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Employee Benefits

Leveraging AI in Employment Decisions

December 7, 2023

Organizations are increasingly using artificial intelligence (AI) in employment-related decisions. According to the Society for Human Resources Management, around 25% of organizations use AI for HR processes.

This may include the following:

  • Recruitment and candidate screening. AI tools help match potential employees to open positions and scan resumes for keywords and phrases. In some instances, companies may utilize AI to assess candidates’ interview responses or even interact directly with potential hires.
  • Hiring and onboarding. AI streamlines processes during hiring and onboarding, reducing redundancies and checking for incomplete responses. It can also be utilized to personalize and improve the hiring and onboarding experience.
  • Performance evaluation and feedback. AI provides real-time assessments and collects and analyzes performance data. The information can then be used to provide targeted and timely feedback to employees and assist leaders in making promotion and retention decisions.

Although AI can offer several benefits—such as improved efficiency, objectivity and decision-making—it also presents challenges related to biases, transparency and ethical concerns.

To mitigate potential liability and reduce risks with AI use, organizations can implement the following strategies:

  • Comply with applicable laws and regulations. Businesses need to make certain they are permissibly using AI in employment-related decisions. Working with the AI vendor to understand its algorithm, consulting with attorneys about the applicable laws and regularly monitoring the technology’s outputs for discriminatory results may help them do so.
  • Develop clear ethical guidelines. Internal policies should address appropriate usage, detail consent procedures for candidates and employees, and emphasize transparency of AI algorithms.
  • Ensure data quality to minimize bias. Since AI can perpetuate unlawful biases, it is imperative for the data placed into the system to be accurate, diverse, relevant and complete. This can help the system produce stronger and more compliant results.
  • Implement human oversight and intervention. Human involvement in decision-making processes is crucial to ensure AI systems’ legal and proper functioning.
  • Audit and evaluate AI performance regularly to address emerging risks. Like other systems, AI needs to be audited on a regular basis to analyze its outputs. Adjustments and corrections can then be made to improve its performance.

Addressing Emerging Executive Risks

Your executive team makes the best decisions they can each day, using the information that is available. But the executive risk landscape is ever-changing and new technologies, such as AI, seem to emerge with increasing frequency.

Hylant’s job is to help you protect your interests and your company. Contact us to discuss risk management strategies for your business.

Related Reading: Nine Cyber Risk Questions Every Board Should Ask

The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.

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