March 16, 2023
3 min read

Demystifying AI in HR: Top 5 AI HR Software Types

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According to research, almost one in four organizations use AI HR software to improve employee management processes like recruitment, hiring, and performance evaluation. 

In the HR industry, there's an amount of manual labor involved in HR management so it's no surprise that businesses are using AI-powered tools to take manual, repetitive HR tasks off their plates. 

In this article, we'll explain the various types of AI tools for HR teams and how they can help. 

Top 5 AI HR software types to try

When trying to improve HR processes, you can use different types of AI HR software in your organization. Whether you run a small or mid-sized business, we've prepared a list of five AI tools for HR management that will elevate your human resource management processes.

1. Performance review software

AI in HR:

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Performance review software helps HR managers and team leaders to improve employee performance evaluation and drive employee engagement through real-time feedback, peer reviews, surveys, online training, and more.

When choosing the best performance review software for your business, you need to consider important factors like ease of use, functionality, and value for money. In this case, Effy is the best option that covers these factors.

Effy is the simplest and fastest performance review software that helps companies evaluate employee performance and organize and store employee data securely.

It also helps you develop a high-performance culture through enhanced features like:

  • Ready-to-use engagement survey templates so employees can start their first review in a few minutes
  • AI-powered insights and analytics reports for every form of performance evaluation
  • Integration with Slack which enables employees to fill out reviews directly in Slack

2. Payroll software

This type of AI HR software helps eliminate the time and labor-intensive processes involved in payroll functions by improving data collection and automating your payroll tasks like reimbursements, overtime calculations, tax and employee payments, etc.

As an AI-powered tool, it helps HR teams spot data irregularities, automatically set new conditions for processes, and perform better data analysis.

When it comes to choosing the right Payroll software for your organization, it can get challenging due to variations in pricing and functionalities. To help you in this process, we've highlighted the top three AI-powered payroll software for growing businesses:

  1. Deel – provides features like international payroll, dedicated account managers, and global mobility support. It helps HR departments manage employee data and make data-driven insights to improve payroll processes.
  2. Paychex – provides online payroll processing features for managing employee data, tracking payments, and direct deposits.
  3. Gusto – helps small and mid-sized businesses handle direct deposits, compliance, data, etc.

3. Recruitment and talent acquisition software

Recruitment and talent acquisition software helps hiring managers attract, recruit, and onboard qualified candidates by automating the recruitment process.

Rather than completing numerous tasks to evaluate a candidate's skills and personality traits, you can rely on recruitment software to automatically screen resumes or schedule interviews.

Here are some examples of recruitment tools you can use:

  • Zoho Recruit – this AI solution uses predictive analysis to help recruiting teams find hidden talent while reducing hiring time. It provides features like smart search, candidate screening workflows, chatbots, and job seekers matchmakers.
  • Fetcher – this AI HR software helps hiring managers automate hiring by combining artificial intelligence with human monitoring. Some of the features Fetcher provides include an applicant tracking system, automated scheduling, AI-powered sourcing tools, and more.

4. Employee onboarding and engagement software

With employee onboarding and engagement software, you can easily measure employee engagement levels and improve your onboarding processes.

These HR tools provide surveys, feedback questionnaires, and quizzes to help you gain data-driven insights into how your employees feel about the workplace.

The best employee onboarding and engagement software are easy to use and provide automated processes and workflows. Here are some of them:

  • Clear Company – specializes in providing a talent management platform to onboard talents, analyze employee data, and boost employee engagement.
  • Ultimate software – helps HR professionals to build an efficient hiring process and employee-centric culture by providing onboarding, compliance management, and employee engagement solutions.

5. Employee training software

AI in hr: Employee Training Software

Image source: Freepik

If you want to help your employees upskill and reach a higher potential in their careers, employee training software is a must-have in your HR department.

As one of the most used AI-powered HR tools, employee training software helps businesses design custom skill development and training programs to improve employee performance and growth.

With the right employee training software, you can create tutorials and courses to train employees and improve their learning experience irrespective of the stage of their careers.

