BIRLA INSTITUTE OF TECHNOLOGY, MESRA

“The IMPACT OF ARTIFICIAL INTELLIGENCE IN HUMAN RESOURCE

MANAGEMENT”

MRS. RIYA KUMARI – Student, department of management, Birla Institute of Technology, Mesra,
(Deemed University) Ranchi.

Abstract

This research delves into the evolving landscape of Human Resource Management (HRM) in
the wake of Artificial Intelligence (AI) advancements. Employing exploratory methods and
drawing from secondary data, it scrutinizes the multifaceted impact of AI on HRM practices.
The study identifies opportunities for AI to streamline HR processes, from talent
management to performance tracking, yet also underscores the challenges inherent in this
integration.

Central to this discussion is the imperative for HR to navigate the delicate balance between
AI augmentation and human-centric practices. While AI presents unprecedented potential for
efficiency gains, it also necessitates careful consideration of its implications for workforce
dynamics and organizational culture.

Moreover, the research underscores the critical role of HR in driving organizational readiness
for AI adoption. This entails not only technical integration but also comprehensive strategies
for upskilling and reskilling the workforce to collaborate effectively with AI and robotics.

In essence, the study underscores the pivotal moment at which HR finds itself—an era
defined by the convergence of human ingenuity and technological innovation. It advocates
for a nuanced approach that embraces AI's transformative potential while prioritizing the
human element in HRM practices.
Keywords:

Artificial Intelligence (Al), Machine Learning (ML), Human Resource Management,

Digitization of HR, future of HR.

INTRODUCTION

Intelligence, encompassing reasoning, problem-solving, and knowledge application, is a

hallmark of both human cognition and Artificial Intelligence (AI). The premise of AI lies in
replicating human-like intelligence in machines, enabling them to perform tasks efficiently
and effectively. Machine Learning (ML), a subset of AI, focuses on computer algorithms
improving autonomously through practice.

Technology has permeated every aspect of human life, enhancing systems' effectiveness and
making lives more comfortable and secure. In the realm of computer science, particularly AI,
the focus is on developing intelligent machines that emulate human cognition. ML, a critical
component of AI, enables computers to understand data, identify patterns, and make
predictions autonomously.

AI technologies, including ML, offer significant opportunities to revolutionize various HR

functions. From self-service transactions to talent acquisition and payroll management, AI
streamlines processes enhances decision-making, and improves overall employee
experiences. Human resources executives increasingly recognize the potential of AI to
optimize HR administration, freeing up time and resources for strategic people management.

Despite the potential benefits, the adoption of AI in HR has been relatively slow. Financial
barriers often impede the widespread implementation of AI tools for HR administrative tasks.
Additionally, concerns about data privacy, security, and ethical implications contribute to
hesitancy in adopting AI technologies.

However, as organizations strive for operational efficiency and transformational value, the
role of AI in HR becomes increasingly indispensable. AI's ability to automate routine tasks,
analyze vast amounts of HR data, and provide actionable insights empowers HR
professionals to make more informed decisions and drive organizational success.

In summary, while the adoption of AI in HR may face challenges, its potential to

revolutionize HR practices and improve employee experiences is undeniable. As
organizations navigate the complexities of integrating AI technologies, strategic investment,
and thoughtful implementation are key to unlocking the full potential of AI in HR.

Objectives:

The study aims to achieve the following objectives:

1) To gain an understanding of how artificial intelligence will impact human resource
management.
2) To understand the ways in which AI can assist in various functions of HRM.
3) To comprehend the limitations of AI in HRM functions.

 The literature review

The literature review provides insights into the impact of artificial intelligence (AI) on human
resource management (HRM) from various authors and studies.

Scott W. O’Connor (2020) emphasizes that AI will continue to positively influence HRM,
but professionals need to be aware of the challenges ahead. To prepare for the future, HR
practitioners should stay updated on current trends and build a strong foundation of HR
knowledge.

Prasanna Vatsa and Kusuma Gullamjji (2019) highlight that integrating AI with HR
practices enhances organizational performance significantly. Although AI is pervasive in HR
functions like recruitment, training, and performance analysis, cost remains a barrier for some
organizations.
Jennifer Johansson and Senja Herranen (2019) note the novelty of AI in recruitment and
the slow adoption across all recruitment processes. While AI offers benefits like speed and
quality improvement, challenges remain in companies' readiness for new technologies.

