AI in HR: How AI powers the future of human resources

As Artificial Intelligence (AI) becomes more integrated into business workflows, it’s critical for HR professionals to understand how it works and how it can support HR practices. This guide will help you understand how to harness the full potential of AI in HR – and how to keep up with an increasingly digital-first workforce and workplace.

What is AI in HR?

AI in HR refers to the use of artificial intelligence technologies, such as machine learning and natural language processing, to help HR teams perform their jobs more efficiently. AI tools can process vast amounts of data quickly to find patterns, make calculations, and trigger specified actions.

At the heart of any AI tool is an algorithm, a sequence of mathematical formulas that instructs the model on what to do and the kind of outputs to produce. These algorithms make it possible for AI tools to perform complex tasks.

Giving your HR team access to AI tools can empower them to work more efficiently, execute complex tasks faster, and improve and customize the employee experience. For example, HR professionals can use AI to better understand employee sentiment. Rather than reading through thousands of pieces of employee commentary, HR leaders can use AI-generated summaries supported by specific quotes and reference points to get a data-backed overview of the employee experience.

Why AI matters for HR professionals

McKinsey has found that employees are ready for AI now – they are three times more likely than leaders realize to use AI in their daily work. In fact, Aon found that nearly 400 HR professionals said the areas of people analytics, talent recruitment, and learning and development would benefit the most from AI tools.

Many organizations struggle with the sheer volume of employee data available to them, which can make it challenging for them to process and analyze it all. Analyzing qualitative data can be time-consuming, but AI has the potential to change that.

With the support of AI technology, HR professionals can manage complex processes more effectively. This enables them to unlock higher levels of performance and engagement, while improving how they motivate and retain talent.

If HR teams can use AI tools to safely and better manage their workloads, they may have more time to focus on creating a thriving workplace – and that benefits everyone. A positive workplace culture is associated with better business performance: A FTSE Russell study found that companies that make the Fortune 100 Best Companies to Work For® list outperform the market by a factor of 3.68. Furthermore, Culture Amp’s people scientists have found that investing in culture and employee experience is positively associated with higher company stock prices.

Why manual processes can’t keep up

Many companies now consider AI a necessity for organizational success. If your HR team isn’t using AI tools, it’s a good time to consider how AI could help you achieve results.

For instance, chatbots that are run by AI can respond to routine employee inquiries and recommend the right resources based on their prompts. This frees up HR team members to focus on more strategic tasks, such as skills planning to futureproof the organization. It’s important to note that AI in HR isn’t intended to replace the work of humans. Rather, it’s a tool that your employees can use to access insights, coaching, and assistance in the moment, setting them up to take action with clarity and confidence.

Take leadership development, for example. Today’s managers are responsible for empowering, mentoring, and leading their teams while balancing the needs of higher-ups. Managers need support, and tools like AI Coach allow HR teams to deliver science-backed coaching to every manager in your business. In fact, Culture Amp’s AI Coach helps managers quickly find answers, overcome common challenges, and build action plans. AI-enabled tools like this can strengthen managers’ performance and improve strategic outcomes.

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Real-world benefits of AI in HR

When HR professionals successfully integrate AI capabilities into their day-to-day work, it can lead to some exciting benefits. For example, Culture Amp customers can leverage AI to help them identify performance drivers, prioritize critical engagement trends, and act on insights faster through our Engage and AI Coach products.

Below are a few other general applications of AI in HR. Please note that these are intended as a general guide on the benefits of AI and Culture Amp doesn’t provide all of these capabilities. You can learn more about Culture Amp AI here.

• Talent acquisition: Recruiting and hiring new employees can be a time-consuming process, but talent acquisition professionals can move from action to outcomes faster using AI tools. AI-enabled software can help them sift through large applicant pools and resumes, guide candidates efficiently through the recruitment funnel, and improve candidate engagement.
• Employee onboarding: You can leverage AI to automate certain repetitive administrative tasks, such as document completion and scheduling, and provide real-time support to new employees via chatbots. AI tools can also play a key role in personalizing the onboarding experience. Based on the employee’s job role, departmental goals, and work experience, the AI can curate the ideal onboarding and learning experience to set them up for success on their particular career journey at your organization.
• Employee engagement and retention: Culture Amp research shows that instilling a company culture of engagement can help keep people on board and committed to your company. A key way to drive retention through employee engagement is to leverage surveys and then take action based on the employee feedback you gather.
  
