AI in Human Capital Management: Privacy

By Evelyn Donatelli

AI (Artificial Intelligence) plays a rapidly growing role in Human Capital Management (HCM). HCM is an industry ripe for disruption, especially within the hiring function of the role, in which HCM employees face with unmanageable numbers of applications. For example, Johnson & Johnson (J&J, $JNJ), a consumer-goods company, receives 1.2m applications for 25,000 positions every year.

Enter: Companies like HireVue, a video interview software start-up (in late stage venture funding) for recruiting and hiring, which is already used by a swath of companies, including Goldman Sachs and Unilever. HireVue reads body language for subconscious cues via recorded video interviews. Applicants may know they are interviewing via HireVue, but may not realize this is a feature of the program. The cues read by the software include facial expressions and voice tones. Supporters of the use of AI in the hiring process claim the software helps applicants by doing a more effective appropriability screening: “Athena Karp of HiredScore, a startup that uses algorithms to screen candidates for J&J and others, says only around 15-20% of applicants typically hold the right qualifications for a job...and that technology is helping to ‘give respect back to candidates.’”

However, there are concerns about inherent biases in the algorithms, and the potential difficulty proving discrimination when a computer is involved in the hiring decision-making process. AI, as a nascent player in the HCM industry, is not currently regulated differently than an “old-school” HCM department would be.

Another application of AI in the HCM role is spurring privacy concerns. Employers are replacing the use of outside consulting firms in favor of using NLP (natural language processing) algorithms to conduct “sentiment analysis” on employees. Privacy is an especially poignant concern here, as the goal of NLP algorithm software like Xander, according to parent company Ultimate Software, functions as follows: “by regularly soliciting feedback from employees and deciphering their true emotions, leaders learn how their employees actually feel and can take steps to facilitate proactive change.”

As technology pushes the barriers of HCM capacity to effectively analyze emotions, and to draw behavioral conclusions reaching beyond the words presented to them, regulators will find themselves in the significant role of protecting the privacy of employees and applicants.