How will AI impact HR? A new study provides some answers.
By Larry Basinait
Artificial intelligence (AI) refers to systems that can adapt their functionality without being programmed to do so, but rather based on the usage data they collect. As a tool used to guide and execute HR processes, AI has enormous implications. Intelligent technology can be leveraged to help HR leaders source candidates, forecast employee flight risk, identify high-potential employees, prevent bias in hiring, improve the candidate and employee experience, and implement corporate learning programmes—and that’s just the beginning.
In order to determine the adoption of AI in the HR industry and its impact on business results, HRO Today partnered with Alexander Mann Solutions earlier this year to conduct a survey of today’s top HR professionals. In total, 150 respondents participated in the survey from the HRO Today magazine subscriber list, e-newsletter mailing list, and HRO Today Services and Technology Association.
Results show that AI used for HR processes remains in the early stages of adoption, with just over one-half (57.4 per cent) of respondents leveraging the technology for a year or less. Its earliest penetration has been among larger companies: Organisations with 10,000 or more employees are three times more likely than those with fewer than 500 employees to be using AI, and twice as likely to have plans to implement it in the next two years. But overall, the use of AI-enabled technology is rising among companies of all sizes, with 53.7 per cent of surveyed respondents planning to implement AI in the near future.
Whilst it’s too early to tell if the investment in AI by HR is paying off, most feel positively about their experience so far. More than one-half (59.7 per cent) of HR professionals indicated that AI has met their expectations, whilst 5.3 per cent feel it has not. That’s a difference of more than 11 times. But there’s still a large group that remains undecided, as more than one-third (35.1 per cent) indicated that AI has neither met nor not met their expectations. However, of the people who were not impressed by their results, the majority have used AI for only 12 months or less.
Whilst AI may be a fantastic tool for human capital management, it will not replace human capital. One of the major concerns about AI is that it’s going to eliminate jobs, but HR professionals need not worry. When study participants were asked what they predict will happen to the size of their organisation’s recruitment teams in 24 months as a result of AI, more than one-half (55.8 per cent) forecasted no change to the size of their recruitment teams. But that doesn’t mean the role of the recruiter won’t change; 69 per cent of HR professionals indicated they felt that recruiters will spend more time developing relationships with hiring managers—certainly a positive outcome. Recruiters will also spend more time building relationships directly with candidates.
Perhaps because it’s so early in the adoption cycle of AI, most of its use in the HR industry centres on creating greater efficiencies with administrative tasks. Currently, the most common application of AI is candidate screening, used by 55.8 per cent of study participants. Responding to candidate inquiries, a key component of the candidate experience, was cited second most often, by 40.4 per cent of respondents. The third most common way AI is being used is in scheduling interviews, as indicated by 34.6 per cent of respondents.
Moving forward, the more analytical capabilities of AI will be tested. Candidate assessment was the most commonly planned area for AI expansion, followed closely by internal mobility planning and then employee performance management. This suggests that companies plan to move their AI capabilities beyond administrative tasks into more strategic and analytical HR functions.
Today, the expected benefits from AI are most often reducing time to fill and cost. But AI can go beyond those standard metrics of HR productivity, delivering value-add benefits like improved candidate experience. In fact, improved candidate experience was the third most anticipated benefit among HR professionals, and one that is already being realised. Nearly seven out of 10 respondents (69.5 per cent) indicated that AI has already had a positive impact on candidate experience, whilst 93.4 per cent feel it will do so in the next two years.
Contrary to common perception, the survey did not reveal the overwhelming resistance in implementing AI that many believe to be true. Over one half (53.5 per cent) of participants stated that they were not facing resistance, suggesting that for many, there are few impediments to further embracing AI technology in human resources.
In over one-half (59.6 per cent) of cases, HR professionals drove the impetus to deploy AI for HR needs—more than twice that of any other part of the organisation. However, a positive correlation indicates that companies that use AI in other departments, such as customer service, are more likely to also utilise it in HR.
The use of AI in HR is still in infancy but will only continue to grow in adoption and scope going forward. Currently, the technology has the greatest impact on areas related to business productivity, where expectations are well defined and the recommendations are straightforward and not heavily nuanced. In the future, expectations will be broader but all applications of the technology—as well as relationships with candidates and hiring managers alike—will still require a human touch. HR professionals will be needed to maintain the technology and ultimately make the connections and decisions, be they hiring, promoting, or exiting.
HR needs to embrace AI sooner rather than later because it’s not going away. AI will become a mainstream HR tool for companies of all sizes and industries, just like the technological advances that came before it.
Read the full survey results here.