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- HR leaders are planning to use AI to help them make layoff decisions this year.
- Companies have long used software and algorithms during the hiring process.
- ChatGPT isn't among the AI tools being used for personnel decisions.
AI might not take your job any time soon, but companies are already using it to help them decide who to lay off.
That's according to a November Capterra survey of 300 US human resources leaders, which found that 98% of respondents plan to use software and algorithms to help them make any layoff decisions in 2023.
While many companies have access to a wide range of employee data — including information on employee attendance, pay, and experience — the HR leaders said "skills" and "performance" data would be most likely to be used in a layoff decision, with 70% of the leaders saying each of these would be considered.
While not specified in the survey, skills and performance data could range from more traditional measures — like an employee's sales figures — to more complicated "productivity scores" that can measure details as small as how much time workers use their emails or who has their camera on during meetings.
While this survey is just a small sampling of HR professionals, it does feed into a broader discussion of how companies embrace new AI tools, and how much of a role they'll play in hiring decisions going forward. In certain cases HR departments have, in fact, started to use AI for both hiring and firing.
Since the Great Recession, HR departments have become "incredibly data-driven," Brian Westfall, senior HR analyst at Capterra, a software review site, told The Washington Post. But now, he says these departments are "more data-driven than ever before."
Since launching in November, ChatGPT and related tools have taken the world by storm, and it's led to speculation about whether AI will replace jobs and threaten Americans' job security. It's unclear how many companies use AI tools when conducting performance reviews and promotions, but some employees say they're concerned about it. And with many companies doing layoffs in recent months, these tools now may be being called upon to help with job cuts.
While companies aren't asking ChatGPT who to lay off, AI is already well established in many HR departments, many of whom have workers who are feeling burned out and might welcome the extra help. Incorporating algorithms when making difficult layoff decisions can also be "particularly comforting" for some HR managers, Westfall said.
AI is being used for hiring and firing, but some experts have concerns
For many years, companies have used AI to process resumes, conduct interviews, and evaluate candidates. Over the past year — when the labor shortage has at times made talent difficult to find — many HR departments have looked for any edge they can get.
Amazon and Goldman Sachs, for instance, have used the hiring platform HireVue to conduct more video interviews. The platform's AI has also been used to assess and score candidates based on problem-solving and communication skills.
"The result is that we can improve candidate quality and double the number of interviews and hires a company can make, while cutting the time in half," Patrick Morrissey, the chief growth officer at HireVue, previously told Insider.
Companies have also used AI to assess performance and monitor employees. JP Morgan, for example, has used an internal company system that provides data on employees' workplace activities, including how much time they spend on Zoom calls and what they do on their company-provided cell phones, Insider previously reported.
While US companies are generally allowed to monitor employees, the legality of some practices has been called into question. In early February, three Democratic lawmakers introduced the Stop Spying Bosses Act, which would prohibit businesses from collecting "sensitive data" on workers and require them to make "timely and public disclosures" about what data they're collecting.
While some experts have argued AI tools could help reduce bias during the hiring process, others have raised concerns. In 2017, Amazon reportedly stopped using an AI hiring tool that it found showed a bias against women candidates.
AI has even been used for "predictive attrition," helping companies predict which employees are most likely to quit. But there are some ways the use of this data could go awry, Capterra's Westfall told the Post. If a company doesn't treat minority employees well, for instance, and many of them quit, the AI might predict that other minorities are likely to quit as well. And this could potentially put these employees at higher risk during the next round of layoffs.
"You can kind of see where the snowball gets rolling," Westfall said, "and all of a sudden, these data points where you don't know how that data was created or how that data was influenced suddenly lead to poor decisions."
Due in part to these concerns, only 47% of the HR leaders surveyed by Capterra said they were "entirely comfortable" using AI to make layoff decisions. A majority said they weren't "completely confident" in the quality of their employers' data.
As companies embrace new AI tools, those in positions of power will continue to be faced with the question of how much of a role AI should play when making key decisions. Some, however, have expressed optimism that the right balance can be struck.
"What AI is able to do is use pattern recognition to help with insights so we can make better decisions," Amy Wright, managing partner of talent and transformation at IBM Global Business Services, said in 2021. "It does not make decisions for us."
Correction — February 22, 2023: This article corrected a misspelling of Capterra's company name.