Artificial Intelligence and the Transformation of the Human Resource Function: Identifying Key Dimensions through an Exploratory Factor Analysis

Abstract

AI's effect on human resources has drawn scholarly interest, but there are a poor number of empirical studies to identify the structural dimensions of the effect of AI on HR. This study aims to identify the main dimensions of the effect of AI on the HR function. To achieve this goal, a quantitative survey was conducted to 216 HR professionals representing different organizations. The quantitative data from the surveys were analyzed via Exploratory Factor Analysis (EFA). The results supported the adequacy of the data for factor analysis, with a Kaiser-Meyer-Olkin (KMO) Index value of 0.868 and a statistically significant outcome for Bartlett's Test of Sphericity (p < 0.001). The use of principal axis factoring followed by Varimax rotation produced five dimensions that accounted for a cumulative total variance of 73.724%. These dimensions include the degree and specific usage patterns of AI in transforming the HR function, acceptance of AI in organizations, perceived benefits and AI-supported decision-making by HR professionals, trust and ethical governance of AI in HR, and the operationalization of AI-based activities in HR. The study results indicate that the integrating of AI into HR is a multi-dimensional phenomenon consisting of technology, organization, decision-making, and ethical components. This study provides an empirical structure to the field and will enable confirmatory studies in the future and improve managerial practice.

Classification JEL: M12, O33, C38

Paper type: Empirical Research