The Futurist: Managing People by Algorithms

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Laura Chapman, co-head of people and reward, Asia, Freshfileds Bruckhaus Deringer on how businesses can find the right mix between people and technology to scale impact and accelerate growth.

Every aspect of business, including its people, is becoming more data-driven. Advances in technology and artificial  intelligence (AI) enable the collection, processing and interpretation of data to make faster and more efficient HR.

Numerous tools are now available in the market to guide HR through complex algorithms that can perform sophisticated functions such as assessing candidates’ honesty and personality in interviews; reading emails to identify mood swings in a team or workforce; spotting stress and even predicting areas of potential fraud.

While people analytics promises to be useful for managers, it also poses legal concerns. As AI becomes more prevalent, concerns are growing that algorithms used to analyse employee data could reinforce discrimination, as they embed biases of their own.

While a well-crafted algorithm can actually assist in minimising any discrimination by removing human biases, algorithms focusing on certain character traits or qualities in job applicants can lead to certain groups of people being overlooked.

Privacy is another obvious concern. As more companies rely on outside firms to collect and process employee information, employees may feel their privacy has been violated if they do not think they have given their consent to sharing their personal data or where it is processed in a way they didn’t expect.

The evolution of data collection technologies also raises broader security-rated challenges. New sign-in methods using biometrics such as fingerprints and iris recognition in place of a conventional badge to log attendance raise new and serious potential repercussions for individuals and society if data is hacked or misused.

Businesses should find the right mix between people and technology to scale impact and accelerate growth, leveraging the power of technology while developing the human skill sets needed to inform decision-making.

In addition, software must be programmed to ensure transparency and exclude arbitrary or discriminatory behaviours, especially during hiring procedures.

Companies are right to explore the opportunities that data analytics offers to improve the fairness or efficiency of HR management. But they should be wary of surrendering to numbers with no limits or safeguards.