How are companies using AI in people management, and what risks does it pose?

What if an Artificial Intelligence tool decided who gets hired or dismissed by a company, or which employees should receive training? The use of AI in human resources is already a reality, but it is important to understand how it is being used and the risks it may pose to companies and employees. At G. Elías y Muñoz Abogados, as lawyers specialising in labour law, we analyse this issue to provide you with the answers you need.

Uses of AI in human resources

AI tools are being used by departments responsible for people management within companies in many different ways, including the following:

• Recruitment. Manual screening of candidates' CVs is increasingly being replaced by automated screening that analyses how closely candidates' profiles match the requirements of the advertised position. AI is also used to search databases and professional networks to find the ideal candidate.
• Performance evaluation. AI can collect productivity metrics and provide solutions to problems within the company as soon as they begin to emerge.
• Training plans. AI is also being used to identify employees who need training. In this respect, fully personalised training programmes are also being designed using AI.
• Drafting documents. Drafting documents related to human resources management is another of the most common uses: letters, contracts, agreements, work schedules and other documents are produced using AI to make the process faster and reduce human error.
• Predictive analysis. AI has the ability to analyse large volumes of data to identify trends and anticipate problems such as employee turnover, burnout or workplace disputes.
• Answering employees' questions. Some companies use chatbots to answer employees' most frequently asked questions about their payslips, contracts, sick leave or holidays, among other matters.

What are the risks of using AI in human resources?

The use of AI in people management involves various risks, including the following:

• Bias. AI systems may make decisions influenced by biases arising from their training data, which can lead to unfair outcomes.
• Lack of empathy. Another major problem is that AI systems completely lack empathy and may therefore make decisions without taking personal circumstances or emotions into account. This can result in the dehumanisation of the human resources department.
• Confidentiality and data protection risks. Human resources management involves handling a large amount of confidential information, such as employment contracts, sick leave records and payslips. These documents also contain personal data such as full names, addresses and bank details, which must be protected. Great care must be taken when sharing this type of data with AI to prevent data leaks and breaches of data protection regulations. Before using AI, it is necessary to ask: where is the data shared with the tool stored, what type of data will be shared, who has access to it and how is the information protected?
• Black box effect. This occurs when it is impossible to explain why AI has reached a particular conclusion, for example, why it rejected a candidate for a position within the company who appeared to be the most suitable.

What rights do employees have regarding the use of AI in human resources?

To answer this question, we must consider that there are several key regulations:

• Data protection. At European level, the General Data Protection Regulation establishes limits on the use of AI in Human Resources, particularly in relation to automated processes, and prohibits decisions based solely on automated processing where they significantly affect a person.
• Protection against the use of AI. The European Artificial Intelligence Regulation classifies AI systems used in recruitment as high-risk systems, meaning they are subject to stricter controls and must comply with prior impact assessments and transparency requirements.
• Right to equality and non-discrimination. The Spanish Constitution is also fundamental in this respect, as Article 14 establishes equality before the law and prohibits any form of discrimination on the grounds of birth, race, sex, religion or other personal circumstances. The right to equality is reinforced by the Law on Effective Equality between Women and Men and the Workers' Statute, which advocate fair and equitable recruitment processes.
  The Workers' Statute establishes the following as basic employment rights:
       o The right not to be directly or indirectly discriminated against in access to employment or, once employed, on the grounds of marital status, age within the limits established by law, racial or ethnic origin, social status, religion or beliefs, political views, sexual orientation, sexual identity, gender expression, sexual characteristics, trade union membership or non-membership, language within the Spanish State, disability, or on the grounds of sex, including unfavourable treatment of women or men as a result of exercising rights relating to work-life balance or shared responsibility for family and working life.
       o The right to respect for their privacy and to due consideration for their dignity, including protection against harassment on the grounds of racial or ethnic origin, religion or beliefs, disability, age or sexual orientation, as well as protection against sexual harassment and harassment on the grounds of sex.
• Fundamental rights. At European level, ILO Convention No. 111 and the Charter of Fundamental Rights of the European Union should also be highlighted.

Ultimately, the use of AI is limited by employees' rights, and employees should be aware of these rights and protect them if they are infringed.

If you believe that your rights as an employee have been infringed through the use of AI, contact our team of expert labour lawyers for advice.