The impact of AI on HR: How it'll change everything (and why that's a good thing)

It’s an exciting time to be in human resources (HR) and talent acquisition (TA). Artificial intelligence (AI) is rapidly changing the world around us and, in many ways, these industries are at the center of the changes. Integral to hiring, nurturing and supporting employees, HR and TA affect millions of people and influence the broader global economy, so any improvements can have a huge positive impact. Over three-quarters of HR leaders now believe that they must implement AI soon or risk falling behind competitors.

In the context of HR, two main categories of AI have immense potential – generative AI and predictive AI. Generative AI encompasses popular platforms like ChatGPT and Gemini for text generation and Dall-E and Midjourney for image generation. Predictive AI can forecast future events and trends to better inform decision-making. This article will primarily focus on generative AI, where the biggest developments are currently taking place.

AI is already used extensively across some HR functions, with varying degrees of effectiveness. The real promise, however, lies in current developments and those on the way. The winners of tomorrow will be those who adopt a clear and informed AI strategy today.

So, what changes are on the horizon (or even closer)? And how can your HR function leverage emerging technologies? Let’s dive into AI for HR and how organizations can take advantage of this technological revolution.

Existing use of AI in HR

How we got here:

The release of ChatGPT-3 in late 2022 brought AI into the mainstream – but it’s not new to HR and TA. Forward-thinking companies have experimented with and integrated various AI tools into their talent strategies over the years, supporting candidate screening, communications, data entry and data analytics.

The latest iterations of generative AI platforms have significantly advanced capabilities, but most organizations don’t utilize them effectively or at scale to source quality candidates. However, as technology progresses and innovation accelerates, existing uses will expand and new ones will emerge.

Emerging uses of AI for HR

Glowing potential:

The rapid advancements of AI platforms in recent months signal that the truly transformational impacts are yet to come.

Looking ahead, many HR functions may be using “off-the-shelf” AI platforms. But the true potential is in specialized models that harness the power of leading generative AI platforms and target them to support specific talent acquisition processes. For example:

• Screening: AI can filter for relevant skills, qualifications and other factors to automate the screening and background check processes for high volumes of applicants. This will save recruiters time, help identify qualified candidates, and potentially reduce time to hire and cost per hire.
• Outreach: Contacting job seekers is a time-consuming part of the hiring process, involving lots of trial and error. Chatbots can handle much of the early outreach at scale, allowing recruitment teams to focus on more personalized communications further down the recruitment funnel.
• 24/7 communication: People only have so much time and are often limited by time zones. AI will be an “always-on” tool that can respond to candidates when and how they want, ultimately improving the candidate experience and supporting recruiters in their roles.
• Democratization of opportunity: Properly trained AI can remove many barriers encountered by candidates of different cultures, languages and abilities. This will open opportunities for both employers and candidates across today’s diverse global workforce.
• Predictive analytics: Using historic and current data, AI models can predict relevant long-term trends – such as industry-specific employment metrics – with increasing accuracy. This can inform future TA strategies and help employers adapt to market conditions.
• Data management: The laborious tasks in TA and HR often revolve around data collection, storage and retrieval. AI can support these day-to-day functions by gathering data and populating databases automatically.
• Streamline content creation: Job descriptions, marketing content, and onboarding materials are all important, but they’re tedious to create. Generative AI can ideate and create first drafts, allowing talent acquisition teams to polish them and focus on more meaningful tasks.
• Hyper-personalization: AI will facilitate far greater personalization, targeting communications, adapting to different communication styles, and strengthening recruiter-candidate relationships.

Challenges for HR using AI

Breaking new ground:

AI has enormous potential to transform HR and improve talent acquisition strategies, but it’s not the catch-all solution some promise. With a realistic mindset and willingness to understand AI’s limitations, companies can put this powerful tool to great use. Challenges include:

• Inaccurate data: Even with ongoing improvements, much of the online content accessed by generative AI is outdated and isn’t fact-checked, so outcomes can be inaccurate.
• Human relationships reign: Candidates feel less committed without human connection. No-show and drop-out rates rise significantly when real people aren’t involved in the recruitment process, according to Cielo trials.
• Geographic and demographic differences: Language, culture, law and policy vary around the world. It’s very difficult for AI to work seamlessly across all talent pools with so many disparities.
• Missing creativity: AI still lacks the originality and diversity needed for many applications. One study found that ChatGPT-4 improved individual performance on some creative tasks but reduced creative diversity by 41%.
• Hesitancy from users: Some people are excited about AI, while others are skeptical or even fearful. Companies can’t expect candidates and employees to embrace this tech without proving its benefits, such as its ease of use and convenience.

Using AI effectively and responsibly

Unleashing the potential:

Organizations that overcome AI’s challenges will successfully unlock its potential for HR. And it all comes down to using this recruitment technology in an effective and responsible way.

The vital role of good data

AI talent acquisition tools and solutions – like chatbots for communicating with candidates – function best when using relevant data.

Data from one industry, culture, demographic or jurisdiction isn’t necessarily relevant for another, so the richer the dataset, the better the outcomes. This is particularly important in HR as employers interact with diverse candidates and employees.

Large-scale, established talent acquisition partners like Cielo will give you the most accurate, reliable and useful data. The ideal partner can call on vast data sets, sourced worldwide and from across industries, backed by a global infrastructure and network of experts.

Oversight from experts

Many assume AI can act alone. But if you want to get the best outcomes from these tools, you should view them as just that – tools. Human oversight from hiring managers and TA professionals will reduce risk and can:

• Provide reassurance to hesitant users
• Remove errors and misleading results
• Refine content and processes to specific audiences and purposes
• Offer deep industry expertise and insight

There’s no substitute for the knowledge, intuition and creativity provided by seasoned experts, so having the right people supervising AI is essential.

Forging a new role for AI in HR

The world of work is in a true technological revolution. Generative AI and predictive AI have the potential to not only empower people within their jobs, but also improve the ways companies source, recruit, nurture and retain top talent – all driving forces of the global economy.

AI will transform the recruiter and candidate experience for the better, driving hyper-personalization, democratization, responsive communications, and more meaningful interactions. Used properly, it will provide huge benefits at both an individual and organizational level.

“Combining Cielo’s leading global talent acquisition expertise and internal tech resources with this new generation of AI will responsibly deliver intelligent tools to support our clients. Ultimately, creating richer – not diminished – human interactions," said Felix Wetzel, Vice President – Product Management.

With this new phase of HR technology, the rapid advances present challenges alongside opportunities. But this is all part of the natural evolution of technology, and Cielo is prepared to help clients responsibly leverage the power of AI to achieve outstanding outcomes.

Cielo is at the forefront of the revolution, developing and delivering AI-enabled talent acquisition tools – powered by unrivaled data sets, multi-industry expertise, and global infrastructure. And it’s all to better serve our clients and continue illuminating talent in the changing world of work.