Growing Role of ML and AI in HR Tech
Today’s modern industry is going through the industrial revolution of 4.0 or the digital revolution. Almost all the industries have been impacted by it. It has given birth to new tools such as data science, ML, AI, BigData, and so on. These tools have provided the industries to acquire a deeper insight into every aspect of their business functionalities. This article tries to highlight the growing role of ML and AI in HR Tech.
What is HR Tech?
Technologies integrated with the Human Resource functions come to exist as HR Tech. These technologies are involved in every aspect of employment in a business function. Some of these aspects include recruitment, payroll generation, background check, bonus calculation, retirement calculation, etc. Some of the HR Technologies include SAP HRMS, Workday HCM, etc.
Evolution of HR in the Digital Age
HR functions have evolved in these 10-15 years lifespan. Earlier days, it was manual tools and basic excel sheet that helped HR professionals to gather data and manually process the data. All decisions were based on manual efforts. Over the years, certain software tools evolved to ease out the process, and some of the organizations also developed their own tools to ease the manual effort. In the last ten years or so many organizations have started embracing the cloud-based software applications that help in reducing the cost required to maintain the HR-related infrastructure. Enter the Big Data, and a plethora of tools have bombarded the market. It is a data-driven world now, and various HR functions have become more engaged than ever before, and many algorithm-driven tools and techniques are being deployed to ease the jobs related to data processing and automating the decision making processes on behalf of HR.
Key Role of ML and AI in HR Functions
AI is a big domain, and ML forms a part of AI, but essentially both play an important role in HR-related functions. ML programs develop algorithms that help system to learn by itself based on certain patterns found in the data. While AI involves implementing chatbots, ML, NLP, computer vision, etc. All these tools and techniques help to reduce manual effort, increase productivity, and enables HR professionals to make the best decisions based on data. These tools find their usage in some of the following use cases:
- Talent acquisition
- Employee FQAs
- Payroll generation
- Employee Attrition analysis
- Retention of talent
- Gender and diversity management.
- Resources empowerment
- Retirement policy analysis and implementation
Compliance and Reporting
- Relocation etc.,
The list of use case mentioned above is limited, but as future technologies evolve, HR functions will also evolve, and many more use cases will emerge while old use cases would become obsolete. Organizations such as IBM, SAP, Google, FedEx, Linkedin have already rolled AI and ML in their HR and have been streamlining the overall HR by leveraging these tools and techniques.
Why Organization’s Core HR needs to embrace AI and ML?
Its a very dynamic business environment, and there is so much interconnection that no business can thrive in isolation. Over the years from the economic crisis of 2008 till a few years back when Big Data was just coming into prominence HR decision making drew flak in several spaces on account of hiring rogue employee while eliminating and laying off a highly qualified employee. Using these tools and techniques over the past few years HR has been able to identify various vulnerabilities in different job functions of the HR. HR acts as a growth engine for an organization. An ineffective HR leads to poor people management, and it directly impacts the growth of the organization. In a global survey conducted by Oracle in 2018, 31% of HR respondents selected AI as the first choice, while 58% of respondents selected AI as the top three choices for HR functions. 25 % of the respondents said they were using AI in “identifying at-risk talent through attrition modeling,” while 22% were using “modeling our talent pipeline” AI use case.
According to Deloitte’s 5th annual global human capital trends, 22% of Indian firms have implemented AI in their HR functions. All these survey results indicate that industries are embracing AI and ML at a much rapid pace than expected. Thus to remain competitive in the market, HR must have the edge over their competitors and should embrace AI and ML in HR core functions.
How can HR prepare for the challenge?
If the whole organization is preparing for digital transformation, so also the HR department. This requires the decision to flow from higher management who are willing to transform each and every business domain of their organization. Freedom and empowerment should be the first list of to-dos for bringing the change. HR Leader plays an equivalent role to that of CEO. If the CEO thinks for the whole organization HR leader has to play a similar kind of role and thus should be empowered to be fully autonomous while rolling out the digital transformation. A road map on transformation can be prepared, which needs to be made understood to every HR professional in the organization which is followed by education and skills up-gradation. A supervising team meant only for overseeing the transformation can be formed which must be autonomous. Next comes the decision to integrate the software tools which will help make the HR automated. All these implementations require meticulous planning, and only a long term vision can make it successful.
Future Trend in HR Tech
According to the KPMG survey for the future of HR in 2019 report, it was found that nearly two-thirds of the HR executives acknowledged the fact that HR is either undergoing or has undergone digital transformation. 36% of the HR functions have introduced AI, while 14% invested in AI over the past two years. 70% of HR leaders believe that AI and ML automation will make several HR job profiles redundant, while approx 60% of the CEOs firmly believed that AI and ML would generate more jobs in the overall industry.
According to World Economic Forum report, “The Futures of Job” it was found that certain skills would evolve while other skills would become redundant over the period of time as AI and ML implementation leads to the transformation within the industries.
The image displays some of the major skills which at present form the part of core HR functions.
New job skills would take over the existing job skills, so in a way, new job roles for the HR departments would be created while jobs like data-entry operators would be diminished over the period of time. New job roles such as HR techno-functional specialist, HR AI, and ML specialist would be created in the possible near future. Meanwhile, the recruitment process would be further faster where HR professionals would rely on critical data points instead of traditional cv to filter out perfect candidates for the job. New AI implementations such as computer vision, facial recognition would help to capture data automatically saving them time and money. Health reports of the employee would help HR teams to devise effective insurance and health benefit programs for the employees. Furthermore, it is quite possible that these tools can give rise to a digital nomadic culture in the industry. Existing talents can be retained, and these tools will help HR to figure out effective retention schemes and bonuses for deserving employees. Not to mention, many organizations would be able to filter rogue employees from highly skilled and deserving employees by using these tools and techniques.
As the world is embracing the power of AI and ML, so is the HR-related business functions. Though HR is the only department in most organization, which has been slow to pick up digital transformation, many HR teams are going out of the traditional way to innovate HR practices in their firms. Although AI and ML are still facing hurdles for implementation, many organizations are hell bend to bring changes and adopt transformation. Owing to market dynamics organizations are reeling under the pressure of competitors to adopt transformation, this would create certain job roles and skills to be diminished while giving rise to new job roles and skills. Only time will tell how much AI and ML are able to generate effective ROI.