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European Union: HR leaders’ role towards ethical AI integration

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In brief

Artificial Intelligence (AI) is revolutionizing the human resources landscape, offering unprecedented opportunities for efficiency and innovation. 

However, this rapid adoption of AI also brings forth critical ethical considerations, particularly in the fields of employment law and human rights protection. Several laws and regulations on AI governance are currently on the way. At the EU level, for example, the AI Act is currently in the legislative process. In December 2023, the Parliament and the Council reached a preliminary agreement. The EU AI Act is likely to be passed this year. In preparation for upcoming regulations, the integration of AI into HR practices is not just a matter of technological advancement; it is a complex journey of responsibility and compliance. In this regard, HR leaders are not just implementers of technology but uniquely positioned to steer organizations toward an ethical and effective integration of AI. 

The ethical use of AI in HR calls for a nuanced understanding of its impact on employment law, human rights, and organizational values. It is about striking a delicate balance between the efficiency of AI and the preservation of human dignity and fairness in the workplace.

In this overview, we would like to outline the key actions for HR leaders to take now to ensure that the ethical aspects are considered as much as the technical aspects.

Reconciling AI and human judgment

AI tools in recruitment, performance management, and employee engagement offer enhanced decision-making capabilities. This can range from sourcing application documents for the identification of qualified candidates to analyzing individual employee preferences to deliver personalized employee experiences. From an ethical perspective, it is crucial to maintain a balance between AI-driven insights and human judgment. 

Along the lines of the current draft of the EU AI Act, HR leaders should take the following key actions into account in this respect:

  • Audit AI Tools for Bias: Regularly evaluate AI algorithms for unintentional biases that might affect decision-making, ensuring compliance with equal opportunity laws.
  • Human Oversight: Implement protocols where critical decisions, particularly those affecting individual employees, are reviewed by human professionals.
  • Transparency and Accountability: Maintain transparency in AI-driven decisions and establish clear lines of accountability for those decisions.

Bringing HR to strategic discussions

The integration of AI in HR is not merely a technical upgrade but a strategic transformation. HR leaders should be involved in the broader conversations around AI adoption at the strategic level to ensure that not only business aspects are considered but also ethical responsibility and employee requirements. In this regard, HR leaders are in a unique position to bring relevant stakeholders to the table to ensure compliance with regulations on AI and ethics. For example, since they already regularly work with legal advisors, IT professionals, and executives on day-to-day operations, they can play a key role in the discussions on internal AI ethics programs and policies.

This leads to the following key aspects of HR involvement:

  • Collaborative Frameworks: Work closely with IT, legal, and executive teams to develop AI strategies aligning with company values and ethical standards.
  • Educate and Train: Ensure HR professionals are equipped with the knowledge to understand and work alongside AI tools, fostering a culture of tech-savvy and ethically aware HR practice.
  • Policy Development: Influence the creation of policies that govern the use of AI in the workplace, emphasizing fairness, privacy, and non-discrimination.

Employee implications of AI adoption

Adopting AI in HR processes significantly impacts employees, from job roles to performance evaluations. It is imperative to manage these changes thoughtfully. The approach to AI integration must be carefully tailored to the needs of the individual workforce while considering legal requirements to ensure success.

For HR leaders, the following key actions are relevant:

  • Employee and Employee Representatives Engagement: Involve employees and their representatives in the AI integration process, addressing concerns and expectations. For employee representatives like works councils and trade unions, their information, consultation, and co-determination rights need to be taken into account. In this regard, AI framework agreements negotiated with the works council can help implement processes for the use of AI.
  • Skills Development: Facilitate training programs for employees to adapt to AI-enhanced work environments.
  • Ethical Use of Employee Data: Ensure the ethical collection, use, and storage of employee data, complying with data protection regulations and respecting employee privacy.

A balanced approach to AI in HR

HR leaders play a pivotal role in shaping the ethical landscape of AI adoption in the workplace. By balancing AI capabilities with human insight, participating in strategic discussions, and addressing the implications for employees, organizations can be led toward a responsible and forward-thinking use of AI in HR. 

We are here to support and guide you on the legal aspects of this journey, especially with regard to drafting AI policies and guidelines as well as negotiations with employee representatives. Our broad legal and market knowledge can assist you in being ahead of the curve of new developments. Please feel free to contact us for further discussion and assistance on AI ethics in HR.

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Author

Anahita Thoms heads Baker McKenzie's International Trade Practice in Germany and is a member of our EMEA Steering Committee for Compliance & Investigations. Anahita is Global Lead Sustainability Partner for our Industrials, Manufacturing and Transportation Industry Group. She serves as an Advisory Board Member in profit and non-profit organizations, such as Atlantik-Brücke, and is an elected National Committee Member at UNICEF Germany. She has served for three consecutive terms as the ABA Co-chair of the Export Controls and Economic Sanctions Committee and as the ABA Vice-Chair of the International Human Rights Committee. Anahita has also been an Advisory Board Member (Beirätin) of the Sustainable Finance Advisory Council of the German Government.

Anahita has won various accolades for her work, including 100 Most Influential Women in German Business (manager magazin), Top Lawyer (Wirtschaftswoche), Winner of the Strive Awards in the category Sustainability, Pioneer in the area of sustainability (Juve), International Trade Lawyer of the Year (Germany) 2020 ILO Client Choice Awards, Young Global Leader of the World Economic Forum, Capital 40 under 40, International Trade Lawyer of the Year (New York) 2016 ILO Client Choice Awards. In 2023, Handelsblatt recognized her as one of Germany’s Dealmaker and “most sought after advisors of the country” in the field of sustainability.

Author

Alexander Wolff heads the Labor Law Practice Group in the Firm’s Berlin office. He co-authored the German section of Baker McKenzie’s Worldwide Guide to Termination, Employment Discrimination, and Workplace Harassment Laws and Global Employer. He is also a regular contributor to other labor law journals, and is a frequent speaker on employment law issues in seminars and conferences.

Author

Agnes Herwig rejoined Baker McKenzie's Frankfurt office as a senior associate in February 2022 after she worked as an in-house lawyer at one of the world's leading quick commerce companies. She was recognized as Ones to Watch lawyer (Anwälte der Zukunft) for Labor and Employment Law by Best Lawyers/Handelsblatt 2021. Initially, Agnes joined Baker McKenzie in 2016. She is a member of the Firm's European and Global Employment & Compensation Group as well as the Global Immigration & Mobility Group.

Author

Kimberley Fischer is a member of the International Trade Practice in Baker McKenzie's Berlin office. She joined the Firm in 2022. Kimberley studied law at the Ruprecht Karls University of Heidelberg and the Universidad de Deusto (Spain), with a focus on public international law and human rights. Prior to joining the Firm, Kimberley completed her legal traineeship at the Higher Regional Court of Frankfurt am Main, the German Federal Foreign Office in Berlin and at an international law firm in Brussels and Frankfurt am Main. She also gained significant experience in public (international) law as a research assistant at the University of Heidelberg and at a reputable law firm.

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