How AI can level the HR playing field for SMEs

The emergence of large language models has the potential to completely alter the jobs of HR professionals in smaller firms, and help them recruit from wider afield, argues Employment Hero’s Ben Thompson.

Nobody ever said that running a smaller business was easy. But the last half decade has proved particularly challenging.

The hand-wringing over how to do Brexit introduced huge uncertainty. Now it is in place, it is far harder to export goods to the continent without the kind of legal muscle a large business can bring to bear. The potential hiring pool has shrunk significantly – again, larger businesses have the ability to sponsor migrants for hard-to-fill vacancies, but that is beyond the capabilities or resources of many SMEs.

Then the pandemic and its aftermath have proved particularly stressful for small HR teams. First, they had to craft work-from-home policies on the fly and make sure that their staff could keep working while staying safe, often while working out furlough payments and other brand-new instruments. Now there is the aftermath: an extremely tight labour market and a continuing divergence of expectations over flexible working.

Just as with Brexit, these issues are far easier to deal with where there is a well-staffed HR team. If HR consists of just a few people they can end up spending their entire day putting out fires or just managing the day-to-day, with no time left to focus on strategic tasks.

But I’m arguing that AI has the potential to radically alter this picture and level the playing field. Here’s how.

AI can streamline repetitive and dull tasks

Hiring, onboarding, and offboarding are huge parts of any HR team’s job.

These processes are crucial to get right but do involve a lot of paperwork. This paperwork is important, but writing it all from scratch or even within a template can take hours of work that a one-person HR team might not have.

AI – or more specifically large-language models like ChatGPT – can be a huge force multiplier here. Instead of starting with a blank page you can ask the tool to generate, say, a job description based on a bullet-pointed list of requirements. Obviously this is only going to be a first draft, something a human needs to check and edit – but it is a lot easier to start with this than a blank page.

Now, you probably don’t want to just jump into ChatGPT for this, as the results can vary quite a bit and it’s difficult to get it to stick to one company style from session to session, or between several users. Software is becoming available specifically oriented for HR but using the same OpenAI tech as Chat GPT. At Employment Hero we have created Swag, for example, for writing job descriptions and other key HR documents such as welcome letters.

We’ve found that by using AI, tasks that once took half a day can take an hour now.

And this is clearly just the start. AI is getting better and better at data analysis every day – not just querying a nice and tidy spreadsheet, but gathering huge varieties of data from disparate sources including pdf documents, emails and websites, then completing custom analyses for the user.

This will make assessing the workload and performance of teams far easier and more holistic than some of the simplistic KPI metrics currently in use. If programmed correctly it will also avoid some of the biases humans can introduce into this process – whether those be based on gender, race, age, or just an HR manager’s relationship to a certain employee.

Why SMEs can beat the big boys with AI

Everyone is talking about AI right now, but most big companies are only just starting to dip their toes into using it.

Big organisations are like cruise ships. They turn slowly. New tools go through months-long procurement processes and take even longer to filter into the organisation, with weeks of training across huge numbers of employees and new policies to be worked out.

Smaller companies can be a lot more nimble. That doesn’t mean they should be reckless with the tools that AI provides them, but it does mean they can move to integrate a new tool in days instead of months. And in this time while we are all working out how useful these tools are, this is a fantastic opportunity for smaller companies to really move quickly – and fill some of those tens of thousands of vacancies they face.

Indeed, the hiring imbalance is one of the key areas where I think AI can help small companies. A lot of people would love to work for an SME. The energy you get from a small team is totally different to what one feels in a larger organisation. You get experience across a huge range of tasks and get to see the impact your own work has on the overall business very clearly.

With AI freeing up time, smaller HR and recruiting teams will be able to reach those currently working for large firms but actually want something a bit more exciting.

The limits of AI and the need for the human touch

We’re busy creating AI tools for HR teams at Employment Hero. But we don’t want to even consider the idea that these could replace them. HR needs the human touch – it’s in the name, after all. It is needed both in good times and in bad – to really celebrate high achievement and to offer counsel when things go wrong. I want AI to give teams more time to do these crucial parts of the job – more time to take people out for coffee and really have a think about their careers – not just sit behind a desk writing another document.

Indeed, in these early days, anything AI generated still needs to be looked over closely by a human. The machines are extremely smart, but they are capable of fairly obvious mistakes if you don’t watch them. That might shift eventually but, for now, make sure you keep an eye on exactly what they are doing.

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