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The Role of Artificial Intelligence in HR: A Year Review


HRM and Payroll Software

The Role of Artificial Intelligence in HR: A Year Review

AI has been one of the hottest topics in 2023, with AI tools such as ChatGPT growing in popularity and attracting over ......

December 6, 2023
min read
December 6, 2023
8 min read
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The Role of Artificial Intelligence in HR: A Year Review 

Over the past years, technology has been a force driving growth and transformative shifts across different industries. Human resource (HR) is one the areas that has embraced and implemented artificial intelligence (AI) tools and techniques enhancing efficiency, precision, and agility in different HR functions. 65% of HR leaders recognize AI as a catalyst for enhanced efficiency and productivity. Additionally, 88% of companies globally use some form of AI solutions in HR. 

Much has happened in 2023 across the HR industry; the adoption of AI technologies is one area you can hardly ignore. AI has been one of the hottest topics in 2023, with AI tools such as ChatGPT growing in popularity and attracting over 180.5 million active users. As we welcome a new year, let’s reflect on how AI has reshaped/revolutionized HR practices in the past year. 

Role of AI in HR 

1. Streamlining Recruitment and Hiring 

AI is revolutionizing and streamlining the hiring and recruitment processes, enhancing efficiency and accuracy. Statistics show that 35% to 45% of companies are utilizing AI recruitment tools, 65% of recruiters use AI in their hiring processes, and 99% of Fortune 500 companies already integrate AI techniques in hiring. Companies using AI tools for recruitment successfully include Domino’s Pizza, I.K. Hofmann, Stanford Health Care, Kuehne+Nagel, Microsoft, Amazon, Unilever, etc. 

Here are different ways AI is streamlining recruitment and hiring functions: 

  • Mitigating bias and promoting diversity. 
  • Improved candidate experience through round-the-clock engagement using AI-powered Chatbots, automated feedback, and improved scheduling.  
  • Faster and automated candidate screening and shortlisting.
  • Enhanced data analysis capabilities that help in decision-making around recruitment and hiring. 
  • Analysis of candidates’ profiles and matching job requirements. 

2. Enhanced Employee Onboarding Process 

Onboarding is another HR area that has seen a significant impact from artificial intelligence. For a long time, employee onboarding has been a lengthy and tedious process for some HR professionals and new employees. However, AI-powered onboarding is driving many changes from personalization, efficiency, and compliance assurance to better engagement. Consequently, employees with a great onboarding process are more likely to stay long-term with that particular organization. 

Among ways AI is used in the onboarding process include: 

  • Automated document/paperwork verification 
  • Providing new hires with real-time feedback 
  • Induction training delivery 
  • Data-driven check-ins 
  • AI-powered virtual assistant onboarding support 

3. Effective Performance Management 

Another area in which HR departments are leveraging AI is employee performance management. One of AI’s significant advantages is its ability to collect, track, and process massive amounts of data at high speed, making it quite valuable for performance management. It’s a powerful tool to help organizations enhance the effectiveness of their performance management process. AI's pivotal role in performance management is depicted in the following ways:

  • Real-time monitoring and feedback 
  • Intelligent performance analytics and predictions 
  • Data-driven insights for evaluation and employee recognition/ rewarding 
  • Automated performance reviewing 
  • Personalized development and coaching 

4. Improved Employee Engagement and Retention 

Employee engagement matters in today’s competitive business world; thus, it has become a top priority for forward-thinking organizations. Integration of AI tools is revolutionizing employee engagement and even overall organizational culture. Panasonic North America is one company that has seen success in employee engagement by adopting AI solutions. 

Below are ways HR professionals are using AI to improve employee engagement and retention: 

  • Automation of repetitive tasks with the help of tools like Virtual assistant, Chatbots & AI-powered surveys.
  • Data-driven insights into the needs and preferences of a workforce through sentimental analysis
  • Personalized employee experiences and recommendations based on an employee’s profile, interests, and competency. 
  • Predictive analytics helps HR teams proactively address concerns, improve employee satisfaction, and reduce turnover. 
  •  AI-driven employee feedback systems 
  • Real-time progress tracking 

5. Learning and Development

AI’s impact has also been seen in learning and development programs and processes in organizations. Organizations that embrace AI can easily equip their employees with the relevant skills, effective learning experiences, and more engaging earning processes. More importantly, AI helps businesses build a continuous learning culture, ultimately boosting productivity, employee retention, and company culture.  

Here are ways companies are leveraging AI in learning and development: 

  • Personalized learning: AI algorithms help assess employees' knowledge, skills, preferences, and experiences and recommend personalized learning programs or content. 
  • Data-driven insights help HR professionals improve their learning and development programs and processes. 
  • AI tools help recognize skill gaps by comprehensively analyzing relevant employee data and performing skill assessments. Consequently, they recommend training programs. 
  • AI-assisted authoring tools help in course creation and generating learning other learning materials.

Final Thought 

The global AI HR market is estimated to be USD 5.26 billion in 2023, and it’s expected to reach USD 10.70 billion by 2028 at a CAGR of 15.26%. It shows that HR departments will increasingly adopt AI solutions to improve their HR functions, from automating routine tasks and streamlining processes to generating data-driven insights for more objective decision-making. However, implementing AI solutions requires addressing ethical considerations, privacy concerns, impacts on the workforce, and accountability. More importantly, it requires HR departments to have the right infrastructure and skillset to leverage the full potential of AI tools in the future. 

In brief, AI will continue largely transforming the HR industry, and organizations embracing it will have a great edge in the labor market. Among the benefits of AI in HR management include improved efficiency, reduced cost, better decision making, enhanced employee experience, and reduced biasness in management. However, AI has disadvantages, including minimal human connection, potential data breaches, and the high cost of acquiring, implementing, and maintaining AI technology. 

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Workpay is a HR and Payroll software company that offers time & attendance, payroll, human resource, leave, expenses and remote teams solutions to businesses across Africa.

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