AI fundamentals: AI’s expanding role in HR in 2024 and predictions for 2025

Talent acquisition and retention

AI tools such as HireVue and Eightfold AI have advanced through enhanced data processing, allowing deeper candidate profiling and predictive analytics to reduce hiring time by up to 30%. Eightfold’s algorithms, for example, use historical hiring data to predict employee success, helping organisations reduce churn.

Personalised employee experience

As companies aimed to enhance employee engagement, tools like Microsoft Viva saw widespread adoption. Viva integrates wellbeing and career-path planning, a capability associated with an 18% increase in employee satisfaction. In fact, recent data from Gartner indicates that organisations using AI for employee engagement saw a 25% increase in retention over those that did not.

Workforce planning and strategy

Workforce planning tools like Visier gained traction, particularly for their predictive capabilities. Research published in the Journal of Management found that organisations using predictive analytics in workforce planning could reduce turnover by up to 22%. These tools help HR leaders make proactive decisions, especially in industries with persistent skills shortages.

Ethics, compliance and trust

Tools like Fairly.ai focus on the ethical management of AI systems, enabling audits to find and mitigate bias – an increasing area of scrutiny. A PwC survey noted that 65% of employees are more trusting of AI-driven HR tools when they have transparent ethics and compliance features.

Widespread adoption

AI adoption in HR increased by around 25% over 2023, driven by demonstrable ROI and positive case studies. A survey from the Society for Human Resource Management (SHRM) found that 65% of HR leaders had integrated AI across multiple HR functions, up from 40% the previous year.

Broadening of AI use cases

Whereas 2023 saw a focus on AI for recruitment, 2024’s adoption was marked by broader applications, notably in workforce planning and personalised employee experience. The Centre for Advanced HR Studies found that companies using AI across at least three HR functions reported a 17% higher organisational efficiency.

Adoption among SMEs

A study by the Chartered Institute of Personnel and Development (CIPD) saw that, in 2024, 35% of SMEs used AI in at least one HR function, a significant increase from 2023. This trend is due to the availability of scalable, affordable AI tools designed for smaller teams.

Enhanced predictive capabilities

AI’s predictive power is expected to further mature, with more sophisticated forecasting for workforce needs, skill gaps and training requirements. According to research by the AIHR Institute, 65% of HR leaders plan to enhance their predictive analytics capabilities in 2025.

Stronger ethics and transparency

With continued regulatory focus, transparency will become a must. The European Commission’s AI Act mandates clearer explanations of AI decision-making, which will prompt providers to integrate more transparent features. This shift aligns with findings from Stanford University, where 78% of HR professionals believe transparency improves employee trust in AI tools.

Integrating wellbeing with AI

The use of AI for employee wellbeing is forecast to expand. A McKinsey study highlights that companies actively checking wellbeing through AI report 30% lower absenteeism. AI tools integrating mental health support, pulse surveys and wellbeing metrics will be key as organisations prioritise holistic employee care.

Generative AI in L&D

Generative AI will revolutionise personalised learning, with 2025 expected to see a 40% increase in its use within HR. Companies will use generative AI to provide tailored training content, accelerating skills development.