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How Big Data and AI is making a difference in HR?

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Pawan Chhibba - Business Strategy & Program Management Professional, Indian Institute of Management Calcutta

17-Jan-2020

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Articles
AI creates an opportunity for organizations to leverage technology in order to reduce the fixed costs associated with human resource. Increased probability of successful performance, lowered employee turnover, higher employee satisfaction, greater levels of productivity, faster decision making, and lower associated costs of screening and recruitment, are few benefits of considering and implementing AI in the domain of HR.

The need for utilizing artificial intelligence (will be referred to as AI henceforth) has been triggered from the realization that great insights can be generated from the humongous amount of information the users/customers, in both B2B and B2C scenario, create. This explosion of data can be attributed to various factors, factors such as availability of mobile devices, the increased ability and willingness of the customers to pay for internet services, exponential increase in consumption of digital content, and adaptation & penetration of e-Commerce to name a few. Greater amount of data can be used for the benefit of the business as it helps extract greater insights into consumer behavior, purchase patterns, human psychology, decision making etc. However, the challenge we humans face is the time & effort it takes to process volumes & variety of information thrown at us at supersonic speeds. Insight developed from data with delay is as good as no insight generated in the accelerated economy we breathe in today. As per a study humans can process data at a rate of 60bits/second, not a promising number. This problem is resolved by Machines with built in intelligence as they carry a greater propensity to process and provide insights from huge volumes of data (Big Data).

Artificial intelligence can help executives and managers take decisions in fractions of seconds and can create impact not only for businesses but also for society at large. One of the most critical areas that AI can create value and revolutionize is the domain of Human Resource.

The success of an organization is deep rooted in the skills, abilities and knowledge of its employees. Attracting and hiring the right pool of talent can hence make or break the existence of an organization. Traditionally, lot of cost towards time, effort, filtering, shortlisting, interviewing, selecting, on-boarding and subsequently training a candidate, has been incurred by organizations. However, recently AI has been playing an integral role in offloading the burden of these tasks and has been providing greater and valuable insights, helping HR managers take quick decisions.

HR processes impacted by AI Screening

With ever increasing growth in the number of people graduating each year, the volume of applications for a position at any given point is far higher than anticipated. Scrutinizing and filtering such humungous amounts of information during the screening process creates a need for a larger HR team, which could inflate the cost of screening and subsequently of recruitment. This burden is shared by an AI algorithm which helps in assimilation of data, based on certain key words and KPIs, filters the incoming information thus reducing the effort, time & cost associated with the screening & shortlisting activity. Integration with cloud makes the results available to the process owners across devices, propelling the decision making and reaction time.

Assessment & interview

In the next phase, an AI system can help identify suitability of the candidate by conducting initial few rounds of assessment such as administering automated tests and questionnaires and utilizing this data to analyze the probability of success of these candidates by comparing the information with historic data on various attributes of the candidates and their actual rate of success. During telephonic and/or face to face interviews AI engine canuse voice samples of the candidate to analyze levels of stress, reaction time, quality of response and confidence level and predict the success probability for certain customer facing jobs or jobs that require one to perform under stress.

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Selection & Onboarding

 Once the candidate is hired, the initial joining formalities, extraction of data, creation of data repository, integration with SAP-HR and orientation training can be completed by the AI, creating lesser need of human intervention and hence favorably impacting the bottom-line. Once the candidate joins and becomes an employee, the performance management, training needs and progress vis-à-vis expectations can be mapped by the algorithm and KPI reports can be generated and sent to the reporting manager and/or HR team for further action. This information can be used to build, implement and measure L&D activities.

Retention

Retention of valuable human resource is one of the critical factors that can either help organizations win or result in their failure. AI can play an important role in retention by identifying factors that motivate employees at various levels of the organizational hierarchy and it can provide greater insights and solutions to HR and managers, helping them arrive at customized reward & recognition systems.

Training

Performance improvement can be triggered through training and development activities of the employees. An AI engine can Identify the gaps in the skills based on the measurement & comparison of KPIs and can propose the trainings required for further development and for enhanced performance. It can generate automated dashboards which can give a snapshot of the performance and areas of improvement and can also offer automatic suggestions for courses/trainings that one needs to undertake. AI can also use this data to predict the training needs for the candidates based on their profile such as education, experience, and professional qualifications much before the candidates are on boarded, helping organizations to onboard candidates fit for the job and preventing high costs associated with employee training.

Conclusion

AI creates an opportunity for organizations to leverage technology in order to reduce the fixed costs associated with human resource. Increased probability of successful performance, lowered employee turnover, higher employee satisfaction, greater levels of productivity, faster decision making, and lower associated costs of screening and recruitment, are few benefits of considering and implementing AI in the domain of HR.

The decision on the areas and timing of implementation rests with the managers and executives of an organization and would depend on the scale of operations, organizational culture, agility of processes and procedures, existing IT infrastructure, understanding of the benefits of implementation and support by senior management, apart from other parameters relevant to the industry and the sector the organization is part of.

Identify the risks, opportunities, and impact of implementation of AI in your organization, gets the buy-in from the leaders by creating a business case, clearly stating the RoI and benefits you intend to draw and go ahead with the AI implementation project. The only consideration is to understand whether AI can benefit the organizational growth in the long term or is it being considered by you or your organization because everyone else in your sector is considering it. The decision lies with you.