HR Divided on AI: Adoption lags despite optimism on benefits

A new study by Deel reveals a disconnect between HR leaders' belief in Artificial Intelligence (AI) and its actual use. While a strong majority (61%) believe AI will positively impact HR practices in the next five years, only 38% of HR decision-makers surveyed are currently using AI in their workflows.

The Deel research, which surveyed over 1,100 HR professionals across the US, UK, and Australia, found a clear age and company size divide in AI adoption.

Younger HR leaders (under 35) are overwhelmingly optimistic about AI's potential, with 86% expecting positive outcomes. However, those over 55 are more sceptical, with only 38% sharing the positive outlook, and a quarter (26%) fearing a negative impact.

Similarly, larger companies (250+ employees) and those with higher revenue are significantly more likely to have embraced AI.  Just 13% of companies under $1 million currently use AI, compared to 61% of those exceeding $10 million. This disparity could create a competitive disadvantage for smaller businesses struggling to keep pace with efficiency and innovation.

Despite the optimism, HR leaders still have reservations about AI. Data security and privacy (16%) are the top concerns, followed by the potential loss of the human touch in HR processes (13%).

Interestingly, areas like employee dismissal (13%) and recognition (21%) were seen as less suited for AI, highlighting the desire to maintain human interaction in sensitive areas.

"We are at a pivotal moment," said Aaron Goldsmid, Head of Product at Deel. He emphasised the potential cost of AI hesitancy, suggesting many businesses are missing a competitive edge. 

"This reluctance to adopt AI is not just about the use of technology, it means many businesses are missing a trick in terms of gaining a competitive advantage in efficiency and strategic insight," he added.

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