AI in the Workplace: Promises and Pitfalls

Companies should consider developing guidelines regarding AI technologies 

by Melissa L. Shingles

Discussion of Artificial Intelligence and its transformative role in the workplace is seemingly everywhere. Whether the issue is how employers can utilize AI to bolster their human resources and management functions, or employees’ utilization of AI tools for work-related tasks, companies are paying attention to both the promises and pitfalls inherent in these new technologies.

Littler recently conducted its 11th Annual Employer Survey to gain insight into employers’ perspectives on key issues impacting the workplace. For the survey, Littler queried 515 United States-based in-house-lawyers, C-Suite executives and human resources professionals representing a range of industries and company sizes. Among the topics touched on in the survey were the use of AI tools to carry out HR functions and the use of generative AI technology. Responses showed an increasing level of interest in the incorporation of AI into both HR functions and work-related tasks as well as a wariness about the potential risks posed by the use of AI tools.

Employers Recognize Both Benefits and Drawbacks of AI in HR

Employers are increasingly turning to AI tools in their HR activities, including for recruiting, hiring and employee management purposes. An overwhelming majority (82%) of employers surveyed view the use of AI in HR activities as having some benefit. Only 18% see no benefit to AI. The top two benefits of AI identified by employers were speeding up HR processes (63%) and reducing HR workloads or making HR processes more cost-efficient. (59%). 

Responses reveal that employers’ optimism about the advantages of AI is tempered with concerns about the potential risks. Whereas 30% of respondents view AI as assisting in reducing bias in HR-related activities, a majority of respondents expressed concerns about AI’s potential to lead to employment discrimination (52%) or create other systemic biases (59%). Such concerns are not without merit, as the data and programming sources of AI systems may themselves reflect historic and/or unintentional biases. For example, if employees of a particular gender, age or race tend to have been historically overrepresented in a particular job or industry, an AI recruiting tool may continue to favor members of such groups. Such an outcome could run afoul of anti-discrimination statutes such as Title VII or the Arizona Civil Rights Act. 

Employers Have Been Slow to Adopt Policies Regarding Generative AI Technology

Another issue facing companies is how to address the emergence of generative AI technologies. Such tools, including DALL-E and chatbots like ChatGPT, can be used to create images, text and other content, ranging from essays to artwork. Generative AI has the power to transform the workplace with the speed with which it can accomplish tasks and generate content.

As with AI in HR, however, generative AI technologies pose legal risks to employers. Concerns include privacy and security, bias, accuracy and intellectual property issues. Despite the emergence of such technologies and the potential for liability, employers have been slow to adopt policies or guidelines governing their use within the workplace. Only one in ten respondents indicated that their organizations have developed any policies around generative AI. One-third of respondents (33%) are exploring policy development around the issue, and 17% of employers indicated that they planned to implement such policies. Remarkably, the largest number of respondents (40%) indicated that, despite the rapid explosion of generative AI, they had not developed policies surrounding AI and did not intend to do so. 

How Can Phoenix Businesses Approach AI to Mitigate Employment Law-Related Risks?

Given the speed with which AI is taking hold in the workplace, employers would be well advised to begin assessing what role, if any, AI has in the future of their organizations and how to ensure the ethical, lawful use of such technologies. Although the current regulatory framework surrounding AI is relatively uncertain, laws governing these tools are on their way and employers need to be prepared. 

Companies would be wise to help insulate themselves from risk by developing guidelines regarding AI technologies, including the use of AI in HR functions and by employees. Employers should also review existing policies to ensure they acknowledge and address the new realities of AI. Without a firm understanding of how AI fits into their organizations and the implementation of guiderails to regulate these powerful tools, companies may leave themselves vulnerable.  

Melissa L. Shingles, an associate in the Phoenix office of Littler, represents and counsels management in traditional labor law matters as well as in all aspects and stages of employment litigation, arbitration and mediation, including claims involving federal and state statutes related to discrimination and harassment, retaliation/whistleblowing, wrongful discharge, unfair competition, trade secrets and restrictive covenants. Shingles also assists companies in developing employee handbooks and policies.

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