How AI Empowers the HR Industry
To say that the AI industry is growing rapidly would be an understatement! According to Next Move Strategy Consulting, the global AI market grows from a value of $95.60 billion in 2021 to a projected value of $1,847.58 billion by 2030, a CAGR of 32.9% between 2022 and 2030. Of course, AI in HR is nothing new. While ChatGPT and its ilk have taken the world by storm since late 2022, recruiters have been using AI to overcome inefficiencies and delays in the talent acquisition process for years.
Oracle’s 2019 Guide to AI in Human Resources [1] reported that 50% of workers already currently use some form of AI at work, a jump from 32% the previous year. It’s not new, but AI is becoming more mainstream, better understood, and more useful due to its growing variety of applications.
Benefits of AI in HR: Risk Mitigation and Security
AI in modern HR solutions can deliver a wide range of efficiencies and improvements. It can handle time-consuming and repetitive tasks, from answering staff questions about leave entitlements or training programs to expediting payroll operations. The use of AI in HR also has benefits in terms of risk mitigation and security. Fraud can occur in an organization from any angle these days, such as the fraud watch guide clearly indicates and reflects the need for real-time operational monitoring to detect and prevent fraud events.
HR systems, with their extensive access to employees’ personally identifiable information (ranging from social security numbers to banking details), are extremely attractive to fraudsters. As such, they require a robust layer of defense in any business. AI can help with this. The Society for Human Resource Management (SHRM) says AI anomaly detection can reveal even small deviations from what “normal” looks like for an HR system. This can indicate an emerging threat at an early stage and prompt the team to investigate and take appropriate action.
This can be particularly useful when HR teams are under pressure from other areas of the business. There will always be times when an organization is particularly vulnerable to fraud that creeps in unnoticed. For example, when an HR team helps a company to navigate change and may be distracted by the demands of doing so. With AI analyzing thousands of metrics in the background, no matter how distracting day-to-day operations, the team has a reliable system to flag any potential issues and instances of fraud.
Additional benefits of integrating AI-powered tools into HR processes
Integrating AI into HR enables professionals to efficiently analyze large amounts of data, automate routine tasks, and detect anomalies or potential security threats. It does this through advanced analytics, automation, and enhanced security protocols. This means that only those who should be able to access HR system data can do so, thanks to rigorous authorization and authentication standards put in place to ensure this.
The impact of these efficiencies and enhanced safeguards can be significant. Managing people can be an expensive business. According to the Scout Logic report, the costs of hiring [2] can average around $4,000, and that doesn’t factor in the cost of onboarding and training. Clearly, any cost savings that AI can deliver by introducing efficiencies into this process will be gratefully appreciated by hiring HR teams.
AI can then be an added benefit for existing staff teams, providing operational support via chatbots for employee queries, verifying salary details and payroll amounts, and tailoring personalized benefits to the individual needs of employees. Ranking stacks is another use, with AI analyzing employee performance across the company and flagging underperforming employees for additional training or other management intervention.
AI can also help reduce organizational bias, although the AI software itself must be audited for bias (by law in some regions) in terms of its use to filter resumes, recommend ranges /salary changes and suggest promotions. Under New York City Local Law 144, for example, starting July 5, 2023, companies can only use automated tools to hire candidates and promote employees if those tools have been independently audited. to detect any bias. If not, companies are prohibited from using them. This is all on top of the security and fraud-fighting benefits discussed above.
The path to organizational success
By mitigating risk and improving security, AI-based HR systems enable more informed decision-making. This can be a key factor in the success of the organization. HR teams are not the only ones to benefit. AI enables companies to innovate both within and across departments, leading to an autonomous, data-driven approach to operational decisions, alongside an enterprise-wide approach to security. business.
That said, it should be remembered that many security breaches are due to human error. This means that the use of AI in HR should always be accompanied by a strong staff training program covering everything from phishing protection to what account takeover fraud entails and how to spot it.
Attention also needs to be paid to how AI systems are trained. Machine learning means that these systems have the potential to continually evolve, making them more useful to a business over time. However, it also requires an upfront investment of time to ensure that the AI system learns what normal looks like in the unique context of an individual organization. The more AI understands what “normalcy” is, the more accurately it can flag deviations from that normalcy, helping to catch potential fraud events and other anomalies as early as possible.
Conclusion
The use of AI in HR is still evolving, as is the use of AI in many industries. According to Market Research, generative AI has a big role to play in the future of the HR market. Worth $413.1 Million in 2022, it is expected to grow at a CAGR of 15.4% till 2032, which means the Generative AI in HR market size would reach a value of $1699.3 million. [3].
The references
[2] What is the average cost per hire in 2023?
[3] Generative AI in HR Market Size, Share & Trends | Forecast 2032