Artificial Intelligence (AI) holds immense promise for transforming Human Resources (HR) practices, yet a significant number of HR professionals remain sceptical about its immediate implementation in their organisations, according to recent research by Deel.

The study, which surveyed 1,100 HR decision-makers, revealed a stark contrast between optimism for AI's potential and its current adoption rates. A striking 61% of respondents expressed confidence that AI will deliver substantial benefits to HR practices over the next five years. 

Younger professionals, particularly those under 35, exhibited the highest optimism at 83%. In contrast, only 38% of those aged 55 and older shared this positive outlook, with a notable 26% expressing concerns about potential negative impacts of AI.

Among the anticipated benefits of AI in HR, respondents highlighted:

• HR Analytics (46%)
• Checking Employment Laws (37%)
• Employee Learning and Development (35%)
• Payroll Management (34%)
• Accessing Hiring Data/Insights (33%)
• Performance Management (32%)
• Benefits Administration (32%)
• Recruitment and Talent Acquisition (29%)
• Employee Onboarding (28%)
• Salary Benchmarking (28%)

Barriers to Adoption

Despite the widespread optimism, current adoption rates of AI in HR remain modest, with only 38% of HR decision-makers incorporating AI technologies into their workflows. Of those not yet using AI, 23% plan to adopt it within the next year, but a significant 70% deem it unlikely that their organization will implement AI within the next 12 months.

The reluctance to adopt AI technology is primarily driven by concerns over:

• Reliability and Accuracy (16%)
• Data Security and Privacy (16%)
• Potential Loss of Personal Touch in HR processes (13%)

Strategic Insights and Competitive Advantage

Aaron Goldsmid, Head of Product, Payments & Integration at Deel, highlighted the implications of hesitating to adopt AI. He noted that beyond missing out on technological advancements, organizations risk falling behind competitors in terms of efficiency and strategic insights. "AI can alleviate administrative burdens, allowing HR leaders to focus more on strategic initiatives, creativity, and fostering a people-centric workplace," Goldsmid emphasized.

As AI continues to evolve, bridging the gap between optimism and adoption will be crucial for HR departments aiming to leverage technology effectively. Addressing concerns around reliability, security, and maintaining human touch in HR processes will be essential steps towards integrating AI seamlessly into organizational workflows.