How AI is Transforming HR: Benefits and Risks

Humanity is at the peak of its technological breakthroughs, and we’re witnessing the advent of various disruptive technologies. Gradually, these hi-tech systems have earned their place in our very existence, most significantly in the business realm, and they show no signs of backing out sooner or later. 

Speaking of a groundbreaking piece of technology that is transforming the face of the business world, especially the human resources management department, AI is definitely one for the picking. 

Considering its dexterity in data analysis, diagnosis, and prediction, HR has never been more operational, and the fate of these two seems inevitably intertwined. With 91% of top businesses now investing in AI, HR is undergoing an unprecedented transformation. 

However, the impact of AI in the HR department has ignited a series of debates and discussions about its versatility. 

Whether or not you’re among the myriad who intend to incorporate AI into their HR department, you might want to weigh its benefits and risks and see how it aligns with your business goals. 

What does AI stand for? 

AI is an acronym for artificial intelligence,” and it is the replication of human intellect into computers or robots to exhibit human traits and carry out tasks as such. 

Some of the most common examples of AI technologies in HR are chatbots, video interview channels, and smart tools used for creating ads. 

Benefits of AI for human resource departments 

The most evident benefit of AI technology is its ability to seamlessly transition manual activities into fully automated processes. As machines continue to imitate human learning through data analysis, they increase work efficiency and save a lot of time in the process.

  • 1. Data security amelioration

Data protection regarding employee information was always a point of worry for the human resources department until the advent of AI-powered tools. 

During a data breach, cybercriminals perform malicious activities with sensitive organizational data, especially that of HR. As a result, employees often suffer fraudulent transactions due to exposed bank account details. 

  • – With AI technologies coming to reality, organizations can now restrict access to sensitive employee data.
  • – AI systems come with a monitoring feature that works with time and frequency and in case of data breaches, it sends instantaneous notifications based on when and how HR data is being accessed. 
  • – In addition, AI can monitor activities by location, giving data security personnel the ability to identify the exact point where suspicious online activities are taking place. 

AI-powered technologies come with a more robust feature set, and more and more organizations have developed a growing fondness for this hi-tech software to ameliorate their security risks.  

  • 2. Recruitment made easy

The hiring stage used to be a nightmare for the HR department due to the tedious and time-consuming activities therein, but the realization of AI technologies has changed the narrative. Are you curious to know how? Well, here’s the banger 

Hiring managers can now streamline their hiring processes and enhance the overall candidate experience, and there’s more in stock. 

Unlike the antiquated ways of manually analyzing resumes, scheduling interviews, or responding to employee reviews, AI can simultaneously perform these tasks within a short space of time, giving the HR team more time to focus on other pressing matters. 

  • – AI can help you sift through piles of resumes and identify candidates who showcase the most relevant skill set and requirements. 
  • – With AI, you can completely extirpate every element of unconscious bias that can influence your selection process during recruitment i.e. applicants are selected solely on their qualifications.
  • – AI avails you the opportunity to scrutinize candidate profiles and conduct proper background checks to ensure you end up with the most suitable candidates. 
  • – In the same vein, AI-powered software such as chatbots plays a crucial role in responding to candidates’ questions, scheduling interviews, and providing adequate feedback prior to and after interviews. 

All of these things save you time and allow you to quickly close in on the best talents while guaranteeing positive candidate reviews for your organization. A win-win situation 

  • 3. Smooth onboarding experience 

Thanks to AI, HR management can now give new employees the proper welcome they deserve. The onboarding experience goes a long way in defining an employee’s overall performance, job satisfaction, and ultimately retention rates. 

With AI, the HR department can transition their onboarding activities from a manual workflow to a fully automated process, allowing them to compress multiple tasks and speed up the entire process. For instance,

  • = AI software can automatically validate employment documentation
  • – Provide adequate feedback for frequently asked questions during the process
  • – Establish organizational policies and codes of conduct for new employees
  • – Brief new hires of latest tasks and link them up with their prospective team members 
  • 4.  Learning and staff development 

Every organization strives to stay updated with the latest marketing and technological trends, and as a result, the human resources department is tasked with the duty of overseeing staff development. 

When it comes to integrating and learning new programs, software, or business procedures, AI creates an easy pathway to e-learning and other learning management systems. These platforms enhance the employee learning experience while keeping track of their progress.

  • – With AI technology, employees can learn at full tilt in the most effective approach. 
  • – HRM departments can keep a tab on employee progress to ensure everyone is on the same page in the learning process. 

Risks of AI for human resource departments 

Let’s beat your curiosity! How can something so profitable pose a threat to your business? 

Well, AI isn’t infallible, and just like any other software out there, it comes with some limitations, and for many, the cons outweigh the benefits. It all depends on your discretion. 

The fun fact remains that AI doesn’t represent actual human participation, and that puts your organization at risk. As a business owner, it’s essential that you put the pitfalls into consideration before integrating AI into your business.    

With that, let’s walk you through the ugly side of AI in the HRM department. 

  • 1. Reduced accuracy and reliability

AI is a sophisticated tool, but it’s far from being perfect. How can you rely on its accuracy when errors surface in its algorithms? 

Every AI tool out there requires a set of codes to function, and each time there’s a bug in its source codes, organizations are presented with wrong data interpretations. For HR, it poses the threat of misinterpretation of applicants’ resumes, which eventually leads to losing out on talented candidates.

As a business owner or HR professional, you must be wary of leaving sensitive reports completely up to AI-powered technologies. 

  • 2. Talent hunt goes wrong 

In a bid to recruit new talents to join the workforce, HR departments often leverage AI software to analyze piles of resumes. As swift as that can be, the current AI technologies are dependent on keywords and phrases to perform resume analysis. 

The downside to that is that only resumes that are written to meet the specific needs of screening software get into the hands of real people. Applicants who are quite familiar with this piece of technology can easily outsmart it by inputting those keywords in their resumes

Due to that, the HR department may end up with unsuitable candidates while the actual talents get eliminated due to the absence of the desired elements in their resumes.  

  • 3. Increased risk of cyber attacks

We’ve been down this lane, and it’s rather bewildering to see how AI increases the threat of cyberattacks

While chatbots are used by HR to streamline customary dealings, they’re often targeted by cybercriminals. Each time a sensitive information is sent out, either personal or organizational data, it puts you at risk of identity theft or data breaches.

  •  4. Returns on investment 

Is it a worthy investment? It’s the question on the lips of every organization that has yet to adopt this hi-tech software. 

AI technologies are very expensive, and it takes a great deal of budget to bring in this piece of technology. For instance, a chatbot will cost you about EUR 100,000 without the cost of revamping your company website on a regular basis, just to keep up with the trend.  

Although chatbots are the latest innovations, we wouldn’t neglect the hype they will give your business, but when we factor in the constraints foisted by the small amount of data in some organizations and the lesser opportunities to rerun a process, the topic of cost-effectiveness comes into play. 

Looking to the future

If we were to base our assertions on the current state of AI technology, we would question its credibility to completely transform the face of HR management, but one thing we can say for sure is that AI is undergoing an incessant evolution, and we know what awaits us in the future. 

Not only will it spread its tentacles across the HR department, but into our homes and everyday activities. 

Writer’s bio

Rilwan Kazeem is a freelance content writer, and an enthusiastic one at that. He has been in the writing world for three years. Being an explorer and reader, he engages his readers with in-depth and thought-provoking blogs and articles.