Since its release in 2022, ChatGPT has quickly become one of the most widely used AI chatbot tools worldwide. One month after its launch, it set a new record by reaching 100 million active users, marking the fastest-ever recorders growing user base. And rightly so, ChatGPT has significantly enhanced efficiency and productivity in various business processes, including human resources.

The tool is still in its research preview phase, and as artificial intelligence (AI) technology continues to advance, so does the potential capabilities of ChatGPT. Meanwhile, the latest paid version, ChatGPT-4.0, was released in March 2023 with upgraded features that offer an even more personalized and human-like chat experience.

In this article, we zero into the potential of ChatGPT for HR in 2024. We will discuss what this cutting-edge tool can do to revolutionize the HR industry and how it can benefit HR professionals. We will also delve into the risks to consider and how to use ChatGPT ethically.

If you want to learn how HR professionals can use ChatGPT in their daily tasks, check out our article on ChatGPT prompts for HR to get started!

What Is ChatGPT?

ChatGPT is an AI-powered chatbot that uses natural language processing (NLP) and machine learning algorithms to simulate human-like conversation. Developed by OpenAI, it has two main parts: the “chat” functionality and the “GPT” technology. 

The “chat” aspect refers to its role as a chatbot, enabling users to engage in interactive dialogues, ask questions, and receive detailed responses. The “GPT” part represents the underlying technology, a generative pre-trained transformer.

In simpler terms, GPT is a sophisticated machine-learning algorithm that produces a chatbot’s human-like conversations by predicting the most probable sequence of words. It is “generative” because it creates text based on the input it receives. “Pre-trained” means it has been trained on a large dataset of text from the internet, learning grammar, facts, and some reasoning abilities. “Transformer” refers to the specific neural network architecture it uses, which is highly effective for understanding and generating natural language.

Other major companies have also developed their own GPTs. For example, Microsoft offers Bing AI and Google has introduced Bard. In the HR sector, there’s Beamery’s TalentGPT. 

ChatGPT for HR: Comprehensive Analysis of What ChatGPT Can Do?

It’s no secret that ChatGPT is rapidly becoming an indispensable aspect of HR functions. In 2023, experts predicted an increase in the use of algorithmic HR for hiring, firing, and talent management. The HR trends report also indicated that 40% of HR leaders within international companies were already using ChatGPT in their day-to-day work.

That means, when utilized correctly across the HR function, ChatGPT can be an effective tool for HR professionals to:

1. Enhance Recruitment Efficiency

One of the most tiring tasks of HR personnel is recruiting and interviewing candidates. It involves reviewing resumes, conducting initial screening calls, scheduling interviews, and providing feedback to applicants. With ChatGPT’s natural language processing capabilities, you no longer need to spend hours doing all this manually. ChatGPT can do it by screening resumes using specific keywords and matching qualifications with job requirements to determine the best-fit candidates. Here are a few steps on how to do it:

• Input the job description into ChatGPT’s query box and specify what you expect from the candidate, such as data analysis or project management skills and experience.
• Add each resume into ChatGPT one by one and prompt it to scan the resume and evaluate how well it matches the job requirements for the specific role. An example of ChatGPT prompts for HR could be, ” Scan this resume and evaluate whether it matches the job description for an entry-level project management position.”
• ChatGPT will compare resumes with the job description and present the results in a structured report with a ranking of candidates and their strengths and weaknesses. So you only need to review the top candidates who best match the job requirements based on the ChatGPT results.

2. Eliminate Repetitive Tasks

HR professionals spend a considerable amount of time dealing with repetitive administration tasks such as answering the same routine questions from employees, manually tracking time-off requests, or updating employee records. ChatGPT can handle these repetitive tasks by providing quick and accurate responses to common HR questions. It can also assist in automating these tasks by creating chat prompts for frequently asked questions and setting up workflows to process time-off requests automatically.

The AI can also analyze employee data to help HR professionals identify patterns in employee behavior. This allows them to predict potential issues and take proactive measures to address them before they escalate.

3. Improve Employee Engagement

Employee engagement is essential for a company’s success. According to Gallup’s State of the Global Workplace Report 2021, just 23% of employees worldwide feel engaged at work. HR leaders need to focus on improving employee satisfaction levels by creating an open dialogue between managers and team members.

ChatGPT can help create this open communication channel by acting as a virtual assistant that employees can easily interact with. It can assist in conducting regular pulse surveys, providing instant feedback to employee questions, and providing company policies and benefit guidance. ChatGPT can also come in handy in developing employee engagement initiatives by offering personalized suggestions for team-building activities or recognition programs.

4. Streamline Employee Onboarding

The next step after hiring top talent is to onboard them effectively. ChatGPT can assist in streamlining this process by crafting an individualized onboarding plan for the new hire based on their role, experience, and learning pace. As a result, you’ll get a personalized program guiding employees through the necessary company information, tasks, and team introductions.

A prompt for ChatGPT could look like this: “Create a personalized employee onboarding plan for a new marketing manager with three years  of experience focusing on [specific areas].”

