A new dawn: prepare for the AI revolution in HR and financial wellbeing

Make no mistake: harnessing artificial intelligence (AI) to improve business operations and decisions is the future. One fifth of companies have already embraced AI solutions, and we can expect that number to rise rapidly over the coming years.

Of the many compelling use cases for AI within business, HR is one of the more interesting. After all, AI offers immense potential for processing vast amounts of data, recognising patterns, and making informed decisions with remarkable speed. This in turn can enhance various HR functions, from talent acquisition and employee development to providing more tailored, impactful benefits, including much-needed financial wellbeing support.

As AI develops at pace, and as businesses seek innovative ways to optimise their workforce and cultivate positive, engaged cultures, it is important we understand the many ways HR teams can harness the technology. We should also consider what opportunities lie on the horizon.

A sector in motion: transforming HR through AI

Although business adoption of AI is still in its relative infancy, particularly for small and medium-sized enterprises (SMEs), it is already establishing itself as an indispensable tool in HR. Let us consider why.

Talent acquisition, for one, has been truly transformed. Turning a tedious task into the click of a button, many companies will use it to screen prospective candidates, sifting through hundreds – if not thousands – of applications to identify profiles that optimally meet the selection criteria for a given position. This automation can save a vast amount of time at the start of the recruitment process, rapidly highlighting prime candidates to HR managers and saving up to 30% on cost-per-hire.

Monitoring employee progress, productivity and feedback can also be significantly enhanced through AI. Tools can accurately track and analyse employee performance and productivity, offering business and HR managers invaluable insights into overall staff conduct and wellbeing. This data-driven approach opens doors for more objective, unbiased evaluations and can be immensely useful in identifying potential issues or areas for improvement.

Another similar, and highly valuable, use for AI is in managing employee surveys, to collect critical feedback on topics such as financial wellbeing, job satisfaction or benefits packages, as well as highlighting employees who may need additional support.

What’s more, training, learning and development can be successfully and seamlessly delivered via AI-driven learning platforms. Such platforms are simple to deploy but can provide optimally tailored training and development programmes for employees, specifically addressing individual needs and preferences. This personalised approach amplifies the learning experience, leading to drastically improved skill development and career growth.

Chatbots are also an increasingly popular and immensely useful AI tool. Acting as a 24/7, virtual HR assistant for employees, they are equipped to address many simple queries related to HR policies, employee rights, benefits and financial wellbeing. These chatbots offer instant and accurate responses, increasing accessibility to guidance and convenience for employees, all while reducing the workload of HR professionals – indeed, research shows that using chatbots can save businesses up to 40 labour hours per week.

AI can boost success – but beware of the dangers

AI’s many virtues are evident, offering HR professionals and employees the support they need to carry out their roles as efficiently as possible.

Crucially, AI simplifies and streamlines otherwise menial, time-consuming processes, creating more room for HR teams to focus on strategic decision-making, innovation and handling bigger issues. In the long run, it may also save companies money, as less hands are required on deck to complete administrative tasks.

However, there are two sides to this story. And, as with any tech revolution, the rise of AI also presents potential issues. Data security concerns remain significant, as AI systems can be highly vulnerable to breaches if not properly secured.

In addition, AI is still prone to errors. For instance, hiring software may inadvertently reject strong candidates due to oversights and even machine-learned biases. Indeed, it may reject well-qualified candidates for missing trivial job criteria, and more troubling reports have even noted that AI-driven hiring programs can perpetuate machine-learned racial, class and gender biases.

This only goes to highlight the importance of ensuring fairness and impartiality in AI algorithms – which unfortunately has not yet been fully mastered. Until then, such programs will still require careful human supervision and evaluation. Initially, running AI solutions alongside business-as-usual HR practices is a good way of evaluating if any issues arise.

With the average spend on AI being £9,500 per small business and £380,000 per medium business, price is another concern, particularly for SMEs. Although it may cut costs for companies in the long run, it is only natural that software on the cutting edge of technology comes with a significant price tag, so the initial investment into AI tools can be prohibitive for companies with lower HR budgets.

Arguably, AI-powered systems also lack an element of the ‘human’ touch that employees need. While AI is unrivalled in its capacity to provide accurate information and rapid support, at its current stage of development it is unable to replicate the depth of understanding, emotional intelligence and compassion that an experienced HR professional can offer.

For instance, for sensitive discussions related to issues such as poor financial or mental wellbeing, many employees would naturally prefer to speak to real-life people who are capable of genuine empathy, rather than AI technology.

Enhancing, not replacing, the work of HR professionals

Ultimately, it’s clear that, in its current stage of evolution, AI is not as comprehensive a solution as it could yet be for businesses looking to streamline their HR needs. AI is an immensely powerful tool that can transform countless HR processes, but I believe its being held back by its lack of ability to replicate human intuition and empathy, at present.

Embracing AI – and technology in general – to find ways to innovate and streamline practices is a must. But in HR, perhaps more than any other department, the importance of the ‘human touch’ is essential. This is particularly true when it comes to sensitive topics, such as someone’s financial wellbeing.

For now, therefore, AI-driven tools should be overseen by humans, to ensure a balanced and well-rounded approach to HR and financial wellbeing support initiatives.

Using platforms that integrate innovative AI-powered functions alongside those supervised by people is a solid middle ground for businesses to tread. For instance, solutions exist that allow employees to manage their financial wellbeing through educational resources, comprehensive savings tracking tools and access to independent financial advisers, while also facilitating access to state-of-the-art, AI chatbots that can rapidly answer more day-to-day queries.

Right now, it is vital that HR teams take the time to engage with AI to optimise their professional lives and those of their employees. However, the dangers that such nascent technology can still present should not be underestimated, and I believe that AI-powered HR and financial wellbeing solutions should still be regarded as a useful tool – rather than a one-stop shop – for providing HR support.

Chieu Cao - CEO of Mintago

Chieu Cao is the founder and CEO of Mintago, an FCA-regulated company that provides its users with a complete and inclusive financial wellbeing solution. Mintago can also assist businesses in saving thousands in NICs, as well as providing their staff with direct savings.