Are AI Recruit Tools Worth the Hype?
Algorithms, schmalgorithms — AI recruiting tools may be hurting a company’s ability to hire senior executives. The latest technology elixirs and outsourcing approaches are not designed to fix what is broken with hiring top leadership talent. In fact, smart AI recruiting solutions may be making matters worse.
In an article in Harvard Business Review, the George W. Taylor Professor of Management at the Wharton School and the director of its Center for Human Resources Peter Cappelli observes that “Businesses have never done as much hiring as they do today and have never done a worse job of it.”
“Businesses have never done as much hiring as they do today and have never done a worse job of it.”
— Professor Peter Cappelli, the Wharton School
The Depersonalization of Executive Search
Now, that may sound pretty harsh. But Professor Cappelli is the author of Our Least Important Asset: Why the Relentless Focus on Finance and Accounting Is Bad for Business and Employees. According to research by Korn Ferry, 40% of U.S. companies are using recruiters known as recruitment process outsourcers or RPOs. Those RPOs, in turn, deploy subcontractors who are primarily in India and the Philippines to do candidate sourcing. They search for passive candidates on LinkedIn and social media. Some even reach out to candidates directly to see if they’re open to being recruited. Most of the time, those doing the outreach fail to make a meaningful connection with the candidate — if they connect at all.
Enter AI Recruiting Tools
For companies that have their in-house executive search team do the hiring, there’s a new twist. Instead of receiving applications directly, applicant-tracking software filters through applicants for keywords — preferred skills and abilities — that hiring managers are seeking. When the filters are further defined by artificial intelligence, things can quickly go awry. CHROs and talent acquisition leaders are fielding a half dozen calls a day from vendors peddling smart AI solutions that are designed to make recruiting easier But there continue to be unintended consequences.
Amazon was forced to shut down its experimental artificial intelligence (AI) recruiting tool after discovering it discriminated against women. The AI tool had been trained to spot and rank ideal candidates, Since more men happen to be software developers, more men are successful in those roles. Consequently, the AI tool baked in a preference for male applicants. In doing so, the algorithm downgraded women applicants for technical jobs.
Do AI Recruiting Tools Make Decent Hires?
But the problem doesn’t stop there. Few companies have the patience or the wherewithal to determine whether these new “smarter” approaches produce decent hires. In fact, only a third of U.S. companies monitor whether their recruiting practices produce good hires and the monitoring is crude. It doesn’t get to the root of what exactly is and is not working.
The Great Decoupling
Recent surveys show 86% of organizations focus on making external hires — so-called passive candidates, instead of promoting an employee into the role. It was quite the opposite from World War II through the 1970s when 90% of vacancies were filled by promotions from within. That leaves very little opportunity for advancement for employees, further fueling employee turnover. Workers disengage. Employers discard. Our connections to our employers grow looser as do employee connections to their own employees. The workforce is more loosely joined than ever before.
Beware of Vendors Bearing Smart AI Gifts
As employers increase their focus on vendors bearing AI gifts, they might find it more cost-effective and less discriminatory first to examine ways to cultivate the talent within. If your organization is really value-driven, then drive value and connection with existing employees. For more insights on how to improve talent acquisition in the era of smarter AI tools, I encourage you to read “Your Approach to Hiring Is All Wrong: Outsourcing and Algorithms Won’t Get You the People You Need” by Professor Peter Cappelli.
