Artificial intelligence (AI) has already infiltrated every aspect of our lives, and is expected to continue to do so, especially in the human resources sectors (HR).
Employees often fear new technologies will replace them making them obsolete, but typically it only reshapes the way they do their job. The first step in the evolution of AI will be able to complete tedious repetitive tasks, which will allow employees to focus on higher-level roles and tasks that require increased flexibility, judgment, negotiation, persuasion, leadership, empathy, creativity, credibility and relationship-building and most likely hold more interest to them. The next step of this evolution is in user grasp of technology that is already proving to be quite useful, to say the least, when taking over tasks that require more judgment.
Companies implementing AI capabilities show substantial increase in their efficiency, optimizing processes and subsequently increasing their bottom lines. This is a result of making more data-driven decisions based on companies being able to utilize different data silos and make judgment calls based on big data processing and calculation.
CHANGING THE HR LANDSCAPE
AI has been helping recruitment professionals in HR (specifically in the talent acquisition space) discover talent by making predictive matches between candidates and open position requirements. Moreover, it has been leveraged to screen resumes and cover letters culling through the mass of applicants, so the recruiters can focus on relationship-building with qualified candidates. With AI streamlining the recruitment process, it is interesting to see its residual effect on HR financing.
HOW HR IS AFFECTING OUR FINANCIALS
The average time to fill an open position is estimated to be 42-60 days making the average cost-per-hire is around $4,129 out of the already tight HR budget. there are many disadvantages to a drawn-out recruiting process. AI drives down recruiting costs by handling a variety of repetitive tasks that take up recruiters valuable time. But maximizing recruitment time will not help you much if your costs are high in order to gain that efficiency. If there are inefficiencies in your hiring process, wasted time and resources translate directly into a higher cost-per-hire and the lightning of your team’s budget. That is where AI comes in – It automates resume screening and shortlists masses of potential candidates within seconds to provide you with the best match.
There are many more financial implications regarding finding, tracking, and onboarding new candidates to the company. When looking at some of the less measurable metrics of recruiting, we can find the cost of not hiring, or sometimes even worst – the costs of a bad hire, estimated at around 30% of that person’s potential annual income. According to a CareerBuilder survey, 27% of U.S. employers estimated a bad hire would cost them more than $50,000. These numbers are astonishing and have great implications on companies budgets and resources.
EMPOWERMENT FOR A BETTER FINANCIAL RESULT
AI can’t necessarily answer all the challenges we face in HR, and most definitely it replaces the “human touch” and insights from your seasoned staff. However, AI can function as valuable tool, applied in a targeted way to make sure you’re using your time and hiring budgets to their best advantage, and can dramatically increase the recruitment efficiency, empower the HR teams and help us hire smarter and more cost-efficient.