Harnessing the Power of AI in HR Management

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In a world swirling with more frequent layoffs and trends like “quiet quitting”, recruiting, managing, and retaining talent becomes an increasingly challenging task. Businesses are racing to make sure they keep up with their potential candidates' and employees’ needs and expectations.

AI in HR Management has been a key to addressing these critical issues. From candidate scanning algorithms and employee information tools to HR automation software, AI is revolutionizing human resources procedures.

According to data from BusinessDIT, the AI HR market is estimated to surge 35 percent to reach 17.6 billion USD by 2027 from a mere 3.89 billion USD in 2022. In five years, 25 percent of companies will use automation or AI in recruitment and hiring.

Let’s have a closer look at the use of AI in HR Management as well as its benefits and limitations that PR professionals should keep in mind.

How businesses use AI in HR Management

Talent recruitment

AI tools are changing the recruitment picture in various ways that we may have not even expected.

Many processes of hiring such as looking for candidates, reviewing applications, and predicting their performance have been revolutionized thanks to AI, according to Forbes magazine.

With AI tools, businesses can look for not only candidates who are ready for new roles but also those who haven't applied but have the skills and experience needed. Advanced technologies also allow recruiters to review a massive amount of applications very quickly and effectively.

In addition, AI tools and technologies can analyze many different groups of data in the hiring process:

Candidate sourcing data: sources from which candidates are acquired, such as job boards, social media platforms, employee referrals, or recruitment agencies.
Candidate screening data: personal details, work experience, skills and qualifications, assessment results, interview feedback, and evaluation notes.
Diversity data: gender, ethnicity, age, and other demographic information.
Offer acceptance and rejection data: data that tracks whether candidates accept or reject job offers.

Infographic of HR data analytic elements

The analysis of data by AI provides PR professionals with insights into the effectiveness of their sourcing channels as well as a candidate's suitability for the position, and the competitiveness of the job offer.

Amazon, for example, employs AI tools to scan applications of candidates for certain roles without having recruiters evaluate them. It also uses behavior-driven machine learning algorithms to create real-time suggestions for relevant roles for potential candidates.

These tools help Amazon increase the number of applicants who reach the next step in the interview process and ultimately join the company, its report said.

Talent management

Amid a fast-moving economy, more frequent layoffs, and trends like “quiet quitting”, retaining talents is an increasingly challenging task for PR professionals.

According to a report about AI in HR Management by Oracle, millennials and Gen Z workers will change jobs at least four times by the time they turn 32.

AI can help companies promote retention with better employee development and engagement.

Employee development

Providing employees with learning and development opportunities is a crucial part of talent management. However, very often, employees may find it hard to look for information about these opportunities and employers may struggle with keeping up with their employees’ needs for growth.

AI can help to address these problems. With advanced learning management systems, employees are now offered personalized recommendations based on their activities and performance. The systems also allow HR professionals to track the progress of their employees and make prompt adjustments. Thanks to these, employee development programs are improved.

Employee retention

According to the Harvard Business Review, improving employees’ commitment and connection with the company is key to retaining talent.

Many companies have used AI tools to capture employees’ real-time engagement metrics. One common tool is Microsoft Viva + Glint. It helps businesses develop an engagement strategy based on sentiment analysis with actual collaboration data.

L’Oréal Group is also known for its use of AI in HR Management. With more than 80,000 employees and nearly 15,000 on demand every year, the company uses software to better identify the company’s and candidates’ expectations.

The software analyzes written and spoken language to feed the algorithms with what the company expects of a candidate and what the candidate expects from his or her future workplace. This technology solution helps the company measure workers’ engagement and set out career paths for them more easily.

KEY TAKEAWAYS

AI in HR Management helps businesses to be 30 percent more efficient.
Businesses now use AI tools and software to scan resumes, automate low-value HR tasks, and gain valuable insights to better retain and manage talents.
Despite the great potential of AI, it does have limitations, which require leaders to be mindful of in order to take the best advantage of it.

Benefits of AI in HR Management

1. Better Efficiency

According to a survey in State of Artificial Intelligence (AI) in Human Resource Management: A 2023 Report, about 65 percent of respondents agreed that AI improved both productivity and efficiency in their HR departments.

