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Executive Summary

The report presents the importance of AI and Analytics on HR functions in an

organization. The report briefly explains the concept of HR analytics and AI. It also

presents the relationship between AI and Analytics. The reports also linked the three

HR functions such as recruitment and selections, training and development and

compensation and benefits with AI analytics. Finally limitation to the adopt of AI

analytics in HRM were also present and follow by the recommendations to solved the

barriers of adoption of AI analytics in HR function.

Introduction

Human Resource decision-making is evolving. In today's data-driven world, HR analytics

assist organizations of all sizes and across all industries in making talent, management, and

hiring decisions. HR professionals frequently use metrics to track data such as turnover rates and

sick days. HR analytics is a new discipline that can help HR fulfill its promise to be a true

strategic partner (Lawler, Levenson and Boudreau, 2004). The challenge of human resource

analytics and AI is determining what data must be collected and how the data should be collected

and how to use the data to model and predict capabilities.

AI's effective application to human resource problems presents a number of challenges.

These range from facts to concepts, such as the fact that the nature of data science analytics when

applied to humans can result in serious conflicts with criteria that society generally regards as

important for making important decisions about people (Deloitte, 2015). HR managers lack

decision-making tools and are unable to effectively analyze variables when confronted with a

situation and find effective solutions to a crisis or project they are working on.

It is against this background that this research aim at linking the HR analytics and

Artificial intelligence in HR Metrics in an organization. In achieving this aim, the research

intends to discuss, concept of Artificial Intelligence and HR Analytics, The relationship between

AI and Analytics, and Analytics and AI in HR functions.

Artificial Intelligence (AI)

Artificial intelligence (AI) has been around for a long time and has many applications,

but the technology has only recently been developed and implemented in a variety of

organizational contexts (Tecuci, 2012). AI is a learning algorithm that is programmed to look

like a human but outperforms a human in its abilities. The most fundamental aspect of artificial
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intelligence is that it is a programmed algorithm that specializes in computation and analysis, and

it has tremendous computational, analytical, and prediction power. To compete in the pursuit of a

personalization strategy, organization must leverage their human capital on an individual basis,

which AI allows. Staffing decisions should be made in this regard based on the individual's

skills, needs, or potential (Tiffany, 2018).

Human Resource Analytics

Data is the foundation of analytics. HR analytics is the science of gathering, organizing,

and analyzing data linked to HR services like as recruiting, talent management, employee

engagement, performance, and employee retention to ensure employee retention. HR

departments collect large volumes of data in all of these areas by employing various types of HR

tools and technology (Lawler, Levenson and Boudreau, 2014).

The goal of HR analytics, on the other hand, is to make sense of this data and turn it into

valuable insights. HR analytics can help estimate employee engagement as well as capability and

skills to achieve company goals. Human resources can use HR analytics to interpret data,

identify trends or issues, and take proactive steps with other departments to keep the

organization running smoothly and profitably (Fitz-enz, 2010).

AI and Analytics

Data analytics and artificial intelligence connect data to learn more about customers,

develop business, and improve the speed and quality of logistics. And these new technologies are

no longer the exclusive domain of "technology" firms. More and more businesses are using such

solutions to help them navigate difficult times and improve their organizations. Artificial

intelligence can provide you with analytical psychic abilities. AI is a combination of fantastic

tools for extracting insights and patterns from massive information. These insights and patterns
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may be used by AI to create predictions about what drives results. Over time, it can even learn to

better forecasts. Analytics made use of massive amounts of diverse and dynamic data that could

be mined for insights. AI is a collection of technologies that allow robots to mimic human

intellect. To successfully learn and grow, AI requires massive amounts of large data. Big data

relies on AI to mine for information more intelligently.

The Application of Analytics and AI in HR Functions

It is being constantly doubted that inclusion of AI and HR Analytics in HR functions will

snatch away various jobs from the workforce by replacing them with highly intelligent software.

However, it will surely result to enormous reclassification and redesigning of jobs at all the

levels. Some industries might face immense scratching out of a bundle of jobs whereas others

might witness creation of fresh set of jobs requiring highly digitalized intelligence.

Figure 1: A conceptual model for AI analytics application in human resource management.

