What is AI-based recruitment?
AI in recruitment has been doing wonders and has managed to make a niche in the marketplace. Find the ultimate guide on AI-based recruitment along with its benefits and challenges here.
Artificial Intelligence is creeping into our daily lives swiftly and smoothly.
According to McKinsey’s Global Institute model, 70% of companies will adapt to some or the other form of AI by 2030.
But what is AI (artificial intelligence)?
Why is it gaining more and more attention each passing year?
AI - What is it?
A precise definition of AI, according to Techopedia, is "the development of intelligent machines that behave and perform like humans." Of course, it is still miles away from mimicking human cognitive abilities, but they can still think, learn and make important decisions.
AI-based software is increasingly becoming a solution for all areas of business. It allows for greater automation of non-creative processes that can be performed by machines.
Artificial intelligence technologies are being used in many areas of business, including sales, marketing, strategy, and operations. And recruitment is not behind!
It is probably the most important recruitment technology solution you should know about—and use!
AI in Recruitment – What Does it Entail?
AI in recruitment has become an ordinary existence nowadays. It has automated and optimized the recruitment workflow, leaving time for more value-adding tasks.
According to a survey conducted by Tidio, 85% of recruiters said that artificial intelligence will eventually replace some parts of the hiring process. Additionally, 89% of candidates said that AI could help with the application process for candidates. These AI in recruitment statistics show that it is widely viewed as a positive addition to the hiring process by both recruiters and candidates.
It's hard to overestimate the potential of this technology for improving the traditional recruitment process. For example, a virtual assistant can make complicated and time-consuming processes much simpler and faster.
AI technologies are so promising because they allow recruiters to create unified profiles from massive unstructured data sets that align with matching skill sets required for a certain position with the candidates' job profiles.
AI is Changing the Way You Recruit
Weirdly, human work is increasing every day. And according to recruiters, they are so overflowed with work, that they have only 6 seconds to glance at one resume.
No wonder that is very little time to judge a candidate for any job role.
Enters… AI-based recruitment tools! They have shifted the entire paradigm of modern recruitment by automating low-level tasks.
Automation has enabled recruiters to adopt a candidate-first approach and minimize recruitment bias.
Traditionally, recruiters employed time taking and obsolete methods such as job advertisements, internal bulletins, rehiring old employees, conducting recruitment drives, and candidate walk-ins for recruitment.
But today with AI-based recruitment platforms, this whole scenario has been uprooted and placed online.
Artificial intelligence can analyze large amounts of applicant resumes, match with your required skills and bring down the whole process to a matter of few minutes (which otherwise would have taken days).
Not only that, but some tools also have the capability to screen candidates and provide a more comprehensive picture to the recruiter without any human intervention.
So.. yes, AI is changing the way you recruit and you as a recruiter will kick yourself for not using this technology any sooner.
When was AI first used in recruitment?
Amazon is crowned as the pioneer for AI recruitment, however, it was a failed attempt and the whole idea was shelved very soon. In 2014, they made an AI-based recruitment platform to automate their hiring process but mistakenly it ended up repeating human mistakes by discriminating against women.
Nevertheless, Amazon’s effort did not go to waste, as 2017 emerged as the year for AI recruitment platforms. Other brands learned a lesson from the mishap and created their software that did not bias, was data-driven, and was able to make important decisions.
Since then there has been no stopping the advent of AI-based recruitment platforms.
How Has COVID-19 Influenced the Need for AI in Recruiting?
The pandemic accelerated the adoption of digital technologies by several years. The adoption of automation and AI expanded the most among firms that had a greater shift to remote work since the outbreak.
74% of companies planned to increase spending on HR tech in 2020 to address pressing talent needs, according to a study by PwC done in December 2019.
The COVID-19 pandemic placed workplace technology in the spotlight. Companies were forced to become technologically advanced to accommodate remote working habits.
Recruitment did not lag behind and jumped on the same wagon to become AI-enabled. Because obviously, recruitment did not stop during the pandemic, and companies had to find a way to keep the process going.
Nearly 67% of HR professionals have admitted that AI in recruitment or hiring has many benefits and has made a positive impact on the entire process.
Smart AI features in modern Recruitment
Slowly but surely, AI is paving its way into every part of the recruitment process, from talent sourcing through pre-selection and interviewing to reference and background checks and determining fair compensation.
To give you an idea of what’s currently happening, we’ve listed the 10 most innovative uses of AI in recruitment we think we’ll be seeing a lot more of in the coming years.
Yes, you guessed it right. There are actual physical interview robots that combine natural language processing (NLP) and interview analytics to assess a candidate’s personality traits and soft skills.
This removes bias from the recruitment process as the bot does not understand gender, age, or any other physical characteristics.
Another plus point of using AI in recruitment is that it gives consistency to all the applicants and improves the candidate’s experience.
