As an HR technologist, who has been in the HR industry since 1995, I’ve been a proponent of Artificial Intelligence (AI) and its power to transform recruitment technology. In this article, industry leaders share how automated workflows streamline recruiting and improve overall effectiveness.
In this article:
Artificial Intelligence recruitment harnesses intelligent technology to make recruiting more efficient and effective. AI enables computers to automate tasks and solve problems that normally require humans, such as resume screening and interview scheduling.
AI excels at reducing recruiters’ time spent on repetitive tasks and automating the workflow, especially for high-volume hiring. (In fact, recruiting automation was an early name for these solutions, but that label does not adequately reflect the intelligent capabilities of today’s AI-powered technology.) AI apps stir the most excitement for their ability to learn and adapt, freed from rules-based thinking. This ability underpins such features as making predictions, personalization, and chatbots.
Going beyond the original HR tech like applicant tracking systems (ATS), AI-powered recruitment tech also improves the quality and effectiveness of recruiting. AI solutions can crunch huge volumes of data and recognize patterns, thereby helping human recruiters perform better. For example, AI can spot bias in job descriptions or predict which advertising platform will perform best for a particular search.
The technology paves the way for data-driven decision making, end-to-end recruiting, predictive analytics, and personalization of the candidate experience.
These technology developments couldn’t come at a more opportune time because recruiters really need an edge in the hiring market. The environment is more challenging than ever for recruiters tasked with finding strong candidates, filling jobs, and securing specialized talent.
Here is the broader landscape that recruiters face:
Recruiters report that these macroeconomic factors translate into everyday difficulties in acquiring the right talent. Seventy-five percent of recruiters say they do not have enough qualified candidates in their hiring funnel. And top talent is only on the market for an average of 10 days.
AllyO’s collected recruiter productivity data that demonstrates AI is making life easier and better for recruiters:
Artificial intelligence aids recruiters in two broad ways: First, by creating efficiencies including time and money savings, and second, by enabling improvements in quality and effectiveness like more precise targeting, more positive candidate experience, and better fit hires.
“AI is going to revolutionize recruiting. We have begun down the road, but we have a long way to go still,” explains Kevin Wheeler, President of Future of Talent Institute.
1. Saves a Company Time and Money
AI is especially helpful in high-volume hiring. AI can take over many repetitive tasks such as screening resumes, which many recruiters say is the most time-consuming aspect of their job when done manually. This automation speeds up hiring, and recruiters can use saved time to focus on activities that people are uniquely suited for, such as cultivating relationships.
AI can handle workforce planning — predicting how many new workers a company will need and in what roles. Within a recruiting team, AI software can intelligently balance the workload among recruiters or reallocate staff resources to higher priority hires. Efficiency translates into financial gains in the form of labor savings and reducing or shortening vacancies that impair a business.
2. Higher Quality and Consistency of Applicants
Another AI advantage is its ability to find a better quality of hire and company fit. These draw on AI’s ability to gather information, analyze lots of data quickly and objectively, and make predictions or recommendations.
For example, AI applications can supplement resumes with data from public sources and social media, offering a more-in-depth candidate view. AI recruiting tools can make connections in data that might not be apparent on the surface and find strong candidates that traditional screening techniques would skip. AI recruiting solutions can also improve the candidate experience. These tools are available 24/7 to answer questions, follow up, send reminders, and provide personalized service.
Moreover, AI solutions enable recruiters to standardize the matching of candidate skills and experience to roles. A team of human recruiters is naturally a bit inconsistent from one individual to another. Even the same person might assess applicants differently from one day to the next, depending on their mood or stress level. Staffing a better fit leads to happier employees and managers, higher productivity, and lower turnover.
3. Reduces Bias in Hiring
Diversity is an important goal for most companies, and recruiters are turning to AI to combat bias. AI tools can analyze job ads or descriptions to make sure the language is non-discriminatory. Engineers can design these solutions to be blind to gender, race, sexual orientation, religion, nationality, or disability, avoiding even unconscious bias that affects people.
Companies can build a more inclusive hiring funnel and more diverse workforce. There is one important caveat, however: AI-driven technology is only as good as its programming. So, if bias is baked into the design, the software will worsen discrimination.
