriate training modules.

Employee Retention: AI can help identify employees who may be at risk of leaving the company by analyzing data such as attendance, performance, and engagement metrics. This data can help managers identify potential issues and take steps to address them.

AI can offer numerous benefits to HR processes, it is important to keep in mind that AI is not a replacement for human judgment and expertise. Ultimately, the decision-making responsibility lies with human managers, who must use the insights provided by AI to make informed decisions. Additionally, it is important to consider ethical and privacy concerns when implementing AI in HR, such as ensuring that data is collected and used in a fair and transparent manner.

Benefits of using AI in Human Resources:

Increased Efficiency: One of the most significant benefits of using AI in HR is that it can help automate many routine and repetitive tasks, such as resume screening and interview scheduling. This can help free up HR professionals to focus on more strategic tasks, such as employee development and engagement.

Improved Recruitment: AI-powered tools can help improve recruitment processes by reducing bias and identifying candidates with the best fit for specific roles. For example, AI can analyze job descriptions and candidate resumes to identify specific skills and experience that are required for a given role.

Better Employee Engagement: AI can help improve employee engagement by identifying factors that may impact employee satisfaction, such as workload or communication issues. With AI-powered sentiment analysis tools, HR professionals can monitor employee feedback in real time and identify areas for improvement.

More Effective Training and Development: AI can help personalize training and development programs for individual employees by identifying skill gaps and recommending specific courses or training modules. This can help improve employee performance and job satisfaction, ultimately leading to better business outcomes.

Enhanced Decision-making: AI-powered analytics tools can help HR professionals make more informed decisions by providing real-time insights into employee data, such as engagement levels and performance metrics. This can help HR professionals identify areas for improvement and make data-driven decisions.

Reduced Costs: Finally, using AI in HR can help reduce costs by automating tasks that would otherwise require significant time and resources. For example, automating the recruitment
the process can help reduce the time and cost associated with hiring new employees.

AI in HR has the potential to revolutionize HR processes, improving efficiency, reducing bias, and providing HR professionals with the insights they need to make better decisions. While there are some potential drawbacks to using AI in HR, such as concerns about privacy and ethical implications, the benefits are significant and should be considered by any organization looking to improve its HR processes.

Potential drawbacks to consider when using AI in HR

While there are many potential benefits to using AI in HR, there are also some potential drawbacks that HR professionals should be aware of. As with any new technology, there are risks and challenges associated with the use of AI in HR. From concerns about bias and discrimination to challenges with data privacy and security, there are several factors that HR professionals need to consider before incorporating AI into their HR processes.

In this section, we’ll explore some of the potential drawbacks of using AI in HR, as well as some of the ethical and legal implications of using these tools. While it’s important to be aware of these challenges, it’s also important to remember that many of these issues can be addressed with careful planning and implementation. By understanding the potential drawbacks of using AI in HR, HR professionals can make informed decisions about how to best incorporate these tools into their organizations.

Bias: While AI has the potential to reduce bias in recruitment and other HR processes, it can also be biased if the data used to train the AI system is biased. For example, if historical data is used to train an AI recruitment tool, it may perpetuate existing biases in the recruitment process.

Privacy: There are concerns about the privacy implications of using AI in HR. AI-powered tools may collect and analyze employee data, such as emails and social media activity, which raises questions about data privacy and security.

Lack of Human Judgment: While AI can provide valuable insights, it cannot replace human judgment and expertise. HR decisions still require a human touch and should be made by HR professionals with a deep understanding of the business and its employees.

Overreliance on Technology: Overreliance on technology can lead to a lack of personal touch and human connection in HR processes, which can impact employee satisfaction and engagement.

Cost: While using AI in HR can help reduce costs in the long run, there may be significant upfront costs associated with implementing AI-powered tools, such as software development and employee training.

Ethical Concerns: There are ethical concerns associated with using AI in HR, such as ensuring that data is being used in a fair and transparent manner and that AI-powered tools are not used to make decisions that should be made by humans.

While AI can provide significant benefits to HR processes, it is important to consider potential drawbacks and ensure that the technology is used in a way that is both effective and ethical. Human judgment and expertise should always be valued in HR decision-making, and privacy and ethical concerns should be addressed when implementing AI-powered tools.

