Digital HR solutions are disrupting almost every HR management practice, from how companies measure and improve turnover, retention, and employee attrition, to talent acquisition and recruitment.
On the one hand, typical digital HR solutions like technology-enabled mobility and remote-work arrangements are changing how, when and where employees work. On the other, data analytics and artificial intelligence (AI) in HR are changing how HR managers and leadership team analyze current employees, measure employee performance, and tackle talent acquisition. In addition, digital transformation technologies bring new challenges as HR management help employees and their organizations adapt to changes.
In IBM’s 2017 survey of 6,000 senior HR executives, CEOs and employees, 66% of CEOs believe cognitive computing can drive significant value in HR. In a 2017 survey conducted by the Canadian Human Resources Professionals Association (HRPA), 84% of its members said they believe that artificial intelligence in HR is a useful tool for human resources professionals.
Let’s look at the four main ways AI-driven digital HR practices is changing human resources management:
AI in HR reduces the administrative burden
Artificial intelligence in HR saves time by automating repetitive, low-value-added tasks, allowing HR to focus on more strategic, value-added tasks, like mentoring and continuous feedback.
Time-consuming tasks—such as scanning resumes, scheduling interviews, and to even selecting a candidate—can be done quickly and efficiently thanks to AI-driven HR solutions. Other benefits of digital HR practices like information security and reduced human error are two more reasons that HR departments are adopting digital transformation office practices.
By reducing their administrative burden, HR employees can tackle more purposeful and challenging tasks, which will increase their level of motivation and engagement. For organizations, the upside is an overall increase in the productivity of their HR teams, in particular, and their employees, in general.
Human error can cause a lot of unnecessary challenges to the organization. Loss of personal employee data can result in legal troubles and compromise data security and confidentiality. Automation reduces the risk of human error and ensures employee data is properly safeguarded.
AI in HR bolsters recruitment and talent acquisition efforts
Recruitment is one of the HR functions where there is a strong consensus regarding the benefits of AI. For example, AI-powered technology can screen candidates, analyze their resumes, and score them based on certain data parameters. It can help HR managers to narrow down a pool of candidates to select the one with the greatest potential for success in their organization, streamlining hiring decision-making processes.
From the very start of the recruitment process, AI-powered assistants (also known as chatbots) can take care of the initial grunt work, ensuring candidates complete the application process, handle follow-up tasks with candidates, and answer their queries quickly and efficiently.
It is likely that as employers increasingly use AI to recruit talent for their organizations, potential candidates will also seek out companies that are AI-enabled and digitally connected, creating a virtuous circle.
AI in HR reduces bias in the recruitment and hiring process
No matter how much a person tries to remain unbiased and impartial, there is almost always a certain amount of unconscious bias, i.e., social stereotypes about certain groups of people that individuals form outside their own conscious awareness. Reducing biases that affect hiring decisions and wage negotiations is one of the key pain points in human resources management. Even strict anti-discrimination laws cannot completely eradicate unconscious bias.
AI introduces merit assessments based on algorithms and data-driven insights, not an individual recruiter’s personal opinions or “feelings”. Some companies are also using AI tools to reduce specific biases pertaining to race, gender, and LGBTQ candidates. Digital transformation technologies like automation and artificial intelligence recruitment practices ensure that every resume is analyzed thoroughly and without explicit bias (assuming any explicit bias has been removed from the algorithms used).
HRPA recommends that HR professionals leverage AI applications to reduce biased language in job postings and unconscious bias in the hiring process, all while understanding AI is not entirely objective.
AI in HR improves retention
One of the biggest pain points for HR managers is driving internal mobility and, as a result, improving employee retention. The loss of an employee can cost a company up to 200% of the individual’s annual salary, making retention a top priority for most organizations.
There is no question that the threat is real. An IBM study conducted in 2018, entitled “Should I stay or should I go? Global insights into employees’ decisions to leave their jobs,” 46% of the 22,000 employees surveyed said they would consider a better job opportunity even if they weren’t actively looking, citing “better career development opportunities,” as the main reason they would consider a new job opportunity. (Results varied slightly by generations with 74% of Millennials, 68% of Generation Xers and just 54% of Baby Boomers.)
There are several ways in which AI can address attrition and retention. The first is by identifying employees who are at risk of leaving the company. Another is using AI-powered technology to determine what skills are in demand in an organization or where the in-house demand is originating, at the same time, offering personalized recommendations to employees to advance their careers by developing needed skills or applying for a promotion based on their existing skillset. Organizations can create predictive models of the skills they’ll need as they grow and match employees with them.
By improving their in-house promotion processes based on mobility opportunities within the organization, companies can reduce spending on hiring and retain talent that might otherwise leave.
Another critical area where AI-power technology can empower organizations to retain employees, and reduce employee turnover is recognition.
The same IBM study highlights: “Positive employee experiences and high engagement are linked to fewer new job searches.” The study’s findings back up the claim: engaged employees were five times less likely to be searching for a new job (6% vs. 33%).
Employee experience platforms like StarMeUp make it possible for employees and managers to exchange feedback and ideas, driving engagement at every level of the organization. It provides AI-powered data analytics to assess employee adherence to initiatives like a career development program. Above all, platforms like StarMeUp empower leadership, managers, and employees to create positive workplace experiences from within the organization.
The HR digital transformation office
AI-powered technology is proving itself to be an effective solution to address HR pain points. It has already begun to generate results, and as more and more solutions emerge, it is clear that digital HR practices are a reality that will only continue to evolve and spread.
A change of mindset from within the HR organization is the first step toward creating a digital transformation of HR. It is a groundbreaking opportunity for HR to accompany their organization’s digital transformation to the next level.