AI and Automation in HR and Its Applications in Different Industries

Introduction

Workforce management since time immemorial has remained an important but challenging task. With the current changing landscape of business operations where employees are working from any part of the world, it has become tougher to keep track of the productivity and well-being of your employees.

Human capital management, a dynamic process, is highly dependent on the type of industry a business belongs to. The needs, priorities and challenges of employees and HRs change based on the type of industry they are working in.

In this blog we will discuss the several challenges faced by HRs in 5 major industries and enlist for you the viable solutions to tackle these challenges.

Rise of HR Tech

It was not until 1987 that the idea of an HRMS came into being. The first client-server based HRMS system, that could handle HR operations like payroll, was launched in 1989.

Post this foundational innovation, data generation and analysis started becoming an integral part of HR management in the 2000-10s. The more upgraded HCM systems no longer took care of just singular modules but were robust enough to handle multiple modules in one pack.

In 2023, AI & ML has taken the driving seat and is helping HR managers to navigate through operations. Chatbots, virtual assistants, ATS, learning and development all enabled by AI are assisting HRs to fulfill their strategic role in achieving business success.

Application of HR Tech in different Industries

In the growing economy, the role of HR Tech is becoming increasingly important in driving a culture of data-driven workforce. Innovative HR tech solutions are now allowing HR managers to play a strategic role in driving long term success for businesses.

The use of such solutions is increasing and spreading across varied sectors and industries. In this section we will discuss the industry specific HR challenges across – healthcare, manufacturing, tech, financial and retail industries.

1. HR tech in Healthcare Industry

A study by The Workforce Institute and Regina Corso Consulting revealed that 74% of healthcare HR professionals highlighted the importance of a need for achieving proper work-life balance for healthcare workers.

In an industry like that of healthcare, employees as caregivers play the major role in providing quality healthcare services to the patients. It is on them that the lives and satisfaction levels of patients depend on. This makes it crucial for organizations to place the wellbeing of their employees at the center.

Burnout is a recurring and prolonged problem among healthcare professionals. Long working hours, emergency duties, lack of poor work-life balance and poor working environment are all contributors to burnout.

A major part of the healthcare industry also consists of non-clinical support staff. This section suffers from a lack of proper job security, career mobility, and competitive packages and benefits resulting in huge dissatisfaction among them. In an industry which must prioritize quality over quantity, talent shortage is a grave issue.

Along with being responsible for core HR tasks, healthcare industry HRs are also responsible for building a workplace that can facilitate statutory compliance; employee learning and development; and a compassionate approach to treating employees and patients. This makes it crucial for HRs to implement strategies that support flexibility and are employee friendly.

2. HR tech in Manufacturing Industry

In a report published by Tribune India, the global manufacturing sector contributes to approximately 38.5% of job roles with 27.3 million workers in India alone. In a labor-intensive industry like manufacturing, human resource management establishes itself as a mammoth task for HRs.

In such a set-up, more than often HR plays the role of bridging the gap between the employees and the management. The sector provides ample jobs but also suffers from the lack of skilled workers. The reason behind this is the stereotypes (like those of being boring, not innovative) associated with the sector.

Employees in the manufacturing sector are subject to working in shifts which often makes it difficult for HRs to track the attendance and hours of work of employees. Lack of proper records also leads to ensuing issues like ineffective performance evaluations. Both time & attendance management and performance management make up an important part of productivity tracking of employees.

On top of the core HR operations like recruitment, payroll and attendance management, tasks like maintenance of workplace safety to avoid injuries and hazards are of prime importance for HRs in a manufacturing company. This makes it critical for HR personnels to stay on top of their toes to manage their time effectively.

3. HR tech in IT/Tech Industry

In a continuously evolving industry like that of tech, where constant innovations are necessary, human resource practice also needs to evolve. In such an environment, gaining a competitive edge over your competitors becomes difficult yet a must have.

In order to constantly overtake competitors, employees need to maintain an extremely high level of productivity on an everyday basis which can easily become a cause of employee burnout. Burnout also impacts the employee engagement rates leading to quiet quitting, attrition, and high employee turnover rate.

The process of hiring new people as a replacement comes with its own set of challenges. Shortage of talents, and ongoing gender disparity in the industry directly impacts the quality of employees, their work and the company’s work environment.

The IT industry is one where the hybrid working style has been dominating for quite some time now. The hybrid setting has its own bunch of merits and demerits. While it is convenient for both parties, employee engagement can be highly impacted because of it.

According to a report published by KPMG, 86% of HRs belonging to the tech industry believe that their roles as HR have become more strategic than before. Thus, HRs must prepare a robust action plan for dealing with issues like hiring top talent, remote onboarding process, etc. This requirement can easily create tremendous pressure on HR professionals every day.

4. HR tech in Financial Industry

The financial industry has always been popular for its apathy towards technological upgrades. However, in a technologically advancing world like ours, even the financial sector has had to take refuge in digitalization in order to survive in the changing economy.

The digital transformation creates a need for technologically savvy employees. However, the aging nature of the industry employees makes this a complicated process. There is a dire need for upskilling and reskilling so as to facilitate a successful transition into digitalization.

The process of transition is filled with issues of its own, including lack of interest from the employees, and a drop in productivity levels during the process. This change can push employees towards burnout and a feeling of disengagement.

Hiring new talents that are already tech savvy is also the need of the hour. However, this hiring should be able to break the existing gender barriers prevalent in the sector. According to a study conducted by PwC, 85% of CEOs of financial sector companies believed that promotion of diversity and inclusion helps in improving the performance of business.

The financial industry is one where compliance and data management has remained a prolonged issue. Outdated data management process and infrastructure make it difficult for employees and HRs to manage customer and employee/organization related data. In a transitioning industry like finance, HRs need to revisit their HR policies to adapt to ongoing market demands.

5. HR tech in Retail Industry

In contrast to the stereotyped simple and boring manufacturing industry, the retail industry has popularly been associated with fame and vibrance. This vibrancy has been an attraction for many; however, it has not been enough to retain employees in the sector. As per a Zipline survey 42% of the retail employees at the associate level plan on quitting the industry.

An equally labor-intensive industry like manufacturing, employees working in retail have hardly been known by their names due to high turnover rates. Although the rise in purchasing and consumption power of people has led to the creation of ample jobs in the sector but finding the right talent to fill a position is still a huge problem.

Lack of diversity in hiring and the high rates of employee poaching in this sector makes it more difficult for HRs to find and retain the right talent. The nature of retail work is such that shift planning during seasonal demands and workplace safety of employees become extremely crucial but management of both is a tough task.

Jobs in the retail sector have been necessarily viewed as temporary fulfilment of positions which reduces the scope of career advancement further leading to retention issues and making the job of HRs tough.

In the section below you will find a comprehensive list of the top HR challenges from across all 5 industries and their respective solutions.

Conclusion

Automation and AI integration has now become the one-stop solution for managing recurring HR problems. Using a robust human capital management system is one of the primary ways that can completely transform the experience of your employees for the good.

For businesses to thrive in today’s market, it is now essential for them to place human resources at the center of their organizational strategy. A strategic approach and a future focused actionable HR strategy is what you need the most.

Connect with us for a free demo session and take a good look at the most valuable tool you will need for a top-notch HR game!