Article: 5 Key Threats Posed by AI in HR

Strategic HR

By Gabriela Paz Y MiñoOct, 25 2024 @4:58pm IST

Integrating AI into HR functions brings significant benefits, but it also introduces serious threats that must be carefully managed.

These risks, from data privacy concerns to skill gaps and the loss of the human touch, highlight the importance of a balanced approach to AI adoption.

AI should not replace human judgment and empathy in HR but serve as a tool to enhance HR functions. In regions like the Middle East, where cultural nuances play a crucial role in business operations, ensuring that AI complements human decision-making is key to long-term success.

Robust security protocols, a commitment to continuous learning, and a human-centered approach to AI will help HR leaders navigate this new frontier responsibly

According to a recent Gartner survey, 76 per cent of HR leaders believe that organisations failing to adopt AI solutions will lag in organisational success. However, the key to responsible AI deployment lies in balancing technology with human oversight and upholding the core values of HR.

These are 5 of the risks that HR must take into account:

#1 Security Threats and Data Privacy

AI systems in HR manage a wealth of sensitive employee data, such as performance metrics, biometric information, and even personal identifiers. The sophisticated nature of these systems means they are attractive targets for cyber-attacks. A breach could expose highly confidential information like health records, salary details, and personal identifiers, leading to severe financial and reputational damage for organisations.

Talal Rajab, Head of Cybersecurity at the UAE's Digital Security Authority, warns, “AI systems in HR could act as an entry point for malicious actors if not properly secured.” In a region like the Middle East, where digital transformation is progressing rapidly, the protection of AI systems is paramount. AI models require continuous updates and security protocols to prevent vulnerabilities from being exploited by cybercriminals.

#2 Overlooking Learning & Development (L&D) and AI Awareness

AI is revolutionising HR processes such as recruitment and performance evaluations, but this automation comes with risks. Employees may become overly dependent on AI, leading to a neglect of their learning and development (L&D). Upskilling and reskilling are critical, particularly in a region like the Middle East, where the need for a highly skilled workforce is pivotal to economic transformation.

Rania Bakkar, an HR director based in Dubai, observes, “AI can create an illusion of efficiency where employees might feel less inclined to engage in personal development activities because they perceive AI as a solution for everything.” Overreliance on AI systems can result in skill stagnation, where employees fail to upgrade their capabilities, reducing long-term productivity. HR professionals must ensure that AI tools complement L&D programs rather than replace them.

#3 Losing the Human Touch in HR

One of the most significant risks AI poses is the erosion of the human element in HR management. AI can efficiently handle tasks like payroll processing, attendance tracking, and even initial job interviews. However, AI lacks the empathy and emotional intelligence needed for nuanced decision-making and conflict resolution.

Asma Elshamy, an HR consultant in Saudi Arabia, states, “AI might give the appearance of fairness and impartiality, but it can’t understand the cultural and emotional intricacies of human relationships that are so crucial in Middle Eastern work environments.” Without the human touch, employee morale may suffer, and trust in AI-driven processes could wane.

#4 AI Awareness and Skills Gaps

While AI adoption in HR is accelerating, the understanding of its full potential—and limitations—is lagging. HR professionals may not fully grasp how AI systems function, leading to mismanagement or improper reliance on AI tools. Employees and managers need to be educated on AI’s capabilities, biases, and ethical implications to ensure its effective deployment.

A survey conducted by PwC Middle East highlights this issue, with 52 per cent of respondents acknowledging that technology will significantly change their roles in the coming years. Yet, this also underscores the pressing need for AI education to avoid mishaps in its application. AI tools can only drive value when employees and managers fully understand how to leverage them without neglecting ethical considerations.

#5 AI Bias and Ethical Concerns

AI systems are inherently prone to bias, as they are trained on historical data that may reflect existing inequalities. For example, AI-driven recruitment tools could inadvertently favour certain demographics over others, perpetuating bias and discrimination in hiring practices.

In the Middle East, where nationalisation policies are a key part of workforce strategies, AI biases could pose a serious challenge. An AI tool that overlooks local talent in favor of expatriates, or vice versa, can undermine national employment goals. Ethical concerns surrounding AI also extend to its transparency and accountability. AI decisions must be explainable and auditable to prevent unfair treatment.

Tamer El Gazzar, a cybersecurity and AI expert from the UAE, emphasises that “AI is a powerful tool, but without human intervention and ethical guidelines, it can quickly become a liability rather than an asset.” Organisations must implement ethical AI guidelines to ensure fairness and transparency in decision-making processes.

You may also like:

A Strategic Approach for HR Leaders

HR leaders must take a proactive approach to managing AI-related risks by adopting a structured framework:

Distinguish Reality from Myth: Understand AI’s real capabilities and limitations, separating hype from practical applications. HR professionals should collaborate with IT, legal, and compliance teams to assess the potential of AI tools.

Establish AI’s Benefits: Align AI implementations with organisational goals. Rather than replacing human capabilities, AI should enhance HR processes to reduce administrative burdens, improve decision-making, and increase efficiency.

Assess and Score AI Solutions: Evaluate AI tools based on success criteria like workforce readiness, ethical considerations, and vendor reputation. Governance and transparency must be at the forefront of any AI implementation.

Key Takeaways:

AI in HR presents risks such as data breaches, skill stagnation, and the erosion of human empathy.
Security is a top concern, with experts like Talal Rajab emphasising the need for constant monitoring.
AI must enhance, not replace, human capabilities in HR, especially in culturally sensitive regions like the Middle East.
Education on AI awareness and ethical usage is essential for both employees and HR professionals