AI for the digital personnel file: a benefit or too risky?

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AI for the digital personnel file: a benefit or too risky?

AI also creates new possibilities for structuring and organizing data in HR. These advantages are offset by questions regarding transparency and data protection. We describe the most important aspects of the use of AI in HR and in particular for the management of digital personnel files.

The digital transformation and, in particular, the use of artificial intelligence (AI) have fundamentally changed everyday working life in many areas, and HR management is no exception. A central element of this development is the digital personnel file, which opens up far-reaching opportunities and trends for companies. Small and medium-sized enterprises (SMEs) in particular can benefit from the switch to digital archiving because it reduces the administrative burden and at the same time increases employee and customer satisfaction.

What is a digital personnel file?

At its core, the digital personnel file is the further development of document management in human resources. It collects and stores all relevant employee information, from application documents and employment contracts to performance appraisals, in digital form. This includes both scanned paper documents and original digital documents that map the entire course of an employment relationship.

The switch from physical files to digital solutions offers decisive advantages such as location and time-independent access, increased data security through encryption, simpler classification and searching as well as the possibility of multiple use and direct updating. This makes the digital personnel file a prime example of efficient document management that makes a significant contribution to data protection and operational efficiency.

The role of AI in human resources in general

AI is a key driver for the transformation of HR and is redefining HR processes. It makes it possible to automate repetitive and time-consuming tasks, gain deeper insights from HR data and support decision-making in organizations. This speeds up processes and significantly reduces manual activities.

AI technologies can analyze large amounts of data in real time, recognize patterns, generate content and simulate human interactions. This allows HR departments to shift the focus of their tasks from purely administrative functions to strategic roles. By transferring routine tasks to AI, using company data and enabling AI-supported skills management, HR departments can become drivers of change.

AI is already being used in a variety of ways in HR, for example to filter and pre-select CVs, to communicate with candidates using chatbots, to manage administrative tasks such as onboarding and training, to evaluate video interviews or to create unbiased job descriptions. AI also plays a role in performance management, for example in appointment management, recording employee productivity data or predicting potential success.

What can AI do in the context of the digital personnel file?

AI technologies, especially in combination with cloud solutions, improve the processing of large amounts of data, automate processes and refine decisions. The digital personnel file is a good starting point here due to its extensive data pool. Here are a few examples:

Classify documents intelligently

For new documents that enter the digital personnel file (e.g. by email or scanning), machine learning technology can provide suggestions for correct classification. After a short training phase, all that is often required is a confirmation click from the HR employee. Specialized solutions recognize, for example, the name, the data contained and the type of document. This not only makes it much easier to record the data, but also saves time and effort when searching.

Extracting and indexing information

An enormous amount of knowledge lies dormant in the many documents in a digital personnel file. Analytical AI can extract previously unstructured information such as complete CVs within a company, career paths, accumulated skills or even historical information on pension commitments.

Enabling targeted searches

AI can search through large amounts of data, for example, to find suitable profiles such as employees with certain language skills or technological expertise for specific projects. AI also makes it easier to check qualifications (employees with a driving license or experience with certain projects). Another application example is CV parsing, i.e. matching CVs with job advertisements.

Automate administrative tasks

Unpleasant, repetitive administrative tasks such as assigning documents to files can be handled more efficiently by K-toolsI than a personnel officer. This frees up valuable resources for more important activities.

Advantages of using AI

The use of AI in conjunction with the digital personnel file offers a number of benefits that go beyond simply increasing efficiency:

• Improved data quality and accuracy: manual errors are minimized and data quality is strengthened through consistent processes.
• Greater transparency and better decision-making: AI enables comprehensive data analysis that leads to informed decisions and provides valuable insights for strategic planning
• Optimized employee experience: Personalized communication systems, faster processing of requests and the reduction of administrative burdens contribute to higher employee satisfaction and retention. Mobile access options increase flexibility and effectiveness.
• Scalability and adaptability: AI systems can manage large volumes of documents quickly and easily without the need for additional resources. This is an important criterion for growing companies.

Challenges and risks

Despite the many benefits, the use of AI in HR and especially in digital personnel files also poses challenges and risks that need to be carefully managed.

