Did you know that replacing an employee costs two and a half times their salary, on average? AI recruitment can help to reduce costs by improving the quality of hire and making the recruitment process more efficient. Read on to find out how you can maximise AI recruitment benefits for your business.
What is AI recruitment?
AI recruitment is using artificial intelligence to shortlist the best candidates for a job in the fastest possible time.
AI can analyse hundreds of CVs and feed hours of data into an applicant tracking system (also called an ATS). These are tasks that normally take up to 40% of a recruiter’s time.
By using AI recruitment techniques, HR teams can spend more time engaging with prospective employees, improving the recruitment experience, and making sure the company secures high-quality talent.
AI powered hiring
AI has many different applications in the recruitment process including:
- Identifying the right candidates
- Communicating with candidates
- Digital interviews
Let’s look at each of these applications in turn.
1. Identifying the right candidates
AI uses an algorithm to find CVs that use the same keywords as those found in the job description. Once the AI program has narrowed down the CVs, it analyses each candidate’s work experience, education, training and qualifications against the job role. It then gives the CV a score.
AI can also:
- Gather extended data on candidates
For example, AI can look at publicly visible social media profiles to take a deeper dive into a candidate’s work experience, skills and other qualities that indicate they could be a good fit for the role. This takes the data beyond the candidate’s CV.
- Use internal data to find the best candidates.
It does this by taking data from your company’s ATS to gain insights into the skills and experiences of the most successful employees in your company.
2. Communicating with candidates
When someone goes to the effort of applying for a job, it’s demoralising if they don’t hear back. Keeping candidates informed about the status of their application leaves them with a positive impression of a business, even if their application isn’t successful.
However, keeping candidates informed takes a lot of time, which is where recruiter chatbots come in. They can be programmed to let candidates know the status of their application, to provide feedback, and to answer frequently asked questions.
Chatbots can sound like a human whilst giving answers to questions instantly. They’re already commonly used in customer service with brilliant success. 64% of customer service professionals who use chatbots say it frees up their time to solve more complex issues.
3. Digital interviews
Digital interviews are being used increasingly for initial screening interviews.
Candidates record themselves answering set questions, then AI analyses the answers they give, the language they use, their tone of voice and even body language.
Digital interviews can be a useful way to shortlist candidates when there are a huge number of applications for a role.
However, there are many pitfalls to overcome with this technology. People are more likely to feel confused and awkward because they’re not used to being interviewed by AI which will inevitably affect the outcome.
It’s often argued that digital interviews facilitate candidates to be treated equally since there’s no exposure to human bias, but the opposite may be true. Digital interviews may disadvantage those who don’t tend to do well in standard interviews, for example, neurodiverse candidates.
Benefits of using AI in your recruitment strategy
The purpose of AI is not to take over recruitment but to free your HR team from routine tasks so they can build relationships with candidates and focus on aspects that require social skills like listening, empathising, and negotiating.
These are some of the benefits of AI powered recruitment:
1. AI recruitment saves time
AI swiftly completes repetitive tasks like screening CVs, arranging interviews, and carrying out background and reference checks. This means you can find the right talent faster, which is a significant advantage in a competitive recruitment market.
Checking references can be particularly time-consuming because people don’t always answer the phone or read emails. AI automates the entire process and sends out reminders to referees so HR teams can get on with more complex tasks.
2. AI recruitment finds the right talent
Attracting the right talent is one of the biggest challenges for recruiters.
AI can provide access to a greater pool of talent than you would otherwise have had. That’s because it can sift through significant volumes of ‘passive candidates’ as well as those actively seeking a new role.
Passive candidates are an enormous group, so it increases your chances of finding the right person.
Finding the best talent is essential for every company. When the wrong person is hired, productivity is affected and money is wasted on recruitment, wages and training.
IBM, who created the Watson Candidate Assistant for recruitment, say that AI has saved their own company $1 billion in recruitment costs.
3. AI recruitment spots talent within a company
It’s faster and more cost-effective to hire people internally than externally. AI can take information from your ATS and other recruitment and screening tools by matching existing employees’ skills and experiences to the roles you need to fill.
