Artificial intelligence is an exciting new technology that is changing how many business departments operate, including HR. AI can be used to optimize workflow automation, conduct better analytics, improve employee scheduling and more. However, HR teams, like any other team, must remain compliant when using AI during the hiring process. As regulators pay more attention to this disruptive technology, businesses must be aware of how their use of AI is viewed under constantly changing legislation. Here are the major challenges hiring teams face when using AI in their workflows and how businesses can overcome them.
Common Compliance Challenges HR Teams Face When Using AI
The first challenge that businesses have to overcome when using AI is managing the underlying data regulations that already exist. For any AI project to be successful, businesses must build a strong foundation on reliable and accurate data. HR teams tend to use data that is highly personal and sensitive. These data points are often protected by data security regulations that define how that data can be used — and whether it can be used for AI projects in the first place.
The next challenge for HR teams to overcome is the inherent biases that AI algorithms tend to have, despite most businesses’ best efforts. While many business leaders understand the importance of using AI responsibly, not all companies have well-defined ways to ensure responsible AI use within their organizations. According to research from Accenture, 69% of companies have not fully implemented a responsible AI framework in their organization.
The Dangers of Non-Compliance with AI Regulations
As more regulators pay attention to how AI is developed and used by businesses all over the world, companies will be expected to prove compliance with new and more complex regulations. This approach often leads to non-compliant businesses being fined or sanctioned for their failure to keep up with changing regulations.
Monetary fines are often not the only result of a non-compliant team being sanctioned. Reputations can suffer when a business is known to have missed compliance requirements. Prospective candidates who must share personal information with hiring teams might be less inclined to apply for open roles if the HR team is deemed to be untrustworthy.
How to Ensure That Your Business’ Use of AI Stays Compliant in an Evolving Regulatory Environment
Use software and technology that is natively compliant. AI is used in many solutions HR teams use on a daily basis. When these solutions are chosen, business leaders must actively evaluate their partners’ compliance policies. If all the solutions within an integrated technology stack are fully compliant with existing regulations, the team is more likely to be, too.
Understand the existing regulations before getting started and set internal rules in accordance with them. Business leaders can sometimes get carried away by the promise of AI-powered hiring workflows and begin AI projects before fully understanding the implications of their undertaking. This can lead to a delayed adjustment of project parameters and unnecessary costs in labor and rework to become compliant after the fact.
Once these regulations are understood, HR teams should develop internal governance frameworks to identify when potential issues arise. While the vast majority of businesses have some rules on how data and AI are used internally, only 62% of companies have developed a governance framework to follow.
Ultimately, AI can help HR teams change the way they operate but they must first prepare themselves for existing and incoming AI regulations. As more businesses use AI, the pressure to remain compliant is only going to get more challenging. Internal frameworks, a robust understanding of the regulatory environment and strategic partnerships can go a long way in ensuring compliance within a rapidly evolving legislative landscape.