The AI can simplify the information if needed and provide resources or links to relevant documents, ensuring a smooth onboarding experience.

5. Improve Employee Satisfaction Through Surveys and Feedback

Besides hiring top talent, you also need to retain them. A high employee turnover rate can be costly and disruptive for any organization. One of the main reasons employees leave is dissatisfaction with their role or work environment. ChatGPT can help HR professionals address these issues by conducting regular check-ins with employees and capturing feedback on job satisfaction, workload, and company culture.

ChatGPT can also identify patterns, detect common themes, identify potential areas of improvement based on employee responses, and offer recommendations for addressing them. This analysis helps HR leaders take proactive measures to improve employee satisfaction, leading to higher retention rates and a more positive work environment.

This is how you use ChatGPT’s capabilities to enhance satisfaction through surveys:

• Design the survey: Outline your goals, create relevant questions like “Generate survey questions to assess employee satisfaction with the company’s benefits package,” and determine the most suitable format for receiving responses, either rating-scale or open-ended questions.
• Distribute the survey: Before sending the survey questions to employees, you may need to tweak them a bit to reflect your corporate style.
• Analyze the responses: Again, with the help of ChatGPT.  Prompt it to analyze the survey responses and summarize the main concerns and recommendations regarding employee satisfaction.
• Generate a report summarizing the results: “Generate a report from the survey analysis, highlighting key employee satisfaction trends and identifying potential areas for improvement.”
• Develop an action plan: ChatGPT can help in this step, too, by providing suggestions for addressing the identified concerns and creating an action plan to improve employee satisfaction levels. For example, do most employees express dissatisfaction with the company’s benefits package? ChatGPT can generate ideas on initiatives to improve this aspect.

6. Analyze Qualitative HR data to Uncover Trends and Opportunities

Another role of HR departments is to collect qualitative data through employee surveys, performance reviews, or cultural interviews. However, manually analyzing this data and identifying trends can be time-consuming and prone to human error.

ChatGPT’s capabilities in natural language processing allow it to analyze large amounts of qualitative data quickly and accurately. It can uncover patterns in employee feedback, identify areas for improvement, and offer recommendations for addressing them. This allows HR professionals to gain valuable insights into their workforce and make data-driven decisions based on real-time insights from their employees.

Prompt examples for this could be: “Analyze employee survey responses and identify key areas of concern for employees,” or “Scan through exit interview transcripts and highlight recurring themes or concerns expressed by departing employees.”

7. Performance Management, Feedback, and Goal Setting

Performance evaluations are another aspect of managing a workforce effectively. With ChatGPT’s assistance, HR professionals can create customized evaluation prompts for each employee based on their role and performance objectives. The AI can also provide real-time feedback to employees based on their performance metrics, allowing for continuous improvement throughout the year.

For example, ChatGPT for HR can provide answers to the question “How do employees perform?” Among its capabilities, it can also generate performance improvement suggestions for managers to discuss with their team members.

An example request could be “Help me draft a list of performance improvement suggestions for an employee who excelled in sales but struggled with time management.”

The tool can also assist in setting and tracking employee goals. It can generate prompts for managers to discuss with employees during goal-setting meetings, suggest SMART (specific, measurable, attainable, relevant, and time-bound) goals based on the employee’s performance history and objectives, and provide progress updates throughout the year. For example, “Set quarterly goals for employees in the marketing department based on their strengths and career aspirations.”

Besides these key areas, ChatGPT also offers multiple application opportunities for human resources across training, HR chatbots, conflict resolution, job description, and compliance.

HR Jobs That ChatGPT Can Not Replace

As much as ChatGPT can assist and simplify the tasks of HR professionals, there are certain roles that it cannot replace. Some jobs require a human touch, empathy, and emotional intelligence, which are still beyond the capabilities of AI.

Some examples of HR jobs that ChatGPT cannot replace include:

• Offering employees emotional support: While ChatGPT is well-suited to provide operational support, it lacks the human touch. Particularly, when a worker has an issue, either personal or professional that needs an empathetic hearing, a human HR manager will always be irreplaceable.
• Conducting disciplinary actions: Disciplinary actions require judgment calls based on various factors and cannot be solely determined by AI. HR professionals need to use their discretion to handle such situations sensitively and fairly.
• Cultivating company culture: ChatGPT can assist in identifying areas of improvement in company culture, but it cannot create or cultivate it. Nurturing a positive work environment and maintaining accountability throughout all company levels requires human interaction and relationships that AI is not capable of providing.
• Facilitating team-building activities: While ChatGPT can provide prompts for team-building exercises, it cannot facilitate these activities themselves. Human HR professionals are better equipped to lead and engage employees in team-building events effectively.
• Developing strategies and driving change: ChatGPT might help in drafting (parts of) a strategy,  but it cannot fully create and implement one. This is also true for driving change within an organization. This AI-driven tool can play a supporting role in creating plans and providing insights, but strategic change will still need human leadership to implement it.