Real-world examples of companies using AI in HR:

Unilever: Unilever has implemented AI-powered tools to streamline its recruitment process. The company uses AI to analyze candidate resumes and video interviews, providing hiring managers with insights into candidate skills and experience.

Hilton: Hilton uses AI-powered chatbots to provide employees with instant access to HR information, such as benefits and payroll. The chatbots are available 24/7 and can help reduce the workload for HR professionals by answering common employee questions.

Artificial intelligence can be useful in identifying who is at a higher risk of experiencing severe burnout. This information can aid busy HR teams in prioritizing specific teams, offering resources, and monitoring developments for additional intervention.
https://www.forbes.com/sites/esmtberlin/2022/12/19/hr-teams-can-and-should-use-ai-to-predict-employee-burnout/?sh=603f345914e6

These are just a few examples of how companies are using AI in HR. By leveraging AI-powered tools, organizations can streamline HR processes, improve recruitment and employee engagement, and make more informed decisions based on data analysis.

Ethical and legal implications to consider when using AI in HR:

Bias: As previously mentioned, AI has the potential to perpetuate existing biases in HR processes. It is important to ensure that AI systems are trained on unbiased data and that the algorithms used are transparent and auditable.

Discrimination: The use of AI in HR can potentially violate anti-discrimination laws. For example, if an AI-powered tool is used to filter job applicants based on certain characteristics, such as age or race, it could be considered discriminatory.

Data Privacy: The use of AI in HR raises concerns about data privacy and security. HR professionals must ensure that employee data is collected and used in a manner that is transparent, ethical, and compliant with applicable data protection regulations.

Transparency: HR professionals should be transparent about the use of AI in HR processes, including how data is collected, analyzed, and used. Employees should be informed about how AI is being used and have the opportunity to ask questions and provide feedback.

Ethical Use of Data: HR professionals should consider the ethical implications of using employee data for AI-powered HR tools. For example, HR professionals should consider whether the data is being used for the benefit of employees or the company and whether employees have given informed consent for the use of their data.

Accountability: HR professionals must ensure that they are accountable for the decisions made by AI-powered tools. This includes monitoring the performance of AI systems and ensuring that decisions made by the system are auditable and transparent.

The use of AI in HR raises important ethical and legal considerations. HR professionals must ensure that the use of AI is ethical, transparent, and compliant with applicable regulations. It is important to monitor the performance of AI systems and ensure that they are not perpetuating bias or discrimination. Finally, HR professionals should be accountable for the decisions made by AI systems and ensure that they are transparent and auditable.

Bias: Amazon was forced to scrap an AI-powered recruiting tool in 2018 after it was found to be biased against women. The tool was trained on resumes submitted to the company over a 10-year period, most of which were from men. As a result, the algorithm learned to favor male candidates over female candidates.

Source: Reuters (https://www.reuters.com/article/us-amazon-com-jobs-automation-insight/amazon-scraps-secret-ai-recruiting-tool-that-showed-bias-against-women-idUSKCN1MK08G)

‘Modern phrenology’

Of particular concern to the researchers were tools to “analyse the minutiae of a candidate’s speech and bodily movements” to see how closely they resembled a company’s supposed ideal employee. Video and image analysis technology had “no scientific basis”, co-author Dr Eleanor Drage told BBC News, dismissing it as “modern phrenology”, the false theory skull shape could reveal character and mental faculties.

“They say that they can know your personality from looking at your face. The idea is that, like a lie-detector test, AI can see ‘through’ your face to the real you,” she told BBC News.
https://www.bbc.com/news/technology-63228466

Does AI Debias Recruitment? Race, Gender, and AI’s “Eradication of Difference”
In this paper, we analyze two key claims offered by recruitment AI companies in relation to the development and deployment of AI-powered HR tools: (1) recruitment AI can objectively assess candidates by removing gender and race from their systems, and (2) this removal of gender and race will make recruitment fairer, help customers attain their DEI goals, and lay the foundations for a truly meritocratic culture to thrive within an organization. We argue that these claims are misleading for four reasons: First, attempts to “strip” gender and race from AI systems often misunderstand what gender and race are, casting them as isolatable attributes rather than broader systems of power. Second, the attempted outsourcing of “diversity work” to AI-powered hiring tools may unintentionally entrench cultures of inequality and discrimination by failing to address the systemic problems within organizations. Third, AI hiring tools’ supposedly neutral assessment of candidates’ traits belie the power relationship between the observer and the observed. Specifically, the racialized history of character analysis and its associated processes of classification and categorization play into longer histories of taxonomical sorting and reflect the current demands and desires of the job market, even when not explicitly conducted along the lines of gender and race. Fourth, recruitment AI tools help produce the “ideal candidate” that they supposedly identify through by constructing associations between words and people’s bodies.
https://link.springer.com/article/10.1007/s13347-022-00543-1

