The introduction of artificial intelligence (AI) in human resource management (HRM) is changing traditional practices with efficiency, decision-making, and employee engagement. Since Industry 5.0 has been characterized by human-centricity, sustainability, and collaborative intelligence, AI generates synergy between human creativity and the efficiency of machines. This crucial change in narrative reorients the HR functions from recruitment and selection to training, performance evaluation, and employee retention. AI tools such as chatbots, gamified assessments, and predictive analytics simplify the process, reducing bias and enabling decisions based on data. Furthermore, AI also contributes to creating inclusive, adaptive workplaces, by alleviating skill gaps, enhancing employee satisfaction, and supporting continuous learning. Despite some of the plus points generated, there are challenges faced by AI [applications], ranging from data privacy, algorithmic bias, to high costs of implementation. Development of solutions to these problems will take recourse to creating sound ethical frameworks, good legal compliance, and responsible investments. This research elucidates how AI transforms HRM into environments that steadily build innovatively and resilience, in line with the Industry 5.0 principles to create sustainable value-added organizational environments.