AI in HR: Transforming Background Screening & Compliance

Artificial intelligence (AI) is reshaping background screening and HR practices, presenting both opportunities and challenges in modern employment. Our recent insights explore AI's transformative impact on these crucial areas, examining its current applications and implications for global hiring practices. In a recent webinar, speakers John Drury and Robert T. Szyba, Partners at Seyfarth Shaw, provided valuable insights into AI's role in screening processes, alongside discussions on regulatory landscapes and emerging challenges in HR technology.

Artificial Intelligence (AI) has become a prominent topic across various sectors, including employment. Though there is no universally accepted definition, AI broadly refers to systems that use data-rich inputs and advanced computational techniques to make predictions, either aiding or replacing human decision-making. These systems, which include algorithms and machine learning models, are designed by analyzing extensive data sets to identify patterns and predict outcomes.

AI is already having a significant impact on numerous HR functions, such as tools that streamline sourcing and recruitment by efficiently identifying the best candidates and making the recruiting, interviewing, and onboarding processes easier. For background screening, AI opens up the potential for more recurring checks since the process is more streamlined. In onboarding, AI automates processes to ensure smoother integration for new hires. AI also plays a crucial role in talent development and promotion by recognizing employee potential and aiding in informed decision-making. Furthermore, analyzing employee data helps optimize retention strategies and compensation plans, while also simplifying the management of leave, benefits, and attendance.

Despite its advantages, the use of AI in employment carries potential risks. Human bias in AI systems is a significant concern; if an algorithm is trained on biased data, it may continue to make biased decisions, potentially excluding certain groups. There are also accuracy issues, as AI systems may be less accurate for underrepresented groups if the training data is complete or accurate. Data privacy concerns arise regarding how personal data is used and protected within AI systems. Additionally, there is the risk of oversimplification, where automated systems may reduce complex human qualifications to simple pass/fail outcomes, eliminating nuanced evaluations.

The regulatory landscape is evolving to address these issues. The U.S. Equal Employment Opportunity Commission (EEOC) has issued technical guidance on using AI under existing laws like the Americans with Disabilities Act (ADA) and Title VII. Various jurisdictions are enacting laws to regulate AI in employment. Two primary categories of these bills are those focusing on bias audits and disclosures and those emphasizing consent and transparency in AI assessments. Examples include:

• New York City's Local Law 144 requires annual bias audits and disclosures for AI tools.
• The Illinois AI Video Interview Act mandates consent and detailed explanations for video-based AI assessments.
• In Washington, DC, the Stop Discrimination by Algorithms Act prohibits using personal characteristics in algorithmic decision-making.
• California and Maryland are also focusing on disparate impact analysis and restricting the use of facial recognition without candidate consent through draft regulations and laws.

AI holds immense potential to revolutionize HR functions, making processes more efficient and objective. However, it is crucial to navigate the potential pitfalls carefully and adhere to emerging regulations to ensure fair and unbiased application. As the regulatory environment evolves, staying informed and compliant will be essential for employers leveraging AI in their HR practices.

Navigating the complex landscape of AI in employment requires expertise and a commitment to ethical practices. At DISA, we are dedicated to helping businesses manage their screening and compliance processes effectively and responsibly. We provide tailored solutions that enhance the efficiency of your HR functions and uphold the highest standards of accuracy and fairness. With our support, you can confidently technology to improve your hiring practices while maintaining a solid commitment to compliance requirements.

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Founded in 1986, DISA is the industry-leading provider of employee screening and compliance services. Headquartered in Houston, with more than 35 offices throughout North America and Europe, DISA’s comprehensive scope of services includes drug and alcohol testing, background screening, occupational health, and transportation compliance. DISA assists employers in making informed staffing decisions while building a culture of safety in their workplace.