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The Importance and Impacts of AI in HRM for the UK Retail Industry


Human resource management (HRM) is one of the key business functions crucial for meeting the overall business objectives of the organisation (Haenlein. and Kaplan 2019). It can be defined as the strategic method to manage people in the organisation in an efficient and effective way so that the most competitive advantage can be gained. The methods of management involved in the HRM approaches are to be designed in a way that can maximise the performance output of the people associated with the organisation and business or the employees to be specific. The field of Human resources started to take shape during the 18th century when the industrial revolution made people realise that employee well-being and management is crucial for organisational success. Retail is an industry that involves a lot of human labour in its long chains of supply and distributions. This labour-intensive sector, hence, requires one of the strongest strategic HRM practices to be applied to ensure the smooth running of the industry (, 2021). Retail firms are responsible for selling consumer goods as well as services through several distribution channels to the customers to earn profit. From small retail stores, shops, department stores and markets to supermarkets, malls and hypermarkets everything comes under this industry. In the UK this industry is even more crucial as it plays a great role in its economy (, 2020). In the last year (2020), the industry acquired a sales figure of £403 billion and employed 2.9 million people in the UK. About a third of the net consumer spending in the UK went through this very industry in 2020. The industry is responsible for about 5% of the net GDP (GVA) in the country (, 2021). These facts make it clear how important the industry is in the country and so effective management of the labour involved in the industry is critical. 

In this regard Artificial Intelligence (AI) is the innovation that is helping the HRM field to emerge from some of its crucial issues tactically. There are several cognitive actions like problem solving or learning that are associated with human intelligence and machines are being programmed to perform these tasks (Berhil, Benlahmar and Labani 2020). Machine learning algorithms are the key tools that are being used for this purpose of programming machines to learn and apply intelligent cognition in action. AI is also proving to be effective in solving HRM issues recruitment, training, employee communications, issue resolving and so on (Jiang et al. 2019). This makes the field of AI a major sector to research on so that the applications can be made more advanced and appropriate to the purpose that it requires to serve. 

Aims & objectives
The key aim of the study being proposed here is to understand the importance and impacts of artificial intelligence on the field of AI in the HRM functions of the UK retail industry. This would involve an overview of what AI exactly is and how it helps in resolving several issues and challenges in the field HRM in the industry.

Furthermore, it also involves the virtues of how such applications can be refined with respect to the specific demands of the field and market. 

Therefore, the key objectives of the study would be:
To develop an understanding of what Artificial intelligence is
To analyse the impacts and importance that AI has in the field of HRM in the UK retail industry
To evaluate how the applications of AI can be more refined to meet industrial and market demands of UK retail

Research questions
What is artificial intelligence? 
How can AI impact the field of retail in terms of HRM practices? 
How can the applications of AI be further refined to help in HR practices of the UK retail industry? 

Research Rationale
The background of the study is clear regarding the importance of HRM in the labour-intensive UK retail industry and virtues of AI in HR practices (Kshetri 2021). The industry has an employee strength of more than 3 million over these last two decades.  

Some of its large firms are also some key employers in the country. The largest firm in the market, Tesco, is having a strength of 423,092 employees whereas Asda, another key firm in the industry is having a strength of 165,000 employees ( 2020). Apart from this there are also companies like Sainsbury with 111,900 employees. All this makes HR strategies in the industry not only crucial for the industry itself but also for the UK economy. Thus, investigating the scope adapting to new innovative solutions like AI-based technologies can play a crucial role. 

Problem statement
With a simple overview one of the key problems to be addressed in the study is the area of HR practices in which AI can help. Also, another key problem to be addressed would be the key challenges related with the execution of artificial intelligence in the field along with the strategies to overcome these challenges. These key problems are to be kept in consideration when the key objectives of the study are being fulfilled through the detailed analysis. 

Literature review

According to the study by Jain and Sharma (2019), HR practices like training and development have the potential to let organisations meet their respective goals and help the retail business to grow further. With a key focus on the HR practices in crucial retail firms in the UK the importance of this business function in the industry would be clearer. ASDA is one of the key firms in the industry with a 23 billion GBP revenue (in 2019). It is having an employee strength of 165,000 which makes it a large employer in the UK. There are some key aspects on which the company keeps its focus on such as:

Workplace engagement is a key factor that ASDA has focused on to achieve to get a more efficient workflow. Functions like Engagement analytics has proved to be a key enabler of such processes where analytical outcomes based on engagement data is crucial.

Employee and customer data has been a key tool to create the insight of effective HR strategies ASDA. Clear reports on key performance indicators (KPIs) are crucial for the HR operations.

Even in acquiring efficient human capital through the talent acquisition process the company has put a lot interest on data as a tool. HR analytics are used in the recruitment and selection processes to look for the best candidates ( 2021).

All these core values of the company are showing how crucial it is the for such a company to enhance its analytics efforts as much as possible. The data plays a great role in how ASDA deals with its key HR strategies. Tesco is another crucial firm in the industry as with more than 60 billion GBP annual revenue last year it is the largest retail firm in the country and the third largest globally. The company also happens to be the largest employer in the UK retail sector with an employee strength of 423,092. The overview of the HR practices followed by the company would also help in understanding the insights of HR practices in the industry. 

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