THE ROLE OF AI IN ENHANCING DIVERSITY AND INCLUSION STRATEGIES IN HUMAN RESOURCE MANAGEMENT

Abstract

This study explores the impact of AI-driven diversity and inclusion (D&I) initiatives on Human Resource Management (HRM) within the banking sector, specifically in the districts of Lahore and Peshawar. The research examines how AI tools, including those used for recruitment, performance evaluations, and employee sentiment analysis, contribute to reducing bias, improving fairness, and enhancing workplace inclusivity. A sample size of 300 employees and HR professionals from 10 banks in these regions participated in the study. Using a quantitative approach, data was collected through surveys and analyzed using descriptive statistics, correlation analysis, and regression analysis to assess the perceptions of employees and HR professionals regarding AI's role in fostering a more inclusive work environment. The findings indicate that AI adoption significantly improves D&I outcomes, particularly in recruitment and performance management, by reducing bias and increasing fairness. However, the study also identifies ethical challenges, including concerns about algorithmic bias, data privacy, and the need for human oversight in AI implementation. Moreover, the research highlights that AI adoption is not confined to large organizations, suggesting that even smaller banks can benefit from AI-driven HR practices. The study concludes that AI holds considerable potential to enhance D&I efforts, but its ethical use and continuous evaluation are essential for achieving long-term, sustainable improvements in HRM. Further research is recommended to examine the long-term effects and cross-sector applicability of AI in HR practices