Ben Eubanks, Principal Analyst, Lighthouse Research & Advisory, says that AI is the best hope for eliminating bias — if trained with unbiased data. While it is not foolproof, “AI can minimize bias beyond what humans are capable of,” given their unavoidable unconscious bias. “Personal interviews are no better than a flip of a coin at predicting who will be successful,” he notes.
The recruiting process typically follows the same sequence of steps. Companies that need a lot of staff performing similar jobs, such as restaurants, factories, banks, and stores, the hiring process is likely to be highly standardized for each hire.
You can see the power of AI if you look at its application to various use cases within each phase of the recruiting process. Your time and labor savings compound while effectiveness increases.
This phase of the recruiting process involves writing a job description, posting and advertising it, sourcing candidates, screening applicants, engaging with candidates, and scheduling assessments and interviews. Let’s look at how AI is transforming some of these:
The search phase helps identify potential hires and check they meet the basic qualifications. The selection phase of the recruiting process entails interviews, assessments, background checks, extending an offer, and finalizing a hire.
Once you have selected a candidate whom you want to hire, you need to perform verifications, get approvals, extend an offer, and bring the new staff member on board. AI tools can help:
Artificial Intelligence is changing recruitment by performing valuable tasks using actionable data. AI solutions use automation to find qualified candidates, decrease the cost of interviewing and hiring, and dramatically reduces the time to hire.
To make a business case for investing in in AI recruiting solutions or setting objectives for AI in HR, you need data. Let’s look at how AI impacts key performance indicators (KPIs) such as cost, time, and quality of hire.
Time to hire measures how many days elapse from when a candidate enters your pipeline to hiring. While time to fill is the number of days from when a job opening is approved to when an offer is accepted.
According to 2017 data from the Society for Human Resource Management, the average time to fill a position is 36 days. Glassdoor reports that the average time to hire in the United States is 23.8 days. These times vary widely by industry, job role, and geography.
See how a U.S. West Coast retailer reduced its offer time by 60 percent by using AllyO recruiting software. Read this AI recruitment case study on how National Safety Apparel decreased its time to hire to less than a week from two to three weeks using the solution. And a Southern Based Retailer reduced its time to fill warehouse jobs to six days from up to 15 days.
One Burger Franchise shows how they save the 10 to 20 percent of each day spent on routine recruiting tasks. The Director of Operations, explains, “Today, we can stand by on autopilot as qualified, interested applicants walk in for interviews when managers are available.”
Using AI-driven recruitment reduces costs. The average cost per hire in the United States is about $4,425, Society for Human Resources Management (SHRM) finds. According to an analysis by the Center for American Progress, the costs of replacing an employee typically averages 10 to 30 percent of their salary but can go as high as 213 percent for highly skilled or senior positions. Plus, the average organization loses $407 a day for each vacant job, according to a Gartner study.
Cabinetry company MasterBrand piloted AllyO’s AI-powered solution and decreased the cost per hire to $131 from $237. Recruiting application Hundred5 estimates technology-driven recruiting saved one company about $1,149 per hire.
At AllyO, customer results show an average decrease of $70 in the cost per interview from using AI recruitment.
Jeff Wald, Co-Founder of WorkMarket, estimates that the average Fortune 500 department could generate $4.7 million in savings a year from artificial intelligence and automation. He bases that on a survey by WorkMarket that found more than half of employees believe workflow automation can save them up to two hours a day. While three-quarters of leaders think they can save three hours a day. That equals six to nine working weeks a year.
Unlike time and cost KPIs, there is no consensus on benchmarks for quality of hire. Among the metrics used are retention, hiring manager satisfaction, ramp-up time for a new employee, revenue generated per employee, and cultural fit ratings.
Artificial intelligence in recruitment and selection can improve these scores in several ways such as by enabling you to screen resumes based on successful employees’ attributes like experience or skills, optimizing pre-employment assessments, analyzing speech and facial expressions in candidate interviews, and collecting pre- and post-hire data.
A Southern Based Retailer, which we earlier noted reduced its time to hire dramatically with AI, also found other improvements using it for texting and automated scheduling. The number of candidates engaged doubled, applicants interviewed quadrupled, the interview show rate increased by more than half, and the interview to hire ratio fell by a third.
As technology automates and optimizes steps in the recruiting process, various tools and solutions integrate to create a seamless flow. Here’s an example of how an AI-driven workflow functions from end to end.