One pitfall that sometimes brings down bot technology is the lack of human interaction. The candidate may not appreciate being spoken to by a machine.
Metaview, a recruitment solution platform has developed a software that listens to the interviews (both online and offline) and provides insights to the recruiter for effective hiring.
What happens is that the software automatically transcribes the audio record of the interview, analyzing it for the most effective points.
One important point is to make sure that candidates are aware and always take their consent before recording.
While background check may seem like a formality, it is a part of the recruitment process and needs to be carried out without any failure.
92% of companies make sure to check their candidate’s backgrounds, according to SHRM.
It is a tedious and boring task. However, AI-based recruitment tools conduct faster and more efficient checks without any bias, with as little information as possible, and without invading their privacy.
Automated Reference Checking
Candidate’s reference checking is another mind-boggling but necessary task that has been simplified by AI-enabled tools.
Common challenges met during the task are: people may not pick up the first time you call them, referees don’t get automated reminders, you can’t easily replicate the process for multiple jobs, etc.
An AI-driven reference check tool can take away a lot of these pain points. The software automates the process and helps gather all relevant information on a single platform.
Referees respond to scientifically designed questionnaires and get automated reminders to avoid missing the deadline. Potential fraudulent activity (think of a candidate’s friends playing referee) gets flagged.
AI for Internal Mobility
Hiring somebody internally can be a highly efficient and cost-effective practice. Your ‘new’ hire already knows the company and catches up faster.
As far as AI technology goes, it collects internal employee data and creates personalized recommendations for the workforce.
Assessing team strengths and bridging talent gaps
In similar lines to internal mobility, AI-based recruitment tools combine data analytics with scientific testing to understand the deep-level characteristics of individuals and use machine learning to understand how these characteristics influence collaboration and performance in a team setting. The basic idea is that an applicant is tested with pre-employment assessment tools and crossed with their position in the team to see if they are the perfect fit or not. After all, a bad hire can drop the team’s performance by 30%, according to Wonderlic.
AI-powered talent marketplaces
Freelancing, or as the Gen-Z calls it, the gig work has been quite a lot in fashion for the past few years.
AI has managed to create a talent marketplace where freelancers and employers meet, the AI tools analyze their skills and the best match goes forward to freelance for the company.
According to ddiy, 53% of all Generation Z workers are freelancers in the USA.
Building the right package and compensation for the new hire can be another gruesome task that requires a lot of parameters to be considered before deciding the final amount.
Payscale, a cloud-based compensation software provider, has developed a differentials engine that takes into account: basic salary, bonuses, overtime, vacation, stock options, healthcare benefits, and retirement plans before deciding the final compensation of the candidate.
Another add-on of the tool is that it also takes into consideration the skill sets and geographic location of the candidate.
Robotic Processing Automation (RPA)
RPA is another smart automation feature of AI recruitment tools that automate all of the recruiter’s tasks from sourcing candidates to interview scheduling and chatbot deployment.
New employee onboarding
Recruitment just does not get over after selection, onboarding is another crucial candidate experience that builds strong foundations between the employer and the employee.
And of course, AI is now also making its way into the onboarding process.
Employee onboarding software also enables organizations to ensure 24/7 onboarding. AI chatbots can answer (basic) questions and guide candidates through the various aspects of their onboarding. As a result, new hires can integrate faster.
Benefits of artificial intelligence in recruitment
According to research by LinkedIn:
- 43% of employers state that AI removes human bias
- 67% of employers state that recruitment AI saves time
- 30% state that it saves money
- 31% of employers state that it delivers the best candidate matches
Artificial Intelligence in recruitment has been benefiting your company in the given aspects:
Recruiters have heaps of work that do not require any creativity and can be easily automated. With the incorporation of AI in the recruitment process, HR professionals can save a lot of time by ceding repetitive and redundant tasks to technology and concentrating on more challenging tasks.
The recruitment process is significantly complex and consists of multiple steps like screening candidates, evaluating them, shortlisting them, engaging in interviews, and ultimately making the final decision. The entire process is tedious and has been a major bottleneck for HR managers who are constantly looking out for ways to reduce their workload while maintaining quality at the same time.
Enables remote hiring
Remote work is on the rise, and, accordingly, so is remote hiring. It is increasingly common for a workforce to be spread across the globe. Automated online screening and interview tools can help recruiters manage remote hiring.
When a hiring team is limited to in-person interviews, or scheduling phone screens across time zones, their hiring pool becomes shallow. AI in hiring lets recruiters easily assess the performance of each candidate, regardless of location, and without wasting time.
Allows hiring to be done at scale
Traditional recruiting methods are becoming increasingly outdated. Traditional resume screening has become a poor fit for today’s candidates, who expect to be assessed on their digital presence before being considered for an interview.
