AI Divide in HR
Deel, the leading global
HR and Payroll Company, released new research on AI’s impact on the HR function
to coincide with the general availability launch of Deel AI. The comprehensive
survey of 1,100 HR decision-makers identified the key benefits and concerns regarding
the role of AI in HR and revealed that while almost two-thirds (61%) believe AI
will positively impact HR practices over the next five years, the majority of
those not already using it are unlikely to implement it soon.
Key Findings:
· Current Use and
Future Adoption: Roughly 2 in 5 (38%) HR decision-makers currently employ AI in
their practices and workflow, while 23% of those not currently using it plan to
adopt AI within the next year. However, a significant 70% of non-users are
unlikely to implement AI within the next 12 months, highlighting a clear gap in
understanding and acceptance.
· Positive Impact
Anticipated: 61% of respondents believe AI will positively impact HR practices
over the next five years. This optimism is especially high among younger HR
decision-makers, with 86% of those aged 25-34 expecting beneficial outcomes.
· Impact across the HR
function: AI is seen as a transformative force across several HR functions.
Respondents believe the top 10 areas that will benefit most from AI are:
1. HR Analytics (46%)
2. Checking employment
laws (37%)
3. Employee learning and
development (35%)
4. Payroll management
(34%)
5. Accessing hiring
data/insights (33%)
6. Performance
management (32%)
7. Benefits
administration (32%)
8. Recruitment and
talent acquisition (29%)
9. Employee onboarding
(28%)
10. Salary benchmarking (28%)
Demographic Insights:
· Youth-driven optimism: HR decision makers
under 35 are the most optimistic about AI, with 83% believing it will have
a “somewhat” or “significantly positive impact” on HR in the next five
years. Only 38% of those aged 55 and older share this outlook. In fact,
over a quarter (26%) of over 55’s believe it will have a “somewhat” or
“significantly negative impact”.
· Larger companies are
more receptive to AI: 85% of HR decision makers from larger businesses (250+ employees)
are optimistic about AI (noting that AI will have a “somewhat” or
“significantly positive impact” on HR in the next five years), compared to 47%
from smaller companies (1-250 employees).
· Companies with higher
revenues are getting ahead: 61% of businesses generating more than $10
million were already using AI, with almost half (47%) of non-users planning to
adopt it within 12 months. Only 13% of companies with a turnover less than $1
million were currently using AI, while 81% of those non-AI-using smaller
businesses were not likely to implement it within the next year. The disparity
in AI adoption could leave smaller companies at a disadvantage, potentially
struggling with efficiency and innovation compared to their larger
counterparts.
Challenges and Concerns:
· Data Concerns: AI reliability
and accuracy (16%), along with data security and privacy (16%), were the top
elements HR decision-makers were most concerned about when considering the
integration of AI into HR.
· Human Element: The potential
loss of personal touch in HR processes ranked third as the element HR decision-makers
were most concerned about when considering the integration of AI into HR (13%),
signaling the importance of maintaining human interaction in AI-enhanced HR
functions.
o Additionally,
“Employee dismissal” ranked lowest (13%) on “HR areas that would most benefit
from AI”, followed by employee recognition and rewards (21%), further
highlighting the concern of AI being overly involved in employee interactions
that need a personal touch.
Aaron Goldsmid, Head of Product,
Payments & Integration at Deel, said: “We are at a pivotal moment in the
evolution of HR technology. Our latest research shows that only 38% of HR
decision-makers have already embraced AI. This means over 60% of companies have
yet to adopt it - highlighting a considerable gap in adoption and hesitation,
especially among smaller businesses. This reluctance to adopt AI is not just
about the use of technology, it means many businesses are missing a trick in
terms of gaining a competitive advantage in efficiency and strategic insight.
For many companies, HR is highly manual, and AI can help alleviate some of this
admin burden, allowing HR leaders to focus more on strategy, creativity, and
people-focused work.
“At Deel, we understand that the future
of HR and payroll lies in making advanced technologies accessible to companies
of all sizes. Deel AI is specifically designed to democratize access to
data-driven HR insights and information, enabling HR teams to be more strategic
and proactive. With Deel AI, all businesses, regardless of size or revenue,
have the tools to not only keep pace but to lead in this transformation.”
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