Can clearer regulations motivate companies to use AI in HR?

IN A BID TO address the challenges of recruiting the right talent, businesses in the modern era started incorporating emerging technologies such as artificial intelligence (AI) and big data analytics.

In traditional HR departments, AI has made a big impact but it also raises questions of ethics and practicality as machines are expected to gauge humans qualifications without any set of guidelines or standards.

Recently, the debate on the matter took an interesting turn when the US state of Illinois passed legislation requiring companies that deploy AI to analyze candidates video interviews to comply with a new set of rules meant to keep candidates apprised of their use of technology.

It is widely expected that this new law will serve as a blueprint for other states to implement similar standards when it comes to the use of AI in the HR space.

Regulation to enhance tech usage, not hinder

When the bill is signed by the state’s governor, J.B. Pritzker, all employers based in Illinois that use AI to analyze video interviews will need to first disclose the fact to job applicants.

Further, companies must explain how the AI technology works, what are the characteristics AI will evaluate, and obtain consent from the job seekers before proceeding with interviews.

Employers also must limit sharing the video with specific experts for evaluation purposes and delete the videos and any remaining copies within 30 days of the applicants’ request to do so.

On the surface, any legislation such as this may seem like an impediment to innovation and tech adoption, but some expert believes that while this specific Illinois bill — albeit with further refining — will motivate employers to use AI in HR functions, according to an SHRM report.

“It can encourage the use of this technology because it starts answering the question of what’s permissible,” said Garry Mathiason, an attorney with San Franciso based law firm, Littler.

Mathiason sees the bill as a starting point for other states to build on when it comes to regulating the use of AI in HR.

According to him, many businesses refrain from adopting the technology in hiring processes due to the uncertainty around regulatory requirements, and this new legislation provides a sense of acceptability.

This certainty will lead to broader adoption of video interviews and AI-based evaluation technology.

Challenges that lie ahead

Littler Attorney Mathiason also acknowledged that being transparent – which is the essence of the new bill – may not be as easily achieved, given the fact that figuring out the mechanic of an algorithm is extremely difficult, if not impossible.

He noted that AI applications utilize advanced processes to seek out patterns, and developers of these sophisticated tools are not likely to share or explain the procedures.

Further, the bill also did not specify the level of details that employers need to provide, in regards to their AI evaluation tools.

Other than that, the new law also remains silent about whether or not employers are allowed to drop candidates from consideration should they refuse to consent to AI evaluation.

Without further clarification and refining, the bill in its current form could expose employers to lawsuits and other run-ins with the law, which could adversely affect the use of AI in the short-term.

In conclusion, it may be a little too early to tell how the new legislation or any form of regulation would affect AI or tech adoption in the HR space.

Governments everywhere have to strike the right balance between providing clear guidelines to enable innovation and adoption of technology while at the same time impose common-sense restrictions to protect businesses and job seekers alike.

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