AI in HR

The future of human resources management looks to be heavily driven by AI. AI in HR statistics and trends have proven this to be the case. With an estimated value of USD 3.89 billion in 2022, going up to USD 17.61 billion by 2027, the HR market for AI is rising rapidly with a CAGR (Compound Annual Growth Rate) of 35.26%. 

In addition, 66% of CEOs are confident that artificial intelligence can bring great benefit to the HR field – that could mean anything from automatic recommendations for improved hiring practices to better forecasts on workforce growth. 

AI is proving itself a real game-changer in HR, with the promise for much greater efficiency during the decision-making process.

AI in HR Statistics

  • According to 64% of HR professionals, their companies’ automation or AI tools automatically screen out unqualified candidates.
  • 85%of employers using automation or AI say it saves time or improves efficiency.
  • Automation and AI are used by 16% of employers with fewer than 100 workers and 42% of those with 5,000 or more.
  • In five years, 25% of companies will use automation or AI in recruitment and hiring.
  • 66% of CEOs think AI can boost HR.
  • 50% of HR executives agree that AI can transform HR.
  • 92% of HR leaders plan on using AI to acquire talent.
  • Intelligent AI mechanisms can quickly screen out 75% of applicants via scanning, reading, and evaluating their resumes.
  • The AI HR market is expected to grow 35.26% from USD 3.89 Bn in 2022 to USD 17.61 Bn in 2027.

Source: (SHRM, ZoomInfo, EightFold AI, Research and Markets)

The field of HR is no stranger to technology-based processes, but in recent years a major trend has been the shift from rule-based systems to those based on machine learning. 

This means that instead of relying on the same set of rules to handle hiring, training and more, organizations can focus on personalizing their HR processes. 

With the help of AI-powered technology, employers can focus more closely on things like diversity and inclusion in their hiring practices, which may not have previously been possible with traditional rule-based systems in place. 

It’s an exciting shift that promises to provide more efficient and effective methods for organizations to manage their human resources.

Future of AI in HR

Let’s explore how AI is changing the HR landscape and what potential challenges may arise from its adoption.

Future of AI in HR

Advancements in Natural Language Processing

Natural language processing (NLP) is one of the most popular uses of AI technology in HR departments today. 

NLP is a form of artificial intelligence used to interpret and understand human languages by analyzing text data. 

With NLP, HR departments are able to quickly extract job-related keywords from resumes or CVs submitted by applicants so they can accurately match them with relevant job openings. 

This saves HR professionals a lot of time in manually reviewing applications and helps reduce recruitment costs.

Increased Use of AI in Employee Training and Development

AI technologies are also being used to improve employee training programs. 

For example, companies are using AI-powered virtual assistants or chatbots to provide employees with personalized learning experiences as well as help them stay up-to-date on company policies or regulations. 

These chatbots have grown in popularity due to their capacity to instantly answer basic questions without the need for human intervention.

Additionally, some companies are using sentiment analysis – a type of AI technology that analyzes customer feedback – to better understand customer sentiment about their brand or products so they can adjust their training programs accordingly.

Potential Challenges to Adopting AI in HR

While there are many potential benefits for adopting AI technologies in an HR department, there are also some potential challenges that come along with it as well. 

One major challenge is privacy concerns; since most AI systems require access to confidential data such as employee information or performance reviews, there must be safeguards in place to protect this data from unauthorized access or misuse.

Some people may be wary about relying on automated systems for decision making since these systems don’t have the same level of judgment or empathy as humans do when it comes to dealing with sensitive matters such as hiring decisions or disciplinary actions. 

There is always the possibility that data collected by these technologies will be exploited or misconstrued if not carefully handled and monitored by skilled employees inside a business.


What is the positive impact of AI on HR?

According to UNext, AI can have a significant impact on the HR department of any organization. By streamlining automated processes, AI can significantly improve productivity and reduce operational costs. 

It can also reduce the amount of time spent on mundane tasks and provide more flexibility in organizing workflow within the team. Employers can gain a better insight into employee performance as well as use AI for recruitment and onboarding new staff quickly and effectively. 

Artificial intelligence plays a key role in optimizing HR departments and helping them work more efficiently.

How is AI being used in HR?

According to Oracle’s recent study ‘AI in Human Resources: The Time is Now’, AI can alert the right people to available jobs even before they are posted. 

Furthermore, AI-based candidate matching uses HR data to project a potential recruit’s likelihood of accepting an offer – as well as their projected performance outcomes and expected tenure. 

AI sends employers better suggestions on who should be hired for each job opening. Therefore, AI has certainly made the labor market easier and more cost effective for companies that want to find the right fit for their roles.

What is the risk of AI in HR?

Traditionally, the human resources (HR) department has been staffed with people, but the process of hiring and managing them is increasingly giving way to artificial intelligence (AI). 

This shift raises questions about how AI should be used in this space without introducing new legal risks. 

According to Brett Farmiloe, the Founder and CEO of shrm, “the use of AI in HR carries with it a significant legal risk,” because there has been an uptick in lawsuits related to algorithmic bias, screening, hiring and discrimination in recent years. 

As a result, any employer utilizing AI in HR must have a plan to properly address these concerns as they arise. 

Companies must be careful when building AI-driven HR systems, or they could face serious consequences if they don’t follow the rules.

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