As AI-powered technology becomes more critical to the recruiting process, you will want to have the right tools to stay ahead of the curve. But understanding what’s available and how these solutions work together can be overwhelming. There are at least 650 software applications in the HR space.
So how do you build an AI recruiting stack that is useful, easily managed, and cost-effective?
“If you look at the recruiting cycle, AI plays a part everywhere. Some areas more than others, but nothing is untouched,” notes Wheeler of Future of Talent Institute. “The potential savings are almost immeasurable… The efficiency potential is very big.”
Recruiting pros agree that the applicant tracking system (ATS) should be the core of your recruiting technology and recommend choosing an AI-driven solution that offers analytics. The ATS automates your hiring pipeline and streamlines manual processes.
Then consider your needs and priorities. If your company hires a large volume of staff or has unique needs, then building an end-to-end stack makes sense. This process entails covering marketing, sourcing, engagement, screening, assessment, and hiring.
But if you have a smaller budget or less bandwidth to manage numerous IT applications from multiple vendors, focus on the applications that will deliver the most dramatic improvements. AI enhancements can appear at any phase of the recruiting workflow, depending on your needs.
Wheeler says that engagement with candidates and screening and assessment are areas where AI-backed tools can make the biggest contribution. Another solution is to contract with a vendor that has done the work of integrating tools into a full stack already. The vendor can save you from having to identify and evaluate tools, integrate them, and manage them.
Some questions to consider when looking for an AI recruitment solution:
While AI improves recruitment in many ways, AI-driven recruiting is not without challenges. As you consider building your recruitment tech stack, you will want to consider these elements.
First, to work well, AI-driven recruiting needs a lot of data to train algorithms. Implementers must carefully think out the data strategy because it’s easy to introduce human bias.
Asked where the promise of AI has been overinflated, Stacy Chapman, CEO of Swooptalent, says, “If the data isn’t right, the answer sadly is everywhere. The two things AI needs most are processing power — easy — and data — not so easy! If you aren’t giving serious thought to how you will have the data to feed AI, you will be left in the dust.”
For example, say a company uses its best software engineers to program its AI to find more matching candidates. However, the company currently has only male software engineers. Unless the employer actively accounts for this, the AI system would be trained to seek out male candidates.
Another hurdle with AI-driven recruitment is resistance to new technology among recruiting staff. This apprehension in part, stems from fears that automation will drive job losses. While the labor-saving potential of AI can reduce headcount, it makes other skills more valuable, such as creativity and relationship-building. So, to lay the groundwork for AI in recruiting, help staff see the potential for AI to free them for higher value work and support them in developing these skills.
Lastly, there are concerns over privacy and data protection. Regulatory efforts like the European Union’s GDPR rules and a British code to shape the development of AI focus on ensuring the use of personal data and fairness. Companies using AI in recruitment need to demand the highest standards from solutions vendors.
Looking ahead, experts see AI becoming more central to the recruitment and selection process. While AI-driven reduction in manual work will enable leaner recruiting teams, the role recruiters play will become more strategic. Job prospects for talented recruiters remain strong as long as they become adept at maximizing the technology.
“We are at a very early stage now. A handful of companies have adopted AI, but it’s piecemeal and scattered. It’s still a bit of a luxury and is confusing and frightening to many recruiters… Over time it will accelerate,” Wheeler predicts.
Eubanks of Lighthouse Research and Advisory says it’s important to underscore that the objective is not to automate all parts of recruiting. “We wouldn’t want to hire someone without them interacting with a human. While there are things that technology can do even better than a human, they can’t go through an offer and talk about culture. A human has to do that,” he says.
The pace of technological innovation will also remain brisk. “We will see self-learning in many places — interviewing, screening, scoring – even process management,” Chapman envisions. “Across the talent lifecycle, applications will self-learn so that they can adapt themselves to be more effective and to deliver better results.”
While new functionality is on the horizon, the number of tools is likely to fall as competition and consolidation take hold in a highly fragmented marketplace, experts believe. This market shift will make it easier to identify best-in-class solutions.
To succeed today, recruiters and employers need to harness AI tools to eliminate repetitive work and strengthen their sourcing and engagement with candidates. AllyO uses conversational AI to automate end-to-end recruiting, solving your challenges in every phase of the talent acquisition cycle. Automated workflows and analytics help you save time, reduce costs, and find more qualified candidates. Discover how to streamline your recruiting process and create a happier experience for candidates with AllyO.
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