For the purpose of this report, the following HR function will be discussion in relation to

HR analytics and AI.

a. Recruitment and Selection

b. Training and Development

c. Compensation and Benefit

1. RECRUITMENT AND SELECTION

Recruitment and Selection is an important operation in HRM, designed to maximize

employee strength in order to meet the employer's strategic goals and objectives. It is a process

of sourcing, screening, shortlisting and selecting the right candidates for the required vacant

positions. According to Dickson and Nusair (2010), the purpose of the recruiting system is to

lessen the strain on the organization and save money by modernizing the recruitment process.

AI and Analytics in Recruitment and Selection

AI can skim material posted on social media, providing users access to applicant beliefs,

attitudes, and personality qualities that have historically been mentioned in job interviews

(Upadhyay & Khandelwal, 2018). Prior to the interview, organization might use the AI system to

scan the applicant's personality attributes (Faliagka et al. 2012). The AI system delivers feedback

on credentials and skills to candidates who are rejected by job advertisements. These candidates

can be explored further in the future. Companies incur various costs while conducting

conventional face-to-face interviews with potential job candidates, including the costs of bosses

and managers present throughout the interview and recruiting process.

According to Leong (2018), the application of AI in recruiting enables organization to

rapidly engage with top talent management prospects rather of wasting time and money reading
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and filtering through resumes. application for a job AI-powered talent recruitment and selection

aids in ranking candidates and thereby identifying the top candidates. In addition to these

developments, AI can assist recruiters in sending customized emails to potential applicants on

the progress of their job applications and scheduling interviews.

It is commonly acknowledged that artificial intelligence has the ability to automate

certain duties in the recruiting process. Many AI specialists and academics believe that AI

technologies have a favorable influence on the recruiting and selection process, with potentially

good consequences. Based on document assessment, the following are the observed outcomes of

utilizing AI in the recruiting and selection process: time savings, cost savings, bias elimination,

accuracy, enhanced efficiency, better applicant experience, and decreased burden.

Source: Design by the Researcher

Challenges of AI-based recruitment

Although studies demonstrate that new technologies and big data improve HRM

effectiveness and accuracy (Zang & Ye, 2015), some people believe that HR analytics can only

be one trend. If technology transformation does not become a managerial continuity, time will be
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lost. making a decision. Individual privacy and the way data is collected and evaluated are two

significant difficulties for AI-based recruiting.

According to Martincevic and Kozina (2018), it is nearly difficult for companies to

function well without some degree of adaptability to new technology. The capacity of companies

to adapt to new technologies determines, in large part, how competitive they may be in the

market. Stuart and Norvig (2016) discussed some of the issues that AI mining might create, such

as job loss due to automation, and how AI systems can be employed in situations when the

outcomes are undesirable.

The risk for job loss due to automation is especially influencing hiring, since many

occupations have been replaced by AI algorithms, thereby increasing unemployment. While

Analytics and AI-based solutions are incredibly valuable for talent detection, other tasks,

including as negotiating, cultural fit evaluations, and construction, must still be undertaken by

people.

2. TRAINING AND DEVELOPMENT

Holton and Swanson (2001) Training and development is described as a systematic

process of growing people's job-related knowledge and skills with the goal of enhancing

performance. Knowledge, Process for Improving Performance. Training and development are

focused with increasing the effectiveness of organizations as well as the individuals and groups

that make up such organizations.

Analytics and AI in Training and Development

According to Jain (2016), utilizing AI-enabled technologies to build employee training

and development opportunities can assist boost employee work satisfaction. AI analytics has

permitted a greater emphasis on experiential learning, stressing design and critical thinking.
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Individual employee ID cards are a new sort of training and development approach enabled by

AI analytics. HR technology suppliers are continually attempting to put artificial intelligence

(AI) at the center of every human resource management arena. The Importance of AI analytics in

Training and Development:

1. Provide a Customised learning process: AI may collect data on employees' skill

preferences, learning interests, job kinds, projects, and tasks, and generate course

suggestions based on that data. Appropriate learning will boost employee productivity

and competency in the workplace.

2. Encourage collective learning: In today's work culture, collaborative learning in

businesses is particularly beneficial. HR managers may provide a wide range of training

and development possibilities for workplace cooperation by incorporating augmented and

virtual reality into AI's micro-learning components.

3. To improve learning administration: AI integrates several patterns and models that aid

in the modification of prospectuses depending on role, location, and line of business,

reducing the labor of administrators who must produce T&D modules for teams.

3. COMPENSATION AND BENEFITS

According to Dessler (2011) employee compensation means all forms of pay or rewards

going to employees and arising from their employment and it may be direct financial payments

(Pay in the form of wages, salaries, incentives, commissions, and bonuses) and indirect

financial payments (Pay in the form of financial benefits such as insurance). Organisations

reward their staff when they attain the goals or targets that they have jointly set with the

employees. Rewards can be non-monetary such as a paid vacation for two.

