In this article, I analyse how virtual reality (VR) is advancing the functions of human resource management. VR enhances multiple HRM functions, including recruitment, selection, onboarding, training programs, and performance management. Recruitment and selection are enhanced and improved by simulating real-world scenarios to examine prospective candidates’ skills and behaviours.

During onboarding, virtual reality (VR) creates immersive and interactive experiences for new hires. VR also provides a safe space to build employee capability in training programs through simulations of high-risk, real-world environments. Performance management can become more objective by providing new employees with real-time feedback within VR programs. Additionally, VR increases the effectiveness of coaching and mentoring and increases pay transparency. VR also allows HRM practitioners to appropriately and transparently address conflict in a VR environment without lag time.

Human Resource Management (HRM) is the engine that drives organisational success. It ensures that the right people are in the right roles, receive the proper development, and feel engaged with their work, all while operating under legal compliance and ethical guidelines. Traditionally, HR functions such as recruitment, training, employee engagement, performance management, and even compensation have relied on tried-and-tested methods—resumes, in-person interviews, classroom training, and periodic performance reviews. But as we progress into the digital era, HR is being transformed by technological advancements like artificial intelligence (AI), data analytics, and, increasingly, Virtual Reality.

VR has traditionally been seen as a tool for entertainment and gaming, but today, it is making significant strides into the corporate world, and HR departments are beginning to take notice. This immersive technology, which allows users to interact with three-dimensional environments, has the potential to revolutionise how organisations manage their human resources. It offers a new level of engagement, interactivity, and personalisation that traditional HR practices can’t achieve.

In this article, I will explore how VR can potentially transform every major function of HRM, from recruitment to compliance, and the challenges that HR professionals must overcome to implement this technology effectively.

Recruitment: From screening to selection

Recruitment is one of the most significant functions of HRM. It directly drives an organisation’s talent pool, and success or failure in recruiting will consequently impact overall organisational success. Standard recruitment approaches generally include posting job advertisements; screening resumes; interviewing candidates; and administering various assessment-tests. While the processes are valid to some degree, they also have their challenges. For example, interviewing is typically based on impressions that are subjective, and even a well-designed assessment-test may not indicate how a candidate will perform in actual practice.

VR offers a means of disruption to recruitment by creating a whole new way to assess candidates. Companies may take the position that rather than using resumes and interviewing, they will recruit candidates by immersing them into a virtual world in which they develop or demonstrate competencies and solve problems in real time.

For example, a company may want to hire a project manager. Rather than asking candidates about past projects they have managed, the recruiter may put a candidate into a virtual world of chaotic work environments where candidates have to directly manage a team, allocate resources, and resolve conflicts with tight deadlines. How candidates react to this situation allows the recruiter to receive true insights that cannot be achieved from traditional interviews.

In addition to assessing technical skills, simulations in VR could also assess soft skills, such as communication, teamwork, and leadership. For example, a candidate applying for a leadership position could be placed into a virtual boardroom to lead a team through the meeting, negotiate with key stakeholders, or resolve a conflict amongst team members. Each scenario allows the organisation to see how candidates respond in high-stakes and possibly stressful situations.

Aside from assisting organisations in evaluating candidates more effectively, VR offers a novel way to enhance the candidate experience. Many candidates attending interviews do so face an unclear picture of the company culture, or what it will be physically like to work within the space. VR allows companies to create a virtual tour of the workplace, where candidates can receive a preview of their potential workplace as well as gain a sense of the company culture. In a virtual environment, candidates will be able to walk through the virtual offices, see breakout spaces, and even interact with avatars of future colleagues.

This opportunity will be especially useful for companies utilising a remote or hybrid workplace approach. Candidates who may be located at great distances from their potential employer can obtain a virtual sense of the office environment. Interestingly, candidates will be able to experience the workplace even before joining that will make the recruitment process itself more transparent, informative, and fun that will ultimately contribute to a better employer brand.

Another potential application of VR within recruitment is that it has the potential to mitigate unconscious bias. One of the drawbacks within traditional recruitment is that the human element can create either conscious or unconscious biases into the process, which may influence or direct hiring decisions. VR simulation is performance-based, so any assessments will be purely focused on the simulation and will move away from considering issues such as gender, race, or appearance but will instead be focused on job-relevant skills and abilities.

Through the design of standardised simulation, VR will also ensure that all candidates undergo the same experience for assessment that can create a more objective and fair experience for evaluating candidates. Even as organisations are striving to increase their diversity efforts, VR and inclusion e will be a key enabler of a fair and equitable recruitment-based experience.

Onboarding and orientation: A virtual welcome

The onboarding experience is one of the most important aspects of an employee’s time with the organization because it sets the foundation for the experience they will have with you. Sadly, traditional onboarding experiences often consist of long-winded PowerPoint presentations, countless forms, and overwhelming information for employees to process in a short period.

