The hiring process is a time-intensive task, for both employer and prospective employees. When applying for a job, Glassdoor’s econ team found UK job seekers spend an average of 27 days in an interview process. This can vary within sectors too; consulting roles have an average of 55 days of interviews, travel, and tourism has an average of 49.
This long timeframe doesn’t seem as surprising when you look at the challenges hiring managers face. Finding qualified candidates is a problem for 59% and the increase in the volume of applications for each role is a problem for 52%. Despite these challenges, finding the right fit is incredibly important. The US Department of Labor estimates a bad hire can cost around 30% of that employee’s first year of earnings, so a bad hire is a costly mistake.
Many companies have implemented multi-step hiring processes. Rigorous interviews have been proven to be of benefit to staff. Jo Cresswell, Community Expert at Glassdoor said “on an industry level, interview duration correlates with interview difficulty, indicating that job seekers are being put through their paces in the longer recruitment drives. This is ultimately a good thing for job seekers, as previous research shows that more difficult job interviews are statistically linked to higher employee satisfaction.”
While this is good news for employees, it is not the most efficient use of time for businesses as for every interview that results in a hire, there will be more that don’t. Many companies are turning to AI as a way to control how much time and resources are spent in the hiring process. But how effective can AI really be at finding the best candidate?
How Does AI Actually Screen Candidates?
Research shows AI as a hiring tool has been found to reduce hiring time by 75%. This is because AI can not only screen a large number of CVs, looking for key phrases and skillsets, it can actually compare candidates against existing employees who thrive in their role.
It’s also a known fact that certain details on CV’s can lead to unconscious bias. Details such as age, gender, and name can all lead to certain assumptions being made. AI can help reduce this bias by removing such details – allowing candidates to progress through the recruitment process on merit alone.
AI such as Pymetrics does this through pre-screening “games” that can assess cognitive and emotional features, whilst avoiding any demographic bias. The software will compare candidate’s results against existing employees who are noted as being good in their roles. The software is even sophisticated enough that it can suggest other departments candidates may be a better fit within.
Companies have found AI can actually create a more complete picture of a candidate than a CV may be able to offer as well. While researching online presence can be an incredibly time-consuming task, AI can speed through this and create a picture that showcases their values, goals, and career aspirations. AI may be able to find candidates who are very active in social causes, too. A candidate may not see this as relevant to their CV, or know where to put it on an application, but it may actually make them a great fit with the company’s values and teams.
In many roles, this will see an increase in the necessity of networking. Forbes says “building and maintaining authentic, professional relationships will help people stand out and land the interview.” Interestingly, bringing automation to hire will actually encourage us to spend more time connecting with each other.
How Is AI Actually Keeping People at Companies for Longer?
LinkedIn estimates staff turnover is around 10.9% worldwide, although the tech software sector has a higher turnover at 13.2%. Online media, entertainment, and newspapers have a similar turnover rate between 13.2-13.3%. As it costs around 60% of an employee’s salary to replace them, this is a lot of additional costs to a business.
Artificial Intelligence has been found to improve employee retention by 50%.
By using data, AI is able to build forecasts of which staff are most likely to leave, and vitally, how valuable they are to the business. This gives companies a chance to get ahead of turnover. With the number one reason employees report leaving their job being a lack of opportunity, it presents an opportunity to potentially retain valuable staff with the right incentives.
AI is also able to offer consistent training that, while always a goal within an organization, can be difficult to implement during busy periods. Tools like Chorus actively analyze sales calls as they actually happen. This makes it easier for staff to gradually improve through consistent feedback that can instantly be put into practice.
Other similar AI training tools like Cogito are actually advanced enough that they can offer real-time advice as to specific as “let the customer finish their sentence.”
AI can even help employees share their experiences, Honeywell uses AR headsets to capture high-performing employees as they work. The recordings can then be played for trainees to experience through VR.
Some employees and students even prefer learning online because it offers them the chance to learn at their own pace without pressure. Having AI software and interactive technology like VR means whatever your employees learning style, they’re able to improve their skill set.
What Are the Cost Benefits of AI?
40% of executives say the biggest obstacle to integrating AI is the cost. With the AI software market expected to grow rapidly year on year, reaching $126 billion dollars by 2025, it is likely that this will start to bring the costs down as it becomes less of a niche product and more accessible for everyone.
The efficiency AI is able to offer to businesses will see it pay its own way in a short period of time, too. As we’ve discussed, it can cost as much as 60% of an employees salary to replace them and the use of AI to aid staff retention is already a huge saving.
When you do need to hire, whether to replace staff or in newly created positions,
Using AI is estimated to reduce the cost of hiring by almost 30%.
Deloitte’s LaborWise estimates that their software will be able to provide managers with analytics that can identify high-cost areas or roadblocks. This will show overworked and understaffed departments so that plans can be put in place to protect staff’s wellbeing and maintain a high-quality workforce.
While AI isn’t going to take over every aspect of hiring or managing employees, it is going to prove a vital tool in finding the right talent and keeping them happy in their roles.
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