AMALGAMATION OF HR & AI: IMPACT ON

PRODUCTIVITY IN MANUFACTURING
INDUSTRY

Submitted in partial fulfillment of the requirements for

Master of Business Administration (MBA)

Guru Gobind Singh Indraprastha University

New Delhi

By

AATHIRA H NAIR
Roll No: 00218403917

Batch 2017-19
Under the Supervision of

Cmde (Dr) Vivek Chawla (Retd)

Director AIMT

ARMY INSTITUTE OF MANAGEMENT & TECHNOLOGY, PLOT NO

M-l, POCKET P-5, GREATER NOIDA-201306 (UP)
April 2019
 SUPERVISOR CERTIFICATE

This is to certify that Ms. Aathira H Nair, a student of Master of Business

Administration, Batch MBA 17-19, Army Institute Management & Technology, Greater
Noida, has successfully completed his/her project under my supervision.

During this period, she worked on the project titled “Amalgamation of HR & AI:
Impact on Productivity in Manufacturing Industry” in partial fulfillment for the award
of the degree of Master of Business Administration of GGSIP University, Delhi.

To the best of my knowledge, the project work done by the candidate has not been
submitted to any university for the award of any degree. Her performance and conduct
have been good.

Cmde (Dr) Vivek Chawla (Retd)

Director AIMT

Date:

i
 CERTIFICATE OF ORIGINALITY

I, Aathira H Nair, Roll No 00218403917 of MBA 17-19, a full-time bona fide student of
Second year of Master of Business Administration (MBA) Programme of Army
Institute of Management & Technology, Greater Noida. I hereby certify that this project
work was carried out by me under the supervision of Cmde (Dr) Vivek Chawla (Retd),
Director AIMT and the report submitted in partial fulfillment of the requirements of the
programme is an original work of mine. The work Amalgamation of HR & AI: Impact
on Productivity in Manufacturing Industry is not based or reproduced from any existing
work of any other person or on any earlier work undertaken at any other time or for any
other purpose and has not been submitted anywhere else at any time.

Aathira H Nair Cmde (Dr) Vivek Chawla (Retd)

Director AIMT

Date: Date:

ii
 ACKNOWLEDGMENT

I want to show my sincere gratitude to all those who made this study possible. First of
all I am thankful to the helpful staff and the faculty of Army Institute of Management
and Technology. One of the most important tasks in every good study is its critical
evaluation and feedback which was performed by my faculty guide Cmde (Dr) Vivek
Chawla (Retd). I am very thankful to my Faculty for investing his precious time
to discuss and criticize this study in depth, and explained the meaning of
different concepts and how to think when it comes to problem discussions and
theoretical discussions. My sincere thanks go to my Institute and family, who
supported and encourage me.

Aathira H Nair

Date:

iii
 EXECUTIVE SUMMARY

Artificial Intelligence (AI) is changing the way organizations are managing their workforce.
The research project studies the way artificial intelligence is transforming the workforce by
improving recruitment process and its productivity. The primary objective of the research is
to study the impact of AI in changing the way businesses work with the evolving technology.

Artificial intelligence is an area of computer sciences that emphasizes the creation of

intelligent machines that work and reacts like humans. AI is transforming our lives at home
as well as our work. The research project analyses the way Artificial Intelligence is
improving workforce productivity. AI will improve Human Resources processes like the way
Chatbots are used to simulate interactive human conversation which is even helpful in e-
commerce sites to answer product related questions from customers.

AI is evolving the way businesses perform their functions so is the Human resource
department changing with the emergence of this disruptive technology. This is not a futuristic
concept; it is real and is happening today. It is already part of the job market and is changing
the labor market as AI is improving productivity in the manufacturing sector. It studies the
gamut of areas where artificial intelligence is transforming the workplace. Ethical issues are a
major concern when dealing with technology whether these systems remove the bias or will
increase it. Disruptive technology will bring a huge change in jobs. It is crucial for companies
to realize how these changes will impact the workplace to bring better productivity at work.