  HR teams can use AI tools to quickly summarize thousands of survey comments into clear sentiment, topics, and trends, enabling faster and more targeted decision-making. AI-enabled survey tools can create customized views of your data. For example, you could ask the tool to highlight how engagement drivers vary across teams, so that you can act on what matters most to each group.
• Continuous performance management: Distilling large volumes of performance feedback into clear, actionable reviews takes time and effort. But with AI-generated summaries, your managers and HR professionals can access a quick, accurate overview of employee performance based on feedback and goals. Managers can also use AI tools to craft feedback for employees that's specific, balanced, and drives meaningful development.

The importance of AI in HR analytics

According to Bersin research, companies that excel at transforming people analytics into a systemic business analytics practice are:

• 3x as likely to have high workforce productivity
• 4x as likely to engage and retain employees
• 3x as likely to exceed financial targets

Today, companies have access to so much data, it can feel endless. Combining AI with people analytics empowers HR teams to quickly surface valuable insights from their people data. AI does the heavy lifting of processing these large data sets, including performance reviews, promotion trajectories, and employee skills, to provide clear analyses that help HR leaders decide on the best course of action.

“What’s amazing about this technology is its increasing ability to translate information and data into natural language for folks with different levels of data maturity,” said Stacia Garr, Co-founder and Principal Analyst at Red Thread Research, at Culture First Global.

Platforms like Culture Amp are leveraging AI to make people analytics even easier to use. Culture Amp’s Explore Data feature is an AI-powered tool that enables HR professionals to provide self-serve analytics to anyone in the business. With Explore Data, they can simply ask their questions using simple, conversational language, such as “What is the turnover rate for the engineering department?” and get answers back in real-time that are easy to interpret.

How to integrate AI into your HR strategy

While AI can support HR’s efforts, it’s critical that HR teams take the time to bring the right AI technology into their organization and develop a thoughtful strategy for safely implementing it. Here are some suggestions as to how you can effectively integrate AI tools into your workflow:

1. Identify your starting point

Aim for a phased approach to test and introduce AI tools into your workflows. For example, you might consider pilot projects where a specific AI tool can have an immediate impact, such as tailoring each new hire’s onboarding journey or enhancing your people analytics program so HR and business leaders can access self-serve insights whenever they need them.

2. Choose the right AI tools

When selecting AI applications for your company, consider your current and future organizational and departmental goals – and whether your team could leverage AI to work faster and smarter.

For more data as you make this decision, use Culture Amp surveys to gather qualitative feedback from employees. Culture Amp includes questions about AI topics to help organizations get a baseline understanding of AI usage and where employees believe it can have the most impact.

As you evaluate different AI tools, prioritize data security and privacy, ease of integration with your existing systems, user-friendliness, and the availability of customer support and training resources. It’s also a good idea to ask vendors for a proof of concept so you can test whether the system will add value to your business.

3. Get executive buy-in

Executives are looking for technology investments that will have a positive impact on financial performance or support the success of a particular strategy. As you enter your AI journey, work with your executive sponsors to determine which pilot project could have the most value for both your workforce and the business, and keep them informed as you move forward.

4. Train and upskill your team

Invest in training and change management upfront to help your team see the value of your chosen AI solutions. Help them understand how these tools will augment their role and empower them to drive organizational success in a new way.

AI is a topic that often sparks emotions – both positive and negative – in people. To keep your team aligned, encourage employees to voice their questions or concerns so you can address them together.

Give your employees opportunities to test AI tools in a real-life scenario. Hands-on experience can transform AI from a theoretical construct into a key part of your team’s processes.

5. Make responsible AI a priority

AI tools don’t change what we do, but they can change how we do it. One thing that hasn’t changed: It’s still essential to protect employee’s private information. Before implementing AI tools at your company, understand the privacy risks – and train employees on how to use these tools safely and securely.

“Responsible AI is really important, especially when we're dealing with human outcomes, in terms of privacy, trust, control, and also accuracy. It's not as easy as grabbing a whole bunch of people data, slapping everything into…your own private generative AI instance, and hope it's gonna work,” says Culture Amp’s Chief People Officer Justin Angsuwat.

At Culture Amp, all of our AI features are designed to augment human capabilities and decision-making, not replace it. We make users aware of their interaction with AI either via consent landing pages, AI disclosures, or through visual icons and written prompts. It’s important that users always know when they’re using an AI tool and what steps they need to take in reviewing AI-generated content.

Transform your HR team with Culture Amp AI

At Culture Amp, we believe AI is a transformative technology, poised to fundamentally reshape the world of work. Developed by experts in organizational psychology and machine learning, Culture Amp AI draws on 1.3 billion data points gathered over a decade of research into the world’s top-performing teams to help HR teams accelerate high performance, improve efficiency, and drive action.

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