Albert Christopher (2019) underscores AI's potential to boost employee productivity

through analysis, prediction, and addressing employee needs. However, challenges such as
privacy concerns, talent gaps, and integration issues must be managed carefully.

Barbara van Pay (2018) emphasizes organizations' growing interest in AI solutions for HR
tasks, particularly in recruitment. AI streamlines candidate screening and interviewing
processes, reducing recruitment timelines and aiding in hiring the right candidates efficiently.

Anupam Jauhari (2017) discusses AI and machine learning's impact on HR practices,

highlighting their increasing relevance. Chatbots and AI technology simplify recruitment
tasks, with a significant percentage of companies ready to deploy digital tools.

Edge Admin (2017) acknowledges AI's groundbreaking role across various sectors globally,
including India. Many Indian startups are integrating AI into their business operations to
remain competitive and visible in the market.

Overall, the literature underscores AI's potential to transform HRM positively, but
challenges such as cost, readiness, and ethical considerations must be addressed for
successful integration.

 AI IN WORKPLACE

Artificial intelligence is increasingly gaining importance in the workplace, enabling the

completion of arduous tasks with a single touch on the panel. According to Oracle's
Workplace Global Report, the usage of AI in offices has surged to about 50% in the present
day from 32% in 2018. Digital assistants have become a valuable tool for employees,
providing them with the ability to have natural-language conversations and receive
immediate responses to their inquiries. Digital assistants also aid in the onboarding process
for new hires and assist employees in finding information without having to search through
files or delve deeply into personal data. To understand natural language and user intent,
digital assistants rely on machine learning algorithms.

 Al and HR challenges:

Continuous expansion and growth are crucial for every establishment, requiring a steady
supply of human capital.
 Human resources are vital assets that contribute to a company's growth, market share,
and longevity.
 Recruiting, selecting, training, and placing human capital are essential processes for
companies.
 The hiring process is time-consuming, with an average of 26 days to fill a position,
often prolonged by candidate screening and decision delays.
 White-collar occupations experience particularly lengthy hiring processes.
 Job interviews are criticized as routine, ineffective, and biased by industry experts like
John Sullivan.
 Traditional hiring and training approaches are no longer sufficient, especially with the
rapid changes in technology.
 Technology is forecasted to both eliminate 75 million jobs and create 123 million new
ones by 2022, requiring employees to adapt through upskilling and re-skilling.
 Upskilling and re-skilling have become essential to bridge organizational skill gaps
resulting from technological advancements.
 Artificial intelligence (AI) can aid in addressing these HR challenges effectively.
  How Al can help in recruitment:

1. AI facilitates the recruitment process by comparing candidates' skills and experiences

with job requirements, aiding in identifying the best-fit applicants from a pool of
hopefuls.
2. It enables job seekers to find suitable positions by promptly alerting them whenever a
job opening that matches their qualifications becomes available online.
3. AI-driven candidate matching utilizes HR data to assess an applicant's likelihood of
job retention, project duration, and expected performance in the role.
4. In the hiring process, AI allows candidates to reschedule interviews, choose
convenient times and locations, share notes, and recommend additional resources for
further research. Additionally, manager’s benefit from AI's capability to remind
candidates of upcoming interviews and compile a list of potential candidates based on
their credentials. Moreover, AI can gather information from current employees and
formulate queries accordingly, communicating with applicants through various
channels and providing them with necessary information as needed.

 How AI can help in the Selection Process:

AI can enhance the selection process through the following methods:

1. Utilizing AI to compare the qualifications of top candidates with current top
performers and the job description can streamline the selection process.
2. Employing AI to compare compensation data from companies offering similar job
roles can assist in crafting personalized job offers for individual candidates.
3. Leveraging AI to analyze a candidate's past responses to job offers and predicting
their likelihood of accepting a specific offer can increase the effectiveness of selection
processes.