The study will use a survey method through a questionnaire to gather information pertaining
to the research study. The questionnaire survey consisted of 17 questions with a 5- point
Likert scale was adopted for the study. The study has used Cronbach’s alpha to test
reliability. Factor analysis was used to analyze the data.

The goal of the study is to analyze how artificial intelligence will help the organizations in
improving the recruitment process and the productivity of the workforce and not take way
jobs rather it will create jobs. By 2020 artificial intelligence will add to, not subtract from, the
job market: it is projected to create 2.3 million jobs globally while eliminating 1.8 million1.

1
Gartner, ed., Predicts 2018: AI and the Future of Work (Harvard Business Review, 2019).

iv
 TABLE OF CONTENTS

Supervisor Certificate ……………………………………………………………………… (i)

Certificate of Originality………………………………………………………………….... (ii)

Acknowledgment…………………………………………………………………….......... (iii)

Executive Summary ……………………………………………………………………….. (iv)

CHAPTER CONTENTS PAGE NO.

1 INTRODUCTION 1-7

2 RESEARCH OBJECTIVES 8

3 LITERATURE REVIEW 9-10

4 RESEARCH METHODOLOGY 11-12

5 DATA ANALYSIS 13-18

6 FINDINGS AND CONCLUSION 19-20

7 BIBLIOGRAPHY 21-22

8 QUESTIONNAIRE 23-25
 LIST OF TABLES

S. No. Table No. & Heading Page No.

1. Table 4.1 Demographic Characteristics Of The Respondents 12

2. Table 5.1 Cronbach’s Alpha 13

3. Table 5.2 KMO AND Bartlett’s Test 13

4. Table 5.4 Total Variance Explained 14

5. Table 5.5 Rotated Component Matrix 17

LIST OF FIGURES

Figure No. Heading Page No.

FIGURE 5.1 Scree Plot 15

 CHAPTER 1
INTRODUCTION
Artificial intelligence is the use of computers to perform tasks that normally require human
analytical skills. This concept has long been the subject of science fiction but only recently
has its profound disruptive potential has come near to reality.

Artificial intelligence cannot be considered as a technology of the future as it is a reality and

it is happening in our everyday lives. It is out in the real world and it is impacting our work
and day to day lives. We are entering into an age of artificial intelligence. Rapid advances in
digital technologies, popularly known as industry 4.0 are disrupting the businesses in
numerous ways. Artificial intelligence is the most disruptive of all digital technologies.

AI is being used in various industries because they are efficient and reduces human efforts in
a variety of tasks. Technologies powered by Artificial Intelligence and Machine learning is
transforming the industrial landscape, by providing organizations with tremendous benefits
and adding value to their businesses.

According to Yang (2018), Artificial intelligence is an important branch of computer science

and is known as one of the world's top three technologies. It is a blend of various disciplines
such as computer science, physiology, psychology, linguistics, biology, and so on. Artificial
intelligence has self-learning capabilities that allow the machines to perform specific tasks by
simulating human actions.

Many sectors have been growing drastically and are contributing more to the economy.
Adding the technology in the sectors would result in a more profound. The sectors like
infrastructure, financial services, technology, automotive and healthcare have been growing
rapidly in the country. Lin (2018) stated that AI in health care will reduce information
irregularity between health care providers, payers, and patients as it redefines the health care
landscape. AI empowers patients to become more responsible for their health as they are the
objects of a value chain system.

Artificial intelligence is being used to alert users about the potential lifestyle conditions
which can be diagnosed early. AI can make predictions to warn people of a health condition
so that they can take preventive action. AI is being used to scan images, slides to diagnose a
disease more accurately than doctors. These are some of the applications of artificial
intelligence.

1
Artificial Intelligence and Manufacturing Industry

The manufacturing industry has always been open to adopting the latest technologies. Drones
and industrial robots have been a part of the manufacturing industry since the 1960s. The next
automation revolution is just around the corner and the Manufacturing Sector is awaiting this
change eagerly. With the adoption of AI, if companies can keep inventories lean and reduce
the cost, there is a high likelihood that the Manufacturing Industry will experience
encouraging growth. The manufacturing sector has to gear up for networked factories where
supply chain, design team, production line, and quality control are highly integrated into an
intelligent engine that provides actionable insights. AI is considered to be path-breaking for
the manufacturing sector.

