Benefits & Drawbacks of Applying AI to HRM - Blog 09

 

Human Resource Management processes are having greater influence with the application of Artificial intelligence which decides the future of HRM. As this is a new and controversial approach there are several benefits as well as drawbacks as well. 

Benefits of AI on HRM

1. Automating Tasks that repeat

Payroll was time-consuming, and double-checking required tasks, and employees needed to put effort into the completion of tasks and yet errors were there. Now HR workers may concentrate on strategic efforts by using AI to manage administrative duties like payroll processing, interview scheduling, and resume screening. 

2. Enhanced Hiring and recruitment

By rapidly evaluating hundreds of applications and selecting the top applicants based on predetermined criteria, AI-powered applicant tracking systems (ATS) like Manus AI will cut down on bias and recruiting time.

3. A better workplace experience

Employees normally struggle in various workplace activities when they lack strategic ideas and methods. AI chatbots and virtual assistants are there to provide instant and analytical responses to employee queries on company policies, procedures tasks, etc. which will improve employee satisfaction and provide a better workplace experience.

4. Data-driven Decision making

AI can analyze vast amounts of data in HR to offer insights into employee performance, engagement level, and workforce trends, enabling well-informed decision-making.

5. Tailored Education and Training

AI-powered training systems offer employees individual learning paths by suggesting courses according to their performance, skills, and career objectives. 

Drawbacks of AI on HRM

1. Possible Discrimination and Bias

As AI increasingly takes on decision-making and operational control, the sense of humanity gets significantly diminished in HR, which has always been a unique aspect of effective personnel Management. AI would only analyze system logs and data-driven analytics and will make decisions accordingly, which may lead to discrimination and biases. Unfair conclusions may result from AI algorithms that are taught on biased data, which could encourage discrimination in hiring and promotions. 

2. Resistance from Employees and Job Displacement

The generational gap and the employees who value traditional HR practices may resist adapting to the new technological implications. furthermore, different technological literacies may create difficulties in understanding AI applications like giving accurate prompts and analyzing outcomes. The employees who fear redundancy may oppose the automation of HR duties if it results in job losses in administrative positions.

3. Absence of Human Interaction

Empathy is necessary for HR tasks like employee counseling, dispute resolution, culture building, and emotional intelligence, which AI lacks. Genuine empathy, which is essential in HR positions including counseling, conflict resolution, and creating a positive workplace culture, is still beyond AI's capabilities. AI finds it difficult to replace tasks that call for human judgment, emotional intelligence, and relational intelligence. AI handling "human-touch" activities is a grave mistake, according to SHRM, since it may lower the level of interpersonal involvement at work and eventually damage the company's culture and employee trust. Because of this drawback, AI should not be used in place of emotional intelligence, even though it can aid in decision-making.

4. Concerns about Data Security and Privacy

AI systems manage private employee information, which raises questions about privacy laws, illegal access, and data breaches. AI systems in HR handle private information, including health records and performance reviews. Risks including data breaches, misuse, and non-compliance with privacy laws (like the GDPR) are increased as a result. Many HR professionals say they are having trouble using AI, especially when it comes to data privacy and algorithm transparency, according to SHRM. Systems that guarantee safe data management, regular audits, and moral algorithm use must be purchased by organizations.

5. High Expenses of Implementation

Large investments in technology, maintenance, and training are necessary for AI solutions, and small and medium-sized firms might not be able to afford them. The cost of using AI in HR includes not just the initial investment in the technology but also ongoing maintenance, training, system upgrades, and making sure the technology integrates correctly with current HR systems. Experts from Forbes point out that these expenses are frequently unaffordable for smaller businesses, especially when continuing assistance and employee training are taken into account. Additionally, a lot of businesses face the skills gap and must upskill staff to fully utilize AI's capabilities.

AI is transforming HRM because it makes procedures more data-driven and effective. However, it also poses challenges that businesses need to effectively manage.
HR practitioners can use AI to improve workforce management while upholding equity and employee trust by weighing the benefits of AI against ethical issues and human intervention. 

References

Forbes Business Council. (2023). 11 Challenges of Adopting AI in Business (And How To Address Them Head-On). Forbes. Available at: https://www.forbes.com/sites/forbestechcouncil/2023/10/24/11-challenges-of-adopting-ai-in-business-and-how-to-address-them-head-on/ [Accessed 4 Apr. 2025].

Society for Human Resource Management (SHRM). (2023). AI and the Future of Work: How HR Can Prepare. SHRM. 

SHRM. (2022). Why AI Should Not Replace the Human Touch in HR. SHRM. Available at: https://www.shrm.org/resourcesandtools/hr-topics/technology/pages/why-ai-should-not-replace-the-human-touch-in-hr.aspx [Accessed 4 Apr. 2025].

Rao, R. (2022). Benefits and Challenges of AI in HR. HR Technologist.