Capterra, a software benchmark company, conducted A survey shows how some companies are using AI in their HR departments.

The study collected data from 1,002 Canadians between the ages of 18 and 65 between May and June 2023. Respondents worked in small and medium-sized businesses (between two and 250 employees) and held a variety of roles, including full-time and part-time positions. The survey looked at how AI is affecting employees and found an “increase” in the use of this technology in small businesses.

About 8% of respondents said their company uses AI to decide whether to lay off employees in Canada.

This text is a translation of an article by CTV News.

“When it comes to important decisions, it is alarming to think that they were made entirely by an algorithm; However, it is rare for HR departments to make decisions without considering the AI’s recommendations,” said Tessa Anaya, analyst on the study, in a news release published on July 20.

How is AI used?

According to the survey, about one in five SMBs in Canada is already using AI in their HR departments.

Tessa Anaya told CTVNews.ca that the survey aims to understand both HR software and software use AI and HR software based on AI.

In some Canadian companies, AI is involved in “human-like activities” such as learning, planning and problem-solving, she pointed out.

“One example of how HR tools are using AI is for prediction: using records and past data to predict what employee schedules and attendances will be like in the near future,” Tessa Anaya wrote in an email to CTVNews.ca.

“It can save HR managers time by letting AI suggest ideas for staffing plans and streamline their workload by automatically taking care of a repetitive task.”

AI helps talent managers find and screen candidates, write performance reviews, assess employee retention and make recommendations for additional training, the study says.

Many people (29%) report using AI in HR software, employee retention programs (27%) and analytics (24%).

The tools can suggest HR tips for improving employee retention and granting raises, says Tessa Anaya.

But although almost 66% said they understood how AI helps, around a third said they were “unaware” or “unsure”.

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Ethical issues in AI layoffs

The study shows that more than half of workers are dissatisfied with using AI to process layoffs.

About 30% said they would be “very uncomfortable” if AI could fire someone, and 39% said they would be “rather uncomfortable”.

Some respondents expressed “ethical” concerns about the role of AI in this space.

Workers also expressed distrust of AI, saying the technology “cannot accurately judge employee performance.” About 75% said they couldn’t trust the AI ​​to fire someone.

Just under half (48%) of respondents who were uncomfortable using AI to make firing decisions said that people should be involved in the firing process.

“What software cannot do is replace the need for human oversight. While AI-powered HR tools can automate many of the processes involved in running an HR department, someone still needs to be in control of operations,” said Tessa Anaya. “This can be very beneficial for small businesses with limited resources as it can reduce the workload on their HR teams rather than automating and freeing them from their jobs.”

But not all employees object to the idea of ​​letting AI make the firing decision, the study shows.

About 31% of employees responded that they would agree “to some extent” if HR used AI to make the termination decision.

Of these employees, 39% mentioned the AI’s impartiality, as it cannot accommodate personal preferences.

Respondents also said that AI could avoid making decisions based on a manager’s personal issues with employees (34%), that it relies on performance-based data (31%), and that 28% believe decisions made by AI are more accurate.

The Impact of AI Layoffs on Employees

A majority of employees surveyed are concerned about the impact of AI layoffs on their mental health.

Around 65% of respondents indicated that using AI during layoffs would increase their stress levels. About 14% weren’t sure it would have this effect and 22% said it didn’t increase their stress.

More than a third of workers (35%) said they would change their behavior at work if AI were responsible for layoffs.

Many (39%) emphasized that they would develop new skills that could benefit the company. About 36% said they would focus on their key performance indicators and others (21%) would get involved in more projects.

“While these are positive ambitions, they are so different from each other that there is a bit of confusion about exactly how AI evaluates employees,” the study continues.

How important is AI in companies?

According to the survey, employees don’t trust AI to make decisions but believe it can be a useful tool.

Around 65% trust AI for training, 51% believe it could be beneficial for employee monitoring, and 48% say AI could help with recruitment.

“To reassure employees who are concerned about the use of AI in HR, companies should educate their employees on how these tools work, what data is taken into account and what processes HR managers use them for,” concluded Tessa Anaya.