AI will help in real-time maintenance of equipment, prohibiting defects during production

(for both - product & machinery), and from streamlining the process of designing which
enables improved and customized products by creating a smart supply chain. Artificial
intelligence exhibits the best of Industry 4.0.

In India, AI has just started to establish its foothold in this sector with manufacturing SMEs
still trying to decode the implication and overall economics of adopting this new-age
technology. Companies like VE Commercial Vehicles (A Volvo Group and Eicher Motors
Joint venture) have robotic processes in the assembly line.

Organizations are now employing Industrial Internet of things (IIoT) that aims to transform
businesses by enabling collection and sharing of relevant data. Adopting these technologies
results in a reduction in costs.

Reduction in defects

AI enabled systems are equipped with the ability to detect microscopic aberrations during
production using complex algorithms, a feature which humans eye fail to detect. AI systems
are capable of making real-time informed decisions. For instance, if the system predicts any
defect in the production line, the data is instantly processed and an alert is sent to both human
supervisors and the machine.

Therefore, these streams of data can be collected and analyzed to prevent defects. The defect
is rectified within record time hence it saves both capital and manpower which is otherwise
lost in recalls, repair, and replacements. AI is also deployed for predictive maintenance of

2
equipment with multiple sensors pre-empting machinery breakdowns and automatically
taking required actions to remedy the expected malfunctions.

Supply Chain
a) Demand forecasting

AI enabled analytics to make supply chain management more efficient and streamlined.
Predictive analytics powered by machine learning and Big Data identifies trends and patterns
from historical data as well as critical demand drivers, thereby, successfully enabling both
real-time adaptations to change in demand and strategic decision-making.

b) Numeric method for the transport equation

AI and Big Data will be increasingly deployed in all areas of supply chain management from
weather forecast for the shipping of raw materials to inventory optimization to predictive
maintenance of the final product. AI can help beyond the linear transport model (numeric
method).

Industrial internet of things (IIoT)

IIoT is poised to revolutionize industrial automation by introducing seamless and efficient

manufacturing processes. The deployment of IIoT comes with a promise of minimal human
involvement that ensures faster decision making, availability of real-time data and limited
risks that have a positive impact on an entire manufacturing chain. This not only drives up
efficiency by several notches but also curbs costs.

Future of the manufacturing industry

Artificial Intelligence will be the key determining factor that will decide the survival of
manufacturing. Not adopting this futuristic technology will keep costs elevated, inefficiencies
in production and will increase the competition. The future is likely to lead to a sharp divide
between the AI-enabled and the not AI-enabled manufacturing companies. The companies
employing these technologies will experience a greater advantage than the traditional ones.

Artificial intelligence is trying to mimic human intelligence and they are better than humans
in identifying patterns and learning from millions of data points.

3
Artificial Intelligence for Recruitment

AI in recruiting is an emerging category in Human Resources which is intended to reduce or

eliminate time-consuming activities like screening of resumes. Screening resumes efficiently
and effectively within the time frame remains the biggest challenge in talent acquisition. The
hardest part of recruitment is identifying the right candidates from a large pool of applicants.
AI designed for recruitment is the application of artificial intelligence, such as the learning or
problem-solving that a computer can do, to the recruitment function.

Automation will change the recruiting workflow, especially repetitive, manual and high-
volume tasks. For example, software that applies machine learning to resumes to auto-screen
candidates or software that conducts sentiment analysis on job descriptions to identify the
potentially biased language.

Benefits of using AI for recruiters

1. Saving recruiters’ time
Manually screening resumes is the most time-consuming part of talent acquisition,
especially when most of the resumes received for a particular role are unqualified.
Screening resumes and short listing candidates to interview is estimated to take 23 hours
of a recruiter’s time for a single hire.
AI for recruiting represents a boon for recruiters if it can successfully automate time-
consuming, repetitive tasks such as screening resumes or scheduling interviews with
candidates.
The best AI-powered technology will be designed to not only automate a part of the
workflow but to integrate seamlessly with the current recruiting stack so it doesn’t disrupt
the workflow. Speeding up the processes of recruiting through automation reduces time-
to-hire, which means the company will be less likely to lose the best talent.