A report about the role of generative AI in HR Management by BCG showed that a strategy a balanced human and AI strategy can increase HR productivity by up to 30 percent.

The life of HR professionals can be very intense as they are swamped with deadlines and have to race against time to look for the best candidates. Meanwhile, they are assigned a number of repetitive and time-consuming tasks which range from sending out forms, and reminders about the company’s events to addressing employees’ questions about forms and procedures as well as policies.

infographic on AI functions in HR Management

With many AI tools and software becoming available, HR professionals can have these repetitive tasks automated. They can instead concentrate on more strategic initiatives and plans such as improving employee performance and productivity as well as employee development, and employee training management. This helps to improve the overall efficiency of HR professionals.

Besides automating tasks, AI is also incredibly useful in analyzing both quantitative and qualitative data. This can be both time and money-consuming without AI tools.

These analyses can help PR professionals interpret and understand the feedback and sentiment of workers efficiently, from which they can have insights into engagement and risk of turnover.

2. Improve Decision-Making

AI and Bias Reduction in HR

Unconscious or implicit bias is part of human nature and it happens in many aspects of HR processes. Preconceived opinions or stereotypes about groups of people can influence hiring decisions, performance evaluations as well promotion opportunities in the workplace.

With the use of AI tools and software, HR professionals can reduce bias and, therefore, have better decision-making. Their informed decisions are made based on the analysis of a massive amount of data, not human judgment or guesswork. This helps businesses ensure equality and inclusion for all staff in the workplace.

Changing the recruiting process

Let’s take the hiring process for example. On average, there are 250 candidates applying for an open role, which is equivalent to millions of candidates for some thousand open positions.

Only 10-20 percent of them are reviewed by recruiters, according to an article about the use of AI in hiring by the Harvard Business Review.

With AI tools, recruiters can evaluate the entire pipeline of candidates instead of implementing “biased processes to shrink the pipeline from the start” due to time constraints, the magazine said. This is to ensure that no candidate is overlooked because of the judgment or bias of recruiters.

According to Amazon, candidates who are successful in their hiring process tend to be more diverse when machine learning is used to review candidates for specific roles.

As AI can handle a large amount of work that manual recruiters can hardly do, the hiring process becomes more diverse and inclusive and this leads to better decision-making.

Limitations of AI in HR Management

With the great benefits of AI in HR Management, PR professionals may be tempted to use all-around software and tools. However, it is worth noting that AI can’t replace human intelligence, it can just elevate it. Despite being known for their precision, AI technologies can still make mistakes.

AI can incorrectly reject good candidates and choose less competent ones in recruitment processes. According to a study by a group of US scholars, AI-powered tools may choose candidates with high visibility in terms of “domain keywords and trending technologies” but reject candidates with good work experience.

Lessons Learned: The Case of Amazon

In 2017, Amazon had to scrap an algorithm that was tested as a recruitment tool due to sexist allegations and built a new hiring AI to ensure there is no bias in the recruitment process.

In employee development tasks, given its shortcomings, AI may not fully understand cultural barriers as well as circumstances employees face in life, and therefore misunderstand the behaviors of workers, and provide them with development coaching or recommendations that are not suitable.

A business's ability to adapt to new technologies can also be a challenge especially when HR is still considered a quite traditional part of a company. HR professionals must be competent to realize unconscious discrimination and train both staff and machines to prevent these prejudices.

Conclusion

Technologies have been manifesting in all aspects of our corporate life. Almost all departments including human-centered ones like HR started to embrace AI in their processes. It is a trend that businesses can’t afford to miss in order to keep up with their competitors.

In an article about AI, Karim Lakhani, a professor at Harvard Business School specializing in workplace technology, said: “AI is not going to replace humans, but humans with AI are going to replace humans without AI.” AI tools bring both opportunities and challenges for businesses.

It is up to leaders and PR managers to ensure their companies are ready to adapt to new technologies and take the best advantage of them for the HR processes.

Here at Consultport, we are proud to offer a great pool of talent to help businesses with their AI in HR Management strategy.

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