How AI in HR Boosts People Operations & Streamlines HR Processes

Discussions of artificial intelligence (AI) today typically divide human resources (HR) professionals into one of two camps: those embracing AI’s potential and those who are still reluctant. Somewhere in between, there’s a middle ground where many leaders are finding they need to land. 

AI is continuously expanding its capabilities and becoming more sophisticated as new use cases arise. AI will magnify in importance as various teams find ways to leverage it. HR leaders are feeling the urgency, with 76% of them convinced that their organizations must adopt AI tech solutions within the next 12 to 24 months or risk lagging behind their competitors, according to Gartner.

Understanding AI in human resources

AI simulates human intelligence using machines or systems programmed to think like people do. Over time, with more and more data input into AI tools, these technologies become adept at problem-solving, learning from past interactions, and making more sophisticated predictions. 

In HR, AI can become a cost-effective sidekick—automating everyday tasks, analyzing vast datasets, and extracting insights for better decision-making within HR departments and small businesses. Using data analytics, natural language processing (NLP), and machine learning (ML), AI can assist with a wide range of tasks, from talent acquisition and onboarding to employee engagement and people management. 

Here are four key applications of AI in HR operations:

• Generative AI: At the heart of generative AI are deep learning algorithms capable of analyzing patterns and generating unique output based on the input the algorithms receive. In practice, it means job descriptions, recruitment social media posts, job ads, and training materials can be done at scale much faster
• AI recruitment and screening tools: Various AI tools can handle the heavy lifting of sourcing candidates, analyzing resumes, scheduling interviews, and conducting initial screenings to locate top talent
• Virtual assistants and chatbots: From a retention perspective, AI tools can facilitate employee engagement and satisfaction, with virtual assistants or chatbots using NLP to help with benefits administration, time-off requests, and HR-related questions
• Performance management systems: Supporting employee development is more manageable with AI tools tracking and analyzing key performance indicators and recommending next steps to achieve individual goals

Scaling the hiring process with AI

Finding qualified job candidates can be a significant hurdle when you must sift through hundreds or even thousands of applicants. Here’s how AI in HR makes the hiring process more efficient:

• Streamlined recruitment: AI tools can identify qualified candidates, narrowing the candidate pool to those who best meet the criteria for a given position
• Quality new hires: AI algorithms can pore over historical hiring and employee performance data to make predictions on candidate success in specific roles. Additionally, AI tools can help source passive candidates who may be open to new positions
• Real-time applicant analysis: AI tools accelerate the hiring timeline, saving time by assessing candidates’ profiles, resumes, salary requirements, geographic locations, and career aspirations

AI in talent management and employee engagement

AI-powered solutions can help HR leaders improve talent management and employee engagement programs—from identifying and hiring top talent to fostering employee development, engagement, and retention. Here’s how AI empowers HR leaders to deliver exceptional candidate and employee experiences: 

• Greater employee engagement: Reducing attrition starts with knowing how people feel about their roles and organizations. AI can help leaders administer surveys, gather employee feedback, analyze overall employee sentiment, predict retention risks, and identify problem areas to address
• Improved talent management: Limited career progression opportunities are often reported as a reason for employee attrition. AI can help design career paths according to individual goals and skill sets, whether identifying upskilling opportunities, delivering feedback, or assisting with succession planning

AI-driven learning and development

AI-driven learning experiences and skill development are crucial in today’s workplaces, given employees’ desire for clear career paths and advancement opportunities. AI algorithms can analyze employee feedback, performance reviews, and previous learning engagements to assist with:

• Personalized learning experiences: Every employee is unique, so a one-size-fits-all approach to learning won’t be beneficial. With AI systems, you can adapt learning programs for individual learning styles, skill gaps, and career goals
• Competency mapping and career progression: AI algorithms can also help anticipate future talent needs and pinpoint upskilling opportunities. With the help of AI-driven skills databases, HR and talent acquisition leaders can design career pathways that optimize internal talent while predicting future needs

Reducing human error in payroll and benefits admin with AI

You will instantly see the positive impact once you incorporate AI into HR benefits and payroll administration. AI can automate many routine tasks, allowing HR professionals to focus on strategic activities requiring human expertise. 

