Artificial Intelligence (AI) is reshaping HR and recruitment practices worldwide, promising enhanced efficiency and precision. While the adoption of AI in HR is not groundbreaking news, as many large companies have relied on similar solutions for years, its undeniable benefits continue to drive organizations of all sizes towards embracing AI-powered tools. Technologies like resume screening software and video interviewing and analysis are increasingly prevalent, offering optimization of HR management processes. However, heightened awareness of the risks associated with AI, particularly concerning personal data, has emerged in recent years, especially in Europe. This growing awareness has raised critical concerns regarding the protection of candidates‘ and employees‘ personal data.

Employers venturing into AI adoption in HR must carefully navigate stringent data protection regulations, notably the General Data Protection Regulation (GDPR), alongside national data protection legislations and labor laws. Additionally, the upcoming European AI Act introduces new obligations and categorizes AI systems based on their inherent risks.

Ensuring GDPR Compliance in AI Utilization

To ensure GDPR compliance while leveraging AI in HR processes, employers must adhere to several requirements:

  • Conduct Data Protection Impact Assessments (DPIAs) to identify and mitigate potential risks associated with AI systems.
  • Ensure transparent and effective communication with candidates and employees regarding the use of AI in decision-making processes. This includes providing clear information about how AI tools function, their specific risks and limitations, and the measures in place for human intervention. Employers should “go the extra mile” from the basic requirements of Article 13 GDPR privacy notices to achieve this level of transparency. It’s crucial to thoroughly explain the AI process and associated risks to ensure understanding and trust among stakeholders.
  • Establish robust mechanisms for data governance and accountability, including policies and procedures for data handling, access control, and deletion protocols to safeguard individuals‘ privacy rights.
  • Consider national data protection legislation in addition to GDPR requirements to ensure compliance with specific regulations in countries where operations are conducted. For example, in Germany, involving Works Councils in the implementation of AI systems that handle employees‘ personal data may be mandatory, respecting their rights of co-determination as outlined in the Works Constitution Act. Collaboration with Works Councils is essential to address any concerns related to the deployment of AI in HR processes, and seeking expert advice when needed is advisable.
  • Ensure compliance with the principle of data minimization mandated by the GDPR. Data should be collected for specific purposes and only to the extent necessary. Given AI’s ability to process large volumes of data, it’s essential to ensure that only the correct and necessary data is processed.

Moreover, organizations cannot solely rely on strict GDPR requirements anymore but must also address additional measures and obligations. In the Uk theInformation Commissioner’s Office (ICO) extensively analyzes such cases and provides recommendations, including:

  • Discrimination and bias detection and mitigation: The use of AI in recruiting introduces potential risks of discrimination, as highlighted by the ICO. Software analytics may introduce bias in candidate selection, disadvantaging minority ethnic groups and neurodivergent individuals. Due diligence is essential before implementing these tools to ensure they do not unfairly favor certain demographic groups. Implementation of measures to detect, prevent, and address algorithmic bias within AI algorithms is necessary to foster fair and equitable outcomes in recruitment and performance evaluation.
  • Automated decision making: The GDPR provides additional protections for decisions based solely on automated processes with legal or significant impact on individuals, including hiring decisions without human intervention. Individuals have the right not to be subject to such decisions unless authorized by law, necessary for a contract, or with explicit consent. Mechanisms for challenging decisions and obtaining human intervention must be in place, and the legal basis for processing personal data in this manner must be identified beforehand.

Despite AI’s widespread use in business and its rapid adoption, implementation of such tools in compliance with all legal obligations is still a challenge. Data protection authorities, as well as the newly established EU AI Office, are highly involved and committed to promoting awareness and governance, also publishing useful Guidelines. As the legal landscape surrounding AI continues to evolve, organizations should schedule periodic audits to review AI functioning and the adequacy of measures taken to protect data subjects‘ rights, ensuring compliance with evolving regulations.

Implications of the AI Act for HR Tools

The upcoming European AI Act will also have significant implications for the use of AI based HR tools, which may fall within the definition of high-risk AI systems and therefore be subject to stringent regulatory requirements. These measures can be, by way of example: data quality measures, transparency obligations, the implementation of human oversight mechanisms and also, the so called “Fundamental Right Impact Assessment” (FRIA).


The convergence of AI and HR offers both opportunities and challenges for employers. By prioritizing GDPR compliance, mitigating algorithmic bias, and preparing for the implications of the AI Act, organizations can navigate the evolving legal landscape while harnessing the potential of AI in recruitment and HR management. Consultation with your Data Protection Officer or Privacy Counsel is essential to ensure compliance with regulatory obligations and support the implementation of appropriate assessments.