How AI is Transforming the Recruitment Industry

Generative AI has been taking the world by storm. Bots like ChatGPT have been revolutionising the way we work, from writing content to creating strategies. On Episode 101 of Talent & Growth - The Talent Acquisition Podcast , we spoke to Tim Sackett, SPHR, SCP the President at HRU Technical Resources, about how we can use automation to improve the recruitment industry.?

What are the significant changes you have seen in the market in the last 12 months, and what should we be preparing for as we move into the new year?

Dynamic, hourly recruiting software has gotten to the forefront with conversational AI. We’ve started to see companies splitting their tech stack and talent acquisition. If you think about traditional applicant tracking systems (ATS), they were designed for people sitting in front of a computer, going through a process to apply to a job through a career site. If you're an hourly worker with low to no skills, more than likely, you're looking at that job on a mobile device. You don't want to go through all those steps, like filling out an application or uploading a resume you don't have on your phone.?

I've seen a gigantic conversion increase on sites that are using conversational AI. A typical conversion rate is around 10% on a career site, whereas a chatbot can convert 50 to 70% of candidates who are starting the process. Applicant tracking systems aren’t even paid attention to. A lot of companies are waking up and going, “Wait a minute, we hire 1000 people a year. Nine hundred of those are hourly, and 100 of them are salaried. Why did we buy technology for the 10% of our hiring instead of the 90%?” These platforms are on fire because they focus on early hiring.?

I have to ask myself, is the future of recruiting that we don't need recruiting? For the most part, 90% of your hiring is posting a job, waiting for somebody to apply, and then processing that person through. Within two or three years, I won’t need humans to do any of that. The remaining 10% of hiring is finding and reaching out to people, building relationships and getting to know your client’s specific requirements. That will be the real recruiting that's done.?

What changes are you seeing right now in how companies are using AI?

If you think about the future of recruiting, it’s here already. I believe that, eventually, most of the conversations or tactical work we do as recruiters will be completely made by AI. Most of our work can be automated. AI can post jobs on your career site, match it to candidates within your talent pool, reach out to them to see if they're interested and get updated information, put them through a screening assessment, and schedule an interview. That’s the first time a recruiter will have a conversation with the candidate at all, and that’s the future that programs like ChatGPT are offering us.?

There are many examples of companies that are taking certain parts of their hiring online and automating it. Let’s start with low-skilled / no-skilled hiring. These jobs pay up to $20 an hour, where the screening process is like, “Do you know what this job is? Can you legally work on this job? Have you been convicted of a crime? Are you going to show up on Monday? Okay, the job is yours.” At that point, conversational AI can approach people on your site and say, “Hi, what can I help you with?” They’re built with natural language processing, and it's still not perfect, but it's much more robust than it used to be. Its responses sound somewhat human, and they’re able to react to people’s input a lot better. They can talk you through a large part, if not all, of the application process.?

Some companies actually use that same conversational AI?to avoid candidates ghosting them. When somebody accepts an interview, let's say it's four or five days out, the bots can start texting that candidate to say, “Hey, just talked to the hiring manager. They're super excited about seeing you on Friday. Do you have any questions?” It's just a relationship build, which is all automated, but the candidate doesn't know it. The bots can include a call to action, like “Hey, I forgot to write down the time I told you to come on Friday. Can you respond with that time?” That checks that they're still interested. Automation can have a huge impact when you start layering in that level of interactive response.

What impact do you think generative AI has??

For most of human history, we’ve been labourers. We had to physically do work. Then, in the mid to late 90s, there was the advent of the creator economy. We went from labourers to creators. There are still labourers out there, but we can all foresee a future where robotics and AI and automation will take labour off the table. There will be a point where labour just isn't part of the economic workforce. We have this creative economy, but with the advent of ChatGTP and generative AI, the future of employees is changing because AI will become the creator, and humans will transition into narrating.?

To put this in the context of an HR person, let's say they need to make a little change to how an employee inputs their time to the payroll system. It’s just a tiny field change. The HR person calls the software company, who say that's customisation, it's gonna cost $25,000 and take six months. The HR person’s role as a narrator would mean working with the AI and saying, “I need to change this field within this pay system so that employees can do this. Can you let me see what that would look like?” and all of a sudden, it would happen. AI can tell you, “By the way, by changing this field, you're actually affecting a couple of other fields too”. As an HR expert, you're narrating what you want to change, and AI can make it happen in real time.?

As a recruiter, instead of going out to LinkedIn or Indeed and searching for resumes, you can tell AI, “I need a software engineer. I would like them from these three or four companies”, and then the AI can do hours of our work in a matter of seconds. We’re looking at a reduced need for a workforce because people won’t be required for many tasks. We’re at a tipping point of rich countries not being able to replace their own people because they have a declining population. I think we’re looking at a global shift, not just a trend in the recruitment sector.?

To hear more about how AI impacts the industry's future, tune into the Talent & Growth Podcast here.?