The utilization of Artificial Intelligence (AI) is transforming various industries, and human resources (HR) is no exception. In Finland, AI’s role in HR is increasingly recognized as a key enabler for enhancing efficiency, objectivity, and decision-making processes. LessonLab’s recent study, conducted in collaboration with HENRY ry, highlights that AI is already playing a crucial role in HR functions across many Finnish organizations. This article delves into the study’s findings and explores how AI is reshaping HR in Finland.

AI in HR: The Current State

According to the study, 52% of respondent organizations in Finland are already utilizing AI in some aspect of their HR processes. However, the level of AI adoption varies significantly between organizations. While AI use in HR is growing, a large proportion of these organizations (72%) still use AI irregularly, and in many cases (78%), its application is limited to a few individuals within the organization.

AI is most frequently used in training and development, with 56% of organizations implementing AI solutions in this area. Recruitment is another popular use case, with half of the organizations applying AI to streamline hiring processes. Additionally, 34% of organizations rely on AI for employee analytics and reporting, which is increasingly recognized as a valuable tool for data-driven decision-making.

Key Benefits of AI in HR

The study found that nearly all respondent organizations (95%) clearly recognize the benefits of AI in HR. Efficiency stands out as a particularly significant advantage, with 94% of organizations reporting that AI helps automate repetitive tasks, allowing HR teams to focus on more strategic activities. AI’s ability to analyze data was also highlighted, with 89% of respondents noting that AI enables more informed, data-driven decisions.

Another important advantage is the improvement in objectivity, as AI reduces biases in decision-making processes. For 47% of organizations, this was cited as a critical aspect of AI’s contribution to HR. AI also presents opportunities for personalizing employee development plans and performance evaluations, an area where 27% of respondents reported benefits. Some organizations even mentioned that AI can enhance accessibility for remote or isolated workers by providing automated “conversation partners,” offering support that might otherwise be unavailable.

Challenges in Adopting AI in HR

Despite numerous advantages, organizations face several challenges in fully integrating AI into HR operations. One of the most significant obstacles identified was a lack of understanding of AI’s potential benefits and applications, with 82% of organizations citing this as the primary hurdle to adoption. Organizational culture and leadership style were also seen as significant barriers, with 47% of respondents highlighting resistance to change within their organizations.

While only 3% of organizations considered data safety or security a barrier to adopting AI technology in HR, 76% acknowledged it as a challenge when using AI in HR operations. This reflects a growing awareness of potential privacy and security issues as AI becomes more integrated into HR functions. These barriers underscore the need for education and clear strategies to address both cultural and technical challenges when adopting AI.

The Future of AI in HR

Looking ahead, there is a strong sense of optimism regarding the role of AI in HR across Finnish organizations. Two-thirds of the organizations in the study (66%) plan to either introduce or expand their use of AI in HR within the next year. Half of these organizations also plan to increase their investment in AI, whether by enhancing existing applications or exploring new areas of use.

As AI becomes more integrated into HR processes, professionals in the field are identifying the key skills that will become increasingly important. Analytical thinking, ethical judgment, and communication skills were highlighted as critical competencies that will gain prominence as AI continues to transform the HR landscape.

First Steps in Adopting AI: Training and Continuous Learning

For organizations looking to embark on their AI journey in HR, one of the most practical and impactful entry points is through training, development, and continuous learning. According to a US study (SHRM Voice of Work Research Panel, 2024), this area offers a relatively low-risk yet high-reward opportunity for integrating AI into HR processes.

The study indicates that AI-powered solutions can enhance the effectiveness of training programs by personalizing learning paths and tailoring content to individual employee needs. Furthermore, AI can increase employee engagement in learning initiatives by making development programs more relevant to specific roles and growth areas, which organizations see as a substantial benefit.

AI also provides data-driven insights into the effectiveness of training programs, allowing HR teams to make more informed decisions about future learning strategies. Additionally, AI can help reduce costs by automating certain aspects of training.

In short, starting with training and development is not only a safe way to introduce AI but also an effective one, offering both immediate and long-term benefits. The US findings align with our Finnish study, where most respondent organizations were already using AI for training and development purposes and seeing its benefits in practice.

Conclusion

AI is already making significant inroads into HR in Finland, particularly in areas like recruitment, employee development, and analytics. While many organizations are still in the early stages of AI adoption, the benefits are undeniable. Increased efficiency, improved objectivity, and better data-driven decision-making are just some of the advantages organizations are experiencing. However, challenges around understanding AI’s potential and cultural resistance remain.

As AI continues to evolve, its potential to transform HR functions will only increase. Organizations that invest in understanding AI’s applications, while addressing cultural and security concerns, will be best positioned to harness its full potential and drive the future of HR management.

References

SHRM Voice of Work Research Panel (2024), 2024 Talent Trends: Artificial Intelligence in HR.

Research Sample, Methodology, and Dissemination

The study conducted by LessonLab in collaboration with HENRY ry was carried out as an online survey from May 21 to September 11, 2024. The survey was distributed to HENRY ry members via email and shared on social media channels. A total of 62 respondents participated, with the majority (31%) working in HR management positions, while another 31% were HR specialists. The respondents represented various industries, including manufacturing, education, healthcare, and professional services, providing a broad perspective on the state of AI adoption in HR across Finland.

The survey findings were disseminated in a webinar organized in collaboration with HENRY ry on September 18, 2024. If you are interested in receiving the survey report or discussing the topic further with us, please contact us here.

Authors

Perttu Dietrich, Ph.D., CEO, LessonLab Oy

Jere Lehtinen, Ph.D., COO, LessonLab Oy