Avoiding gen AI pitfalls and $300,000 mistakes

It’s possible to make a $300,000 mistake by relying on generative AI in a crucial contract situation, even for savvy business leaders. Carly Holm, founder and CEO of Humani HR, has seen it firsthand, and she doesn’t want anyone else to hit the same regrettable pitfalls.

Holm’s firm provides fractional HR support and HR consulting services for approximately 200 small- and medium-sized enterprise companies in the U.S. and Canada. Humani supports human resource teams on tasks such as payroll, audits, layoffs and now, AI integration.

Holm says she’s been working with many clients to avoid snags associated with using artificial intelligence. This has become more critical with the surge of interest in generative AI. Many employees (and leaders), inspired by headlines and promises, want to experiment with gen AI but lack the long-term experience to foresee potential issues.

HR staff, accustomed to vetting applicants before generative AI became widespread, often struggle when candidates use AI tools to fake proficiency. Holm has observed instances where candidates use ChatGPT to look up answers during interviews. Additionally, many candidates craft their resumes with generative AI, leading to reports from clients about receiving nearly identical resumes from different applicants.

Despite the challenges, Holm believes that integrating generative AI into the workplace tech stack is feasible, though the process at most organizations still needs refinement. She suggests that a critical first step for HR leaders is understanding when the “use of generative AI is appropriate and when it is not.”

Holm has also seen business leaders, including execs, use generative AI tools to draft contracts and policies. She warns against this practice, noting that free or templated versions of content creators often do not meet the necessary legal standards for important transactions.

AI can be useful for relatively low-risk tasks such as creating job descriptions. However, for binding documents, Holm advises hiring a professional to ensure proper drafting and avoid expensive gen AI pitfalls, like the $300,000 one mentioned above.

HR tech in action

Cornerstone OnDemand has acquired SkyHive Technologies‘ AI-powered skills intelligence platform and its team of experts. This acquisition will enhance Cornerstone’s reskilling capabilities by providing predictive labor market intelligence, automated job architecture management and rapid skill proficiency detection.

Payroll and compliance provider Deel announced the appointment of Francis deSouza, a seasoned tech entrepreneur, to its board of directors. deSouza has previously served on the boards of The Walt Disney Company and Citrix and has co-founded and led companies acquired by Microsoft and Symantec.

Solar Staff, an HR tech company providing freelancer solutions across 190 countries, has launched Mellow, a platform to streamline collaboration with contractors and integrate them into business operations. Mellow caters to the growing trend of project-based work and helps companies easily select, manage and pay freelance talent.

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