Here’s how AI can, and can’t, disrupt the hiring process

Welcome to?Fast?Company?Daily, our?daily?newsletter on?LinkedIn, featuring a free article selected each?day?by our editors as well as a roundup of great advice on careers, hiring, innovation, and technology.

Visit?fastcompany.com?for our top stories and breaking news.?First time seeing this? Please?subscribe.

• Detroit’s down payment assistance program has helped more than 400 first-time homebuyers. Kamala Harris wants to roll out something similar nationwide.
• Ximena Vengoechea explains that to help prevent analysis paralysis to build a life that she wants, she decided to map her wishes and desires on a spectrum of ‘when.’
• What is Chick-fil-A Play? Inside the food chain’s surprisingly logical next move.
• A recent TikTok trend involves people actively seeking out opportunities to get shot down, then filming and uploading the awkward encounter for millions to see.

It may not feel like it, but the U.S. economy is currently doing alright. Economic indicators are neither too hot nor too cold—a Goldilocks dynamic that The Federal Reserve strives for.

Despite this, most people aren’t feeling great about their economic situation. Consumer confidence, a catch-all measure of the opinions and attitudes of consumers about the current and future strength of the economy, fell from 105.6 to 98.7 in August. The slide was the biggest one-month decline since August 2021 when surging COVID-19 cases rattled markets. One survey found that 59% of Americans incorrectly believe that the U.S. is currently in a recession.

So where's the disconnect? Read the full story on Fast Company Premium.

A?Fast?Company?Premium?subscription offers readers full access to subscriber-only stories including exclusive reporting and trend analysis on technology, business innovation, future of work, and design.

Get the details and subscribe here.

Here’s how AI can, and can’t, disrupt the hiring process?

By Adam Charlson

Artificial intelligence has become part of the fabric of our everyday lives–both personally and professionally. Whether it’s AI-powered dynamic pricing or healthcare diagnostics, businesses are continuously exploring new ways to incorporate AI into their daily operations. Companies are also leveraging AI-powered tools when it comes to hiring. In fact, 64% of human resources professionals say talent acquisition is the top way they are using AI.

For many organizations, AI has long been a part of the recruitment process—specifically in the form of applicant tracking systems (ATS), which have evolved considerably since their inception in the 1990s. Modern ATS solutions now offer advanced functionalities, including the ability to craft job postings, manage résumé collection, screen résumés, and provide analytics.

AI can quickly sift through a vast pool of résumés and pinpoint those that best match the keywords in a job posting. It can be tempting to rely almost exclusively on AI to identify top candidates for an opening. But can AI alone truly determine the best fit for a position?

The short answer is no. While AI can do a lot, it doesn’t replace a human when it comes to hiring.??

The longer answer is that while AI is a powerful additive to the hiring process, it cannot entirely substitute the nuanced judgment and relational insights that human recruiters bring to the table. The biggest AI application in the hiring process today is in the initial stages of sourcing and recruitment. The efficiency made possible by AI is a major benefit, especially for handling large volumes of applications.

But while AI excels at sorting data and automating repetitive tasks, it lacks the ability to fully comprehend the subtleties of human interactions and complex decision-making. Particularly for roles that require strategic planning, innovative thinking or leadership, AI’s capabilities still fall incredibly short. Take, for example, product management roles, which require complex decision-making and innovative thinking. It’s probably one of the few roles where—especially in the technology industry—the candidate needs to be both an engineer and a marketer, because they’re responsible for a product that will eventually become a revenue stream for the company. AI is not an ideal tool to screen for unique or new positions or for those that require a combination of skills.

Why we still need humans for hiring?

Effective hiring relies heavily on understanding nuanced human qualities that data alone cannot capture. Human recruiters excel at evaluating soft skills, emotional intelligence, and adaptability—traits that are vital for professional success, regardless of the role. In the hiring process, these qualities are revealed through personal interactions, interviews, and informal conversations—not through résumés keywords or automated screenings.

The rapport recruiters build with hiring companies, or that internal talent acquisition teams innately know by working there, gives humans the unique ability to match candidates to an organization not just based on both their skills but also based on an understanding that the candidate would be a good cultural fit. Hiring someone is about establishing a relationship, not just a systems match.