VR has the capacity to turn onboarding into a memorable, engaging, and interactive experience. Imagine an employee reporting for their first day, and experiencing the onboarding and orientation process using VR and stepping into a VR headset to virtually walk through a tour of the company’s global offices, meeting various executives and other key stakeholders as avatars, and engaging in more engaging training activities throughout the day.

In a VR onboarding experience, new employees could go through the different virtual worlds, including virtual workspaces, learning about company history and culture, and the significant training modules required in an engaging, immersive experience. This would provide a completely different experience, not only allowing for a more interactive experience where new employees wouldn’t just be on “receiver mode,” but actually engaged in their new surroundings.

For larger organisations with locations all over, VR would also support positive onboarding experiences with equal involvement for new employees based on their geographic location. Employees could virtually “meet” colleagues from other offices, coming to some understanding of the company’s operational hierarchy, and feeling a sense of connection with the larger organisation from their first day onward.

One of the biggest advantages of a VR onboarding approach is that the onboarding phase also becomes a process where the new employee’s training and readiness can also be demonstrated. New employees can be put into realistic job-based situations simulating the most common issues and challenges they will face while serving in their capacity as an employee. For example, a newly hired customer service representative may go through training modules in VR that require navigating through simulated engaged individuals dealing with disgruntled customers.

Similarly, a newly hired manager may be put into a leadership scenario that requires strategic decisions under pressure/ deadlines. This type of experiential learning is far more effective than traditional onboarding methods, as it allows employees to practice their skills in a risk-free environment. Studies have shown that people retain information better when they learn by doing rather than just reading or listening. VR provides the perfect platform for hands-on learning that enables new employees to hit the ground running.

Training and development: A key philosophical area for corporate learning

Training and development are essential components of developing a qualified and agile workforce. Conventional training methods, including in-person training, webinars, and Learning Management Systems (LMS), often fail to provide the engagement required to keep employees excited and attentive. Furthermore, some training situations—specifically those relaying technical skills or safety training—are nearly impossible to replicate in the real-world without enormous costs or risk.

VR has the ability to change how organisations implement training. One of the biggest advantages of a VR-trained employee is their ability to train professionals in a safe space to enact high-stakes tasks. For example, if a nurse working in a hospital needs to learn how to deal with emergency medical situations, they can engage in a VR experience and repeatedly practice life-saving procedures, like CPR. The VR training experience can also give immediate feedback to the nurse so that they can quickly modify mistakes and improve performance before working with real-life patients.

VR training also has its advantages for industries where employees are exposed to dangerous or hazardous workflows. VR allows employees to practice using dangerous machinery/moving parts, pursue disposal of toxic materials, practice calling 911 for an emergency, among countless other examples—all in a safe environment where the employee or team can safely fail. This will reduce risk, but more importantly, will build employee confidence in administering high-risk tasks—before they really have to!

In addition to the opportunity to train employees in their own personalised way, VR training has added benefits for an organisation’s training program. It can measure progress as employees learn and provide data to the organization in real-time about each employee’s skills and weaknesses.

VR training may also help in developing soft skills like communication, leadership, and emotional intelligence. The importance of soft skills is increasing in a diverse workforce, but most training programs focus on hard skills, thus may not deliver less development of soft skills.

For example, VR training could simulate a situation that involves two coworkers disagreeing on the direction of a project, and the employee is required to navigate an uncomfortable conversation with them. VR training places individuals in a virtual setting. It provides employees with an opportunity to practice soft skills to resolve a multitude of interpersonal skills, which is again crucial for organisations to adopt VR training for employees. Even more so, after completing the virtual scenario, participants will receive customised feedback regarding their soft skills.

Evaluation management: Immediate input and continuous performance management

Evaluation management is a foundational aspect of HRM; however, traditional performance reviews tend to be infrequent in nature, subjective, and disconnected from the day-to-day. Annual or semi-annual review sessions based off of managers recollection rarely yield timely feedback to employees who need to improve performance.

VR provides a new way of approaching evaluation management by enabling real-time assessment and constant feedback. Employees can engage in VR assessments that reflect actual work performance. One of the most powerful aspects of using VR for performance management is the data it generates. This VR data can ensure objectivity in evaluation. Every action an employee takes in a VR simulation can be tracked. This data can reveal patterns, such as which tasks employees struggle with or excel at.

For example, if multiple employees struggle with the same task in a simulation, it may indicate a gap in the company’s training program that needs to be addressed. Alternatively, if an employee consistently performs well in simulations, they may be a candidate for promotion or leadership development.