2. Improving the quality of hire through standardized job matching

Quality of hire used to be a bit of a recruiting Key performance indicator (KPI) (i.e.,
measuring what happens to the candidates after they get hired). As HR data has become
easier to collect, access, and analyze over the years, quality of hire has become recruiter’s
top KPI.

4
 The promise of AI for improving quality of hire lies in its ability to use data to
standardize the matching between candidates’ experience, knowledge, and skills and the
requirements of the job.
This improvement in job matching is predicted to lead to happier, more productive
employees who are less likely to leave the job. The companies adopting AI-powered
recruiting software have seen their cost per screen reduced by 75%, their revenue per
employee improve by 4%, and their turnover decrease by 35%.

Challenges of applying AI in recruiting

1. AI required a lot of data
AI requires a lot of data to learn how to accurately imitate human intelligence. For
example, AI that uses machine learning needs a lot of data to learn how to screen
resumes as accurately as a human recruiter. This can mean several hundred to several
thousands of resumes for a specific role.
2. AI can learn human biases
AI for recruiting promises to reduce unconscious bias by ignoring information such as
a candidate’s age, gender, and race. However, AI is trained to find patterns in
previous behavior. That means that any human bias that may already be in your
recruiting process can be learned by AI. Organizations must avoid any replication of
biases that may already exist and must take steps to remove patterns of potential bias.
There are two main ways by which the bias shows up: either the data collected is
unrepresentative of reality, or it reflects existing prejudices. In the first case, if a deep-
learning algorithm is fed more photos of light-skinned faces than dark-skinned faces,
the face recognition system would be worse at recognizing dark-skinned faces. The
second case is specifically what happened when Amazon discovered that its internal
recruiting tool was dismissing female candidates. Because it was trained on historical
hiring decisions, which favored men over women and it learned to do the same.
3. Skepticism of new technology
Recruiting and talent acquisition leaders can be skeptical of any technology that
promises to make their jobs easier. Leaders want to be sure that the software that will
automate their work tasks is going to be able to do as good of a job as they can. The
doubts could also be because of the changes it will get in the way the work.

5
Innovations in AI in recruiting
1. Intelligent screening software
Intelligent screening software automates resume screening by using AI (i.e., machine
learning) on your existing resume database. The software predicts the candidate’s
success rate based on their performance, experience, tenure, and earlier turnover rates.
In particular, it learns the experience, skills, and other qualities of the existing
employees’ and applies this knowledge to new applicants in order to automatically
rank, grade, and shortlist the suitable candidates. The software can also develop
candidates’ resumes by using public data sources about their prior employers as well
as their public social media profiles.
Intelligent screening software that automates resume screening represents a massive
opportunity for recruiters because it integrates with the existing database, i.e it
doesn’t disrupt the workflow, the candidate workflow, and requires minimal IT
support.
2. Recruiter Chatbots
Recruiter Chatbots provide real-time interaction to candidates by asking questions
based on the job requirements and providing feedback, updates, and next-step
suggestions. AI-powered Chatbots have a lot of potentials to improve the candidate
experience.
Many job seekers stated that they have a negative impression of a company if didn’t
hear back from the company after submitting an application, whereas others have a
positive impression when receive consistent updates throughout the application
process.
3. Digitized interviews
Online interview software would use AI to assess candidates’ word choices, speech
patterns, and facial expressions to assess whether the applicant is fit for the role and
the organization’s culture.

AI changing Recruiter’s Role

Experts believe the future of AI for recruiting is Augmented Intelligence. Augmented
intelligence is the belief that machines cannot fully replace human capabilities
through technology. Instead, augmented intelligence suggests it will create technology
to enhance human aptitude and efficiency.