Analytics and AI in Compensation and Benefits

Analytics and AI might aid in the development of remuneration metrics that recognize

employee efforts to advance an organization's goals. It may also explore unusual sections of

labor market data to generate permitted compensation rates. The Importance of using AI in

Compensation and Benefits:

1. Fairness: Using real and good performance and reward data, exceptional employees'

behaviors may be recognized using algorithms to uncover links and patterns between

prior pay programs, desirable practices, and outcomes that describe a high performer.

2. Personalization: AI can gather and analyze data about how we think and believe in

order to forecast how we will behave in our personal and professional lives. It is

conceivable to foresee the customisation of incentive systems by breaking down the

individual motivational variables. This will assist workers in better matching their

desires and talents to decentralized needs (Jessica, 2019).

3. Agile Program: Many organizations are transitioning from paying employees once a

year to paying them in installments. This has the potential to boost employee

engagement and organizational commitment. This generation awaits constant rewards

and malleability in choosing them which can be commenced via AI.

4. Cost reduction: Despite the fact that there will be significant investment in AI

technology, it will significantly reduce operational expenses and make it easier to deploy

and execute several projects at the same time in any place. The improved feasibility of

AI-powered programs will result in greater ROI in the form of less turnover, increased
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employee engagement, and retention.

Benefit of AI and Analytics in HR Function

According to the digital HR perspective, the inclusion of HR analytics and AI will

increase the total value of HR. Machine learning and automation will execute basic standardized

activities requiring methodological expertise, while HR will focus more on duties requiring

problem-solving and leadership abilities. religion. HR analytics and AI create a bridge that

allows for the smooth delivery of HR-related services. As David Mallon, vice president and

analyst at Bersin, pointed out, computer-aided bots or Robotic Process Automation will soon

handle shared services chores such as regular data administration (RPA).

Because Regular Data Administration (RPA) can replicate human talents, it will replace

human labor (Hagginbottom, 2018). HR analytics and artificial intelligence (AI) significantly

improve HR functions such as writing job descriptions, matching job descriptions with employee

apps, selecting employees using expert systems, educating employees in the process of

introduction, training and development, compensation design, capacity mapping, and

performance evaluation using expert systems (Copeland, 2016).

Limitation in Implementing AI in HR Function

It is evident that organization have the potential to use AI in HR, but this does not

indicate that organization will be able to update humans in the near future. Accuracy is one of the

analytics and AI challenges. In this way, organization still want humans to at least confirm AI

choices. Second, enforcing AI is currently expensive. As a result, organization can no longer rely

on peer analytics and AI in a range of organizations, particularly those with little financial

resources. Finally, it is a significant goal for firms to train their human resources in order to

employ such advanced technology.

Recommendations for HR in the adoption of AI Analytics

HR department are dealing with a lot of data and adopting the AI analytics will make the

organization to be competitive in this AI analytics world;

1. First, organization must recognize and address their employees' anxiety and resistance to

AI technology. More importantly, human experience and understanding must be

incorporated into AI system design and implementation. It is preferable to achieve

performance improvement through human-AI collaboration as soon as possible.

2. Second, the company's employees must adopt a digital culture. It covers the fundamentals

of statistics and programming languages. In fact, it is a basic language for humans and AI

to communicate and understand each other. This skill and knowledge should be included

in the HR functions criteria.

3. Third, it is critical to cultivate and strengthen learning agility in order to deal with the

ongoing reconstruction work. In fact, AI technology is constantly changing the content of

work, decreasing the value of experience, and making the future more unpredictable.

Learning agility becomes important in this context.

4. Fourth, leadership should foster employee understanding and creative ideas. In some

ways, it is the most significant human contribution. Humans and AI can find solutions

through collaborative intelligence or open collaboration with collaborators outside the

organization.

5. Finally, management must foster an open organizational culture. Managers should

prioritize this age or experience over new ideas and skills.

Conclusion

The study made some important points that link AI to HR analytics. With the

proliferation of HR Analytics and AI digital technology, managers now have mechanisms to

significantly improve multiple HRM functions. The use of HR Analytics and AI can aid in the

achievement of objective decision-making on human capital management and employment, as

well as strategic HR. HR analytics and AI are thus essential tools for human resource

management.
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