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A Forbes report has revealed HR consultants are increasingly seeing AI-generated employee handbooks that miss crucial clauses.
The report, shared on Wednesday, draws on anecdotal feedback from three HR consultants who have observed a spike in the number of clients who, upon requests to view their employee handbook, share incomplete documents littered with errors and omissions.
Carly Holm, CEO of HR consultancy Humani, was contacted by an employer after one worker filed a harassment claim against another. After asking for a handbook, she was given a document that her client informed her was ChatGPT-generated. To her horror, there was no anti-harassment policy.
“If the workplace does not have appropriate policies in place like a zero-tolerance policy for sexual harassment, workplace violence, etc, the investigation will then look at the employer, and there will be consequences,” Holm warned.
It wasn’t the first AI-generated handbook Holm had seen, and she was not alone in her observation. Daniel Grace, a director at global HR consulting firm Iris, told Forbes of a California-based employer with 200 workers that distributed an AI-generated employee handbook without an overtime policy. “They went back to look at the handbook and there was a section on overtime in there, but it was blank,” Grace stated.
Paul Cortissoz, CEO of HRSoul, a Florida-based HR consultancy, shared a similar case of a remote SaaS company whose AI-generated handbook informed workers they were eligible to take five days of paid bereavement leave, despite the employee’s state mandating workers are entitled to take up to ten days.
This alarming trend poses huge risks to employers, both legally and financially. Many employers evidently do not understand the full implications of using AI to generate such documents. Moreover, they do not appreciate that a clearly defined employee handbook carries huge cultural value, and therefore must be carefully created rather than knocked up on the fly with generative AI.
AI-generated employee handbooks carry legal and financial risks
Before we address the cultural argument, let’s consider the legal and financial risks. In each of the examples above, the companies put themselves in a precarious position. At Grace’s California-based start-up, the missing policy meant the company racked up an unexpectedly high wage bill. In Holm’s example, if an employee had suffered from sexual harassment or workplace violence, an investigation that revealed no anti-harassment clauses in the company handbook could result in the employer being punished.
By taking a shortcut, employers are leaving themselves vulnerable, particularly when they do not proofread the AI-created handbooks. Moreover, as a VP at Iris pointed out to Forbes, Generative AI models may draw on training data that is not up to date with the latest labor laws.
And if that wasn’t enough, the VP adds, employers who make handbooks context-specific by inputting company data into free generative AI tools risk privacy breaches, if confidential information is used to train AI models or is leaked to the public.
With all the checks that would be needed to ensure an AI-generated employee handbook is compliant and risk-free, it would surely be quicker for a human to draft it.
“People are using artificial intelligence tools to speed things up … and they really shouldn't,” Grace stated. “They're generating these documents. No one’s proofreading them, they're publishing them and it's causing more issues than it would have caused if they’d taken the time to make the handbook successfully in the first instance.”
Human-created handbooks offer cultural value
As Grace states, the reason most employers would give for using AI to create an employee handbook is speed. Employee handbooks are detailed documents that are time-intensive to create, and there’s no doubt that HR could greatly benefit from automating many of its administrative tasks to focus on more strategic work.
However, creating an employee handbook, while time-consuming, falls firmly into the latter camp. They are an invaluable resource for workers hoping to learn more about company benefits; seeking guidance through difficult experiences, such as anti-harassment or bereavement leave policies; or quickly gathering practical information such as their working hours or what clothing is appropriate in the office.
An employee handbook is the codification of the company’s culture. It is perhaps the clearest articulation of HR strategy a people leader can create and should be a living and breathing gospel of the employee experience the employer hopes to foster.
AI-generated employee handbooks are legally dangerous, financially risky, and culturally anemic. So, yes, many HR functions can be automated, but creating an employee handbook should not be one of them.
