How Artificial Intelligence Is Impacting The Job Market For Employers & Job Seekers

September 20, 2024 –

By Ethan Sympson

Artificial Intelligence (AI) is changing the way we work and live, and has become an increasingly important tool in daily life. This tech has shaken up human resources as well, changing how job seekers write applications and how employers evaluate candidates. It’s now an essential tool for both sides of hiring, speeding up the hiring process for employers and job seekers alike. In this article, we’ll explore the immediate impacts of AI on both employers and job seekers, and what the future holds for this evolving technology.

What Is Artificial Intelligence?

Artificial intelligence has been a buzzword for decades, but its application has only become mainstream in recent years thanks to advancements made by innovators like OpenAI (and its groundbreaking tool, ChatGPT). At its core, AI refers to computer systems designed to simulate human intelligence. These systems can perform tasks that typically require human thought, such as problem-solving, learning, and decision-making. What sets them apart are their ability to continuously evolve by processing vast amounts of data, adapting to new information, and improving its performance over time. Here are some common AI-powered technologies that you might interact with regularly:

Virtual Assistants: Assistants like Siri, Alexa, and Google Assistant are now leveraging AI to better help users with voice-activated tasks like setting reminders, searching for information, or controlling smart home devices.
Chatbots: Many websites and customer service platforms use AI chatbots to assist with answering questions, troubleshooting, and guiding customers through various processes (ex. ordering online, tracking shipments).
Facial Recognition: Commonly used for unlocking smartphones (ex. iPhone Face ID) and verifying identities in various apps and security systems.
Smart Home Devices: Home systems like Nest (smart thermostats) and Ring (smart doorbells) use AI to learn user habits and optimize home energy use or provide security alerts.
Autocomplete and Predictive Text: Applications like Gmail’s Smart Compose or texting apps predict words or phrases as users type, making writing faster and more efficient.
E-commerce Personalization: Retailers like Amazon use these systems to suggest products based on a consumer’s browsing history, previous purchases, and similar customers’ behavior.
Navigation Apps: Apps like Google Maps or Waze, provide real-time traffic updates, route optimization, and estimated arrival times based on machine learning and crowd-sourced data.

How Is AI Being Used In The Application & Hiring Process?

AI is reshaping how both job seekers and employers navigate the hiring process. With over 50% of job seekers using AI tools and 30% of employers incorporating them in some capacity, the presence is growing in day-to-day employment activities. By integrating artificial intelligence into various stages of recruitment and job searching, both sides benefit from more efficient, personalized, and streamlined workflows.

How AI Is Used By Job Seekers

Artificial Intelligence is helping to create a more efficient, personalized job search experience, allowing candidates to connect with opportunities that better match their skills and preferences. As AI continues to evolve, it is making the job search process faster and more accessible, fundamentally changing how candidates approach their next career move.

Tailored Job Recommendations: AI-powered tools use algorithms to match job seekers with roles that align with their skills, experience, and preferences. This helps individuals save time searching through job boards and ensures more relevant opportunities are presented.
Resume Optimization: Many job seekers use AI writing assistants to enhance their resumes, making them more likely to pass through Applicant Tracking Systems (ATS). These tools help identify important keywords and formatting adjustments to improve visibility.
Virtual Interview Practice: Many AI-driven platforms can now simulate interviews, giving candidates the opportunity to practice responses, get feedback, and improve their performance before they meet with real employers.

Many individuals and bloggers on platforms like Springboard have been sharing their experiences using AI tools when applying for jobs (like this post sharing recruiter tips on how to use AI for job searching). For example, some job seekers use AI platforms like ChatGPT to draft resumes, cover letters, and answers to job application questions. A growing number of candidates have reported higher response rates on applications after submitting AI-enhanced documents. Platforms like Teal allow job seekers to integrate AI-generated content into their resumes, while tools like Jobalytics help optimize resumes for Applicant Tracking Systems (ATS), increasing the chances of passing the initial screening. Additionally, candidates can use AI for personalized cover letters and follow-up emails, significantly reducing the time spent on the application process.