AI recruitment tools streamline the process. These tools allow small teams to evaluate applicants at scale, in days not weeks, without compromising quality. This means recruiters can more easily identify strong candidates who might otherwise be overlooked by traditional screening methods.
The result? More candidates get through the hiring funnel and into the hands of hiring managers. And that’s good news for everyone involved: It means more opportunities for great hires, lower turnover rates, and higher productivity for recruiters — all of which translate into stronger business outcomes for your company.
Predicts candidate performance
In the world of hiring, there are two kinds of people: those who want to hire great people and those who think they can hire great people.
The right screening and interview tools outperform interviews when it comes to predicting performance. Depending on the platform you choose, you can accurately predict the best fit for your role.
AI tools can assess a mock sales pitch, a customer service call, coding competency, or strategy presentations. Automated interviews help understand how candidates do the tasks that matter to you most for the job you’re trying to fill.
Offers a great candidate experience
Online screening and interview tools save time for recruiters and candidates. These tools remove the friction of scheduling phone screening of interviews. It also allows candidates to apply for a role without interrupting their current employment. Additionally, improved transparency and quick communication with automated tools deliver an improved hiring experience.
By removing the need for physical interactions between candidates and companies, online screening and interview tools help companies to stay focused on what matters most: finding the right person for a job.
Reduces hiring costs
The average cost per hire is $4,700. It takes almost 36-42 days to fill a position in the United States. Most of the time is killed in screening and interviewing the candidates.
AI is being used to help reduce the time and costs of screening candidates. AI recruitment tools assess candidates quickly, and surface candidates most likely to match the hiring criteria. In fact, early stats show that recruiters that use AI see a 30% reduction in cost-per-hire.
AI Recruitment Tools have also been shown to be more accurate when it comes to matching candidates with job titles. This means fewer misidentifications or false positives. And because AI can be trained on thousands of data points, it's able to learn from past mistakes and improve over time.
Removes hiring bias
Bias in recruiting exists for many reasons. It’s primarily a question of efficiency: HR teams may receive hundreds of resumes for a single open position. As a result, many recruiters advance candidates whose backgrounds are similar to current employees. Those candidates with different backgrounds or work experience never have the chance to advance within the company.
AI can make a difference in how candidates are processed through the hiring funnel. One such algorithm allows HR teams to evaluate 10,000 candidates in the same time it takes for an individual recruiter to assess one.
Using AI in recruitment makes the process more democratic and merit-based rather than about who an applicant knows. In a report by Vervoe, companies that switched to AI tools saw a 62% increase in female candidates.
Nepotism and selective hiring practices get eliminated when an AI tool is correctly utilized.
How recruiters are using AI
While there are a number of tools available for AI recruitment, recruiters have made their lives easy by sticking to these three basic tools:
Candidate Sourcing: AI tools offer intelligent talent sourcing by understanding the intent and content of the job role, taking spellings, synonyms, and prediction into consideration and applying natural language processing.
Also known as semantic search, AI tools have the capability to understand language the same way a human would.
This way recruiters are able to source talent more quickly and more efficiently.
Candidate Screening: 362.5 $ is the average cost it takes to screen a candidate. And on top of that, it is the most time-consuming activity during recruitment.
Recruiters are using screening tools for resume parsing, skill, and behavioral assessments and predicting candidates’ performances.
Digital Interviews: Big-shot companies like Google, Unilever, and Google are using AI tools to conduct digital video interviews and assess the candidate’s voice and facial expressions.
Another way to use the AI tool is to assess the content of pre-recorded candidate interviews.
These uses of AI in recruiting are just the tip of the iceberg.
Challenges of applying AI in recruitment
When used correctly, AI-powered recruitment technology can be a tremendous asset. Nevertheless, there are also some pitfalls to be aware of.
For instance, AI recruitment tools can detect certain mannerisms in candidate behavior. But who’s to say that the applicant wasn’t fidgeting simply out of nervousness or cheating in reality?
Another deceitful situation, the AI tool might identify the best talent based on keyword research but will miss the fact that the same applicant has switched jobs more than four times in one year.
Immense data requirement of the AI: Machine learning and artificial intelligence work best when they are fed plenty of data.
The tool catches up on the data and mimics human intelligence. Unless and until you are at the highest point of your funnel, employing AI tools will be redundant.
This is a big drawback because smaller companies cannot use this kicking technology(till they have at least 1000 resumes for a single position) to simplify their recruitment process.
AI can pick up on human bias: We went over how AI reflects on past actions and data to mimic human bias. It is sometimes possible that your data has unconscious bias already and AI further picks it up.
The missing human touch: However advanced the world may become, a basic human touch ought to be missing while making important hiring decisions.
