The Importance of Conversational AI in HR

How Conversational AI can empower your HR team

Table of contents

Due to the widespread interest in Generative AI, CEOs are turning their gaze toward HR leaders, recognizing AI’s potential to revolutionize HR functions. The expectations placed on HR departments have expanded significantly, necessitating an improvement in data quality and a comprehensive understanding of the current and future workforce.

“Half the time HR personnel spend solving mundane and repetitive queries such as payroll, HRMS systems, leave and attendance, and employee exits.” –  Forbes 

Consequently, HR professionals are now compelled to adopt data-driven approaches for decision-making and to optimize workforce management. The impact of AI on the composition of the workforce has created a new sense of urgency for HR leaders. With nearly three-quarters of employees expressing a likelihood of quitting their jobs in the next 12 months, HR departments urgently need to prioritize technology that enhances their ability to enhance the employee experience, thereby retaining valuable staff, reducing costs, and driving business outcomes.

This article explores ten ways in which AI supports Human Resource departments in delivering unprecedented value.

What are the different processes in HR?

HR processes encompass a spectrum of strategic endeavors undertaken by HR leaders to secure and retain the right talent crucial for accomplishing organizational objectives. These processes span various facets of your business and are designed to fulfill specific objectives.

Recruitment: Recruitment involves attracting qualified candidates, while selection is the process of identifying the right candidate for a role.

OnboardingOnboarding is the crucial first impression on new hires, aligning them with company goals and setting them up for success; successful onboarding includes automation of document sharing, engagement with chatbots, short application processes, remote-friendly welcome kits, scheduled introductory calls, and assigning work buddies.

Workforce Planning: This process analyzes, forecasts, and plans workforce supply and demand, ensuring the right skills are in the right places at the right time; this involves understanding organizational goals, tracking attrition, conducting demand analysis, analyzing gaps, and iterating solutions to meet strategic objectives.

Leave Management: This handles time-off requests while ensuring business workflow efficiency; best practices include outlining leave policies clearly, ensuring compliance with labor laws, utilizing leave management dashboards, deploying chatbots for on-the-go leave applications, and measuring policy effectiveness with goals and KPIs.

Performance ManagementPerformance management ensures employees perform to the best of their abilities; key elements involve goal setting, performance reviews, and improvement, with effective practices including clear goal-setting, measured feedback, empathetic communication, and periodic employee feedback.

Learning and Development: L&D systematically encourages employee professional growth through training courses, seminars, and certifications; essential elements include skill gap analysis, personal analysis, designing learning paths, analyzing program impact on individual and team performance, and engaging enterprise chatbots for an interactive approach.

Compliance Management: Compliance ensures workplace policies align with labor laws and industry regulations; effective practices involve knowing industry-specific regulatory requirements, building a document repository, conducting compliance training, regular audits, tracking violations, and reviewing compliance programs for vulnerabilities.

Compensation and Benefits: This encompass salary, monetary, and non-monetary perks to boost employee morale and motivation; components include fixed salary, variable salary based on performance, and equity pay in the form of company shares.

What are HR's main challenges?

1. Repitition

HR professionals often dedicate a significant amount of time to manual tasks, such as addressing basic employee inquiries, creating time-log spreadsheets, and managing payroll calculations.

2. Unoptimized processes

Current processes are not optimized to cope with the dynamic work environment, resulting in increased costs and reduced revenue for businesses.

3. Human errors

Manual data entry not only proves inefficient for managing organizational data but also introduces the possibility of human errors, lowering the overall quality of the system.

4. Outdated workflows

The “one size fits all” approach is no longer viable when designing learning and development tracks or managing employee rewards and incentives. Employees have unique needs and aspirations that evolve over time, and HR professionals must adapt their perspectives accordingly.

How conversational AI comes into play

Automating HR tasks involves streamlining time-consuming and repetitive activities, enabling the HR team to concentrate on more intricate responsibilities such as planning and decision-making.

The adoption of HR automation significantly influences a company’s financial performance by enhancing overall business productivity, expanding operational scalability, minimizing turnaround times, and reducing error rates. Worldwide, organizations are increasingly integrating HR automation to optimize the effectiveness of their endeavors. In fact, as reported by Personnel Today, 38% of enterprises are currently utilizing AI in their workplaces, with 62% anticipating its implementation as early as this year.

1. Corporate FAQs

Often, your colleague or HR has likely responded to the same inquiries multiple times. Developing a dedicated application to address frequently asked questions about company policies and processes can be costly. However, by employing HR bots with AI, machine learning, and natural language processing (NLP), your company can deploy an assistant that provides real-time responses to your queries.

2. Performance review

Conversational AI can enhance various aspects of performance reviews, including self-assessment processes. Instead of relying solely on traditional self-assessment forms, an AI-powered interactive assistant can provide employees with a conversational experience. HR bots can efficiently remind employees of goal-setting tasks or prompt them to fill out appraisal forms.

3. Leave requests

Imagine an employee needing to check their leave balance while on the go. The traditional methods involve sending emails or logging into an application, which are both time-consuming and tedious. By integrating Conversational AI into your HR system, the employee can simply ask the bot through text or voice command, instantly accessing their leave balance. Similar to a human HR professional, the bot can grasp urgency through its sentiment skills, addressing queries promptly without prolonged wait times or, in case of misunderstood intent, seamlessly handing off to a real HR professional with the complete history and context.

4. Automating compliance

The HR team must address new regulations to ensure the business operates safely and legally from the outset. How this information is communicated and enforced is crucial.

5. Streamline onboarding

An AI-powered interactive assistant can optimize the end-to-end onboarding process, making it efficient and engaging. This assistant can assist the HR department in gathering necessary information, offering new recruits a quick start guide to help them understand the organization, its products, clients, and overall culture.

What to look for in HR automation software

Employee Information Management: Typically structured as a database housing personal and professional details of employees, this functionality encompasses resumes, contact details, addresses, positions, compensation, vacations, and more. The automated software ensures prompt updates to any alterations in the recorded information, maintaining systematic and current records.

Document Management for the Company: This system or database is utilized for capturing, tracking, and storing electronic documents related to employees, including legal documents, agreements, manuals, safety guides, induction materials, templates, and others.

Applicant Tracking System: Facilitating the electronic management of recruitment and hiring processes, this feature stores information on multiple applicants, job openings, ongoing applications, and interviews for specific positions. Additionally, it often integrates with third-party solutions for candidate screening and assessment.

Payroll: The American Payroll Association (APA) estimates that automation can reduce payroll processing costs by up to 80%, primarily by minimizing errors in invoices and paychecks. It gathers employee data, such as tax withholdings, benefits contributions, and total hours worked, and performs calculations automatically.

Absence Management: Automated absence management streamlines the tracking and reporting of leave requests, overtime, balances, and accruals. This feature meticulously monitors all types of time-off and automatically recalculates salaries for each employee.

Talent Management: Automation extends to career path planning and creating mentorship opportunities to retain high-performing employees. HR teams can leverage this feature to offer personalized career guidance based on employees’ inherent capabilities, potential, and professional aspirations.

Find out how Born Digital's Generative and Conversational AI solutions can help you automate your HR processes