 How Al can help in onboarding:

Onboarding is crucial for integrating new employees into an organization and maintaining a
positive brand reputation.
Effective onboarding ensures that employees feel welcomed and supported, reducing the
likelihood of them leaving the company prematurely.
Studies indicate that 40% of employees leave their jobs within the first year, with 75% of
resignations preventable through effective, personalized, and prompt onboarding.
The cost of turnover, including onboarding, training, and lost productivity, can be significant,
ranging from 100 to 300 percent of an employee's compensation.
Organizations typically spend around 20% of an employee's salary on rehiring.
AI can streamline the onboarding process by automating the distribution and collection of
official documents, company policies, manuals, and login information, reducing
administrative burdens.
Digital assistants powered by AI can provide round-the-clock assistance, guiding new
employees through organizational protocols, best practices, and shortcuts to effective
productivity.
AI can track document readings, capture electronic signatures, and minimize the need for HR
follow-ups, enhancing efficiency in the onboarding process.

 How AI can help in Talent Management:

Talent management is a significant concern for employers globally, particularly in retaining

and satisfying employees across multiple generations.
Retention becomes challenging when employees feel their talents are underutilized, leading
to increased attrition rates.
AI can assist in talent management by gathering data on employees' needs and aspirations in
their current roles, thus improving retention rates.
AI technology can facilitate succession planning, address skill shortages, and support career
development initiatives within the organization.
It enables the creation of equitable compensation structures that meet employees' financial
expectations, potentially providing a competitive advantage.
Individualized guidance on professional growth and recommended training courses can be
offered by AI, enhancing employee value and contributing to the company's growth.
AI can identify precise learning objectives tailored to individual and managerial levels to
address present and future skill gaps effectively.
Despite strong retention efforts, some employees may still leave due to retirement or illness.
In such cases, AI can match open job roles with personnel records to swiftly fill the resulting
gaps.

 How Al can help in Performance Management:

A global survey of HR managers reveals that 92% of firms plan to integrate AI into their
operations in the near future, with various processes being streamlined accordingly.
The top five anticipated uses of AI, along with their predicted utilization rates, are:
1. Performance management (43%)
2. Payroll and benefits administration (42%)
3. Recruitment and hiring (42%)
4. Onboarding new employees (40%)
5. Employee records management (39%)
IDC's Future of Work Research 2022 suggests that 80% of HR managers will leverage AI
and machine learning (ML) for hiring, firing, and training by 2024, across approximately
60% of the global organizations surveyed.
In 2020, reports indicated that Amazon utilized machine learning for employee terminations.
Stack ranking, an AI-enabled process, compares employees' performance against each other,
recommending additional training, managerial intervention, or termination for the lowest-
performing 10%.

Limitations of AI in HR function:
Stephen Hawking warned of the uncertainty surrounding AI, whether it will be beneficial,
ignored, or potentially destructive, making it a significant concern for humanity's future.
Limitations of AI in HR functions include:
1. A single coding error can lead to misinterpretations of employee behavior, causing
dissatisfaction.
2. While AI excels in data analysis and decision-making recommendations, aspects like
corporate culture and values require human input.
3. Chatbots, while effective, pose cybersecurity risks due to retaining sensitive employee
data.
4. AI may struggle to recognize essential traits like enthusiasm and emotional intelligence
crucial for a positive workplace culture.
5. AI relies on human input and coded programs, leading to biased outcomes if inputs are
biased.
6. Algorithms used by AI in candidate selection can be tricked by candidates familiar with
AI processes, influencing outcomes.
7. Deployment of AI incurs significant expenses for software and hardware.
8. While AI can generate content, it lacks the human touch and creativity.
9. AI lacks ethics and morality inherent to human values, which cannot be incorporated
into its operation.
 Conclusion:

 Artificial intelligence (AI) is revolutionizing complex HRM processes, including

talent management, staff development, employee assessments, benefits allocation,
selection, engagement, and performance tracking.
 HR managers face the decision of how much technology, particularly AI, to
incorporate into their departments.
 Predictions suggest that AI may eventually replace crucial HR functions due to its
error-free and rapid responses, but conflicting views argue that AI cannot replace the
valuable input of human HR abilities.
 With the integration of AI and HR, it's essential for HR managers to determine the
extent of AI's influence on HR processes.
 Clear delineation of tasks controlled by AI versus those managed by HR is crucial,
ensuring that AI enhances HR functions rather than supplanting them entirely.
 Integration of AI with HR should be pursued, but both functional areas must have
clearly defined roles to prevent the overshadowing of human functions by technology.
 REFERENCES

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