Virtual coaching and mentoring

Beyond feedback, VR can promote virtual coaching and mentoring initiatives. Managers and mentors can leverage VR technology to walk employees through challenging tasks while giving real-time mentoring or coaching. For example, a mentor could view one of their mentees engaged in a VR simulation of a difficult customer situation, and coach them on their communication.

Ultimately, VR coaching is much more engaging than traditional coaching, since it allows an employee to practice the advice they received in real-time. Furthermore, the VR experience provides opportunities to have more frequent and thoughtful interactions between staff and mentors.

Compensation and benefits: Visualisation of compensation programmes and engagement

Compensation and benefits are integral aspects of HRM and help in employee job satisfaction, motivation and retention. It is commonplace for organisations to discuss compensation using transactional, complex and often jargon-heavy language that employees can easily find difficult to digest. Misunderstandings around compensation can easily impact satisfaction and reduce engagement.

VR can allow compensation discussions to be more straightforward and transparent. Rather than emailing dense brochures full of charts and figures, employees can now easily, via virtual access, enter a virtual environment and visualise what they will receive as compensation. Employees will be able to ‘play’ with compensation variables and fully understand what their options are in regard to how any compensation decision, salary vs bonus, would alter their overall earnings. Importantly, having the interactive aspect adds not only transparency, but it also helps employees take or own their decision around their compensation, and they are more satisfied and ultimately engaged.

Additionally, VR can be utilised to hold virtual benefits fairs outside of the office, where employees can discover and explore the different benefits given to them and have an experiential option of customising their benefits. Specifically, employees can interactively enter each ‘virtual booth,’ choosing healthcare plans, retirement savings, wellness programs or additional employee benefits. Employees can ask questions, examine options and simply come to a functional dual understanding in real time, surrounding the options and choices available to them.

This individual approach to benefits makes employees feel valued and also further supported as they are able to better customise their benefits and compensation towards their individual style of option and need. Employees are less likely to leave with flexible and customised compensation or benefit options, and the level of retention increases overall.

Employee relations: Building trust and resolving conflicts virtually

Employee relations play an integral role in promoting a positive workplace culture. Employee relations include everything from conflict resolution to addressing employee complaints and maintaining open communication. Typically, in traditional human resource practice, these important functions are conducted face-to-face, via email or telephone. Sometimes, face-to-face, email, or telephone exchanges feel sterile or uncomfortable.

VR offers a much more empathetic and meaningful approach to Conflict Resolution. In a VR setting, HR can simulate challenging conversations or conflict resolution situations so employees and managers can practice and execute conflict resolution strategies. For example, if a manager is uncomfortable conducting constructive feedback meetings with their employee. Then, the manager may effectively simulate providing feedback in a VR setting to an avatar of an employee. Similarly, the employees can attend the mediation meeting in a VR-created space. The humanness of the VR-based mediation provides physical safety to all parties and an opportunity to resolve the matter.

Compliance and legal training

Ensuring compliance with legal regulations is arguably one of the most critical functions of HRM. Non-compliance can lead to severe consequences. The traditional approach to compliance training, e-learning modules or live instruction often struggles to keep employees engaged.

VR has an opportunity to enhance compliance training by being more interactive and immersive; it changes the typical training offerings from watching a video or reading a handbook to engaging employees in VR simulations of actual event compliance challenges. For instance, an institution offering financial services could use VR to engage employees in scenarios of identifying and reporting suspicious transactions. VR can ensure consistent training in different departments.

Conclusion: The future of HR with VR

As I have already noted, VR could disrupt every major HRM function, from recruitment and onboarding to training, performance management, and employee relations. VR provides immersive, interactive, and personalised experiences, changing the world. Bringing VR into HRM is not without challenges. Organisations will need to overcome the cost of the technology, the need to educate employees on the use of technology and the barriers to accessibility.

The integration of VR into an overall HR strategy remains equally challenging. Despite the challenges, the advantages of VR in HRM are too powerful to ignore. VR technology will provide a competitive advantage by developing a more engaged, skilled, and workforce-ready for the future. In the end, the question is not whether VR will turn our traditional Human Resource practices upside down; the question is how HR professionals adapt to harness VR within the framework of their organisation.

About Author

Prof. Dinesh Kumar is an accomplished professional with extensive expertise spanning the military, academia, business and charity sectors. He holds a PhD from the Indian Institute of Technology (IIT) Roorkee and received admission offers for the Fellow Program in Management from the Indian Institute of Management (IIM) Ranchi which made him the first Indian soldier to secure doctoral admission offers from both IIT and IIM. He is a former Chief Executive Officer of Pomento. Currently, he serves as a faculty member in Business Analytics at the School of Business, Woxsen University and Director of Strategic Enforcement and Technology Intelligence Lab, Woxsen University. He can be contacted at https://linktr.ee/realdrdj.

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