Navigating HR compliance in the age of AI

Dario Amodei, CEO of AI company Anthropic, recently stated that “…the single most important thing to understand about AI is how fast it is moving.” The novel technology is now in use across the spectrum of industry, with legislation and policy on both a governmental and organisational level struggling to keep pace with AI advancements.

While AI has brought with it a number of benefits for HR professionals, including improvements in productivity, time management, and financial efficiency, its’ rapid growth has caused issues for HR professionals who must now navigate a host of emerging challenges.

Let’s take a closer look at the impact of AI on the HR landscape.

Benefits of AI in HR

Increased productivity

AI is now commonly used in HR to increase productivity. This is done through automating tedious, time-consuming tasks which have a high margin for error when completed by human beings, such as data entry.

In fact, 93% of HR professionals now use AI tools. By automating these arduous, often complex tasks, the risk of inaccuracies is minimised and employees’ time and energy are freed up; allowing space to focus on activities with a greater value and impact.

Employees are, therefore, less pre-occupied with mundane tasks and better able to leverage their energy, skills, and talents to more significant effect.

Time management

Automating time consuming tasks allows teams to better manage their time and use it more efficiently. In addition, AI can be used to support effective scheduling. As Ken Pearson notes in his article, the use of AI agenda creation tools enables those working in the HR industry to benefit from focused, productive, and time-efficient meetings.

It can also save time when recruiting, by screening resumes and shortlisting the appropriate applicants; saving HR professionals from having to manually assess hundreds of applications. AI can also keep applicants informed of developments in the interview process and assist with scheduling interviews.

Financial benefits

Increased employee productivity, as a result of AI usage, naturally leads to greater gains for the organisation. As teams benefit from greater creative space to focus on achieving organisational goals, organisations will gain financially and eliminate the need for investment in the areas of tasks like data entry.

AI can also save costs in often-expensive recruitment strategies – helping to streamline complex processes and reduce the amount of time and expense spent on recruiting new employees.

Challenges of AI in HR

Bias

While AI can support the recruitment process through streamlining and time saving, it can potentially incorporate bias into its practices. For example, when screening job applications.

If a workplace is already lacking in diversity, it is possible that AI will seek out applicant profiles which ‘match’ those already working at the organisation. In 2023, an IBM survey of global IT professionals showed that 42% of companies were using AI screening "to improve recruiting and human resources", according to the BBC.

Carnegie Mellon University in Pittsburgh discovered that Google’s online advertising system displayed lucrative positions more frequently to male job seekers than to female. Individuals from different ethnic backgrounds, or with disabilities, can also be discriminated against via AI bias. According to Forbes, MIT researcher Joy Buolamwini discovered that though a major U.S. technology company alleged its facial recognition accuracy rate was 97%, its training set was actually more than 83% white.

The BBC also highlights the 2020 case of a make-up artist who was advised by her employer to reapply for her job after being furloughed due to the pandemic. An AI screening programme, used to evaluate her, scored her body language poorly and resulted in her losing her job.

Security concerns

When allocating tasks such as data entry to AI tools, there are security risks. HR departments handle a great deal of sensitive data pertaining to employees, such as their personal data and financial information.

Ensuring that the correct security measures are in place to protect employee data is crucial for HR professionals, and these measures must be consistently reviewed and refined in line with any changes in the space.

Forbes notes that data breaches, while common, can be catastrophic for organisations; leaving both employees and employer open to reputational damage and fraud, among many other negative consequences.

Lack of humanity

Ultimately, HR stands for Human Relations and the automation of various HR practices such as recruitment can have a negative impact on company culture. Wholly relying on AI for HR processes can result in organisations losing their ‘human touch’ – thus, causing a breakdown in feelings of connection and support within the organisation.

According to The Guardian, a survey from Resume Builder found that by 2024, four in 10 companies would use AI to conduct verbal interviews with candidates, while 15% said decisions regarding hiring would be made entirely by AI, “with no input from a human at all.”

However, many would argue that a key element of the recruitment process is assessing whether a candidate will be a good fit for the existing team, and while someone may seem perfect on paper, i.e. has all the right experience, if their attitude doesn’t match what is needed to enhance and invigorate the organisation, AI will not catch this.

Ensuring that employees have human management and individuals and teams they can turn to for support is key to retaining a nourished, productive, satisfied workforce. A recent survey of US workers showed that 37% think AI will equally help and hurt them in the workplace, while 11% said it will hurt more than help.

As with any new technology, there are pros and cons to the use of AI in the world of HR. HR professionals are both helped and, in some ways, hindered by the popularity and wide usage of AI. But with all the discussion around the positives and negatives of this one thing is for certain: AI is here to stay.

Is your organisation seeking support with your international HR needs? Contact our team today and speak to one of our experts about how Mauve Group can help.