AI in HR: From Efficiency to Employee Engagement

May 02, 2023

Find out how artificial intelligence is already enhancing core HR functions and what’s on the horizon.

“Artificial” seems like the antithesis of human resources. Yet advances in artificial intelligence (AI) technology can actually make HR more people-centered.


By streamlining HR administration, improving communication, and boosting productivity, AI is poised to save organizations time and money. That leaves more resources to spend on building a supportive work culture.

Equally important, AI can provide deep data insights to inform key business decisions regarding your long-term talent strategy.

Now, organizations have new ways — and even better tools — to personalize the employee experience using generative AI (we’ll explain!) and other new technology.

But just as HR’s role continually evolves to stay ahead of workforce trends, it can be hard to keep up with all the latest changes in HR tech.

In this article, we’ll look at how AI is already enhancing core HR functions and what’s on the horizon. We’ll also discuss the importance of choosing a technology vendor who understands the ethical implications of using AI in HR.

What Is AI and What Is It Doing at Work?

Broadly, artificial intelligence is the science of using machines to solve problems. There are several subsets of AI, like machine learning and natural language processing, that analyze large amounts of data for different purposes.

AI brings these technologies together to perform tasks similar to the way the human brain works, constantly synthesizing new information to identify patterns and generate insights.

In our everyday lives, we use AI as a pretty reliable personal assistant — finding directions in a strange city, seasonally adjusting a smart thermostat, or adding ingredients to a shopping list on command.

Artificial intelligence works behind the scenes in social and streaming media, keeping track of our likes and dislikes to offer better options (and ads).

We can find examples of AI in the workplace across almost all industries. In manufacturing, “collaborative robots” or cobots work alongside humans handling packaging, checking quality, and retrieving items from the warehouse. The healthcare industry uses AI to diagnose patients, identify disease markers, and recommend preventative treatment. Retailers are implementing AI both online and in-store to analyze customer behavior, adjust product placement, and predict demand.

And if you’re reading this on a computer or mobile device, you likely used AI to search the internet. Other ways you might use AI at work on a daily basis include email spam filtering, grammar checks, and blurring your background on video calls.

AI Terms for HR Professionals

  • Artificial Intelligence — an umbrella term for technology that processes and analyzes vast amounts of data to solve real problems.
  • Machine Learning — a type of AI that uses algorithms to identify patterns in data. As more data is collected, software applications that leverage machine learning can make predictions with increasing accuracy.
  • Deep Learning — a subset of machine learning, deep learning can process highly abstract information similarly to how the human brain works. Self-driving cars use deep learning to operate autonomously.
  • Generative AI — this type of machine learning helps users create content, including text, imagery, and audio.
  • Natural Language Processing — algorithms that allow computers to “understand” spoken or written human language. For example, NLP is the engine behind autocorrect and other word-processing assistants.
  • Chatbot — on the periphery of AI, chatbots use natural language processing to answer common customer or employee questions.
  • Internet of Things (IoT) — a system of connected devices that exchange data to make those devices work more efficiently, or “smarter.”
  • Virtual Reality — simulating a detailed, immersive environment, VR can make employee training safer and more engaging.

How Does HR Use AI?

There’s a growing list of HR use cases for AI. From streamlining processes like onboarding and payroll to helping maintain compliance, AI increases efficiency through automation and reduces errors caused by manual data input. Essentially, if a task involves the collection and analysis of data, it can be enhanced with AI.

Saving time and improving accuracy are two good reasons for HR to take advantage of AI technology. But AI can handle a lot more than task management.

Today, HR is finding applications for AI throughout the employee journey. According to a recent SHRM survey, 79% of organizations of all sizes plan to start using or increase their use of automation or AI in recruitment and hiring; 41% in learning and development; and 38% in performance management.

Examples of AI in HR: Making Work More Personal

By leveraging AI, HR can personalize services at critical moments throughout the employee lifecycle — tailoring benefits and career opportunities based on individuals’ goals and preferences.

Artificial intelligence can also help managers empower employees to “own” their shift schedules and communicate with them more effectively.

Let’s look at some examples of how AI helps HR professionals and people leaders connect employees with the support they need, want, and are entitled to.