How AI Is Used By Employers

On the other side, artificial intelligence is speeding up the hiring process for employers by automating tedious tasks and offering deeper candidate insights. In fact, research shows that AI-powered tools can reduce screening time by up to 75%, allowing recruiters to focus on other important activities throughout the day. With a majority of companies now investing in AI recruitment tools, the technology is becoming a staple in talent acquisition strategies, enhancing efficiency and decision-making throughout the hiring process.

Resume Screening & Shortlisting: AI can quickly review thousands of resumes to identify top candidates based on specific criteria, such as skills, qualifications, and experience, drastically reducing the time recruiters spend on manual review.
Chatbots for Candidate Interaction: AI-powered chatbots assist with answering common candidate questions, guiding applicants through the process, and even conducting initial assessments, allowing recruiters to focus on more strategic tasks.
Predictive Analytics in Hiring: These systems can analyze data from previous hires to predict a candidate’s potential fit within the company, helping employers make more informed decisions and improve retention rates.

Stanford Health Care successfully uses AI to enhance its recruitment process, creating a highly personalized experience for candidates. The healthcare organization implemented an AI-driven chatbot that simplifies the job application process by suggesting relevant job matches, enabling candidates to resume their applications at any time, and answering frequently asked questions. This has significantly improved the candidate experience, leading to over 11,000 candidate leads and 35,000 unique visits in just six months. Moreover, AI has helped the HR team proactively resolve candidate issues, drastically reducing the number of support tickets from 50 per week to just one or two, streamlining operations and improving overall efficiency.

Similarly, Brother International Corporation revamped its recruitment process using AI, boosting both efficiency and candidate engagement. By adopting an AI-powered career site and customer relationship management (CRM) system, Brother saw a 140% increase in completed job applications and a 25% reduction in the time required to fill positions. The AI tools helped screen passive candidates, personalize job recommendations, and capture leads more effectively. This not only helped them hire talent faster but also enhanced their employer branding, ensuring a better candidate experience, particularly for high-volume positions like those in sales and marketing (BenchPoint)(Phenom).

Are There Problems With Using AI For Hiring?

There are many great things about the use of AI and new technology during the hiring process for both parties. However, it’s important to understand the specific challenges that businesses and individuals may encounter along the way.

AI Challenges For Job Seekers

Over-Reliance on AI Generated Content: A majority of job seekers now use generative content to draft resumes, cover letters, and prepare responses to interview questions. While these tools can save time and improve layout and formatting, over-relying on them without reviewing or customizing the output can backfire. AI can oftentimes generate generic or incorrect content, potentially misrepresenting the job seeker’s skills or experiences.
Lack of Personalization in Initial Screening: With most businesses using AI screening tools, job seekers might miss the opportunity to connect with a human recruiter early in the application process. This can create a more impersonal experience and limit a candidate’s ability to highlight qualities that may not be easily captured by these algorithms.
Potential Bias in Algorithms: AI systems are only as objective as the data they’re trained on. If the data used to develop these systems is biased, it can perpetuate existing inequalities. For example, certain demographic groups may be unfairly filtered out or prioritized based on the historical data fed into AI hiring tools, affecting diverse candidates’ chances of moving forward in the hiring process.
Limited Interview Feedback Personalized To You: Interview simulations and chatbots can provide helpful tips, but they may not always offer the detailed feedback that a human could provide. As a result, job seekers might miss out on personalized advice that could help them improve their applications or interview performance.
Increased Competition Due to AI Efficiency: AI tools make it easier for more candidates to apply for jobs quickly, leading to a higher volume of applications for each role. While this is efficient, it also means that competition is fiercer, and job seekers may face challenges standing out in a crowded field of applicants.

