Maltese firms use AI in hiring, firing and promotion decisions

One in seven Maltese businesses is using or planning to use artificial intelligence in decisions affecting employees, including hiring, promotions and dismissal, a survey has found.

The findings emerge from the latest Eurobarometer survey on the use of AI and automated management tools in European workplaces.

Overall, 41% of Maltese SMEs and mid-caps engage with workplace AI, broadly in line with the EU average of 42%.

However, some 15% of these companies are deploying AI in human resources decisions, well above the the EU average of 9%. In the survey, human resources decisions are defined as “individual personnel actions regarding hiring, promotions, and/or firing”.

Malta is among the highest-adopting member states in this category, alongside Denmark (18%), Romania (17%), Lithuania (15%) and the Netherlands (14%).

The figures do not mean that AI systems are independently hiring or firing workers. The survey covers the use of software to assist or inform HR processes, rather than necessarily transferring final authority to automated systems.

AI-assisted recruitment and candidate screening is also reported by 12% of Maltese enterprises, slightly above the EU average of 11%. Adoption reaches 25% in Denmark, 20% in Greece and 19% in Finland.

As in the rest of the EU, human oversight remains the norm in Malta when AI is used in workplace decision-making. Some 59% of businesses using AI, rely on it to make suggestions while leaving the final decision to a person, while 16% use AI to make decisions that can subsequently be revised by humans. A further 14% keep decision-making entirely in human hands. Fully automated decisions without human intervention account for just 2% of businesses.

Customer service is main application

Maltese businesses are more likely to deploy AI in customer relations than in employee monitoring.

Some 65% of Maltese firms using or planning to use AI, deploy it in customer service or client relations, the highest share in the EU and well above the European average of 47%. In this aspect Malta is closely followed by Poland (64%), Greece (58%) and Romania (58%).

By contrast, 33% of Maltese businesses use automated systems to monitor employee productivity or performance, below the EU average of 36% and well below the figures recorded in Lithuania (59%), Poland (55%), France (50%) and Italy (47%).

As regards the deployment of AI in workplace health, safety, and risk prevention, Malta trails significantly behind the European average. While 15% of AI-engaging enterprises across the EU27 deploy or plan to use automated tools for occupational health, safety, or risk management, only 8% of Maltese firms do so. In contrast 33% of Irish firms use AI for health, safety and risk prevention.

Labour shortages drive AI adoption

Malta also stands out in the importance businesses attach to AI as a response to difficulties in finding workers. While 57% of Maltese enterprises consider labour shortages an important motivation for adopting workplace AI, the figure across the EU stands at 44%. This makes Malta 13 percentage points above the European average.

Across the union, businesses are more likely to prioritise improving product quality (75%), and reducing costs (73%), than addressing staffing gaps. In 25 of the 27 member states, labour shortages are a less prominent motivation for adopting AI.

Employers optimistic

Maltese employers are also among the most optimistic in Europe about the impact of AI on working conditions. Some 85% expect the technology to improve job quality, including aspects such as workload, safety and privacy. This is the highest share in the EU.

The survey also found that 71% of Maltese business leaders report positive employee attitudes towards workplace AI, tying with Greece for the highest share across the bloc.

Employers in Malta also express relatively high levels of trust in AI-assisted decisions affecting staff. While 44% of businesses across the EU express trust in AI for staff-related decisions, the figure rises to 50% in Malta.

Despite this optimism, employee surveillance remains a concern across Europe. Some 33% of EU businesses cite fears of increased surveillance as an obstacle to AI adoption, ranging from 50% to 29% in Malta.

The comparatively lower use of performance-monitoring systems in Malta, alongside employers’ positive expectations, points to a more favourable reported business climate for workplace AI. However, these figures reflect employers’ perceptions and reported practices rather than independently verified improvements in working conditions.

In total, 260 Maltese companies participated in the survey. Target respondents were business owners, CEOs, managing directors, CTOs, or HR managers with decision-making authority or direct knowledge of operating systems in privately owned SMEs and mid-caps.