Here are some examples of some of the best AI-powered employee training software to consider:

  • Trakstar – allows HR teams to create training programs and automatically enroll new employees to participate in their onboarding and training programs. The Trakstar learning management platform provides auto-enrollment features and helps HR managers publish and email online materials to employees.
  • Absorb LMS – This AI HR software uses predictive analytics to predict which training employees will most likely need and deliver the content to them. It also helps HR management teams design and create online courses according to their needs.

Benefits of using AI HR software

AI can support human resources management in many different ways, including:

1. Resource optimization

By increasing efficiency and saving time on specific tasks, artificial intelligence can reduce costs in HR processes. AI can speed up operations like:

  • Searching for candidates
  • Contacting candidates
  • Scheduling interviews
  • Collecting documentation
  • Providing new hires with answers to frequently asked questions
  • Freeing employees from time-consuming and repetitive tasks

2. Employee engagement & satisfaction

Artificial intelligence and machine learning in HR technology can improve employee engagement and satisfaction in many ways.

For example, many companies already use survey software or a feedback system to measure employee sentiment. AI algorithms can also analyze this data, identify themes, tag employee comments, and structure the data. Then it can deliver valuable feedback for HR departments to act on.

3. Employee retention

Companies can use AI technology to distribute work more intelligently to avoid overload. This customization of work schedules can enhance employees' work-life balance, giving them more personal time and chances to work on development. In this way, AI in HR can improve job satisfaction and increase employee retention.

To further increase retention, HR teams can use artificial intelligence to invent programs for rewarding and engaging employees.

4. Data-backed insights

Many organizations are leveraging AI to track how employees use computers at work. By analyzing employee productivity and behavior, they can pinpoint unproductive, bored, or disengaged workers and identify those looking for other job opportunities. It allows HR professionals to take specific steps to improve employee experience and retain those workers.


Businesses that use manual, time-consuming processes to recruit, onboard, and train employees will keep lagging in the HR industry.

By leveraging AI HR software as an integral part of your employee management processes, you'll help your company gain a significant advantage in the HR industry.

Whether you're trying to improve the hiring process, increase employee retention, or analyze HR data, AI-powered tools can help you get started.

If you’re looking for the best tool to improve your performance management, try Effy.

FAQs: AI in HR

Here are the answers to the most asked questions related to AI HR software:

What is AI software in HR?

AI software helps HR professionals to automate HR tasks like employee data analysis, recruitment process, performance management, and employee onboarding to drive employee engagement and increase retention.

How can AI be used in HR?

AI can positively influence HR operations in multiple ways. It can significantly reduce hiring time, simplify organizational tasks, help increase employee satisfaction, improve decision-making processes, and relieve HR teams of repetitive, time-consuming tasks.

What is the best HR software?

Choosing the best HR software depends on your specific needs, but Effy is the best choice for performance reviews. Our performance review software provides:

  • Ready-to-use engagement survey templates that help employees start a review within a few minutes
  • Analytics and AI-generated insights for all forms of employee evaluation
  • Review participation directly from Slack or MS Teams interface
  • Different types of evaluations, from self-reviews, peer reviews, 360 reviews, and more

What is the positive impact of AI in HR?

Artificial intelligence can improve the functioning of HR departments by speeding up and making more effective various processes, such as:

  • Talent acquisition
  • Verifying documents
  • Analyzing employee engagement levels
  • Gathering and analyzing feedback
  • Performing data entry tasks
  • Updating employee details in databases
  • Handling queries
  • Creating training programs
  • Checking for legal compliance
What’s Effy software?
Performance review
Easily launch review cycles in your way, track progress.
360 degree feedback
Collect feedback from peers and managers. Identify strength and improvements areas.
Choose templates that are right for you. Start review process in 15 min.
Collaborate effectively with team meeting agenda, action items and meeting notes
Personal development plan
Develop your people by providing them an explicit plan to the next level. Track goals progression.
AI generated insights & Analytics
AI will generate an extended summary for every employee, including top strength, areas to improve and action plan.
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