U.S. warns of discrimination in using artificial intelligence to screen job candidates

The federal government said Thursday that artificial intelligence technology to screen new job candidates or monitor worker productivity can unfairly discriminate against people with disabilities, sending a warning to employers that the commonly used hiring tools could violate civil rights laws. The U.S. Justice Department and the Equal Employment Opportunity Commission jointly issued guidance to employers to take care before using popular algorithmic tools meant to streamline the work of evaluating employees and job prospects — but which could also potentially run afoul of the Americans with Disabilities Act

ICO launches investigation into discriminatory AI recruitment

The UK’s data watchdog is launching an investigation into potential bias when using artificial intelligence (AI) during the recruitment process. The probe will focus on alleged racial discrimination from automated recruitment systems

https://www.uktech.news/ai/ico-investigation-ai-recruitment-20220714

The Ethics of AI in Human Resources
the ethical issues these products raise are manifold. First, there is the question of whether these technologies work: whether they really can predict future ability, whether their hiring judgements are actually robust (replicable and not falsifiable) (Bayerischer Rundfunk, 2021). Yet, even if AI/HR technologies do what their manufacturers claim, the use of AI in HR raises significant ethical and legal concerns (Bogen & Rieke, 2018; Sánchez-Monedero et al., 2020; Tambe et al., 2019). Analogous to other applied areas of AI, these concerns include those relating to discrimination, privacy, explainability, and accountability. For job seekers and workers, multiple dimensions of human dignity are at stake, including their individual autonomy. Given the importance of work in people’s lives, these and other ethical questions surrounding the use of AI in HR are highly consequential to both individuals and society at large.
https://link.springer.com/article/10.1007/s10676-022-09653-y

These are just a few examples of how the ethical and legal implications of using AI in HR can manifest in real-world scenarios. It’s crucial that HR professionals remain vigilant and proactive in addressing these concerns to ensure that the use of AI is ethical, transparent, and compliant with applicable regulations.

One of the main benefits of using AI in HR is that it can help provide actionable insights to HR professionals. By analyzing vast amounts of data, AI-powered tools can identify patterns and trends that may not be apparent to humans. This, in turn, can help HR professionals make more informed decisions about recruitment, performance management, and other HR functions.

For example, AI-powered tools can help identify the key factors that drive employee engagement and retention. By analyzing data from employee surveys, performance evaluations, and other sources, these tools can identify the specific factors that are most strongly correlated with employee satisfaction and retention. HR professionals can then use this information to develop more effective retention strategies and improve overall employee satisfaction.

Similarly, AI-powered tools can help identify the most effective recruiting channels for different types of candidates. By analyzing data from job postings, social media, and other sources, these tools can identify the channels that are most likely to attract the types of candidates that a company is seeking. HR professionals can then focus their recruiting efforts on those channels, which can help improve the quality of hires and reduce recruitment costs.

AI-powered tools can also help identify performance issues before they become major problems. By analyzing data from performance evaluations, time and attendance systems, and other sources, these tools can identify employees who may be at risk of underperformance or burnout. HR professionals can then intervene early, providing additional support or resources to help those employees get back on track.

In order to fully realize the potential of AI in HR, it’s important for HR professionals to have a solid understanding of how these tools work and how to interpret the insights they provide. This may require additional training and education, as well as a willingness to embrace new technologies and approaches to HR. Ultimately, however, the insights provided by AI-powered tools can help HR professionals make more informed decisions and improve overall business performance.

Melvine Manchau, Digital Strategy and Transformation Executive, All views are my own. February 2023

The Future of HR: How AI is Changing the Way We Recruit, Manage, and Engage Employees

Benefits of using AI in Human Resources:

Potential drawbacks to consider when using AI in HR

Real-world examples of companies using AI in HR:

Ethical and legal implications to consider when using AI in HR:

Written by Melvin Manchau