Across the country, companies are struggling to find qualified candidates. As of March, there were roughly 5 million more job vacancies than there were people to fill them, causing employers to become increasingly desperate to attract top talent.
The so-called War for Talent has put increased pressure on hiring teams nationwide, causing frustration, setbacks, and high turnover amongst recruiters. To help ease the tension, employers are invested in HR tech to help streamline recruiters’ day-to-day tasks.
Unfortunately, new research shows that the very technology used to make recruiters’ lives easier is actually working against — not for — them, all while causing a compliance nightmare for employers.
Applicant Tracking Systems (ATS) and Recruiting Management Systems (RMS) are built to make the hiring process more efficient, thereby alleviating the burden placed on recruiters. Unfortunately, new research suggests these tools eliminate qualified, high-quality candidates from the running —, particularly when using artificial intelligence early on in the process.
While ATS and RMS solutions are vital to the recruiting process, a solution with zero human oversight can come at a detriment to the company. Below, we explain why AI can’t be an end-all-be-all solution to the hiring crisis, and what technology your company should invest in instead.
4 Reasons How AI Can Worsen — Not Solve — the Current Hiring Crisis
As the hiring crisis drags on, recruiters demand new technology solutions to help source and vet candidates. According to HR Brew, the HR tech space reached $16.8 million in investments worldwide in 2021, creating new-and-improved employee engagement platforms, recruiting platforms, and project management software alike.
For better or worse, the adoption of new technology will always come with challenges. As the use of artificial intelligence within the hiring process has become increasingly prominent, ethical and legal ramifications have come to light. Research shows that 80% of companies use AI in some form or fashion throughout the hiring process. Unfortunately, the use of these systems can exclude viable candidates from consideration, thereby preventing recruiters from filling vacant roles.
Below, we examine how artificial intelligence inadvertently eliminates qualified candidates from the running:
1. It Can Eliminate People With a Disability
According to Jobscan, 99% of Fortune 500 companies use an ATS system. In addition, research shows that an estimated 75% of companies use a Recruiting Management System (RMS) to help automate the recruiting process. If you rely on these tools to recruit top talent, know this: Leaning too heavily on AI — without any human oversight — can lead to compliance issues.
In May 2022, the Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ) announced that employers are responsible for identifying hidden biases when using AI within the recruiting process. In fact, relying on artificial intelligence too heavily could violate the Americans with Disabilities Act (ADA).
According to the Bureau of Labor Statistics, individuals with disabilities face unemployment rates nearly twice as high as the greater population, rising to 10.1% in 2021. The EEOC warns employers that AI could eliminate qualified candidates from the running due to a disability — even though the candidate could perform the role with certain accommodations. Companies are now required to identify these biases or face legal consequences.
2. It Can Eliminate High-Quality Candidates
An ATS system typically integrates with an RMS in order to automate tasks throughout the hiring process. According to research conducted by the Harvard Business School, 90% of employers surveyed use their RMS to initially rank candidates, market vacant roles, schedule interview, and recruit top talent. In doing so, companies hope to streamline the recruiting process, thereby preventing their recruiting team from having to manually screen candidates.
Sounds good in theory, right? Not so fast.
The Harvard Business School reports the vast majority (88%) of surveyed employers acknowledge that AI workflows eliminate high-quality candidates from the recruiting process. Rigid formulas eliminate candidate resumes due to a lack of college education, a shortage of experience (e.g. four years’ experience versus five), or a work gap on their resume. As a result, AI disqualifies these candidates before their application is ever seen by a recruiter — even when a live, human being may have scheduled them for an interview.
3. It Ignores Candidate Engagement
Artificial intelligence was introduced to ATS and RMS technologies for a singular purpose: to make recruiters’ lives easier. In theory, AI solutions would automate tasks in the hiring process, thereby reducing recruiter turnover and the time dedicated to hiring a candidate.
There was only one, glaring problem: AI solutions focused entirely on recruiter wants and wishes, completely ignoring those of the candidates themselves.
Let’s review a lesson recruiters learned all too well in 2022: Just because you extend an offer, doesn’t mean a candidate will accept it. According to a recent Wall Street Journal article, between 15-20% of new hires ghost recruiters after they sign an offer — a huge headache that artificial intelligence fails to predict.
Why? Most RMS technologies don’t track candidate engagement, leaving recruiters unaware as to which applicants are most excited about the opportunity. The reliance on AI within the recruiting process has stripped humanity from the recruiting process, not recognizing when candidates inquire about mentorship opportunities, take part in meetups, or submit questions to their future manager, making it impossible to differentiate between disinterested and engaged candidates.
4. It Doesn’t Elevate Your Employer Brand
In a typical labor market, candidates sell themselves (and their unique skills and experience) to employers, positioning themselves as the best for a role. But in a candidate-hot market, these roles are reversed, requiring companies to sell themselves to applicants now-faced with multiple opportunities.
As described by Recruiting.com, this scenario requires companies to answer the “Why me?” question. Why should a candidate choose to work for you, as opposed to a competing organization? If you can’t think of any answer besides a salary and benefits package, it could be a clear sign you need to invest in your employer’s brand.
Today’s top talent — particularly early-career candidates — don’t just care about dollar signs when selecting their next role. They crave job flexibility, mentorship opportunities, and a career that makes an impact upon society. In addition, they want to work for a company whose values align with their own, who has clear DEI initiatives in place, and who takes a firm stance on current social issues.
And frankly, your top recruits may want to hear all of the above in a face-to-face conversation with their future supervisor or other team member — not through an AI workflow.
Bring a Level of Humanity Back to the Recruiting Process
The use of artificial intelligence within the recruiting space has spiked in recent years, helping to source and screen candidates. However, AI should never be looked upon as an end-all-be-all solution. Research shows that the AI can potentially screen out candidates who are 1) qualified for the role or 2) individuals with a disability, coming into direct conflict with the Americans With Disabilities Act.
Instead, RMS and ATS technology should always be used with human oversight. Scholars seeks to bring a level of humanity back to hiring practices, allowing you to create personalized candidate journeys at scale. Scholars allows teams to automate communications throughout the candidate journey, personalizing communications based on role, demographic, location, and persona. Plus, Scholars offers predictive analytics over each individual candidate, allowing recruiters to prioritize communications with those most interested in the opportunity.
Scholars helps streamline the recruiting process while offering space for human oversight, delivering a candidate-first experience. To see how Scholars can help you recruit top talent, schedule a demo.