Hiring can be daunting in an ever more competitive global job market. The numbers can seem overwhelming for candidates and prospective employers alike.
Here are just a few of them.
-LinkedIn receives 117 job applications every second. That equates to more than 10 million applications per day.
-More than 50% of job seekers apply for over 20 jobs to receive a job offer
-More than 20% make over 80 applications to receive an offer.
-One source suggests recruiters spend just 6-7 seconds on average on a CV
-Job seekers have a three in four chance of being screened out by AI algorithms before making it to human eyes.
Selection Process for an Average Interview
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Source: Citi Global Insights
Against this backdrop, AI assistants are now at your service for the recruitment process. As shown in the full report, companies are using various AI tools to help them automate the hiring process, expand talent reach. This is reducing the time it takes and how much it costs to hire. Candidates are also using AI tools to guide them through every step of the hiring process – my AI assistant meet your AI assistant.
Companies’ AI suite can help them on several fronts:
-To expand their reach to better find, match and communicate with talent, including lower cost remote workers;
-To solve the ‘black-hole’ issue from previous applicants and provide more internal mobility options;
-Better infer skills from applications, CVs or LinkedIn profiles;
-Assess additional skills via game-based psychometric tests and video interviews;
-Complete admin tasks such as drafting job descriptions and scheduling
interviews.
Candidates’ AI suite can help them:
-To build and edit CVs / cover letters / applications to appeal better to AI evaluators;
-Gain personalized career advice and guide them through the process;
-Practice interview questions with answers tailored for specific positions.
TAMs for Recruitment Software Market (in $mns)
© 2023 Citigroup Inc. No redistribution without Citigroup’s written permission.
Source: Various (See Chart), Citi Global Insights
TAMs for AI in Recruitment Market (in $mns)
© 2023 Citigroup Inc. No redistribution without Citigroup’s written permission.
Source: Various (See Chart), Citi Global Insights
A recent survey from the online recruitment service provider Zippia revealed that 95% of global recruiters believe AI can help applicants with their application process.
AI is already widely used in the talent acquisition process – almost all (97.4%) of the Fortune 500 companies use some form of AI in their hiring system, and we expect to see even more AI used as the latest transformer based LLMs allow HRs and job seekers to do things they couldn’t previously.
AI meets AI – the good news is AI can help recruiters / seekers find better
candidates / jobs. AI tools can add extra liquidity to the job market. However, this
may also increase applications and AI will be needed to deal with what can already be an overwhelming process.
AI can screen candidates much faster than human HRs and does so in a systemic and dynamic way. The model can achieve the following, which is never going to be possible for human HRs:
- Match the profiles of all the candidates who ever applied to the firm with all the openings;
- Calculate how well a candidate matches with a certain position based on skills.
AI can significantly improve on selection efficiency and reduce burnout. In addition, well-trained AI models can make selections based on the requirement for the particular opening and candidate profiles. This is much better compared to the clunky key word matching algorithms widely adopted across recruitment tech solutions.
In a forthcoming paper, Professor Bo Cowgill at Columbia Business School found that a candidate picked by the machine (and not by a human) is 14% more likely to pass an interview and receive a job offer and 18% more likely to accept a job offer when extended.
Using Eightfold AI, an AI-powered Talent Intelligence Platform trained on over 1.5 billion CVs and career trajectories, video game publisher Activision is able to make 47% of all new hires through talent rediscovery, where previous applications for other similar positions are recycled, and competent candidates are rematched with new openings.
LinkedIn and Indeed allow companies to contact candidates who are not actively job hunting. LinkedIn also launched a new AI tool that allows HRs to conduct searches using natural language prompts.
The full report goes on to look into how AI can help with the administrative burden of recruitment, for example by helping with draft job descriptions, scheduling interviews, summarizing interviews, synthesizing interview feedback, customizing email communications and even organizing career events.
It also looks at the important debate over whether the adoption of AI algorithms in the hiring process will promote or hurt DEI in companies.
For more information on this subject, if you are a Velocity subscriber, please see the full report here AI Meets Human Capital (Management) Part 2 - Will You Be Hired by AI? (23 Nov ’23)
Citi Global Insights (CGI) is Citi’s premier non-independent thought leadership curation. It is not investment research; however, it may contain thematic content previously expressed in an Independent Research report. For the full CGI disclosure, click here.
