The Ultimate Guide to HR Digital Transformation (Part #2) — The Role of Artificial Intelligence in Human Resources Management

December 14, 2020
by Damian Keane

In part #1 of The Ultimate Guide to HR Digital Transformation, I explored what digital transformation in human resources is. I also dug a bit deeper into why it’s important, and how your company can harness it to make some bottom-line-boosting changes.

What I didn’t mention there is that successful digital transformation in HR is highly dependent on technology. 

In the same way that technology improved marketing and sales, it’s now transforming human resources management.

And I’m not talking about any old tech here, either.

HR departments — long considered to be slow on the uptake when it comes to anything new — are now using sci-fi tech. With the help of artificial intelligence, Big Data, and machine learning, HR is reinventing decades old processes.

Before we dive into the business case for AI in human resource management, let’s get the definitions out of the way.


What is Artificial Intelligence?

AI is an intelligent machine capable of thinking like the best human… but better and all the time. It executes tasks that, until now, have been squarely in the human domain — learning and adapting, critical thinking, reasoning, problem-solving, and language processing. This leap was made possible by two underlying technologies - machine learning & deep learning.


What is Machine Learning?

Machine learning is a part of AI that allows algorithms to automatically learn from large datasets. Basically, the algorithm tries to come up with a set of rules or patterns which would allow the program to make predictions or decisions. For best results, human supervision is important because the data needs to be structured properly.

Machine learning in HR: Thanks to ML, HR software can be programmed to recognise anomalies (for example, drops in performance or engagement), run background checks on applicants (based on resumes of successful applicants), identify employees that are considering leaving (and suggest re-engagement activities), and more.


What is Deep Learning?

Deep learning is a more advanced branch of machine learning. Instead of relying on predefined patterns and data points, a DL algorithm makes use of a more complex machinery to identify relationships between various inputs. In a sense, it approaches data similarly to how a human would learn and draw conclusions. This makes it one of the most powerful techniques available to interpret complex data and make accurate predictions at scale.

Deep learning in HR: Thanks to DL, chatbot assistance will continue to improve (as software gets better at recognising language, context, and tone). This will allow delivery automation of various HR services. Additionally, learning recommendations will become more personalised for individual employees.


3 Reasons Behind Implementing AI in HR

Definition & Goals of DT in HR part 2-07

The ‘why’ behind AI in HR is three-fold and, unsurprisingly, it lines up with the business case for HR digital transformation.

And while it’s not a magic bullet that will obliterate all of the challenges that HR departments are faced with today, AI will make those departments more effective in dealing with them.

The three main business reasons for AI in HR are:

  1. Employee Experiencecompensation, benefits, and career stability are becoming increasingly less important to modern employees. What they want is excellent, differentiated employee experience (at least, 80% of them do). This experience encompasses everything from tailor-made onboarding to on-the-job assistance (for example, a voice-powered virtual assistant that answers work-related questions). AI-driven human resources software makes this possible.
  2. Data-driven insights at scaleright now, HR departments collect and analyse data automatically. And then they hit a bottleneck because that data is still interpreted by either data scientists or end-users. This creates delays in decision-making. With AI, those delays become the thing of the past. Thousands of resumes can be scanned, sorted, binned, or advanced within minutes. Performance reviews can be analysed, with recommendations for each individual employee produced instantly. In addition to expediency, two of the biggest benefits of this approach are unbiased data interpretation and reduction in human errors.
  3. Automating the boring bitsbut not really because they’re boring… more because they’re a) time-consuming, and b) software does them error-free. With AI, this automation can turn into intelligent automation. This means that even those processes that used to require human intervention can now be automated because the software will reach a valid, data-based decision.

The Impact of AI on 5 Major Areas of HR

Right now, there’s a lot of experimenting with artificial intelligence in human resources management. That’s a nice way of saying that we’re not still 100% certain where we’ll land with it all.


The same thing happened with sales and marketing when they were implementing their digitally-forward strategies and AI-driven solutions. A couple of minor setbacks. Some hiccups. But things eventually settled and, today, sales and marketing are infinitely better thanks to technology.

The same will happen in HR, sooner rather than later. 

In fact, HR digital transformation — powered by AI — is already impacting 5 crucial areas of HR, bringing an innovative and data-driven approach to stale, old processes.

  • AI in human capital management (HCM) — imagine an HCM solution that can figure out when to promote someone? Or how to create a bespoke onboarding roadmap for a specific role (schedule training sessions, initial meetings, or find the best onboarding buddy)? You don’t need to imagine too hard because we’re already there. Solutions such as Oracle HCM Cloud, Workday HCM, or SAP SuccessFactors already use AI to guide HR managers making these decisions. And these solutions will only get better the more they’re used and trained.
  • AI in recruitment — talent sourcing is one of those labour-intensive HR tasks that is slowly being taken over by AI-powered software. This software screens and categorises job requirements and then finds speciality recruits with a proven track record of delivering a specific subset of candidates. Other software excels at screening candidates and weeding out those not suited for the job. In the very near future, we’ll also be able to collect video interviews, analyse it with our AI-powered recruitment software, and then bring in only the best candidates for additional testing and conversation.
  • AI in benefits administration — AI can be of immense help when it comes to tailoring benefits plans to individual employees. It can take their personal circumstances, pre-existing conditions, and goals into consideration, and find the most cost-effective providers (of healthcare and retirement plans, for example). Also, chatbots and AI-driven virtual assistants help answer any questions employees might have about benefits (saving your HR team time responding to dozens of identical emails every week).

[Recommended reading: 5 Onboarding Tips for Increased Employee Engagement]

  • AI in learning and development — with the right AI-powered L&D platform, you have access to deeper analytics. This allows you to figure out which employees to train, for what, and when. Additionally, the whole process goes faster — meaningfully personalised content + augmented learning (VR) helps you re-skill and retrain employees at a fraction of the cost and the time.
  • AI in employee engagement — smarter employee engagement solutions are not reactive — they are proactive. With AI, you get to manage employee sentiment before it reaches a critical phase that affects motivation and performance. Things like intelligent surveys, real-time feedback, and personalised communication allow you to constantly keep your ear to the ground, and to figure out the real drivers of engagement in your organization.

[Recommended reading: The Ultimate Guide to Employee Engagement]


Next Steps — Plotting Your 6 Stages of HR Digital Transformation

Changing well-entrenched and decades old HR systems and processes doesn’t happen overnight. There are simply too many balls to juggle for this transformation to occur just because you’ve decided it’s time for it. 

But, with a plan, you can make it happen.

The name of that plan is the 6 stages of HR digital transformation. It allows you to break down HR tasks and processes, and reinvent them with a digitally-forward mindset. In my next post, I’ll take you through these six stages. What they are, what happens in each one, and how using AI-powered tech helps you reach your stage-specific goals.


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