Artificial intelligence offers opportunities and challenges for HR

Companies are quickly adopting new ways of creating and innovating using AI tools with the aim of becoming more efficient and profitable - and there could be lots of positive impacts for employers and workers if associated risks, which are increasingly understood, are anticipated and managed.

Although AI is a new technology, for HR professionals there is much familiar territory in the skills they can bring to bear to help make its implementation a success for the business and its workers. By adopting AI proactively, HR can drive efficiencies, reduce the need for mundane work and allow employees to focus on important and interesting issues.

How are HR professionals currently using AI?

Applying AI in the HR context involves using machine learning to make decisions about people. In a recent research briefing, researchers for the UK House of Commons Library describe AI as “technologies that enable computers to simulate elements of human intelligence, such as perception, learning and reasoning”.

The paper gives examples of ways in which AI is already being used by HR professionals:

• recruitment: devising job adverts, sourcing candidates, filtering CVs and scoring tests
• task allocation and performance management: scheduling shifts and evaluating worker performance
• surveillance and monitoring: looking at performance and health and safety

More widely, AI brings with it the potential for job roles to change or even to be replaced, with a significant impact on training and the skill sets required from a work force in the future. That said – and contrary to many headlines – the International Labour Organization has predicted that  ‘generative’ AI, such as ChatGPT, is likely to augment rather than destroy jobs.

Challenges and opportunities

The challenges of AI governance fall between different disciplines and will require the involvement of data specialists, commercial managers, procurement management and HR. An AI governance team should be established, and HR should definitely be part of that broader hub of expertise. HR involvement in implementing AI opportunities can maximise its positive impact on the business and its workers.

HR expertise in diversity, equality and inclusion (DE&I) can help the use of machine learning reduce the risk of human bias, but the decisions made using AI are only as good as the data being used to make those decisions. It is therefore crucial to consider what data is being used and how AI supported decisions are arrived at. Above all, decisions must be capable of explanation.

Input to data privacy implications of AI applications will also be needed to ensure the processing of personal data is lawful. Special considerations apply when automated decisions are made.

Industrial relations must also be considered, particularly where it is predicted that the use of AI will impact the skill sets, training needs and shape of an employer’s workforce. Engaging with trade unions or other worker representatives may facilitate implementation by increasing transparency around workforce impact, and especially if reassurances can be communicated around retraining and new job opportunities. Engagement with works councils is also required in some jurisdictions, such as Germany.

HR expertise on broader issues of workforce governance will also be valuable, especially as businesses may want to consider how AI opportunities fit into broader environmental, social and governance (ESG) strategies. HR should input into the business’ broader AI ethics policy development, helping to develop a set of values and principles which guide the development and use of AI systems.

This means that the HR team needs to embed its clear proposition of how the business wants to treat its workers into a broader framework of ethical values such as wellbeing and DE&I; and principles such as accountability and transparency. The business will already have an HR strategy which is aligned with its broader business strategy, values and purpose. HR should be clear as to how it wants to see proposed AI applications align with these values and principles.

Regulation in a global context

All of this is against a backdrop of competing world views as to the regulation of the use of AI. The EU is set to put in place its own AI Act, whereas the UK and US favour an approach based on industry commitments. The UK government will host a global summit on AI safety on 1 and 2 November.

To date, in Australia, AI regulation has been based on voluntary principles. However, Sydney-based employment law expert Aaron Goonrey of Pinsent Masons said that the Australian government is now exploring more formal regulation of AI. The Australian Human Rights Commission has raised concerns about the risks of AI including in respect to privacy, algorithmic discrimination, automation bias and misinformation.

In Germany, although there is not yet an explicit AI law, Frankfurt-based Franziska Füßl noted that the use of AI systems must also comply with all relevant national and international laws and regulations.

AI in human resources has been gaining relevance in Spain. Samuel Gonzalez of Pinsent Masons said that, in Spain, companies are using AI to optimise various human resources functions such as personnel selection, talent management, employee data analysis and the automation of administrative processes.

Similarly, Singapore does not currently have regulations focused specifically on AI in the context of HR, but Mayumi Soh of Pinsent Masons said that other regulations and guidelines in Singapore may serve to regulate the use of AI to a certain extent. “Overall, Singapore adopts a proactive attitude towards the responsible adoption and use of AI, and it is likely that there will be further development of AI-centric regulation over time,” she said.