Even if AI doesn’t uncover talent for a particular role, you may find that the process reveals certain employees who have much-needed skills that have gone unnoticed.
4. AI recruitment prevents unconscious bias
It’s very difficult to prevent unconscious bias in the recruitment process because we all have preconceptions (whether we’re aware of them or not).
It’s argued that by removing the human element, AI is the answer to this. AI can even check job descriptions to make sure language doesn’t communicate unconscious bias and put off prospective candidates.
The problem is that AI relies on data and algorithms created by people, which means bias can still creep in.
That’s exactly what happened at Amazon. They discovered that their AI algorithm was discriminating against women. AI was basing its selection process on data from CVs submitted to Amazon over the last 10 years, which were mainly from men.
5. AI recruitment takes over onboarding
AI can carry out most of the process of onboarding new employees. This not only saves management time, but it can be more convenient for employees.
Companies sometimes delay induction for weeks simply because managers don’t have time. With AI, onboarding can happen straight away, shortening the time to hire.
Plus, chatbots can instantly answer employees’ questions about the business at any time of the day.
6. AI recruitment carries out offboarding
When an employee leaves, a business offboarding needs to be thorough and swift. This keeps disruption to a minimum, and company information secure.
AI automates the repetitive tasks of employee offboarding in a quick, systematic, and organised way.
A smooth offboarding process can also help ensure employees leave with a positive impression. It’s important that an employee leaves on a happy note, not least because the business might want them back one day.
According to Unum UK, 1.5 million workers are planning to return to their previous employer this year. Interestingly, these ‘boomerang’ employees usually out-perform other employees because they’re more satisfied at work.
Hiring using AI: Key considerations
These are some key considerations if you’re thinking about AI powered hiring:
Risk of ATS bias
Critically, an AI system needs to integrate with your existing ATS and other HR recruitment tech you use for screening, interviewing, onboarding, and offboarding. AI relies on the quality of the data you hold in these systems.
A report by Harvard Business School called Hidden Workers: Untapped Talent found that applicant tracking systems were preventing businesses from tapping into certain talent pools.
The report revealed that people with gaps in their work history, for example, were often discounted because it was assumed they lacked work ethic.
However, there are any number of reasons why people have gaps in their work history. Crucially, this assumption meant suitable candidates weren’t making it through the screening process.
In fact, the report found that many groups of applicants were automatically disqualified by AI recruiting software based on assumptions that wouldn’t stand up to human scrutiny.
The report recommends that recruiters use ATS filters to find candidates with demonstrated skills rather than sorting by credentials only.
Tackling data protection with AI recruitment
There are several data protection issues to overcome when using AI powered recruitment.
To comply with both GDPR and the Equality Act 2010, decisions taken based on data mustn’t be discriminatory or biased. If there’s already bias in an ATS, then the AI recruitment system on which it’s based will be equally flawed.
AI needs a reasonable amount of data to work well, but GDPR means that organisations must minimise the volume of personal data they hold.
This is an issue that can be overcome, however, and the Information Commissioner’s Office (ICO) has published guidance on this and other AI data protection matters.
Overcoming bias in AI recruitment – ICO25 guidance
The ICO has set out a new plan for what they aim to achieve by 2025, ICO25.
Part of the ICO25 plan is considering how AI recruitment is negatively affecting candidates who haven’t been involved in the testing of AI software. This includes those from diverse backgrounds, vulnerable groups, and neurodiverse people.
A further part of the ICO’s plan will be ‘investigating concerns over the use of algorithms to sift recruitment applications’. For this, they’ll be providing ‘refreshed guidance for AI developers on ensuring that algorithms treat people and their information fairly.’ (ICO – Empowering you through information, p. 41)
To find out more about how ICO25 could affect how your business uses AI in recruitment, visit the ICO’s website.
Meet your hiring goals with AI recruitment
AI recruitment can help your business to make the best and fairest hiring decisions, as long as it’s based on high-quality data. It can also make the process more efficient, which saves time and money and enhances your company’s reputation.