Additionally, there is a chance that employing AI to contact candidates will occasionally come across as a little impersonal. While it’s excellent that AI is available to answer applications at any hour of the day or night, there is a barrier that may make both the applicant and the hiring manager feel a little removed from the process.
You might discover that it’s preferable to communicate with the candidates directly rather than leaving this duty to your AI-powered software, using the time saved by an automated screening process.
An often-heard fear is that of AI replacing humans, displacing many from their jobs. While there certainly will be an impact, it’s not as bad as many people seem to think. In most cases, AI and automation will only take over those repetitive, easy-to-automate tasks we mentioned. As such, this will enable us, humans, to focus on more interesting tasks.
Can candidates trick an AI recruitment tool?
It is difficult to trick the AI recruitment tool. Some of the softwares have anti-cheating tools that capture the activities of the candidates. For example, the tool can pick up if a candidate is continuously looking away from the screen (to the cue cards) or if another voice in the background is directing the candidate.
If a candidate tries to outsmart the AI recruitment tool, the recruiter should be able to triangulate a submission with other facets of their application. It’s all part of creating a formula that helps the right candidate stand out from the crowd.
How will AI change the role of the recruiter?
AI is changing the face of recruitment in the workplace by streamlining the process and removing the need to perform repetitive and redundant tasks. Instead, the hiring professionals get time to concentrate on engaging candidates, developing relationships, and training hiring teams to be better interviewers.
Instead of poring over resumes and collecting interview feedback, AI has enabled recruiters to
- Become more strategic
- Develop better relationships with the hiring team
- Increase their organizational impact
Examples of how companies use AI & Automation for recruitment
Here are examples of some of the most common use cases for AI across different industries that provide insights into how organizations are using AI today.
Ethical Implications of AI Recruitment
It is all flowery and shiny when we talk about how AI tools have untangled the entire recruitment process, but it is directly required to talk about the ethical implications it poses upon us as well.
Taking an example of Amazon's misfortune, the unconscious bias that was incorporated into their software was a stroke of bad luck.
To overcome these ethical intimations, companies should be incredibly intentional about the data they feed to the software. After all, machine learning and artificial intelligence can make decisions only based on the data you feed it.
Gaining clarity from the AI vendor on how the technology works and perpetuates bias is necessary. You have full freedom to demand ethical responsibility from the providers and seek providers (specifically) that ensure ethical use of both the AI algorithms and personal data collected during the hiring process.
What’s next for AI recruitment?
It may not be a totally ridiculous proposition to say that hiring will soon be delegated to robot representatives completely.
In fact, AI hiring tools have brought in the possibility of constructing a candidate-side AI tool. The day is not far when candidates can use AI tools to build their own digital representation that fits perfectly with the recruitment algorithm.
Predicting the humanness in humans – or taking the human touch out of hiring?
While the use of AI in the recruitment process is still becoming a norm, it is possible to imagine the implications of having a fully automated CV screening process. AI is only codes and numbers that are made by humans themselves, and we will not be surprised if one day someone cracks the code and starts making AI-optimized resumes.
This would ironically remove any human touch, creativity, and personality from the applicant’s CV and become another code in the universe.
From an employer’s perspective, interviews are also an opportunity for hiring managers to ‘connect’ with potential employees and to understand and assess situations in ways that a machine may not be able to.
Perhaps AI could simply be used to sort candidate profiles and improve efficiencies, while interviews and final decision-making processes lie with the hiring manager; after all, artificial intelligence should support, not replace human intelligence.
Could AI Take Your Job?
The answer is NO! AI will never replace recruiters, it can only make them better. While AI can automate and simplify a lot of recruitment processes, it will never be able to show empathy, negotiating abilities, or social skills.
By streamlining manual recruitment processes that do not necessarily require a human touch, you can focus on things that do require your attention and possibly put “human” back to human resources.
Best AI recruitment tools - Choose the best one today
Now that you know all about AI-based recruitment, its benefits, features, pitfalls, and future, are you ready to choose a software that is best suited for your organization?
But.. What features to look for in the recruitment tool that can be suited for your company? You should make sure that the software is bias-free, generates data-driven insights, has an easy integration, and provides the best candidate experience.
We have listed the best AI recruitment tools with their unique features to simplify your search:
- HireQuotient - acing automated talent sourcing, pre-employment skill testing and video interviews
- iMocha - making a mark in learning and development
- TestGorilla - best candidate experience without any bias and stress
- Mercer | Mettl - smartest proctoring tool
- Vervoe - mobile-friendly software
AI: Our Tomorrow?
The use of AI in recruitment is here to stay and is not a temporary phenomenon. As the recruitment industry is continuously evolving, you may soon find your CV getting screened by automated software (if it isn’t already) or getting analyzed via video interviews for your facial and language expressions.
So, watching what AI holds for our tomorrow could be exciting. Brace yourselves and tighten your seatbelt to experience this captivating journey.