AI in HRM: Where India stands today — and where people management is headed next
The problem at hand is not a deficiency in AI capability but rather a lack of clarity surrounding the use of AI. The future direction of AI-HRM in India is shifting from merely measuring to truly understanding its significance. The upcoming stage of AI-HRM in India will go beyond efficiency and focus on enhancing decision quality, promoting fairness, and ensuring sustainability. Continuous and evidence-led, performance management will be the new standard.
AI-HRM has become deeply integrated in the realm of human resources in India. It can be found in various aspects such as recruitment, performance tracking, employee engagement, and workforce analysis. The shift is not whether companies utilise AI in HR, but rather how strategically they implement it.
The HR landscape in India is currently at a crucial turning point. On one hand, there is a swift adoption of digital tools, while on the other, there is growing scrutiny regarding fairness, use of data, and employee trust. The future of AI-HRM will no longer be determined solely by technological capabilities but also by governance, maturity, and intent.
India’s current position: AI as a tool to increase efficiency in HR.
In Indian organisations, specifically in IT services, BFSI, manufacturing, and large conglomerates, AI implementation in HR has predominantly taken three routes.
- The transformation of high-volume tasks through automation: The use of AI technology has become the norm in large companies when it comes to hiring. These systems, including applicant tracking tools, resume screeners, chatbots for candidate enquiries, and interview schedulers, have significantly improved the efficiency of candidate selection. By relying on machine learning models, organisations that receive a high volume of applications can quickly narrow down their pool of candidates. This has resulted in a decrease in time-to-hire and reduced workload for recruiters, especially in IT, GCCs, and shared services industries.
- Leveraging people analytics to gain insight and management capabilities: Indian companies have progressed from using basic HR dashboards to utilising more sophisticated analytics. These advanced tools include predictive models for attrition, factors influencing engagement, productivity insights tailored to specific roles, and analyses of workforce costs. Leaders in both HR and business are increasingly incorporating these platforms into their HRIS systems to identify patterns across various categories such as location, managers, projects, and demographics.
- Creating customised experiences for employees on a large scale: organisations are utilising data in a variety of ways to tailor engagement interventions. These include AI-powered learning suggestions tailored to skill gaps and pulse survey sentiment analysis. This approach has proven useful in maintaining consistency across geographically dispersed workforces without complete centralisation.
At this point, Indian HRM utilises AI primarily as a means of supporting and improving operational excellence.
What do Indian organisations continue to struggle with? The remaining gaps.
Although AI-HRM is widely used in India, its maturity level varies across the country. There are three main challenges that seem to consistently arise.
- Rather than designing based on problems, focus on adopting tools: Numerous establishments allocate resources towards advanced HR technology stacks without a clear determination of decision responsibility. While AI provides valuable insights, accountability remains uncertain. If HR is unable to clarify the production of recommendations or identify those who override them, AI becomes nothing more than a reporting tool, rather than a facilitator in decision-making.
- The idea of algorithmic neutrality: AI is commonly believed to be unbiased, but the truth is that past HR data reflects outdated systems. These include gender imbalances, role segregation, selective educational criteria, and subjective management practices. If not adjusted properly, AI can unintentionally perpetuate the very issues organisations are working to eliminate.
- The excessive use of automation in decision-making processes: The success of performance management, promotions, and identifying potential relies heavily on various factors such as context, opportunities, and managerial discretion. However, relying solely on AI as an absolute judge, rather than using it as a supporting tool, can lead to reduced trust in HR systems. In India, where relational leadership is highly valued, there is a heightened awareness about the perceived lack of transparency in the workplace.
The problem at hand is not a deficiency in AI capability but rather a lack of clarity surrounding the use of AI. The future direction of AI-HRM in India is shifting from merely measuring to truly understanding its significance. The upcoming stage of AI-HRM in India will go beyond efficiency and focus on enhancing decision quality, promoting fairness, and ensuring sustainability. Continuous and evidence-led, performance management will be the new standard. With annual appraisal cycles facing mounting challenges, the use of AI provides real-time performance indicators, including project involvement, skill utilisation, feedback from colleagues, and progress in learning. This suggests that instead of automated ratings taking over dialogue, the focus should shift towards continuous coaching discussions fuelled by data.
The focus of predictive analytics is expected to shift from control to care. Progressive companies are utilising forecasting to not only identify potential departures but also to facilitate timely intervention. Predictive methods, such as attrition modelling, burnout detection, and tracking engagement levels, are now commonly employed to restructure job responsibilities, provide learning opportunities, and modify leadership approaches. This approach is particularly prevalent in demanding industries, such as technology and consulting.
Trust will be characterised by explainability and transparency. As employees and regulators come together, a common question arises: What led to this decision? To adapt to constantly changing labour regulations and data protection norms, Indian organisations must implement AI systems that can be understood, verified, and defended.
In this future, HR takes on the responsibility of ensuring ethical use of AI, rather than just utilising HR technology. The focus for Indian HR leaders at this time should be on creating sustainable structures.
To effectively guide in this new phase, organisations must make significant investments in four essential capabilities.
- HR teams’ level of proficiency in utilising AI: It is important for HR professionals to possess knowledge of the functionality and objectives of AI models, as well as their limitations. This pertains more to asking strategic questions and making informed assessments, rather than relying on technical expertise.
- Definitive rights to make decisions: It is essential for AI to serve as a recommendation tool rather than making final decisions, especially when it comes to performance evaluations, salary adjustments, advancement opportunities, and succession planning. Human expertise must remain present and responsible.
- Guidelines for ethical behaviour and proper governance: It is imperative that AI-HRM practice incorporates routine audits for bias, validation of models, and documented review processes. Waiting to address ethics until after the implementation has been scaled will be ineffective.
- The philosophy of human-centred design: AI in HR serves a greater purpose beyond just surveillance and efficiency. Its role is to elevate the employee’s voice, promote fairness, and foster development within India’s diverse and multi-generational workforce.
The journey ahead. The incorporation of AI-HRM in India has shifted from being a pioneering concern to being a crucial aspect of leadership.
Organisations that embrace AI as a strategic partner, guided by governance and human judgement, will elevate HR to a true decision-making role. However, those that solely prioritise automation without accountability may undermine trust in the very systems designed to enhance people management.
Algorithms alone cannot construct the future of HR in India. It relies on our responsible usage of them. For further insights into the evolving workplace paradigm, visit