Other HR activities that will continue to remain the responsibility of human HR professionals include policy development, managing workforce ecosystems,  redefining strategies for remote and hybrid work, and reshaping workplace learning.

Limitations and Risks of Using ChatGPT for HR

While AI tools like ChatGPT can greatly assist HR professionals, there are also some limitations and risks to consider when incorporating them into HR processes. Here are a few examples of cited constraints:

ChatGPT Limitations

• Biased answers. AI-driven models can inherit biases from the data they are trained on. That is, if the data holds biases or prejudices,  the AI could reflect and amplify them, leading to discriminatory outcomes. For example, the current data is primarily English and reflects a largely Western perspective. This may somehow lead to cultural insensitivity and misunderstandings among employees from non-Western cultures.
• Limited data. ChatGPT’s current database is not extensive enough to cover all HR topics and scenarios. It doesn’t go beyond September 2021, which means it doesn’t “know” what happened after that. So, some AI prompts won’t provide accurate or up-to-date responses for certain inquiries.
• Lack of sources. Unfortunately, the tool doesn’t provide any references, links, or footnotes to support its answers. This could create a lack of transparency and accountability for the information provided. In some instances, the tool has also provided fake or incorrect sources.
• Incorrect answers that seem right. Sometimes, ChatGPT will answer questions that it doesn’t have enough knowledge on with factually incorrect information that implies it is correct. This is also referred to as overconfidence bias.

ChatGPT Risks

With any new technology, there are also potential risks that HR professionals need to be aware of when using ChatGPT.  These include:

• Cybersecurity. The number of employees using ChatGPT secretly is on the rise. It has been reported that two-thirds of employees have used personal devices for work, and ChatGPT can be easily downloaded onto these devices without proper authorization or security checks. This poses significant risks for companies when confidential information is shared. 
• Dependence on technology. Relying solely on AI-driven tools for HR tasks can create a dependence on technology that diminishes human involvement and critical thinking skills. This could result in a loss of creativity and innovation in the workplace as well as potential job displacement for HR professionals.
• Bias. If left unchecked, AI tools like ChatGPT can perpetuate and amplify biases in the workplace. This issue previously occurred at Amazon and more recently at Workday. In both cases, their AI systems and screening tools allegedly disqualified Black, disabled, or over-40-year-old applicants.
• Ethical concerns. There are several ethical considerations to take into account when using AI in HR, such as consent, privacy, transparency, and human oversight. These are some of the issues that must be carefully considered and addressed to ensure that the use of ChatGPT is ethical and compliant with laws and regulations.

Tips for Using ChatGPT Ethically in HR Processes

To mitigate these limitations and risks and ensure the ethical use of ChatGPT (and all AI-driven tools), here are some tips for HR professionals to keep in mind:

• Ensure diversity in data. Before integrating ChatGPT into various HR processes, try it first! Assess whether the toll holds value for your employee life cycle, and determine its applications and rules to use.
• Make a plan. Given that the tool is still in its trial phase, it might be wise to clearly define the roles and functions which you want to use it for and what not to do.  That is, identify what specific HR activities could be “ChatGPT’d.” It is also advisable to not only use the tool for things that ‘can’t go wrong’, but also try to adopt a wait-and-see approach for the remaining HR activities until more up-to-date information is available.
• Use it as a support tool.  Instead of entirely relying on ChatGPT for HR tasks, use it as a supplement to human-driven decision-making processes.  Also, don’t take the output it provides at face value. Do due diligence by fact-checking and researching further the accuracy of the responses before adding anything provided in a task or process.
• Establish ChatGPT policy for employees. As mentioned earlier, the use of ChatGPT among employees can pose cybersecurity risks. To avoid this, develop a “How to use ChatGPT” policy that outlines how and when employees can use the tool. Ensure they understand their responsibilities in terms of cybersecurity and confidentiality, as well as the potential consequences of misusing the tool.
• Don’t share sensitive or personal information. As a general rule, do not share sensitive employee information with ChatGPT. This includes confidential performance reviews, salary data, and personal employee issues. Keep in mind that the tool is still in the trial and developmental stage, hence the security of the tool is not yet up to scratch.   

Key takeaways

• AI-driven tools such as ChatGPT offer exciting opportunities for automating certain HR processes.
• Despite its potential benefits, ChatGPT still has limitations and risks that need to be carefully considered before integrating it into HR day-to-day tasks.
• HR professionals must prioritize ethical considerations and establish policies and guidelines for the responsible use of ChatGPT by themselves and their employees.

Frequently Asked Questions

Is ChatGPT suitable for all HR processes?

While ChatGPT can provide helpful and accurate responses for certain inquiries, it is still in its trial phase and should not be relied upon entirely for all HR processes.

What are the potential risks of using ChatGPT in HR?

Some potential risks include cybersecurity concerns, overdependence on technology, bias, and ethical considerations.

Can employees also use ChatGPT?

Yes, employees can use ChatGPT for personal purposes, but it is essential to establish guidelines and policies to ensure responsible and ethical use.  As an HR professional, it is your responsibility to educate employees on the proper usage of ChatGPT in the workplace.