Moreover, AI enables enhanced accuracy, automating tasks such as payroll processing and benefits administration while reducing the likelihood of human error. This accuracy ensures accurate compensation and benefits for employees and minimizes errors. Additionally, AI systems can automate compliance checks, reducing the risk of errors, penalties, and legal issues. 

And yes, when it comes to payroll, human errors happen — with the top mistakes being missing or incorrect time punches, according to EY research. There are direct and indirect costs involved with fixing each type of error — with an average cost per incident of $291. Some errors incur even higher costs; for example, mistakes related to employee onboarding average $635 per incident. 

Improving employee retention and satisfaction with AI

AI algorithms are adept at gathering and analyzing data, predicting employee turnover, and crafting retention strategies addressing workers’ needs. Key areas where AI can assist retention include: 

• AI-assisted flexible scheduling systems, allowing employees to self-schedule shifts that promote work-life balance
• AI-managed time-off requests, approving paid time off or sick time in real-time
• AI-powered recommendations to engage employees with new challenges, additional training, and other growth-promoting strategies
• Data analysis and predictions, identifying behavioral patterns like deadline tardiness so managers can intervene to understand employees’ needs and pain points better

AI-backed decision-making in HR

Making faster, more accurate decisions is a superpower many HR leaders want to possess. With AI enabling better data and insights, HR professionals are tapping into that capability — saving time, increasing efficiency, improving recruitment, and reducing costs. 

AI-powered recruitment platforms offer real-time insights on job postings, candidate sourcing, and hiring processes, allowing HR teams to refine strategies based on applicant feedback and improve the candidate experience and conversion rates. Meanwhile, AI algorithms can analyze workforce data and market trends to forecast future needs, allowing HR teams to adjust staffing levels and recruitment strategies in real-time.

According to SHRM research, AI in HR is growing by leaps and bounds, allowing greater agility in various aspects of HR:

• Talent acquisition: With a 64% adoption rate, talent acquisition processes benefit from AI-driven job descriptions, interview questions, and resume reviews
• Learning and development: AI tools can recommend or tailor educational opportunities, track learning progress, assist with upskilling or reskilling, and build new training content
• Performance management: Although still a burgeoning area of AI in HR, performance management is helping with objective performance reviews, goal setting, workforce planning, and automation of labor-intensive HR tasks

Challenges and considerations when implementing AI into HR processes

While AI offers numerous benefits for HR teams, there are some challenges and other considerations to address when implementing AI in HR, such as: 

• Potential for algorithmic bias when AI systems are trained using information that lacks the principles of diversity, equity, and inclusion
• Data protection and privacy concerns due to the collection, storage, and analysis of personal information
• Transparency concerns, ensuring applicants and employees understand how AI systems will use their information and make decisions
• Trustworthiness of AI output, with information potentially being factually incorrect
• The need for human oversight and input in the talent acquisition process

Strike a balance between AI and human work

Embracing the future of HR means recognizing the dynamic interplay between AI tech advancements and regulatory frameworks, and committing to ongoing learning and adaptation. HR leaders are required to keep up with AI innovations and regulatory mandates. 

Active engagement in industry forums, continuous professional development, and collaboration with regulatory bodies are vital for shaping the responsible and ethical integration of AI in human resources. Through this proactive approach, HR teams can adeptly navigate challenges and seize opportunities, ensuring compliance and positioning HR as a catalyst for innovative organizational change. 

Deel is at the forefront of future-of-work technologies, including AI, offering globally compliant contracts, worker mobility solutions, and a comprehensive HR management suite. Now, both workers and employers can concentrate on their critical work while entrusting the intricacies of HR management to Deel.