By using AI in…

HR can:


  • Proactively identify internal and external candidates for open positions
  • Answer common applicant questions using chatbots


  • Guide new hires through document collection prior to their start date

Time & Labor

  • Predict the hours needed to optimize scheduling and reduce costs


  • Recommend and assign training based on employee career goals


  • Ensure the review process happens consistently and fairly for all employees
  • Analyze tone and sentiment for real-time coaching on feedback delivery


  • Automatically generate company-wide messages for faster, clearer communication


  • Identify risk factors for burnout before it’s too late

Data Analysis

  • Power employee engagement efforts with better metrics and benchmarking

Will AI Replace HR?

No, but AI is changing how HR creates a holistic and productive employee experience. Let’s see how.

Using AI to Improve the Employee Experience

As HR’s role continues to expand, the focus on employee experience (EX) narrows. Not only have worker expectations shifted over the last several years; organizations have recognized the impact of EX on the bottom line.

Today’s sophisticated AI tools can help HR professionals build a culture of communication, collaboration, and connection. When integrated with your everyday HR and payroll software, AI makes it faster and easier to engage employees in more meaningful ways.

Paylocity is a leading innovator in HR technology and has developed the industry's most modern HCM platform to help organizations increase insights, bolster productivity, and drive better business outcomes. Below are two of our most recent AI breakthroughs for HR that improve the employee experience and overall organizational health.

AI Assist: Generative AI Breaks Down Communication Barriers

Built using an integration with OpenAI — the developer of ChatGPT — AI Assist gives HR professionals, leaders, and employees the power to create highly effective communications in less time.

With AI Assist, all employees can take advantage of generative AI to share information directly in Paylocity’s social collaboration hub, Community. Following simple prompts from users, AI Assist makes communication easier by speeding up the draft process, boosting writer confidence, and jumpstarting creativity. It even translates company news into other languages.

Learn about our pilot of AI Assist and how your organization can access it in the future.

Modern Workforce Index: AI Makes HR Data More Actionable

In April 2021, Paylocity introduced the Modern Workforce Index (MWI), a dashboard that provides unique insights on employee sentiment, performance metrics, and engagement.

Backed by a patent-pending algorithm that uses machine learning and natural language processing (NLP), MWI aggregates data from Paylocity’s 33,000+ clients to help businesses benchmark employee engagement key performance indicators (KPIs). HR leaders have real-time visibility into your organizational health compared to similar companies based on NAICS code and company size.

The Modern Workforce Index goes one step further, providing customized recommendations to improve your score — and ultimately reduce turnover and increase productivity. By leveraging AI, MWI increases its accuracy over time to offer relevant and impactful recommendations specific to your organization.

Find out more about how MWI helps organizations measure and maximize the employee experience.

Ensuring the Ethical Use of AI in HR

As we’ve learned from Spider-Man (an early adopter of the web): With great power comes great responsibility.

The use of AI in HR — and in our lives generally — raises some questions and concerns about data privacy, integrity, and bias. Companies and HR professionals must proceed with caution when using any technology to make policies or inform employment decisions.

Choosing a technology partner who is laser focused on the ethical use of data is imperative to achieve the true employee and HR benefits of AI. Ask potential HR solution vendors these questions about their commitment to AI ethics:

  1. How are your AI systems held accountable by humans?
  2. How do you provide transparency to users of AI?
  3. How do you maintain compliance with applicable laws and regulations?
  4. How do you stay current on AI technology and best practices in HR?
  5. How do your AI systems help reduce potential bias?

At Paylocity, we aspire to create software that enables an intelligent, diverse, equitable, and inclusive workplace that empowers people. We believe data is an incredible resource and should be handled ethically to ensure businesses operate beyond bias.

To Think Next Generation as an organization, Paylocity commits to proactively designing products that leverage AI with our users in mind. We approach all our data science projects with scientific integrity, transparency, and accountability.

Read how Paylocity’s principles uphold the highest standards of data security and AI ethics in HR.

Want to see AI in action? Request a live demonstration of Paylocity’s user-friendly platform and we’ll show you how to get the most out of your AI-enabled HR and Payroll solution.


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