6
The ability to use augmented AI to automate repetitive, administrative tasks will be
extremely valuable. There are 3 main ways this technology will change the role of the
recruiter:
o Recruiters will be able to conduct proactive strategic hiring rather than spend
most of their time with reactive backfilling.
o Recruiters will have more time to spend with candidate’s in-person to build
relationships and help determine culture fit.
o Recruiters will able to close the loop with hiring managers as AI allows them
to use data to show recruiting KPIs including quality of hire.

7
 CHAPTER 2
RESEARCH OBJECTIVES
Based on the research gap identified from the existing literature, the research focuses on
studying the impact of artificial intelligence in the recruitment process and the productivity of
the workforce. Followings are the objectives of the study:

1. To study the impact of AI on the recruitment process.

2. To study the impact of AI on the productivity of the workforce.

HYPOTHESIS

H1: The use of AI has resulted in improvement in the recruitment process.

H2: The use of AI has resulted in an improvement in productivity.

NULL AND ALTERNATE HYPOTHESIS

H0: The use of AI has no significant improvement in the recruitment process.

Ha: The use of AI has resulted in an improvement in the recruitment process.

H0: The use of AI has no significant improvement in productivity.

Ha: The use of AI has resulted in an improvement in productivity.

8
 CHAPTER 3

LITERATURE REVIEW

Artificial intelligence term means the intelligence shown by machines. One of the first
researches to use the term artificial intelligence in their research paper is by John McCarthy
et al (1955) in “A Proposal for the Dartmouth Summer Research Project on Artificial
Intelligence”. The research is also considered the birth of AI.

The need for artificial intelligence is increasing day by day and it is now increasingly being
used by various functions of the business including human resource management.
Information technology has had an intense effect on human resource management (HR)
processes and practices. Artificial Intelligence plays a fundamental role in the success of
transforming human knowledge into organizational knowledge as we move towards building
smart organizations. Artificial intelligence is an emerging area in the field of HR Technology
which can replace or augment the effectiveness of human resource management processes.
Artificial Intelligence can be used by organizations for candidate screening, employee
engagement, employee re-engagement, and career development. It can be applied to HR
policies, procedures, and HR perspective and can enhance the effectiveness of human
resource management. The study by Lochan Sharma Tandon (2017) analyzes the emergence
of Artificial Intelligence in the HRM process and the potential benefits of artificial
intelligence through secondary data. The research paper generates insights on the utilization
of technology for the conversion of effective HR into sustainable HR.

Elliot (1996) suggests the impact of an expert system used as a decision aid in a job
evaluation system. Although the study examines an expert system within an HRM context,
the results are useful as one test of expert system efficacy within the more general area of
managerial decision making.

Rickli (2018) state that in Asia, the Gulf countries will not be immune to the developments
and consequences of AI. Economically, the productivity of the Gulf economies is most likely
to benefit from AI. Artificial intelligence will allow the automation of many sectors of
activities which will reduce the need for foreign labor and thus free financial resources to
diversify the Gulf economies in order to move beyond their rentier state model. AI, however,
will require the re-skilling of the domestic populations and the education of the younger

9
generation towards innovation and critical thinking as well as the development of more tech-
savvy future workers in order to avoid them being side-lined by automation.

In China, in addition to government-supported academic research, the industry has also been
very active in AI exploration. China’s technical giants, such as Baidu, Alibaba, Tencent, and
Huawei, are actively investing in AI research and related development. These corporations
have established their own worldwide AI labs, typically directed by world-renowned AI
scientists such as Andrew Ng, who led Baidu Lab from 2014–2017. International companies
like Microsoft, IBM, and Intel, also have built research labs in China with active AI research.
(Jun 2018)

Artificial intelligence in human resource management includes four challenges in using data
science techniques in HR practices: 1) complexity of HR phenomena, 2) constraints imposed
by small data sets, 3) ethical questions associated with fairness and legal constraints, and 4)
employee reaction to management via data-based algorithms according to Peter Cappelli
(2018).

