Technology has revolutionized how we handle everything from payroll to performance reviews in the world of human resources (HR). Now, artificial intelligence (AI) and generative AI are taking center stage, reshaping the development of HR and HR compliance solutions, and even how HR professionals view their roles.
AI and generative AI capabilities are being woven into HR applications to improve efficiency and decision-making. Here are just a few of the areas in which AI is making an impact:
- Automating the onboarding process: AI helps organize and manage documents, ensures all forms are filled out correctly, and guides new hires through their first steps in the company.
- Crafting job descriptions and handbooks: AI is also stepping in to help write up job postings and employee manuals, saving time and ensuring consistency.
- Managing compliance: With AI on board, monitoring and applying regulatory requirements becomes a breeze. It can track changes in labor laws and automatically update policies and procedures.
- Simulating HR scenarios: AI can help predict and prepare for potential HR issues and changes, to help companies be more proactive in managing them.
These innovations are helping companies boost efficiency, reduce errors, get a better handle on workforce dynamics, and make the HR department more effective and agile.
Recognizing HR Concerns About AI
Despite these benefits, many HR professionals worry about whether or not they can trust AI. According to Mineral’s State of Human Resources survey, conducted by SMB Group, only 3% of HR professionals in small and medium businesses (SMB) have a high level of trust in AI, and 43% have a moderate level of trust. Just over one-third say they have little or no trust in AI. They cite fears about data privacy, concerns about information security, and making poor decisions because AI provides inaccurate answers are their top worries.
These concerns lead to apprehension about using AI in HR solutions. Only about one-quarter of survey respondents said they are very likely or likely to use AI in HR solutions—while one-third said it’s somewhat or very unlikely. In addition, only about one-third of respondents said that it is very or somewhat important that HR vendors embed AI tech in their solutions.
This seems perplexing because many HR and HR compliance vendors already embed AI capabilities into their applications.
So what’s going on? In all likelihood, some HR professionals already use AI capabilities in HR apps without knowing it. The good news here is that HR vendors are doing a pretty good job of integrating AI functionality into their solutions so that users can quickly take advantage of new capabilities without much of a learning curve.
Lack of Understanding About How AI Works Can Create Big Problems
However, the bad news is that when HR professionals don’t have a basic understanding of how AI works or don’t even realize they’re using AI-powered tools, it can result in negative consequences, such as:
- Misinterpreting AI decisions: Without understanding how AI works, HR personnel might misinterpret why and how certain decisions are made. Without understanding the basis for these decisions, people may accept the conclusions generated by AI without examining them closely enough.
- Compliance Risks: AI systems must adhere to many legal standards, especially around issues like employment discrimination and data privacy. If HR professionals don’t understand the mechanisms behind AI decisions, they may unknowingly breach these laws, leading to potential legal consequences, and damage to the company’s reputation.
- Resistance to Adoption: Understanding and trust go hand in hand. If HR professionals aren’t aware or don’t understand how AI is integrated into their tools, they may be less likely to trust and adopt these technologies. This can slow down a company’s ability to benefit from AI.
With so many publicly available AI tools (such as ChatGPT, Google Gemini, and Meta Llama) and as HR vendors integrate more AI capabilities into their solutions, HR professionals must get up to speed. A basic understanding of how AI works, where it is applied, and its implications can help ensure that these tools are used for maximum benefit, with minimal risk.
With that in mind, here are some AI basics that every HR pro should know.
Accurate Data Fuels Successful AI-Driven HR
AI systems are trained on data and need high-quality, accurate data to function optimally. Inaccurate data can lead these systems off course, resulting in errors that can affect everything from employee paychecks to violating labor laws.
Most people have already heard about how bad data in AI-enabled recruitment applications causes big problems, particularly when it comes to fairness and non-discrimination. For example, if a recruitment system uses AI models trained on historical hiring data that reflects biases, it is likely to unintentionally perpetuate these biases. This could lead to discrimination in hiring and violations of equal employment opportunity laws that cause irreparable damage to a company.
