The regulatory landscape around artificial intelligence (AI) is continuously moving, with the European AI Office’s release of the draft General-Purpose AI Code of Practice marking a significant step forward. As AI continues to reshape industries, the human resources (HR) and recruitment sectors are particularly poised to be impacted by this new framework. In this article, we will break down what this regulation entails, explore its potential impact on the world of HR and recruitment, and provide actionable advice for HR leaders and tech providers on how to prepare.

What is the General-Purpose AI Code of Practice?

The General-Purpose AI Code of Practice is a draft regulation introduced by the European AI Office as part of the EU’s broader strategy under the AI Act, which came into force in August 2024. This draft code, set to be finalised by May 2025, aims to establish a comprehensive framework for the development and deployment of general-purpose AI models, especially those with systemic risks.


The draft outlines stringent requirements for AI transparency, risk assessment, documentation, and compliance. Key aspects include:

  • Transparency: AI providers must maintain detailed documentation on model training, capabilities, limitations, and acceptable use policies​.
  • Risk Management: There are rigorous obligations for identifying and mitigating risks associated with AI models, particularly those with potential systemic impacts​.
  • Governance: Providers must establish governance structures that extend accountability to executive levels, ensuring oversight throughout the lifecycle of AI models​.
  • Proportional Compliance: Tailored measures are introduced for small and medium enterprises (SMEs), allowing them to comply without facing excessive burdens​.


At its core, this Code of Practice is designed to create a safer, more accountable AI ecosystem while fostering innovation and protecting fundamental rights within the EU.

How Does It Impact the World of HR and Recruitment?

The implications of this draft regulation are far-reaching for HR and recruitment, sectors that have increasingly embraced AI-powered tools to streamline processes, enhance efficiency, and gain a competitive edge. Here’s how the draft Code will influence these industries:


1. Increased Scrutiny on AI Recruitment Tools

Many HR teams rely on AI for CV screening, candidate assessments, talent matching, and employee engagement. The Code’s requirements for transparency mean that AI tools used in these areas will need to provide clear documentation on how decisions are made, reducing the risk of bias or unfair treatment. Recruitment platforms that leverage AI for automating candidate selection must now ensure their algorithms are not only efficient but also transparent and non-discriminatory.


2. Greater Accountability in HR Processes

The new Code’s emphasis on lifecycle risk management will require HR departments using AI tools to conduct continuous risk assessments. Whether it’s evaluating performance, engaging employees, or automating onboarding, HR leaders must ensure that the AI systems used are not inadvertently causing biases or systemic risks. This could also mean more audit trails and documentation for internal compliance checks.


3. Impact on Diversity, Equity, and Inclusion (DEI) Initiatives

AI tools have often been criticised for perpetuating existing biases if not properly managed. The draft Code’s focus on transparency, accountability, and risk assessments provides a framework for organisations to leverage AI responsibly, supporting their DEI efforts. Regular bias audits of AI-driven recruitment systems will become essential to ensure that hiring processes are inclusive.


4. Challenges for Smaller HR Tech Startups

While the Code provides proportional compliance measures for SMEs​, smaller HR tech startups may still face challenges in aligning with the documentation and transparency requirements. However, the use of standardised templates and best practices outlined in the draft could ease this burden.


What Do HR/Recruitment and HR Tech Providers Need to Know?

HR professionals and tech providers must prepare to align their practices with the new regulatory framework. Here are the critical areas to focus on:


1. Documentation and Transparency

The draft mandates that providers of AI systems keep detailed documentation on their AI models, including training data, testing processes, and usage policies. For HR tech providers, this means ensuring that their platforms can provide clients with documentation that proves compliance.


Key Action: HR teams should collaborate with their tech vendors to understand how AI algorithms work, especially in areas like talent screening and performance management, and request detailed compliance reports.


2. Risk Assessments and Governance Structures

Organisations using AI for HR functions must conduct regular risk assessments throughout the lifecycle of AI models​. This includes tracking the impact of AI on recruitment outcomes and ensuring that these systems align with internal DEI goals.


Key Action: Develop internal risk management frameworks that include regular bias audits, lifecycle risk assessments, and executive oversight. Engage senior leadership in AI governance to ensure compliance.


3. Acceptable Use Policies and Copyright Compliance

The Code requires providers to implement acceptable use policies (AUP) and ensure compliance with EU copyright laws, especially when training AI models on external data sources​. Recruitment platforms that use AI for scraping candidate profiles will need to be particularly vigilant.


Key Action: Review data acquisition practices and implement robust AUPs that align with EU guidelines to avoid potential legal pitfalls.


4. Tailored Compliance for SMEs

The draft Code introduces measures to support small and medium-sized enterprises by simplifying compliance obligations​. This is crucial for smaller HR tech providers that may lack the resources of larger firms but still need to demonstrate adherence to the regulations.


Key Action: Leverage standardised templates provided by the AI Office to streamline compliance efforts. Smaller HR tech firms should also consider collaborating with industry associations to share best practices.

What Do HR Leaders and Recruitment Firms Need to Do?

To prepare for the implementation of the General-Purpose AI Code of Practice, HR leaders and recruitment firms should take proactive steps:


1. Audit Current AI Tools

Conduct a thorough audit of all AI systems currently in use. Ensure that they are fully documented and comply with the transparency and risk assessment requirements set out in the draft Code.

  • Review vendor agreements: Ensure that your tech providers can demonstrate compliance with the EU’s standards.
  • Assess AI-driven processes: Identify any areas where AI might introduce bias or risk, especially in hiring and performance evaluations.


2. Develop AI Governance Frameworks

Establish internal governance structures to oversee the use of AI within HR functions. This includes assigning responsibility for AI oversight at the executive and board levels, as required by the Code​.

  • Create AI compliance teams: Appoint cross-functional teams to monitor AI usage, risk assessments, and compliance.
  • Engage senior leadership: Ensure that executives are aware of their responsibilities under the new regulations.


3. Invest in Training and Upskilling

Equip HR teams with the knowledge to navigate the complexities of AI compliance. Training on AI ethics, bias detection, and the upcoming EU regulations will be essential.

  • Conduct workshops: Regular training on the ethical use of AI in HR processes can help mitigate risks.
  • Leverage industry resources: Stay updated with guidance from industry associations and regulatory bodies.


4. Collaborate with Industry Peers

Engage in dialogues with other HR leaders, tech providers, and regulators to share best practices and stay ahead of compliance requirements.

  • Join industry groups: Collaborating with peers can provide valuable insights into navigating the regulatory landscape.
  • Participate in consultations: The EU’s draft Code encourages feedback from stakeholders, which can help shape the final version.


Conclusion

The introduction of the EU’s General-Purpose AI Code of Practice signals a transformative moment for HR and recruitment. While the road to compliance may be challenging, it also presents an opportunity for HR leaders to demonstrate their commitment to ethical, transparent, and inclusive AI practices. By proactively addressing these new regulatory requirements, HR professionals can turn compliance into a strategic advantage, fostering trust among candidates and employees alike.


HR leaders should start preparing now by auditing their AI systems, aligning with the new standards, and developing robust governance frameworks. By doing so, they can future-proof their organisations against the changing regulatory landscape and ensure the responsible use of AI in HR.