Artificial Intelligence–Based Human Resource Practices in Small and Medium Enterprises: A Study of Solapur MIDC

Artificial Intelligence–Based Human Resource Practices in Small and Medium Enterprises: A Study of Solapur MIDC

                                                                Dr. Rahul Manjare

Assistant Professor, BharatiVidyapeeth (Deemed to be University) Abhijit Kadam institute of Management and Social Sciences, Solapur

                                                                   Dr. Hema Mirji

Assistant Professor, Bharati Vidyapeeth (Deemed to be University) Institute of Management and Entrepreneurship Development, Pune

Abstract

Artificial Intelligence (AI) is rapidly transforming Human Resource Management (HRM), especially in Small and Medium Enterprises (SMEs), by improving efficiency, decision-making, and workforce management. This study examines AI-based HR practices in SMEs with special reference to the Solapur MIDC industrial region. The objective is to understand the level of AI adoption, its applications in HR functions, benefits, and implementation challenges. The study is based on secondary literature analysis and identifies that AI is primarily used in recruitment, payroll, and attendance management, while advanced applications remain limited. Findings indicate that AI improves operational efficiency, reduces administrative workload, and enhances decision-making accuracy. However, adoption is hindered by financial constraints, lack of technical expertise, resistance to change, and ethical concerns such as data privacy and algorithmic bias. The study concludes that SMEs are gradually shifting toward hybrid HR systems integrating AI with traditional practices, indicating an evolving digital transformation in HRM within industrial clusters.

Keywords: Artificial Intelligence, Human Resource Management, SMEs, Digital Transformation, HR Analytics, Recruitment Automation, Workforce Management, Industrial Clusters, Solapur MIDC, Employee Engagement