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Generative AI in HR: Custom chatbot solution for more productive workforce

Generative AI in HR: Custom chatbot solution for more productive workforce

40%

less HR workload

80%

faster response times

2X

higher satisfaction

AI for HR-chatbot use case

Challenge

HR overwhelmed by repetitive inquiries; generic chatbots failed due to security risks, lack of customization, and poor process alignment.

Solution

Custom HR AI chatbot delivered secure, accurate, and context-aware responses, streamlining FAQs and reducing HR workload.

Tech stack

OpenAI API + RAG, prompt engineering.

Background

Every growing company faces the challenge of scaling efficiently. As we expanded, routine HR, IT, and payroll inquiries overwhelmed teams, and generic solutions lacked HR chatbot customization, misinterpreted queries, and posed security risks. To stay agile and secure, we built a tailored AI HR platform that aligns with our workflows and keeps employees supported.

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Team

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AI/ML Engineer

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QA Engineer

Modsen team
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Process

1. Strategic planning for AI-driven HR automation

The project began by identifying the department’s specific pain points and setting clear goals for the chatbot. Key considerations included:

What tasks should the solution handle? (answering employee questions on policies, leave, payroll, etc.).

Who is the target audience? (employees across different departments and global teams with varying language needs).

What outcomes of AI application in HR are expected? (reducing HR workload, improving employee satisfaction, and speeding up response times).

The stage helped shape the chatbot’s design by prioritizing the key tasks it would address, such as automating FAQs and providing access to internal HR documents, while also focusing on usability for a diverse employee base.

2. Choosing the right platform and AI tools for HR

With goals defined, Modsen experts selected OpenAI’s ChatGPT API for its advanced NLP (natural language processing) and scalability. Using the RAG (retrieval-augmented generation) approach, we enhanced the HR operations chatbot’s accuracy by pulling data from internal documents. We also prioritized seamless integration with tools like MS Teams and PeopleForce, ensuring scalability and robust data security for future growth.

3. HR chatbot data preparation and structuring

The chatbot needed access to up-to-date HR policies, payroll details, leave information, and other resources. Our HR team gathered and updated the relevant documents, pre-screening them to remove sensitive data and structuring them for easy retrieval. The RAG system was then set up to access this information in real time, providing accurate, relevant answers.

4. Customization and development of AI-driven HR software models

This stage focused on customizing ChatGPT to match the company’s specific HR needs. While the base version of ChatGPT was effective, it required adjustments to fit Modsen’s terminology, workflows, and HR-specific processes.

Prompt engineering: The team designed custom prompts to align the chatbot’s responses with Modsen's HR processes. A critical step for accuracy and consistency in answers.

Advanced customization: More complex modifications were made to adapt the AI HR software to the company’s internal terms and scenarios. The bot was trained to recognize specific phrases and workflows related to benefits, leave requests, payroll, etc.

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5. Testing and refinement of the AI solution for HR

After customization, the chatbot went through thorough testing to verify its effectiveness.

Scenario testing: The AI HR bot was tested with common employee queries to check if it could provide accurate and relevant answers.

Performance testing: We evaluated the system’s ability to handle multiple queries simultaneously and responded in real-time to simulate a high-volume environment.

User acceptance testing: The HR team and selected employees interacted with the chatbot to provide feedback on its accuracy and ease of use.

AI-based HR software refinement: Any issues identified during testing were addressed promptly. Responses were refined, and the chatbot’s logic was adjusted based on feedback.

6. Integration of HR AI tools with corporate systems

After successful testing, the chatbot was integrated into Modsen’s existing infrastructure:

Internal systems integration: The chatbot was linked with platforms like MS Teams for easy access by employees, as well as PeopleForce for HR data integration.

Access control: Role-based access was implemented so that employees could only query information relevant to their roles, while staff could manage the AI HR bot’s knowledge base and monitor interactions.

7. Launch and monitoring of the AI-powered HR assistant bot

After launch, the chatbot’s performance was closely monitored. Logs were reviewed, and user feedback was collected to identify any issues or gaps in responses. Regular updates are made to improve accuracy and keep the knowledge base up to date.

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Solution

The developed HR chatbot is a robust virtual assistant that answers employee HR-related queries, offering the following functionality:

Multilingual support: The bot serves a global workforce by supporting multiple languages, ensuring inclusivity.

Contextual responses: The AI HR assistant leverages the RAG method to retrieve relevant internal HR documents, delivering accurate answers.

Seamless integration: It integrates with company platforms like MS Teams, offering employees easy access.

Security: A multi-layered approach ensures that sensitive data is protected and privacy is maintained.

Continuous improvement: The AI HR platform undergoes regular updates to stay relevant and accurate.

2nd phase agenda (ongoing development)

Following the successful launch, we are now expanding the chatbot’s capabilities:

Expansion of functionality: Future updates will integrate employee education modules, advanced AI tools for HR analytics, and feedback collection features.

Knowledge base updates: The system will refresh its knowledge regularly to reflect new HR policies and guidelines.

In-depth analytics: Metrics like response accuracy, time to resolution, and common queries will be tracked for HR bot’s performance improvement.

Result

Six months after implementation, the HR chatbot platform delivered measurable results:

Employees were able to resolve common queries without HR intervention, allowing the team to focus on more complex tasks.

Employees received immediate responses to their HR questions, significantly reducing delays compared to email-based responses.

Instant and accurate answers provided by the AI-powered HR assistant led to a more engaged and satisfied workforce.

40%

reduction in HR workload

80%

faster response times

2X

higher employee satisfaction
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