HR must be proactive to ensure the data feeding their AI systems is accurate and current to help guard against bad data. Internally, this includes setting strict data entry rules, performing regular data checks to correct errors and outdated information, and implementing validation processes to make sure things are working the way they should. Understanding the data sources HR application vendors use and how data is updated is also critically important.
Algorithms are the Engine of AI Decision-Making
The power of AI lies in its algorithms—rules and mathematical models that process and analyze data and turn it into information you can use. AI algorithms can analyze vast amounts of information very quickly. This helps to streamline many HR tasks—from identifying the best job candidates to tailoring benefits programs to individual employee needs.
How well AI algorithms work—or not—depends on how they’re built. This gets us back to the necessity of training these algorithms with trusted data that is accurate, free from bias, and aligned with ethical considerations.
Let’s say there’s an AI algorithm tasked with ensuring equal pay, as the law requires. If this AI trains on old payroll data that has traces of past gender or ethnic wage gaps, it might just keep those unfair practices going. To do its job right, the AI needs to learn from data that’s been checked and corrected to remove any biases to ensure that everyone gets paid fairly.
Continuously testing and tweaking these algorithms is key to keeping them free from biases that could skew hiring and other HR decisions. Regular checks can help ensure that algorithms aren’t just doing their job, but doing fairly in an unbiased manner.
HR applications vendors should be forthcoming in explaining how their AI algorithms work, and have them answer questions such as:
- What data sources do you use to train your algorithms?
- What steps do you take to identify and mitigate biases in your systems?
- How do your AI algorithms make decisions?
- What are the factors that influence the information that the AI provides to you?
- How do you protect data privacy and ensure security compliance?
- What’s the process for updating and maintaining AI algorithms to keep them up to date?
- What type of human expertise and oversight is used to ensure that AI-generated decisions are reasonable, or can be overridden or adjusted when necessary?
You’ll also want to learn what regulatory standards they comply with for AI development. AI in HR touches on many legal areas—from privacy laws to anti-discrimination measures—and many laws are continually evolving. Checking in on a vendor’s compliance strategy can help you determine the degree to which they’re staying on top of regulatory changes and their commitment to doing things right. This way, you can feel confident that the AI tools you bring into your workplace are safe, sound, and ready for the future—both legally and ethically.
Human Expertise Is Essential
While AI can process and analyze data at speeds exponentially faster than humans can, it lacks the nuanced understanding that experienced HR professionals provide. Effective AI requires oversight by knowledgeable humans who can judge when an AI’s decision should be changed or overridden—or HR risks making decisions that are not only wrong but potentially unfair or harmful to employees.
On the application development side, it takes human expertise to design effective and fair AI models, select solid data sources, and continually fine-tune the system. Once a company is using AI, it also requires HR professionals to ensure that AI-driven solutions align with company goals and translate AI’s analytical power into meaningful HR strategies that reflect the organization’s culture and values.
Human reviews also provide a critical checkpoint in AI-driven HR processes. Human oversight is key to ensure that AI outputs are vetted for accuracy, fairness, and ethical considerations. The involvement of HR professionals is also vital to building trust and acceptance of AI among employees. This can help reassure them that there is a layer of human judgment focused on fairness and empathy behind every AI-driven decision—and that the company is using AI to serve the workforce, not just the bottom line.
Perspective
AI and generative AI tools are revolutionizing HR, but they also bring their fair share of challenges.
It’s not surprising that many HR pros are still on the fence about AI, and worry about whether it’s reliable and ethical. Making sure the data AI uses is accurate and updated, ensuring the algorithms are fair, and keeping human judgment in the loop are essential for AI that not only improves HR efficiencies but also stays true to legal and ethical standards and company values.
There’s a significant gap in understanding and trust that needs to be addressed when it comes to using AI tools in HR. HR professionals don’t need to be technology experts, but they do need to develop a basic understanding of how these tools work. That starts with HR vendors stepping up to clearly explain how their AI tools are built and how they’re being integrated into HR tasks.
By learning more about how AI works, and demanding high standards from tech providers, HR professionals can integrate AI capabilities more effectively and responsibly.
© SMB Group, 2024
Mineral Mitratech sponsored this blog.