Data protection and data security

Personal data is highly sensitive. AI tools often have access to large amounts of confidential information, which poses considerable risks to data protection and data security. Storage in electronic files requires the consent of employees. The use of public AI systems such as ChatGPT for sensitive data is risky and not recommended because they are not under the control of the company and data could be passed on without authorization. It is advisable to operate AI systems behind a controlled firewall.

Bias and partiality

AI tools can deliver inaccurate or discriminatory results due to insufficient, incomplete or biased training data. This is also known as bias. Historical prejudices in the data can be adopted and even reinforced by the AI. For example, if the AI learns to favor certain genders or origins in the selection process, this can lead to unfair results. It is important to use diverse user groups to train the AI in order to avoid such distortions.

Lack of transparency

The workings of some AI tools are opaque, making it difficult to assess whether individuals are being evaluated fairly. It is important to ensure that AI does not respond to illegitimate or unethical requests, such as asking about employees who should be made redundant for economic reasons. Such requests are legally problematic and would meet with resistance from works councils and data protectionists.

Dependence on foreign technologies

Another risk is the increasing dependence on AI technologies, which primarily originate from the USA or Asia. Particularly in the highly sensitive HR sector, Europe should rely more on its own solutions in order to maintain independence. Developments from the EU, such as Papershift Pulse from Germany, are the safe option here and strengthen digital sovereignty at the same time.

Legal aspects

The digitalization of personnel files and the use of AI are subject to strict legal requirements, in particular the General Data Protection Regulation (GDPR) and the Federal Data Protection Act (BDSG). These standards ensure that the processing, use and archiving of personal data complies with the law and that the privacy of employees is protected.

A key aspect is obtaining the consent of employees before their data is stored in electronic files. This can be formally stipulated by company agreements or in the employment contract. The data protection officer plays a crucial role in the introduction of electronic personnel files to ensure compliance with data protection laws and to strengthen employee confidence.

Companies must implement technical and organizational measures for data security (e.g. encryption), conduct regular training for employees on data protection practices and carry out data protection impact assessments for affected procedures. Strict compliance with the Works Constitution Act and the co-determination rights of the works council is also essential.

Impact on companies and HR

The digitalization of personnel files and the integration of AI are not temporary trends, but fundamental changes. What still raises questions today will be taken for granted in a few years’ time. AI will fully automate administrative tasks such as creating and filing personnel files, and the pre-selection of CVs will become the norm.

This development will not necessarily lead to job losses, but rather to employees being relieved of routine tasks so that they can concentrate on strategic and more complex issues. In view of the shortage of skilled workers and demographic change, automation through AI can make an important contribution to compensating for a lack of resources.

Companies that take the plunge into digital transformation and implement the right digital personnel file software solutions are laying the foundations for an agile and future-oriented corporate culture. They enable their HR department to act proactively instead of reactively managing, thereby unlocking the full potential for increased efficiency, employee satisfaction, improved security and transparency.

FAQs

What exactly is a digital personnel file?

A digital personnel file is the further development of document management in HR, which collects and stores all relevant employee information digitally. It includes scanned and original digital documents and maps the entire course of an employment relationship.

How is artificial intelligence (AI) changing HR management in general?

AI is a key driver for the transformation of HR by automating repetitive tasks and providing deeper insights from HR data. This enables HR departments to evolve from administrative to strategic roles.

What functions can AI take on in the context of a digital personnel file?

AI can intelligently classify documents in the digital personnel file and extract and index information. This includes CVs, qualifications and salary data. It also enables targeted searches for employee profiles and automates repetitive administrative tasks.

What are the main benefits of using AI in conjunction with the digital personnel file?

The use of AI in conjunction with the digital personnel file improves data quality and accuracy and leads to better decision-making. AI also improves the employee experience and offers scalability for companies.

What are the challenges and risks of using AI in HR?

Challenges in the use of AI in HR include data protection and data security, whereby legal requirements such as the GDPR must be observed, as well as the risk of bias and bias from training data. Other concerns include the lack of transparency of some AI tools and the dependence on foreign technologies.