Understanding Algorithmic Bias in AI

Algorithmic bias sits at the centre of this video, which addresses AC 2.1 of FREE08 – People Professionals and Artificial Intelligence (AI). The video examines how bias enters AI systems through two distinct routes: training data and system design. It looks at how historical patterns embedded in data can be absorbed and amplified by AI, and introduces the concept of proxy variables – factors such as postcodes or educational institutions that appear neutral but correlate with protected characteristics, producing discriminatory outcomes indirectly. Both routes are discussed in the context of people practice, where AI is increasingly used to make or inform consequential decisions about individuals.

Recruitment and performance management are the applied areas the video draws on to make these risks concrete. It covers automated CV screening and video interview analysis tools as examples where bias can disadvantage candidates, and explores how performance management systems trained on historically biased ratings may systematically misrepresent the contributions of employees from particular groups. Running through these examples is a thread on the Equality Act 2010, the nine protected characteristics it covers, and the principle that liability for discriminatory outcomes does not depend on discriminatory intent. The video also takes in the concept of black-box decision-making and the challenges of explainability when AI produces outcomes that are difficult to interrogate or account for.

The third area the video addresses is accountability and trust, considering who bears responsibility when an AI system causes harm and how opaque decision-making affects employee perception, engagement and organisational culture. These threads are brought together through an ethical framework built around the principles of fairness, transparency and accountability – the same principles named within the AC 2.1 indicative content. Together, the recruitment tool examples, the proxy variable concept, the Equality Act framing and the ethical principles form the specific scope people professionals will encounter in this video.