Make up your mind: How AI helps HR teams make better decisions

July 29, 2026

Drew Maginn

When assessing the true impact of artificial intelligence on human resources practices, it’s difficult to get a straight answer. While the general feeling is that AI can reduce administrative burden and assist with decision making, it’s often unclear when and how it should be used. Trusting virtual assistants with people analytics or making AI-driven hiring and workforce decisions is still a tricky proposition without having proper guardrails in place to manage their use in a transparent and responsible way.

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Are HR automation tools living up to the hype?

Before looking into how to use AI tools in human resources, it’s important to clarify that many of the productivity gains that have been enthusiastically associated with AI have not yet come to fruition. A study from Statistics Canada examined current AI trends and found that “There is no statistically significant direct association between AI adoption and productivity.” This doesn’t mean that productivity gains aren’t happening, but it does suggest that simply investing in AI doesn’t automatically guarantee results.

” There is no statistically significant direct association between AI adoption and productivity ”

Finding the right balance when using AI for HR decision-making

While the time and resources allocated to human resources varies depending on your organization, the key functions of these departments are fairly universal. Within some of the most common human resources functions, let’s examine when and how AI might be used to improve productivity and complement decision-making.

Recruitment and selection

How can AI help?

AI tools are being used to streamline the screening process by reviewing applications to recommend and even rank potential candidates based on a common set of criteria relevant to the job (e.g., skills, experience).

What decisions are still made by you?

If your organization allows applications to be screened using AI tools, it’s important for employees to review all short-listed applications to ensure that candidate recommendations align with the actual requirements for the job and that selections were made fairly and without bias. As for the rest of the recruitment and selection process, including interviews and final selection, automation rarely provides value, and these decisions are best left to human resources employees and hiring managers.

Employee compensation

How can AI help?

Without strong processes in place, many organizations struggle to develop and maintain an up-to-date compensation system. In the past, these systems typically relied on surveys, market data or leadership team discretion. AI tools offer the potential to develop a system based on benchmarking across a variety of different sources, including some you may be unaware of. In addition, potential changes to compensation levels can be simulated over time to better understand impacts to your bottom line in the short, medium and long term.

What decisions are still made by you?

While the data shared back by AI tools may seem robust and extensive, it still requires oversight to validate that the sources being used are real, reliable and trustworthy. In addition, compensation practices need to align with provincial and federal legislation (e.g., minimum wages, pay equity laws) and your overall compensation approach, considering other areas of compensation such as fixed and variable pay practices.

Performance management

How can AI help?

Depending on the job responsibilities, AI tools can provide benchmarks for certain performance indicators (e.g., measuring quantitative outputs like sales or units produced) to allow for equitable comparison between employees. In addition, AI tools can support managers to prepare and review performance evaluations for consistency, fairness and potential training and growth opportunities for different employees.

What decisions are still made by you?

While AI tools can assist with some aspects of the performance management process, final evaluation decisions need to reflect a manager’s personal assessment and understanding of each individual and their contributions to the organization. This includes understanding soft skills, providing personalized examples and offering feedback in a thoughtful and consistent manner.

How can your organization hold itself accountable for its use of AI in HR?

While the use of AI tools will continue to evolve over time, there are steps that should be taken by all human resources departments to lead by example.

Establish departmental guidelines: In the absence of organizational policies or standards around AI, it’s important that your team is aligned on when and how it is used. This can include creating a shared document to establish guiding principles for how you approach AI, which may cover areas such as your commitment to data privacy, accountability, transparency and human oversight.

Use quality data: AI tools are only as effective as the data they use. Before you can trust the outputs of these tools, you need to make sure that your organizational data is accurate and well-maintained. If the data you’re using comes from external sources, time and effort must be taken to ensure it can be trusted. For example, a compensation approach informed by data coming from ghost job postings will put the accuracy and credibility of your entire system at risk.
Be transparent: Lead by example through your transparency, both internally and externally. This means sharing when and how you use AI, whether it relates to an internal job posting or an external screening process. With shadow use of AI growing among today’s workforce, your transparency might encourage others to follow suit and create a more accountable culture across all departments.
Hold yourself accountable: AI tools can assist in decision-making, but they should never have the final say. While AI might provide some helpful context, you need to stand behind your own decisions regardless of the outcome. Blaming an AI tool for a mistake is simply not acceptable if you want to be taken seriously in your role.

Sometimes it’s difficult to remember a time when we weren’t bombarded with information about AI tools and their ability to transform our work. However, while the potential of AI tools is undeniable, expectations need to be tempered, especially as it relates to human resources. While these tools can assist in data analysis and decision-making, there will always be a need to maintain human oversight and direction. Without it, one of the most people-focused professions risks losing the empathy, judgment and credibility that are essential to its effectiveness.

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