A human resource management system (HRMS) uses automation to manage an organization’s day-to-day HR tasks. It also enables employees to perform specific HR-related tasks independently. Artificial intelligence (AI) amplifies the functionality of an HRMS and helps organizations teams achieve better efficiency, productivity, and growth across HR functions. However, an organization has to choose and use the right tool to derive the maximum benefits of AI in HR.
Even though it’s a promising function, human resource management (HR) can pose multiple challenges to an organization. It involves a wide range of activities from an employee’s recruitment to exit. In today’s fast-paced world of work, it is impossible to handle these processes manually or with the aid of spreadsheets.
A modern human resource management system automates and manages an organization’s day-to-day HR tasks more efficiently. It also empowers employees to perform specific HR-related tasks independently and swiftly. As a result, the platform enhances HR efficiency and streamlines processes across an employee’s life cycle in the organization.
Enter Artificial Intelligence in HR
Artificial intelligence (AI) can augment the capabilities of the HR function. Hence, today’s technology developers are adding AI to the human resource management system (HRMS) they provide to customers.
AI can widen the functionality of an existing human resource management system and enable HR teams to do more with less effort. When HR improves operational efficiency, the organization experiences higher productivity and faster business growth.
The Benefits of AI in HR
- Widens the scope of an HRMS
- Enables HR teams to achieve more
- Increases operational efficiency
- Improves productivity and growth
- Streamlines every core HR function
In this blog post, we explore how an organization can benefit by leveraging artificial intelligence in HR management. An AI-powered human resource management enhances the core functions of an HR department. Read on to know how.
Making Recruitment Smarter
The tasks of sourcing and hiring candidates can be stressful and time-consuming. By leveraging the power of AI in HR, hiring managers can find the most suitable candidates faster. An AI-powered application tracking system (ATS) simplifies the recruitment process by:
- Writing job descriptions, ads, and outreach messages with Gen AI
- Using natural language processing (NLP) to match CVs with job descriptions
- Sending status notifications to eligible candidates and hiring managers
- Scheduling/conducting preliminary interviews using chatbots
- Predicting the likelihood of a candidate accepting an offer
- Checking the background and references of shortlisted candidates
Among the organizations that have adopted AI for HR purposes, talent acquisition is the top area for its use (64%) ‒ SHRM.
Using an AI-enabled human resource management system, hiring managers can save more time, reduce cost-per-hire, eliminate bias, and improve the quality of hires.
Simplifying Employee Onboarding
New employees have high expectations. Therefore, HR team members must put their best foot forward while welcoming them. By using an AI-enabled human resource management system in HR, they can simplify and speed up the onboarding process while delighting the new employees. Here’s how AI can make this happen:
- Automating welcome messages and checklist creation
- Sending automated reminders for document collection
- Using bots to guide new hires with virtual onboarding tasks
- Conducting virtual induction and orientation sessions
- Taking employee feedback using natural language processing
- Analyzing the onboarding progress of new employees
According to research, a good onboarding program leads to 69% of employees staying at least for three years.
Modern HRMS platforms have an AI-driven onboarding module to automate the processes for employees and HR teams. The automation enables organizations to standardize onboarding processes, create engaging experiences, ensure 100% compliance, and generate insightful reports. This is one of the most critical applications of AI in human resource management.
Automating Payroll Management
When handled manually, computations and compliance can be stressful to payroll managers. Modern HRMS platforms can automate the entire process from payroll policy definition to computation and compliance to salary payouts. With the infusion of AI in HRMS platforms, key payroll activities become accurate and hassle-free. Here’s how it helps payroll managers:
- Automating data entry, validation, and reconciliation
- Assisting payroll managers in complex calculations
- Identifying potential errors/anomalies in the payroll cycle
- Addressing queries instantly with a self-service portal
- Ensuring consistency in payroll data and workflows
- Reading complex documents and identifying compliance risks
- Enabling timely decision-making with insightful analysis
According to a study by ETHRWorld and ADP, three out of four organizations are considering the adoption of Artificial Intelligence (AI) to streamline and optimize payroll management systems
A full-suite HRMS platform is likely to have a payroll module built into it. An AI-powered payroll software augments the capabilities of the human resource management system. As a result, HR teams can enhance the speed, reliability, and accuracy of their payroll operations. The result? Stress-free month ends, happy employees, and an elevated brand image.
