Exploring the Role of Artificial Intelligence-Powered HR Practices in Shaping Employee Engagement and Retention Strategies

Abstract

The present research investigates the influence of AI-driven Human Resource practices on employee engagement and retention in the IT industry of Chennai, India. Employee engagement is examined as a mediating variable, whereas AI-reduced workload of employees is evaluated as a moderating factor. Data were collected by means of an organized Google Form survey from 317 valid responses, addressing IT professionals from five companies, using a quantitative, cross-sectional research design. Based on the level of employee experience (entry, mid, and senior), stratified random sampling was used. SPSS was employed for cleaning the data, while SmartPLS 4.0 was employed for structural equation modeling (PLS-SEM). The findings indicate that artificial intelligence applications in Recruitment & Selection, Training & Development, Compensation & Benefits, and Team Appropriateness greatly improve employee engagement, which in turn promotes employee retention. However, the AI-based Performance Appraisal didn't show a significant effect. Additionally, the engagement and retention relationship was positively moderated by the AI-reduced workload, which had a direct impact on retention. This research emphasizes the strategic significance of skillfully integrating AI into HR practices to cultivate a workforce that is both engaged and retained. It provides practical guidance for HR executives who are seeking to effectively integrate AI into human resource management, as well as theoretical contributions to HR technology research. Employee engagement is substantially improved, which in turn has a beneficial impact on employee retention.