Exploring AI’s Impact on HRM Practices: A Narrative Review of Literature and Emerging Trends

Abstract

Introduction: Organizations are increasingly leveraging AI to gain competitive advantages and enhance performance, particularly in human resource management (HRM). AI-driven applications improve efficiency in recruitment, employee engagement, and decision-making. However, the rapid technological evolution poses challenges for HR adaptation, requiring strategic implementation to maximize AI's benefits while minimizing governance costs. Despite extensive research on AI’s impact, gaps remain in understanding its broader implications for HRM.

Objectives: This study aims to examine AI's role in HRM by reviewing literature across six key dimensions. It highlights AI's strong impact on recruitment, training, performance management, and salary evaluation, while strategy and employee relations remain experimental. The study also identifies research gaps to guide future AI adoption in HRM.

Methods: This study employs a narrative methodology for the literature review, allowing for a comprehensive analysis of existing research while identifying gaps without redundancy. A systematic approach was avoided due to its requirement for well-defined research questions and quantitative analysis, which fall beyond the study's scope. Given the broad nature of the research, the narrative method is the most suitable. The study follows the IMRAD structure, as it is widely recognized and commonly used in academic research.

Results: AI significantly enhances HR functions by improving recruitment, reducing biases, and streamlining decision-making. It also supports employee engagement and organizational efficiency through advanced data analysis. Additionally, AI adoption extends beyond HR, benefiting sectors like energy and healthcare by optimizing resource management, improving diagnostics, and enhancing service delivery.

Conclusions: The review of 50 articles highlights the significant advantages of AI in HRM, particularly in improving efficiency and productivity. Various AI applications, such as the Oracle program used in government recruitment, streamline hiring by simplifying processes and enhancing candidate selection. Additionally, AI techniques assist in evaluating employee success, aiding organizations in retaining top talent and offering training opportunities to less experienced employees.