According to (Zurich, 2018), there are four major causes of the rapid adoption of Artificial
Intelligence by organizations. In the past two decades, there has been a significant
advancement in the science and technology underlying AI methods. Many organizations have
made these technologies available under open-source which increases their adoption. Second,
IT has become efficient in capturing and storing data across the organization. Such data feed
the underlying algorithms of AI for automation. Third, although sophisticated AI demands
extensive computation, the rapidly decreasing cost of computer hardware and AI-dedicated
chip designs makes computational power increasingly affordable. Fourth, the growth of
cloud-based services has made AI available to different kinds of organizations from start-ups
to established firms.

Review of the literature suggests that a number of studies have been carried out to study
artificial intelligence and how it will impact employment opportunities in the current
scenario. The research tries to answer questions relating to artificial intelligence and its
impact on the recruitment process and productivity in the manufacturing industry. All this has
not been done from the Indian context. There is a need to understand how India will embrace
this change towards this disruptive technology.

10
 CHAPTER 4

RESEARCH METHODOLOGY

The study used descriptive research method where primary data was collected using a
structured questionnaire administered to a sample of 50 respondents.

1. Questionnaire Design

The survey method was adopted to conduct the study. Based on the review of the
literature and the understanding of the concept, a structured questionnaire was developed.
The questionnaire consisted of four demographic questions and 17 questions related to the
study.

Likert scales (1-5) with anchors ranging from “strongly disagree” to “strongly agree”
were used to obtain responses. The questionnaire used is divided into two parts. Part 1
provided the demographic information of respondents such as name, gender, education,
qualification, and age. Part 2 of the questionnaire contains items measuring the impact of
Artificial intelligence on productivity and the recruitment of the workforce.

The reliability of the questionnaire was checked by calculating Cronbach’s coefficient

alpha value. The value measures the internal consistency. Cronbach’s coefficient alpha of
the overall scale for this study was calculated to be 0.814. Hence, the questionnaire is
reliable.

2. Respondents and Research Approach

Respondents were contacted and requested to fill the questionnaire about the impact of
Artificial Intelligence in the productivity and the recruitment of the workforce. Female
and male respondents were included in the study. The random sampling technique was
used for collecting the data. Respondents were included in the study only if they were
willing to respond.

3. Content Validity

In any research, content validity plays a pivotal role. To make certain the content validity
of the questionnaire, it was made sure that the questionnaire consisted of simple,
understandable, and clear language. Before the survey respondents were given clear
instructions on how to fill the questionnaire. The anonymity of the respondents was
ensured.

11
 Table 1. Demographic Characteristics of the Respondents

Description Frequency %

Age (in years) 18-24 years 18 50

25-34 years 11 30.6

35-44 years 4 11.1

45-55 years 3 8.3

Gender Male 14 38.9

Female 22 61.1

Qualification Graduation 14 38.9

Post Graduation 21 58.3

PhD 1 2.8

Experience 1-5 years 23 63.9

6-10 years 6 16.7

10-15 years 4 11.1

15 years & more 3 8.3

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 CHAPTER 5

DATA ANALYSIS

(1) Cronbach’s alpha

Table 2. Cronbach’s Alpha

Cronbach's Cronbach's N of Items

Alpha Alpha Based on
Standardized
Items
.814 .815 16

The Cronbach’s alpha for the overall scale for the study was calculated to be 0.814. A
Cronbach’s value of 0.60 is suggested as a threshold for the Cronbach’s alpha
reliability and acceptability. The value of Cronbach’s alpha ranges between 0 and 1,
where 0 indicates that internal reliability is highly lacking and 1 indicates high
internal reliability. This confirmed the validity and reliability of the study. Cronbach’s
alpha is computed using SPSS 21.

(2) KMO and Bartlett’s Test

The KMO and Bartlett’s Test was conducted for evaluating the sampling adequacy.
The Kaiser-Meyer-Olkin test of sphericity is a sphericity check. It is a measure of
sampling adequacy that suggests the quantitative relation for the analysis. Accepted
index for the value is 0.6. The KMO and Bartlett’s test shows the reliability and
validity. Kaiser-Meyer-Olkin measure of sampling adequacy is found to be 0.710 and
Bartlett’s test of sphericity is found to be .000 (Table 3). The sample is adequate for
factor analysis.

