Deel, a leading global HR and payroll company, has released new research on AI’s impact on the HR function to coincide with the general availability launch of Deel AI. The comprehensive survey of 1,100 HR decision-makers identifies the key benefits and concerns regarding the role of AI in HR and reveals that while almost two-thirds (61%) believe AI will positively impact HR practices over the next five years, the majority of those not already using it are unlikely to implement it soon.
Roughly two in five (38%) HR decision-makers currently employ AI in their practices and workflow, while 23% of those not currently using it plan to within the next year. However, 70% of non-users are unlikely to implement AI in the next year, highlighting a gap in understanding and acceptance. More than half (61%) believe AI will positively impact HR practices over the next five years. This optimism is especially high among younger HR professionals, with 86% of those ages 25 to 34 expecting beneficial outcomes.
AI is seen as a transformative force across several HR functions, including analytics (46%); checking employment laws (37%); L&D (35%); payroll (34%); accessing hiring data and insights (33%); performance management (32%); benefits administration (32%); recruitment and talent acquisition (29%); employee onboarding (28%); and salary benchmarking (28%).
Larger companies are more receptive to AI, with 85% of HR leaders from larger businesses saying they’re optimistic about AI’s impact on HR. This is compared to less than half (47%) of those from smaller companies. More than half (61%) of businesses generating more than $10 million in revenue are already using AI, with nearly half (47%) of non-users planning to adopt it. Only 13% of companies with a turnover less than $1 million are planning to use AI, while 81% of those non-AI-using smaller businesses are not likely to implement in within the next year. This disparity in AI adoption could leave smaller companies at a disadvantage, potentially with efficiency and innovation compared to their larger counterparts.
AI reliability and accuracy (16%), along with data security and privacy (16%), are the top elements HR leaders are most concerned about when considering the integration of AI into HR. The potential loss of personal touch with HR processes ranks third as the element HR leaders are most concerned about when considering AI in HR (13%), signaling the importance of maintaining human interaction in AI-enhanced HR functions.
Additionally, “employee dismissal” ranks lowest (13%) on HR areas that would most benefit from AI, followed by employee recognition and rewards (21%), further highlighting the concern of AI being overly involved in employee interactions that need a personal touch.
“We are at a pivotal moment in the evolution of HR technology,” says Aaron Goldsmid, head of products, payments, and integration at Deel. “Our latest research shows that only 38% of HR leaders have already embraced AI. This means over 60% of companies have yet to adopt it, highlighting a considerable gap in adoption and hesitation, especially among smaller businesses. This reluctance to adopt AI is not just about the use of technology, it means many businesses are missing a trick in terms of gaining a competitive advantage in efficiency and strategic insight.”
