Wednesday, April 24, 2024

Artificial Intelligence (AI) in HR

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The use of artificial intelligence (AI) has led to a variety of positive outcomes in human resources (HR) departments.

AI helps HR professionals stay on top of trends, understand employee sentiment, streamline the acquisition of talent, and detect indications of dissatisfaction or imminent departure.

The Need for AI in HR  

  1. Fewer HR personnel are being asked to cover a larger number of employees.
  2. Workforces have become increasingly dispersed and no longer right under the watchful eye of HR. 
  3. There are many disparate systems offering data and potential inputs with regard to employee behaviors. It takes AI to pull these all together and provide sensible insight in a timely manner. 

See more: Artificial Intelligence Market

AI HR Use Cases 

The use cases for AI-based HR include: 

  • Background checks: AI can improve the speed and accuracy of background checks. It can note red flags on resumes and spot indications of falsehood that might otherwise be missed. 
  • Detection of anomalies: With so many working from home, AI can look beyond simple indicators of who is logged in and who is not. It can spot regular work patterns and anomalies that may mean someone is avoiding work or trying to escape detection. 
  • Switch from generic to personalized communication: Traditional HR bulletins to all personnel can be transformed via AI. Perhaps the bulletin only needs to go to specific sets of employees. Including the person’s name, position, and other personalization features increases the likelihood of response and engagement. 
  • Risk management: HR can make use of AI algorithms to determine key personnel who may be at risk of leaving, being headhunted, or need a more defined career path. 

See more: Artificial Intelligence: Current and Future Trends

5 Examples of AI Being Used for HR 

There are many ways in which companies are using AI in HR: 

1. Availability

Sonia Mathai, chief human resources officer at Globality, said that AI provides major assistance when it comes to 24/7 assistance and availability.

AI-powered chatbots are used to simulate live interaction and answer employee questions about hiring, benefits, training, and more. 

2. Turnover

Sparkhound helped a large collision repair chain realize $1 million in turnover costs by addressing employee churn during a phase of high growth.

With almost 700 locations across the country and more than 10,000 employees, turnover at the auto chain reached 40% a year in some regions for key personnel, such as mechanics, painters, and customer support staff.

Sparkhound created an AI-based regression model using Microsoft Power BI to analyze the impact and correlations of variables, such as salary, training level, exit interview comments, and other indicators of turnover. The resulting dashboard provides managers with a real-time risk indicator for each employee and suggests preventive measures.

The result was employee retention and satisfaction rose rapidly, while reducing HR costs and helping increasing revenue.

Sandy Michelet, director of people strategy at Sparkhound, said AI allows HR to transfer time spent on repetitive and administrative tasks to more strategically valuable activities. 

3. Service baselines

ADP Research Institute (ADPRI) has devised a way to measure HR service quality and uncover the factors that influence the talent brand, intent to leave, and actually depart.

It gathered this data from sources across 25 countries by tracking a number of metrics and indicators. This results in an HR XPerience Score (HRXPS).

The metric has proven useful in determining how employees are twice as likely to value their company when they experience a single point of contact with HR. They are also 7.4 times more likely to say HR is value-promoting when they experience seven interactions with HR compared to no interactions.

The conclusion is that the more HR is engaged with an employee, the more likely the employee is to think well of HR and the company — and that direction impacts retention rates. 

“While companies have always tried to better understand what contributes to the talent brand, we now have a studied metric to effectively measure the HR function,” said Marcus Buckingham, head of people and performance research at the ADP Research Institute.

“Our research found that the HR function is critical to the talent brand — so much that every employee interaction that takes place, specific services used, and a personalized feel with a single point of contact are what influences a higher HRXPS. In fact, this high-ranking, single point of contact upends the current industry trend of doing away with HR.” 

4. Automation

Another area where HR receives material help from AI is automation.

Mathai of Globality noted that with many HR teams trying to do more with less, AI platforms are being used to relieve the burden.

AI is automating transactional and repetitive HR work, freeing them up to focus on tasks that involve direct interaction with personnel. 

See more: Artificial Intelligence and Automation

5. Employee benefits

The administration of benefits is an area that consumes a tremendous amount of HR time.

AI-directed automation addressed to this area can eliminate much manual work and enable HR to better serve the employee base in this area.

Sparkhound implemented this approach internally, according to Michelet. An AI-based chatbot is used to answer benefits-related questions. A feedback button provides continuous improvement to the bot. 

See more: Top Performing Artificial Intelligence Companies

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