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A Beginner’s Guide to AI in HR
HR Insights & Analytics

A Beginner’s Guide to AI in HR

Tejashree Anchan
March 8, 2024

The power of automation. What is there to automate in the HR sector and how does AI in HR work? Will it take away jobs? Or handle things better? Or make things super R-O-B-O-T-I-C in a way that an alien species will finally claim your work space with their wobbly eyes?

Well, check this quick summary on how, what, why, when and where the magic does begin. Read on to know what automation in human resource management looks like. Here’s a quick and basic guide for all: (at least for starters)!

Here's what facts say:
1) Employers predict 17% of work will be automated by 2020, compared to about 5% in 2014, according to ​Willis Towers Watson​, a global consulting company.
2) Contrary to the “AI Apocalypse” narrative, recent studies point out that 93% of people are willing to take orders from a robot and 70% of employees are already using      some form of AI in HR and in their personal lives.
3) HBR’s recent study shows that 31% of HR professionals are already using AI-backed data analysis to identify at-risk talent, source best-fit candidates via resume      analysis, and predict high-performing recruits.

Terms you need to know to understand the potential use of AI in HR:

HR: Human Resource

HCM: Human Capital Management 

HRIS: Human Resource Information System 

HRMS: Human Resource Management System

A beginner’s guide to AI in HR | peopleHum

The core of HRIS:

Human Resource Information System (HRIS) refers to the software or online solution that is used for all human resources operations of an organization, that is for data entry, data tracking, and data management.

1. Database management

HR teams (or anyone managing the portal) can easily input all personnel data into the system.

2. Time and labor management

Simplifying time-intensive tasks like monitoring the clocking hours of every single employee.

3. Payroll functions

Improved analysis in tax compliance, especially for organizations that deal with multiple tax levels.

4. Benefits management

A one-stop platform experience for all employers and employees alike by added transparency and enabling smoother operations.

5. Employee interface

Self-update personal information, review pay scales, update direct deposit information or download benefit election documents that are needed to provide or change retirement benefit programs with an employee experience that is easy, integrated and time-saving.

6. Talent acquisition and retention

Acquiring and retaining the right talent is how an organization can grow better.

Most HRIS solutions today offer customized systems based on a company’s unique needs and tasks, and efficient growth plans for the organization​.

The core of HCM:

HCM refers to practices for human resources management. The employee life-cycle is looked at with the goal of achieving organizational competency for workforce acquisition, management and optimization.

1. Talent Acquisition

●  Recruitment/ e-Recruitment
●  Application Tracking System
●  Onboarding

2. Talent Management

●  Time & Attendance
●  Payroll
●  Performance management
●  Culture connect

3. Talent Optimization

●  Career-path
●  Competency mapping
●  Succession planning
●  Learning and development

Efficient HCM systems steer organizational leaders towards the right career-path decisions in advancement, thus providing both the organization and the individual a map to follow.

So what’s exactly the difference: HCM v/s HRIS v/s HRMS

HRIS and HRMS are systems that automate HR tasks and processes and serve as the single source of workforce information. They help make AI in HR and other HR core processes like payroll and benefits administration easier. Basically the system stores, processes and manages employee work permit information and tax data.

HCM is much broader than AI in HR. It helps manage & optimize each stage of the employee lifecycle such as recruiting and onboarding. Offering performance management and learning, along with next-generation capabilities. It is wholesome & provides full lifecycle management of an employee - from talent acquisition to retirement strategy; and everything in between.

One might have questions like:

Why do we need an HCM system? What are the must-haves or rather nice-to-have features we want? How to balance out the present budget and futuristic growth-related financial needs? What is the level of customization required? Is one ready to adapt to it? ​

Well, the answer would ideally be to look at the ‘hows’ over the ‘whats’ i.e. how an employee works rather than on what aspect he works.

Human capital allows companies to remain innovative, as it’s crucial for companies to dedicate time and resources towards training, recruiting, managing, and developing employees. The good news in the Future of Work of AI in HR is that there are many HCM systems for companies to avail, which offer a multitude of features.

Role of an HR professional and how much of it can be optimized:

A recent KPMG report found that virtually all HR functions can be fully or partially automated. Ideally, of the 21 responsibilities, KPMG found only five to be relatively less susceptible to automation:
●  People perform whole system architecture (building a high-performance work system).
●  HR and business strategy.
●  Organizational effectiveness.
●  Change management.
●  Employee relations.

​Understanding why one team performs better than another can be automated with an HCM system. This way, one would be able to measure the effectiveness of each team in an analytical manner.

Analyzing​ your company’s current and future needs, measuring integration ability, understanding compliance risk exposure and estimating options for data security would be possible with HR automation by availing the services of an HCM/HRIS software. 

In conclusion, to answer the question we started this with - will the wooly eyed alien be the AI in HR , taking up HR professionals’ jobs? Well, not really. But they would definitely make it more dynamic and user-centric. Also, it’s time to rethink if your HR team really deserved the trolling that they were subjected to for so many years! 

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