What’s more, recruiters and HR professionals are able to leverage their industry relationships to tap into a broader network, reaching passive candidates who may not be actively seeking new roles but who are a great fit for the organization. This strategic outreach and personal engagement are aspects of recruitment that AI simply cannot replicate yet. It takes skill and the ability to connect as a person first, and to reach out to someone who may very well be happy in their current job, and convince them to take a look at an open role. Recruiting is both thoughtful and incredibly relational; it involves actively searching for and connecting with people who are the right fit for the role, as detailed on paper, but who will also drive lasting impact and feel fulfilled in the work they are doing. It’s a science and an art.?

AI’s limitations when it comes to hiring?

When faced with multiple candidates who possess similar qualifications, AI lacks the valuation abilities to determine the best fit for an organization’s specific needs and culture. It cannot conduct marketplace research, which often includes an element of interviews to gather sentiments and other intangibles, or gather critical insights from individuals who have worked with someone before. Human recruiters play a crucial role in this comparative analysis, taking the time to assess someone’s background and speak one-on-one with references.

For executive-level and high-stakes roles, the impact of hiring decisions can be even more substantial and the cost of a misstep can be significant. In these scenarios, human judgment is paramount. Executives and senior leaders are relied on to make critical decisions, and finding the right person for these roles involves more than just matching qualifications—it requires a deep understanding of how someone will contribute to the organization’s culture and dynamics. This can only be achieved through interviews with a person, and subsequent conversations with team leaders who have a vested interest in the role and the organization.??

When it comes to extending an offer, recruiters must also navigate a variety of scenarios, including budget constraints, commuting considerations, benefits issues, and counteroffers. Ultimately, it’s the human touch that will motivate candidates to accept an offer, often balancing multiple competing factors. It goes without saying, but this negotiation expertise is something AI does not yet possess.?

Risks of excessive AI reliance?

Relying too heavily on AI in the hiring process comes with risks. One major concern is algorithmic bias. AI systems are only as unbiased as the data used to train them, and historical data may contain implicit biases that become amplified by AI, leading to potential discrimination. This could impact a company’s diversity and inclusion efforts and could result in highly capable candidates being overlooked because they did not use specific keywords or phrases in their résumés. Legal and compliance risks are also possible, particularly with privacy issues and the potential for biased decision-making without proper human oversight.

How to utilize AI responsibly?

So, what is the right way to utilize AI when hiring? The ideal approach is a blend of both AI and human expertise. Here are three considerations to keep in mind:??

Let AI handle the data-heavy tasks, such as initial résumés screenings, managing applications, and tracking applicants through the recruitment process. I believe this is where AI can make the biggest impact and save people a lot of time. By automating repetitive tasks, human recruiters and talent acquisition professionals can focus on more strategic activities, such as engaging with top candidates and refining hiring strategies.

Leave the complex hiring evaluations to experienced professionals. Humans should be leading hiring tasks when it comes to nuanced aspects of the process, including assessing leadership style, emotional intelligence, career aspirations, and organizational fit, as well as late-stage candidate comparisons. This ensures that critical elements are evaluated with the depth and multifaceted understanding that AI cannot today provide.

Recalibrate your AI-driven processes from time to time. As with any automated process, it’s a good practice to assess your AI technology to ensure it’s truly capturing the right résumés during the initial résumé screening phase. Regular evaluations help identify any biases or gaps and ensure the process evolves with changing job requirements and market trends.

Consider a time when you were job searching and felt you were the perfect fit for a role, only to be overlooked—or worse, never looked at at all. Most of us have experienced this frustration at one time or another, and unfortunately, one of the biggest downsides of relying too heavily on AI is missing out on strong, qualified people who don’t align perfectly with keyword searches. This is why I believe an integrated approach is the best way to ensure hiring remains both effective and inclusive, capturing the right range of talent through the powerful efficiencies of AI and the irreplaceable human touch that matters, especially when it comes to work.

Follow us on LinkedIn, X, Instagram, Threads, Facebook, WhatsApp, TikTok.