The Impact of AI in HR – Top 3 Compliance Issues

AI is becoming a powerful tool for HR teams. 79% of companies are using some form of AI in recruitment or hiring, marking a significant leap in how HR teams acquire talent.

AI is finding use in organizations as an HR tool for skill gap analysis, learning and training, and automating administrative tasks. However, as the use of AI surges with HR teams, new compliance challenges are cropping up that need immediate addressing. 

Laws governing the use of AI in organizations are rapidly changing to deal with emerging issues of using AI in HR, such as bias, data privacy, and violation of employee rights. 

Here’s what you need to know about AI in HR and what impact using AI will have on your HR team and compliance. 

What is AI in HR?

AI, also known as artificial intelligence, refers to machines that can analyze data and make decisions without human interference. AI uses various technologies and tools, such as machine learning and natural language processing, to learn, gather data, and mimic human intelligence.

AI in HR seeks to automate manual, repetitive functions and free up time for HR teams to handle other important tasks. AI can complete high-volume functions for HR teams and departments given the necessary parameters and data, freeing up weeks of work for the team. 

However, despite AI’s incredible processing power and speed, it shouldn’t be used as a full replacement for HR staff. Instead, AI in HR should be viewed as a team player, contributing to better performance of HR teams by taking up technical work and letting the team focus on innovation and company growth. 

The Advantages of AI in HR

Here are some top advantages of using AI in HR.

Improved Experience for Employees

AI can answer multiple employee inquiries simultaneously, unlike your HR team, which can only tackle one at a time. Your HR team can also use AI to handle critical issues with your employees and improve overall employee satisfaction.

Less Administrative Overhead

AI is capable of managing the repetitive tasks that typically consume your HR team’s time, like answering employee inquiries or generating company documents. This allows your team to dedicate less effort to administrative work and allocate more attention to enhancing the overall employee experience.

More Meaningful Reports

AI can access and process tons of company data faster, leading to better and more meaningful reporting. AI can analyze and develop correlations between performance, finances, and engagement to help your HR team make strategic workforce decisions, such as suggesting new, more efficient work processes. 

The Influence of AI on HR

Here are some of the key areas AI influences HR.

Talent Acquisition

Talent acquisition is one of the most prominent uses of AI in HR. AI helps HR teams screen candidates, schedule interviews, maintain databases, and answer queries from job seekers. Therefore, your HR department requires less manpower to handle mundane recruitment tasks. 

Using AI for talent acquisition reduces hiring time significantly, allowing you to be more productive in other areas such as employee management, talent management, total reward, DE&I, and overall people strategy.

Learning and Training

AI-integrated HR systems can help HR teams with employee development and training. Skills required for various jobs are constantly changing, making it imperative that HR teams offer a concise development path for employees to learn these new skills.

AI assesses the employee’s skills and recommends various resources, such as learning programs and videos, to upskill them based on their job requirements. 


Apart from assisting with talent acquisition, AI in HR can help with onboarding, presenting new hires with crucial work information immediately after they report to work on the first day. These include company policies, job profiles, team members, reporting authorities, task assignments, and other important information they may need.

This plays a crucial role in employee retention and improving HR productivity. Employees are more likely to stay in an organization for longer if they experience a superior onboarding process. 

Skill Gap Analysis

AI can conduct skill assessments and identify specific skill gaps within organizations or educational institutions. These assessments can be used to create targeted training programs, enabling employees or students to acquire the skills required for their roles or career paths. 

The Compliance Challenges of Using AI in HR

Despite becoming a growing, popular tool among HR teams, AI poses significant compliance challenges that must be addressed. These challenges include the following:


Based on the data provided, AI can make decisions that negatively affect individuals from underrepresented communities. This can be more prevalent during the talent acquisition process, where the AI algorithm may favor individuals from a certain demographic over others. 

This can lead to legal issues, especially with anti-discriminatory laws.

Exposure of Private Data

AI can access and process tons of data. This includes sensitive information such as birth dates and social security numbers. HR teams using AI run the risk of the AI accidentally revealing this information, leading to serious violations of laws such as CCPA and GDPR. 

If personal data exposure leads to severe consequences for the employees, such as identity theft, the organization may be liable for fines and other penalties. 

Violation of Employee Rights

Legislation is catching up with the use of AI in HR, with areas such as Maryland, New York City, and Illinois enacting regulations for the use of AI during recruitment. There’s growing concern that AI can violate employee rights, especially for workers in protected classes under Title VII of the Civil Rights Act, ADA, or ADEA.

Have an Expert Address Your AI Compliance Challenges

AI is finding its footing in HR teams, making it one of the most adopted tools by HR departments recently. However, as the law catches up with the use of AI in HR, it is paramount that your HR team is aware of changing legislation to ensure compliance while improving systems and processes using HR.