Streamlining Leave & Attendance Management
Leave & attendance management with email and spreadsheets can become an ordeal for HR teams. Paperwork, time theft, and buddy punching are some of the most common challenges of contemporary HR teams. Thanks to the adoption of AI in HR, it’s now easier to administer uniform leave policies and ensure accurate leave accounting. It also facilitates effective attendance processing and shift management. Here are some ways to realize the benefits of AI in HR, especially leave & attendance management:
- Answering leave-related queries instantly
- Monitoring employee leave/attendance automatically
- Verifying leave information in the HRMS
- Analyzing patterns and preventing leave fraud
- Enabling real-time attendance capture and processing
- Using facial recognition for marking attendance
When a human resource management system is enhanced by artificial intelligence, HR can easily manage the different types of employee leave and attendance requests. Also, an AI-powered leave and attendance management system puts more complex activities on autopilot. It also reduces HR efforts, while employees save time by marking attendance conveniently from any location. Even their leave requests get approved faster since the process requires only a mouse click by their manager! Stated simply, AI helps improve productivity, minimize absenteeism, and ensure smooth operations.
Elevating Performance Management
Although the onus of meeting and exceeding expectations lies with the employees, even the employers have a vital role to play. They need to set clear performance parameters aligned to the organizational goals. A performance management system (PMS) comprises processes and tools that help HR track, evaluate, and level up employee performance. When AI is added to a human resource management system, it enhances performance management in the following ways:
- Automating employee performance reviews
- Analyzing performance data from multiple sources
- Studying available data to predict future results
- Offering macro and micro-level feedback to employees
- Using generative AI to summarize appraisal information quickly
- Customizing programs with an AI-powered recommendation engine
According to a Gartner report, 76% of HR leaders believe their organization will lag if they don’t adopt AI solutions in the next 12 to 24 months.
Modern performance management systems help reduce bias, identify skills gaps, and augment organizational performance. They also eliminate the guesswork and facilitate the provision of actionable feedback. These AI-driven PMS systems also offer detailed insights to HR for making employee-friendly decisions. When employees perform, the organization benefits from improved productivity and profitability. Performance management is one of the many ways to tap the benefits of AI in HR.
Driving Employee Engagement
The role of HR doesn’t end after hiring and onboarding employees. They must also keep these employees happy and productive. Is it a tall order? Yes, it is. However, the level of engagement can be gauged and enhanced with a focused employee engagement strategy that spans multiple phases, from onboarding to training and recognition and beyond. This requires a human resource management system. However, an AI-enabled HRMS can do a lot more. Here’s how:
- Identification of employee preferences
- Answering repeated queries and taking meeting notes
- Launching full-filled quizzes with the aid of bots
- Performing polls and surveys for sentiment analysis
- Understanding the level of collaboration within teams
- Personalizing rewards based on employee needs
Technology providers and human resources teams are trying to figure out more ways to use AI in HR. Here’s another one: Some full-suite HRMS platforms have employee engagement modules built into them. These AI-based modules help HR foster a culture of feedback and celebrate achievements. They can also use the same to transform daily interactions into opportunities for cultural enrichment. An organization with high employee engagement can expect a lower absenteeism rate and turnover.
Summing Up
HR teams across industries are recommending an AI-powered human resource management system in their organizations. Even the technology providers are exploring newer ways to use AI in HR. However, it is up to the organization to choose and use AI prudently.
An organization must train its employees to use these tools safely, ethically, and effectively. Although employees have shown resistance to tracking, organizations should have a transparent way to regulate the official use of artificial intelligence (AI) in HR. The HR function must also choose a tool that suits the organization's exact needs. Moreover, they must select a reliable and seasoned vendor in consultation with other stakeholders. The vendor must thoroughly know how to use AI in HR. Only then will the investment pay off for the organization that deploys/upgrades the human resource management system. Since some full-suite HRMS platforms have AI built into them, it becomes easy for HR teams to leverage it for their day-to-day activities.
AI can simplify and streamline every activity, from HR planning to recruitment and performance management to exit. AI has taken the world by storm. However, HR shoulders the responsibility to make it work effectively in their organizations.
