The Effect of Industry 4.0 and Artificial Intelligence on Human Resource Management

Abstract

To create a strong and institutional organization, it is extremely important to build it on solid foundations. Considering today's market conditions, it is clearly observed how important competition is. Organizations have to direct the right resource to the right investment to increase their competitive power and stay in the market. In this respect, the human resource management (HRM) unit has also entered the digitalization phase. The digitalization phase in human resources (HR) has made significant progress, particularly in the recruitment process, with the help of artificial intelligence (AI). In this phase creating a loss of value for the organization, to select the most suitable option for the job among hundreds or even thousands of applications, the process of calling candidates and placing the suitable candidates into open positions within the organization as a result of the evaluations can be carried out with AI technology without losing both cost and time. Thus, with the AI approach, it is ensured that interviews are managed quickly and with less cost in the recruitment process. Furthermore, AI enables the efficient fulfillment of various activities of the human resource management (HRM) unit, such as training, orientation, and career planning. The present study attempts to explain the impact of Industry 4.0 and artificial intelligence on human resource management processes by conducting a literature review.

Revisiting the role of HR in the age of AI: bringing humans and machines closer together in the workplace

“…This is often referred to as human-in-the-loop (HITL) (e.g., Monarch and Munro, 2021 ). In phase two, HRM practices focus on bringing humans and machines closer together by integrating AI more into daily functions of employees (e.g., Rydén and El Sawy, 2022 ), personalizing employee experiences and learning journeys (e.g., Bulut and Özlem, 2023 ), and identifying and leveraging human-AI interaction mechanisms in the workplace (e.g., Budhwar et al, 2022 ; Herrmann and Pfeiffer, 2023 ). When we look at empirical survey data, high AI performer firms, defined as “ organizations that attribute at least 20 percent of their EBIT to AI adoption ” (Chui et al, 2023 , p. 8), already distinguish themselves by integrating AI deeply into their operations, leveraging it not just for cost reduction but to enhance HRM functions and organization design.…”