Almost 70% of Irish businesses have not implemented an artificial intelligence (AI) policy, new research shows.
However, the survey by Mason Hayes & Curran reveals that 64% are using AI in their HR practices to some degree.
"The disconnect between AI use and governance could expose companies to significant legal and reputational risks," said Catherine O'Flynn, Employment Partner at Mason Hayes & Curran.
"With HR AI systems now classified as 'high-risk', aligning practices with regulatory requirements is crucial.
"Companies that proactively address these challenges will be better positioned to leverage AI's benefits while minimising legal risks," she added.
The survey, which had 400 responses from employers across the public and private sectors, was conducted during a recent employment law webinar on 'AI in the Workplace'.
The event explored the legal implications of the EU AI Act, which classifies certain HR AI systems - such as those used for recruitment, performance management, work allocation, and terminations - as ‘high-risk’ under the new regulation.
The survey identified data protection as the biggest challenge in complying with the EU AI Act in HR, followed by regulatory clarity and AI bias.
"Data protection remains a central issue, tied closely to existing GDPR obligations," said Brian McElligott, Partner and Head of AI at Mason Hayes & Curran.
"The AI Act introduces new layers of complexity for high-risk AI systems used in HR.
"Businesses need to prioritise risk assessments, create detailed AI governance policies, and ensure their workforce is adequately trained on AI’s regulatory framework," he added.
Recruitment emerged as the area where AI could deliver the greatest benefits, followed by work allocation and performance management.
