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Artificial Intelligence in Plain English

Business Breakthrough
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Jan 16

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ARTIFICIAL INTELLIGENCE IN HUMAN RESOURCES


ADVANTAGES AND CHALLENGES



Artificial Intelligence (AI) is becoming increasingly prevalent in the field of
Human Resources (HR) as it offers a range of advantages that can improve the way
businesses operate.

From increased efficiency to improved decision-making, better employee
engagement and retention, and cost savings, AI is providing new opportunities
for HR professionals to streamline their processes and drive success (Workday,
2020).

However, it’s important to note that while these advantages are significant,
they come with challenges as well. By understanding both the benefits and
challenges of AI in HR, businesses can make informed decisions about how to best
implement and utilize the technology (Budhwar et. al., 2022).

In this article, we will explore some of the advantages and challenges of AI in
HR and discuss how organizations can mitigate the risks and ensure that their AI
systems are fair, responsible, and compliant with the law.


ADVANTAGES OF AI IN HR

From increased efficiency to improved decision-making, better employee
engagement and retention, and cost savings, AI is providing new opportunities
for HR professionals to streamline their processes and drive success (Votto et.
al., 2021).

In this section, we will explore some of the key advantages of AI in HR and how
these benefits can positively impact an organization’s operations and outcomes.


A. INCREASED EFFICIENCY

AI can automate repetitive and time-consuming tasks, such as resume screening
and scheduling interviews, allowing HR professionals to focus on more strategic
and value-added activities (Chen, 2022).


B. IMPROVED DECISION-MAKING

AI can analyze large amounts of data and identify patterns, trends, and insights
that can inform recruitment, hiring, and performance management decisions
(Forbes, 2021).


C. BETTER EMPLOYEE ENGAGEMENT AND RETENTION

AI can help improve employee engagement by providing personalized feedback and
coaching, as well as helping to identify and address employee satisfaction
issues (McKinsey, 2022).


D. COST SAVINGS

AI can help reduce costs by automating tasks and reducing the need for manual
labor, as well as by improving efficiency and productivity (IBM, 2023). In
addition, the use of AI can help to reduce the risk of errors and improve
compliance, further reducing the potential costs of HR-related issues (IBM,
2018).

Besides identifying major benefits, it’s important to also consider the
potential challenges that come with the implementation of AI technology. From
data privacy to bias, job loss, and legal compliance, organizations must take a
proactive approach to address these challenges to fully realize the potential
benefits of AI while minimizing its risks.


CHALLENGES OF AI IN HR

As Artificial Intelligence (AI) becomes more prevalent in Human Resources (HR)
practices, it brings with it a set of challenges that organizations must be
aware of and prepared to address. These challenges include data privacy, bias,
job loss, and legal compliance among others (Chevalier, 2022; ENAR, 2020;
European Commission, 2021; The White House, 2022).

From protecting sensitive employee data to preventing bias and ensuring legal
compliance, organizations must take a proactive approach to address the
challenges of AI in HR (EESC, 2021).

Organizations need to be aware of these challenges and take steps to address
them to fully realize the potential benefits of AI while minimizing its risks.


A. DATA PRIVACY

One of the main challenges of AI in HR is ensuring the protection of sensitive
employee data (Northeastern, 2023). As AI systems collect and process large
amounts of data, there is a risk that this data could be accessed, shared, or
misused without the employee’s consent (McKinsey, 2019). This can lead to
serious legal and reputational consequences for the organization (Chevalier,
2022).


B. BIAS

Another challenge of AI in HR is the risk of bias in the algorithms and
decision-making processes. AI systems can inadvertently perpetuate existing
biases, such as discrimination based on race, gender, or age, which can lead to
unfair and discriminatory treatment of employees (ENAR, 2020).


C. JOB LOSS

The use of AI in HR can lead to job loss as some of the tasks that were
previously done by humans are now being automated (Economic Times, 2021). This
can lead to concerns about the impact of AI on employment and the future of work
(The White House, 2022).


D. LEGAL COMPLIANCE

AI systems must comply with a variety of laws and regulations, such as data
protection, privacy, and non-discrimination laws (EDPS, 2022). Failure to comply
with these laws can lead to significant fines, penalties, and reputational
damage for the organization (European Commission, 2021).

Companies need to keep themselves updated with laws and regulations that apply
to AI-driven HR and ensure that their AI systems are compliant.



AI offers a range of advantages that can improve the way businesses operate in
the field of HR.

From increased efficiency to improved decision-making, better employee
engagement and retention, and cost savings, AI is providing new opportunities
for HR professionals.

However, organizations need to be aware of the potential challenges that come
with the implementation of AI technology and take a proactive approach to
address them.

From data privacy to bias, job loss, and legal compliance, organizations must
take steps to ensure that their AI systems are fair, responsible, and compliant
with the law.

By understanding both the benefits and challenges of AI in HR, businesses can
make informed decisions about how to best implement and utilize the technology
to drive success.



Thank you for reading this article. If you found the information presented
helpful and would like to stay updated on similar topics, please consider
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