Table 3. KMO and Bartlett’s Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .710

Approx. Chi-Square 321.713
Bartlett's Test of Sphericity df 120
Sig. .000

13
 Table 4- Factor Analysis

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

5.092 31.828 31.828 5.092 31.828 31.828

1

1.821 11.378 43.206 1.821 11.378 43.206

2

1.559 9.741 52.947 1.559 9.741 52.947

3

1.235 7.718 60.665 1.235 7.718 60.665

4

1.083 6.768 67.433 1.083 6.768 67.433

5

1.015 6.346 73.779 1.015 6.346 73.779

6

.847 5.293 79.072

7

.670 4.186 83.258

8

.527 3.293 86.551

9

.491 3.071 89.622

10

.416 2.598 92.220

11

.352 2.199 94.419

12

.292 1.827 96.246

13

.276 1.722 97.968

14

.170 1.065 99.033

15

.155 .967 100.000

16

Extraction Method: Principal Component Analysis

14
 Figure 1. Scree Plot

(3) Factor analysis

The questions relating to the impact of artificial intelligence on recruitment and its
impact on productivity of the workforce were analyzed using Principal component
analysis with varimax rotation. The Total variance explained depicts the factors
extracted from the analysis along with their eigenvalues. From Table 4, we can notice
that the first factor accounts for 31.828% of the variance followed by the second
factor which describes a variance of 11.378%. The third factor elucidates a variance
of 9.741%, the fourth factor elucidates a variance of 7.718%, the fifth factor
elucidates a variance of 6.768% and the sixth factor elucidates a variance of 6.346%.

Scree plot shows the initial eigenvalues. As evident from the scree plot, six major
factors were extracted (see Figure 1). The plot is useful in determining how many
factors to retain. The main area is the place where the curve begins to flatten. It begins
to flatten from factors 6, so 6 factors have been retained.

15
The Principal Component Analysis was performed with varimax with Kaiser
Normalization. Six factors were extracted. Six factors which represent 73.8% of the
total variance of the original variables were extracted, which is acceptable for factor
analysis. The six factors represent two dimensions covered under the impact of
artificial intelligence on recruitment and productivity.

The higher the absolute value, more the factor contributes to the variable. From the
table above (Table 5) we can see that improving the quality of hire with standardized
job matching and informed decision making is loaded on factor 1. Enhanced
productivity is loaded on factor 2. Use of Chatbots and Virtual assistants for job-
related queries are loaded on factor 3. Reducing costs is loaded on factor 4. Training
of employees with MOOC Courses is loaded on factor 5 and Job loss is loaded on
factor 6.

16
 Table 5- Rotated Component Matrix

Rotated Component Matrix

Component

1 2 3 4 5 6

Recruitment

Ease in the hiring process .737

Identifying recruitment need in .640

the company

Cheaper recruitment .654

Reducing costs .810

Job loss .907

.884
Use of Chatbots and Virtual
assistants for job-related queries

Improving quality of hire with .716

standardized job matching

Finding patterns in data .557

Productivity

Efficient manpower planning .581

Enhance productivity .792

.519
Detects decline in performance

Identifying training need .496

Training of employees with .904

MOOC Courses

Reduction in production time .696

.690
Better inventory management

Informed decision making .762

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

17
 (4) Structural Equation Modeling

The structural equation modeling approach using SMART PLS software was adopted
to test the hypothesis framed for the research. The model developed using the
dependent and independent variables were analyzed using the data collected through
the survey. The Bootstrapping test was conducted on the study to test the null
hypothesis.

Table 6- Bootstrapping test

Original Sample Sample mean Standard deviation T P-

(O) (M) (STDEV) Statistics values

Productivity 0.564 0.594 0.119 4.734 0.000

Recruitment 0.398 0.454 0.226 1.763 0.039

The P-values obtained can be seen from the table above. The study used
Bootstrapping test (one-tailed test). If p<0.05 then the test is significant i.e. it is low
enough to reject the null hypothesis. That means the study shows that the use of AI
has resulted in the improvement in recruitment and it has resulted in improvement in
productivity. The hypothesis H1 and H2 are supported by the results obtained.

