AI-Powered Recruitment: The Case for HR Efficiency

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Talent acquisition teams are under increasing pressure to hire diverse, high-quality candidates, but existing traditional recruiting methods aren’t effective, scalable, or sustainable.  

The latest advancements in artificial intelligence  are transforming hiring practices and how candidates are sourced.     

How Startups Changed the HR Landscape with AI 

Finding and recruiting qualified applicants  is challenging for companies of all sizes, made even more difficult by the recent labor shortage crisis. The added responsibility of applicant screening, interviewing, and onboarding becomes an expensive and time-consuming function.  

However, recruiting for startups is a persisting problem as they need to attract top talent without an established reputation or the ability to offer attractive salaries and benefits.  

In March 2020, over 800 thousand  businesses were less than a year old in the United States. As a result, these newly-established innovative companies had to be creative in finding and persuading the best candidates to join them.  

For startups, the decision-making process is not complex, making it an adaptable environment that ultimately leads to maximizing profits through innovation. To gain a competitive edge in recruiting, startups turned to newly-emerging AI-powered technologies and cloud-based solutions.  

Evidence  suggests that AI tools allow companies to cast a broader net to source candidates without increasing their workload.  

Undoubtedly, companies of all sizes and industries recognize the value-creation of AI tools and are increasingly investing and funding recruitment startups.  

Over $600 million  is invested every year in recruiting startups. One statistic shows that 84% of business leaders  believe AI will allow them to obtain a competitive advantage and reach growth objectives in the future.  

Is AI the “Great Industry Disrupter”? 

Over the next decade, business success will rely mainly on using artificial intelligence to gain a competitive edge. Companies that don’t embrace AI risk stagnating, falling behind competitors, or extinction.  

As a result, AI is one of the most significant disruptive forces across all industries.  

AI platforms and software-based systems are expected to cause changes in nearly every industry, from automotive, logistics, and retail to healthcare, insurance, or investment banking. What’s more, Mercer’s study  found that almost three-fourths of executives expect AI to be a significant industry disruptor in the next three years.  

Emerging technologies are affecting every function in the workplace – and the human resources function is no exception.  

Forward-thinking HR and recruitment leaders are using artificial intelligence to improve recruitment efficiency and enhance the employee experience. Developers are creating AI tools to utilize every HR and employee life cycle stage. These tools help HR professionals carry out operations like: 

  • Sourcing candidates through the proper channels 
  • Using ATS for candidate screening and assessment  
  • Scheduling interviews as an automated process 
  • Using chatbots to engage with candidates and enhance the candidate’s experience 
  • Using chatbots to provide information on company policies and benefits 
  • Providing personalized learning and training for employees  

AI tools lessen the administrative burden, allowing HR to contribute meaningfully and take on a more strategic role. Despite the advantages, AI’s capabilities are limited in many ways and have many shortcomings that must be addressed.

The Pros and Cons of Using AI-Powered Solutions 

Using AI-powered solutions  improves and automates processes, solving some long-standing HR challenges.  

However, despite the myriad of opportunities these new technologies present, there are also many downsides. A proliferation of AI-powered solutions creates an increasingly complex and confusing landscape for HR professionals to navigate.  

1. Legal Implications 

Security and privacy issues are cited as one of the main concerns preventing workers from using AI at work. While there isn’t any federal law to evaluate the use of AI in recruitment in the United States – that could change in the future.  

The European Union  is already drafting a regulatory framework for the ethical use of AI in the workplace. Therefore, you must reach a careful balance between the active interest of companies and the privacy and anti-discrimination rights of employees.  

2. An Objective Recruitment Process 

AI systems are playing a pivotal role in eliminating bias from hiring.  

While the technology isn’t perfect, an overwhelming number of respondents agree that using AI builds more equitable hiring practices. Removing conscious and subconscious human bias means companies can be more inclusive of underrepresented groups and create a more diverse candidate pool.   

3. Employee Engagement 

The latest cutting-edge technology can measure and predict employee engagement. Companies adopting AI-powered solutions can comprehensively analyze content from annual surveys, pulse surveys, and social media and quickly identify high-performers and disengaged employees.  

Moreover, gamified AI can bridge the link between an employee’s tasks and the company’s objectives.  

4. HR Insights and Data 

AI can support strategic decisions by providing valuable and actionable data. Managers and leaders can better understand the workplace and make better-informed, data-supported decisions. People analytics, business intelligence, and decision intelligence are now part of the vital HR function.    

5. Reliable Predictions 

Interpreting large data sets and creating models that can increase reliable decision-making is at the core of many AI-powered solutions. This predictive quality can be used in many areas, including examining future workforce needs or succession planning. 

6. Learning and Development 

Advanced learning management systems (LMS) can create employees’ personalized career recommendations and provide relevant learning content. Customized career progression and pathing are essential to encouraging continuous improvement, creating internal mobility, and maximizing employee potential.   

In addition, Virtual Reality (VR) and Augmented Reality (AR) allow employees to train in otherwise dangerous or expensive settings. 

The Risk of Turning AI into a “Gimmick” 

Aside from all the “buzz” surrounding the use of AI in the business world, there is also much apprehension. The constraints of having only small datasets and using historical training information to feed algorithms raise questions about the quality and relevancy of the data used.   

Is investing in AI worth it if there are known limitations?  

A lack of understanding, trust, and usability may render it a wasted investment.  

Furthermore, there is a considerable risk of turning AI tools into a gimmick with vast information and HR metrics available without much relevance or use.   

Moving forward, developers of these tools and companies deploying them need to ensure that AI becomes more:   

  • Unambiguous – AI tools are more user-friendly and understandable  
  • Scalable – AI is cheaper and has a greater return on investment   
  • Practical – Utilization of relevant and valuable metrics  

Aligning the metrics and data with real-world conditions and challenges is crucial for optimizing the use of emerging HR software and tools.  

AI in HR Trends 

The HR department is undergoing a digital transformation.  

Upcoming technologies are all focused on creating a superior workplace with an emphasis on nurturing an employee-centric culture. The trends in HR are all centered around creating best-in-class workplaces that consider individuals’ preferences, likes, and dislikes and providing personalized experiences to employees.  

Today’s AI solutions put the employees as the focal point and aim to gain a profound knowledge of their needs and concerns. Embracing artificial intelligence as an essential recruitment tool comes with heightened expectations of the ethical use and increased accountability of tech practices. 


Elements of the HR role can become more efficient, streamlined, and automated with AI-based solutions, creating a significant competitive advantage for the organization. As the speed of change accelerates, organizations need to stay agile and leverage the power of AI to stay ahead.   


Ivana Radevska is an HR and benefits content expert atShortlister.


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By Ivana Radevska