Evaluating the Risks and Potential Rewards of AI in the Hiring Process

Elaine Pulakos, Ph.D.—the CEO of PDRI by Pearson—evaluates the risks and rewards companies may experience when using artificial intelligence (AI) in the hiring process. This article originally appeared in Insight Jam, an enterprise IT community that enables human conversation on AI.

Historians will likely see the advent of ChatGPT in late 2022 as a pivotal moment in technological progress. Generative AI (GenAI) is unlikely to leave any aspect of the business world untouched, including HR. However, despite its potential to aid hiring processes, HR professionals should exercise caution in adopting this nascent technology, as there is still much to learn about its implications and applications.

One intriguing prospect for GenAI is its ability to facilitate a shift from degree-centric hiring to a skills-based approach. This transition is gaining momentum in government and corporate sectors as organizations increasingly recognize that mandating a specific academic degree can be an arbitrary barrier. Many highly competent candidates may lack such credentials, which are not necessarily indicative of job performance. After all, the founders of Microsoft (Bill Gates), Facebook (Mark Zuckerberg), and Apple (Steve Jobs) all became technology titans without completing college.

Moreover, the skill sets that organizations need are evolving rapidly. Research from Gartner shows that one-third of the skills listed in tech and other job postings from just a few years ago were no longer relevant just four years later, and the overall number of required skills continues to grow yearly. This dynamic environment makes it difficult for traditional degree programs to keep pace, and job seekers must continuously develop new skills and competencies to remain competitive. Fortunately, there are numerous online resources available for skill development and certification.

The Importance of Enduring Skills

While technical skills are important, hiring managers should also prioritize more general skills, such as adaptability, analytical thinking, and effective communication. General skills are often enabled by innate personal characteristics. They are more challenging to learn but crucial for effectively working with others and keeping one’s technical skills relevant in a rapidly changing workplace.

The shift towards skills-based hiring presents a significant challenge: How can hiring managers assess a wide range of constantly evolving skills at scale? The answer lies in having access to accurate, effective skill assessments. GenAI can likely play a key role here by assisting subject matter experts in crafting high-quality assessment questions, administering the assessments, and evaluating candidate responses.

As an example, consider the candidate interview, which is a type of assessment that is an essential component of the recruitment and hiring process. While traditional, unstructured interviews are poor predictors of job performance, interviews conducted in a structured, consistent manner are highly effective. GenAI could aid in generating effective questions to assess the most critical skills for the job, suggesting follow-up inquiries to capture complete information about candidates, and potentially even conducting and evaluating structured interviews autonomously. However, candidate acceptance of AI-led interviews remains uncertain.

Challenges and Risks of Using AI to Support Hiring

Despite these potential benefits, there are significant risks and challenges associated with leveraging GenAI to facilitate hiring processes today. The lack of extensive research on its safe and effective use in recruitment and hiring has raised concerns, with numerous reports of AI systems inadvertently perpetuating biases against women, minority groups, and people with disabilities or making arbitrary decisions based, for instance, on a first name it has somehow learned to prefer. Proper safeguards, ongoing monitoring, and specialized training for HR professionals are essential to prevent adverse outcomes.

Public perception is another crucial factor to consider. A recent survey from the Pew Research Center indicates that most job seekers would be hesitant to apply for positions if they knew AI was involved in the decision-making process. Ethical considerations require that organizations be transparent about using AI in recruitment, which may deter some candidates until they gain more confidence and public opinion becomes more favorable.

Given these considerations, the prudent approach for organizations to take regarding the use of GenAI in high-stakes applications, like hiring, is to proceed with caution. While the technology holds immense promise, the absence of established best practices grounded in thorough research makes early adoption risky. Ongoing studies are exploring how to harness this cutting-edge technology to improve the efficiency and effectiveness of recruitment and hiring processes. For now, HR departments would be wise to exercise patience and await further insights into the judicious and safe use of GenAI in the hiring process.