How can SMBs benefit from the use of Artificial Intelligence in human resources?

At first glance, it may sound counterintuitive to have an artificial intelligence in a human-centric field. (Photo by Francois Mori / POOL / AFP)

How will SMBs gain from artificial intelligence in human resources?

  • From naysayers to evangelists, almost everyone has an opinion about how AI will impact not just businesses, but global economies and job markets 

Of interest is how artificial intelligence (AI) might feature in human resources (HR), a field not generally associated with intelligent automation. Contrary to popular belief, AI is not a new technology. From its first proof of concept in 1955, it has evolved tremendously since. Buzz aside, AI can impact organizations in profound ways, especially when coupled with novel problem-solving approaches

The AI hype has enthralled many businesses, most prominently in how it proffers automation of processes, thus improving efficiency and lowering costs. Additionally, AI confers powerful analytics capabilities, optimizing decision making, reducing human error, and improving customer responsiveness.

Applying Artificial Intelligence in Human Resources

At first glance, it may sound counterintuitive to have an artificial intelligence in a human-centric field, but if AI can automate processes and provide insights, it stands to reason that these can be applied to human resources too.

A 2019 survey by Gartner identified three ways AI would impact HR, namely: in talent acquisition; voice of the employee (VoE) analytics, and HR virtual assistance. 

AI in talent acquisition is rather controversial, especially regards the fear that AI will replace humans in the decision-making process as well as introduce bias and discrimination as in the case of Amazon. Thankfully, HR personnel now use AI for ‘labor market analyses, competency identification, skills matching, and bias detection in job descriptions and candidate ranking’, according to Helen Poitevin, Research VP at Gartner. Furthermore, AI in recruitment is known to be precise, accurate, and fast.

Voice of the employee (VoE) analytics can monitor employee sentiment, helping to inform decision making in workplace improvement policies, whereas HR virtual assistants can optimize the front-end of employee-related HR processes (for instance, via employee helpdesk services). 

Key considerations for SMBs 

Implementation of AI in HR processes for small-to-medium businesses (SMBs) is affected by different barriers, priorities, and opportunities. Limited by smaller budgets, pricier AI options are often out of reach for them. Additionally, SMBs tend to lack HR departments, with many opting to outsource or automate HR processes, such as using payroll solutions. 

However, SMBs benefit from a shorter chain of communication between the different strata of staff. HR processes tend to be faster and rely on organic human interactions versus the complicated layers of processes common in larger companies. As such, SMBs look for optimized organizational fit, making teams tightly-knit and agile. It is precisely this sort of ‘small company’ feel that larger companies try to imitate using AI.

What’s the best approach for SMBs?

Anne Bailey, an analyst at Kuppingercore, suggests that SMBs focus on using AI to handle two issues: Recruitment, and HR visibility. Leadership Strategist Jeanne Meister also advises companies to improve the employment and employee experience by identifying the right business problems to be solved using AI. 

As with all businesses big or small, talent acquisition is a time-consuming and tedious process. Sourcing for qualified talent due to smaller candidate pools can be a challenge, and a lack of HR visibility within the organization can affect employee performance and retention.


Within recruitment, AI tools can quickly source for potential candidates across job portals or internal databases, or optimize marketing efforts for open roles. It can also quickly scan through hundreds of applicants, shortlisting best-fit candidates through techniques such as resume parsing, or behavioral and skill assessments, while at the same time, reducing hiring bias. 

Predictive performance, a feature of skill assessments, is more efficient at matching candidates to available positions, which can cut down on the time spent to manually screen applicants prior to interviews. 

Increasing HR Visibility

HR visibility is crucial, but often overlooked. AI can transform the employee experience, and improving visibility helps in employee management and strategy, viz monitoring/analyzing sentiment and feedback from staff. It can also analyze company policies and practices, track employee performance and activity, and manage payrolls, amongst others. 

Ultimately, the adoption of AI in HR depends greatly on how HR personnel are trained and aware of AI, as well as identifying the needs and priorities of the SMB in order to find the right tools to deliver the appropriate services.