18
 CHAPTER 6

FINDINGS AND CONCLUSION

6.1 Findings

1. The component loadings on the Rotated component matrix show that

component 1 has high loadings on improving the quality of hire with
standardized job matching, efficient manpower planning, identifying training
need and informed decision making.

2. Component 2 has high loadings on finding patterns in data, enhance

productivity, reduction in production time and better inventory management.

3. Component 3 has high loadings on ease of hiring process, identifying

recruitment need in the company and use of Chatbots and virtual assistants for
job-related queries.

4. Component 4 has high loadings on cheaper recruitment, reducing costs,

detects a decline in performance.

5. Component 5 has high loadings on the training of employees with MOOC

Courses.

6. Component 6 has high loadings on job loss.

7. The hypothesis was tested with the help of Bootstrapping test. The p-values
obtained are less than 0.05 so as to reject the null hypothesis. Hence, it can be
concluded that artificial intelligence has resulted in the improvement in the
recruitment process and the productivity of the workforce.

8. It will improve recruitment with by reducing costs, improving the quality of

hire with standardized job matching, efficient manpower planning, and
identifying training need, hiring process, identifying recruitment need in the
company and use of Chatbots and virtual assistants for job-related queries.

9. The productivity will be improved with finding patterns in data, enhance

productivity, reduction in production time and better inventory management,
training employees with MOOC courses, and informed decision making. It

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 will help in detecting a decline in performance with efficient manpower
planning.

10. Job loss will be inevitable with AI taking the lead. Jobs with repetitive tasks
will be taken away by the machines. To match up employees need to
constantly update themselves by enhancing their skills.

6.2 Conclusion

The present study has revealed the opinion of employees of the manufacturing
industry towards the impact of artificial intelligence on the recruitment process and
the productivity of the workforce. The responses reveal that Artificial intelligence will
improve the recruitment process and the productivity of the workforce which are
highly correlated to each other. The null hypothesis is rejected and hence we can
conclude that Artificial intelligence has resulted in improvement in the recruitment
process with the use of Chatbots and virtual assistants, reduction in costs, improving
quality of hire and detecting decline in performance. It improves productivity by
finding patterns in data, better inventory management and by identifying training
need. However, they were of the opinion that Artificial intelligence will result in job
loss as it will take away jobs which are repetitive.

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 CHAPTER 7

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 APPENDICES

QUESTIONNAIRE

1. Name _____________ (optional)

2. Email id ______________
3. What is your age?
a. 18-24 years b. 25-34 years c. 35-44 years d. 45-55 years
4. What is your gender?
a. Male b.Female c. Other
5. Qualification
a. Graduation
b. Post Graduation
c. PhD
6. Experience (in the current organization)
a. 1-5 years
b. 6-10 years
c. 10-15 years
d. 15 years and more
7. Do you think AI will ease the hiring process?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree
8. Will AI help in identifying recruitment need in the company?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

9. Will AI help make recruiting cheaper?

a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

10. Do you think AI tools will help in reducing cost?

a. Strongly disagree
b. Disagree
c. Neutral
d. Agree

23
 e. Strongly agree

11. Do you think AI will lead to job loss?

a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

12. AI interfaces such as Chatbots and virtual assistants will become an

increasingly viable way for people to get answers to job-related queries.
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

13. Do you think AI will help in improving the quality of hire through
standardized job matching?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

14. Do you think AI will help in finding patterns in data?

a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

15. Do you think AI will help in efficient manpower planning?

a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree
16. Do you think artificial intelligence will enhance productivity?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree

24
 e. Strongly agree
17. Will AI help in detecting a decline in performance?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree
18. Will AI help in identifying training need among the employees?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree
19. Will AI lead to the training of employees with MOOC courses?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree

20. Do you think AI will help to reduce the production time?

a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree
21. Do you think AI will help in better inventory management?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree
22. Do you think AI will help in informed decision making?
a. Strongly disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly agree
23. Any Comments / Suggestions on further usage of AI for improving
productivity of Manufacturing
___________________________________________________________________

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