Navigating the Challenges of AI in HRM: Balancing Efficiency and Ethics

challenges of AI in HRM

While maximizing the usage of AI, recognizing the challenges of AI in HRM will also help the company to streamline processes and improve its overall situation. The question is how HR strategy molds the system to meet their needs.

The importance of recognizing the Challenges of AI in HRM

The many uses of AI in various sector raises a concern about how effective it is for the recruitment process. There is a significant rise in how many HR Companies are using the technology, from 56% of total companies in 2022 to close to 80% in 2023.

Many analysts and HR managers have been predicting this jump for a while. The customers are expecting better products and services. Thus, the company needs to meet the market’s wishes to stay in the business.

Utilizing AI can save the company time and effort on various fronts. The AI system can automate parts of the process of recruiting and maintaining employees. It will help HR to do their essential work.

Having HR who recognizes these issues will help the company to build a better plan for employee management. They can retain more talents and have minimum difficulties in training new talents. Overall, the company will continue to grow with the market and be able to meet the customer’s demands.

What are the Challenges in HRM

Here are several challenges that a company face in utilizing artificial intelligence. Keep in mind that the company may only need to face one or two of these issues at once. Yet, if they don’t address it soon, they may face other challenges as well.

· Cost

Using AI is not cheap, and since it’s still in the early stages, the initial and maintenance cost can be expensive. And this led to some of the companies can’t afford to use AI. While at the same time, they may be the ones who need it the most.

The cost of technology is only part of the problem. As there is no guarantee that an expensive technology can give the company the best result. And the company also has to worry about implementing the system and maintaining it for the years to come.

Another cost-related issue is how the company also needs to train recruits on the system. While AI may provide immense help, it might be not suitable for the recruit with a high potential.

· Data Security

Since most AI technologies are using the cloud storage system, there is still a possibility for data tampering. In a sense, the company can mitigate the risk by using an in-house system that uses LAN.

However, it possesses more issues as they may be limiting the HR and other employees to do their best. While it means enhanced security, it also means difficulties in accessing from a remote place. Thus the employees may have issues with having a work-life balance. And in the long run, it will reduce their satisfaction and employee retention.

Some HR data also includes personal information. This can lead to fraud cases and identity thefts in the future. In addition to enhancing the security of their data, the company must assure the employees that their private data is also safe with them. Moreover, they also need to abide by the law on data protection.

· Inaccurate Interpretations

Artificial Intelligence is a misnomer at heart. The mathematical language relies on input from the developer. AI will only show results based on the information they have. Therefore, it’s still imperfect and may have inaccurate results.

And since it depends on the parameters that the developers and users are setting, AI can get unreliable at times. This can be an issue for employees with unstable performances and HR that equally have no clue on how to translate the AI result.

For example, an HR can put education requirements above work experience in the parameter. The AI will suggest recruits from specific colleges instead of looking at work experience and certifications.

And it means instead of cutting the recruitment process to half, the AI forces HR to work on another round and do more screening. It also means that the company can’t have the right recruit immediately.

HR also has issues with integrating the new system. It can be a case of bad implementation or a misinterpretation. Relying on AI to screen the employees means losing out on some of the potential. As the recruitment process often goes through several HR processes, they may have different ideas about what they’re looking for.

On Balancing Efficiency and Humanity

While it may sound difficult, finding a balance is still highly possible. A company can find the best formula to integrate AI into its HR system. However, even two companies working on the same business may need a different approach.

AI can be personal and highly usable for a company of any size. It’s a case of how well the company can utilize the technology.

It’s a misconception to think that it’s all on HR to find the balance. There must be a working relationship between all employees to achieve maximum efficiency. HR can act as the control and balance force to adjust how much the company can rely on the AI. And they also need to know when they need to take action.

The human touch in using AI for many HRM activities is still inevitable. As a growing language, AI has the potential to enhance the human ability to be more efficient.


A company needs to understand the best way to utilize the AI force in its hands. Albeit the many benefits, the system still has flaws and possesses some serious challenges for the company. And that is one thing they need to know and address beforehand.

As the company recognizes the challenges of AI in HRM, it can improve its overall productivity. In addition to having better efficiency, they also can improve the employee’s experience and have a better loyalty rate.

FREE - Brilliant PPT Slides on HR Management x HR strategy. Download Free - NOW.

HR English Jpeg RE