AI Challenges For Employers

Lack of Human Insight: AI can screen candidates efficiently but lack the emotional intelligence and nuanced understanding that human recruiters bring to the process. Employers may miss out on softer skills, personality traits, or unique perspectives that could make a candidate a great fit culturally, which are often overlooked by AI-driven systems.
High Implementation and Maintenance Costs: Deploying AI tools for recruitment and talent management can require significant investment in terms of technology, training, and infrastructure. Small to mid-sized businesses, in particular, might find the cost of acquiring and maintaining these systems prohibitive, limiting their accessibility to brand new recruitment tools.
Potential Candidate Frustration: Automated communication tools like AI chatbots can help streamline the hiring process, but they can also create a frustrating experience for candidates if overused. Applicants may feel disconnected or undervalued when interacting with bots instead of humans, which could harm employer branding and discourage top talent from applying.
Legal and Ethical Concerns: AI in hiring can raise legal and ethical questions around privacy, data security, and discrimination. Employers need to ensure they are compliant with laws and regulations, such as those concerning data protection (ex. GDPR) and equal employment opportunities. Failure to address these concerns could result in legal risks or damage to the company’s reputation.
Dependence on Quality of Data: The effectiveness of AI is only as good as the data it is trained on. If employers use poor-quality or incomplete data to build their models, the results may be inaccurate, leading to flawed hiring decisions or operational inefficiencies. Regular monitoring and fine-tuning of the systems are necessary to ensure consistent performance.

The Future Of Job Seeking & Hiring With AI

While there are challenges with the current state of artificial intelligence, the future for it in the hiring and job-seeking processes is promising. It will help bring even more innovation, making the recruitment landscape more efficient, personalized, and data-driven. Here are some key trends and developments we can expect.

More Personalized Candidate Experiences

The combination of improved AI and other technology is likely to offer even more personalized and engaging experiences for job seekers. These systems will tailor every step of the job search, from suggesting roles based on unique skill sets and career goals to offering real-time feedback and guidance. Job seekers will interact with smarter AI-driven platforms that make the process feel more human while remaining efficient.

AI-Assisted Skills Development

AI will likely play a greater role in helping job seekers identify gaps in their skills and offer tailored recommendations for online courses, certifications, and other learning opportunities. This “career coach” functionality will help candidates stay competitive by providing actionable steps to enhance their qualifications.

Improved Bias Mitigation

With growing awareness of the risks of bias in AI, future systems are likely to integrate more sophisticated mechanisms to identify and correct biases. Continuous monitoring, auditing, and the use of diverse training data will help AI systems become more equitable, offering employers and job seekers fairer opportunities in the hiring process.

Integration with Other Emerging Technologies

AI will increasingly integrate with other technologies, such as blockchain for verifying credentials and qualifications, and virtual reality (VR) or augmented reality (AR) for things like virtual interviews. These technologies will further enhance the hiring experience, making it more interactive and transparent for all parties involved.

Get Personalized Help From A Trusted Staffing Partner

Artificial Intelligence is a powerful tool when used thoughtfully, but it isn’t–and likely never will be–a replacement for a human-led and personalized, people-centered approach to staffing. At Staffing By Starboard, we don’t replace people with AI. We make sure both employers and job seekers always have access to a dedicated team member for personalized support. If you’re seeking staffing solutions with a supportive, human team, contact us today to discover how we can help!

AI Application/Hiring Statistics (2024)

95% of HR Professionals think that AI could help with the application process for candidates. (Source)
46% of people say they’d like a combination of humans and AI during the onboarding process, but they would still like to be in some contact with company employees during this period. (Source)
90% of hiring managers say that it’s acceptable to use generative AI in application materials. (Source)
Nearly 60% of job seekers are using AI in their job searches. (Source)

Frequently Asked Questions - AI In The Hiring Process

Can I Use AI For A Job Application?

Yes, but in moderation. AI should always be used as a tool, not a substitute for your own critical thinking and effort. Often, AI lacks the full context of a situation, which can result in misinformation or an inaccurate reflection of skills. It’s important to review and personalize AI-generated content to ensure it aligns with your goals and expertise.

Can Recruiters Tell When You Use AI?

Relying solely on AI to create your application materials is risky, as recruiters can often spot AI-generated content quickly. This is something you want to avoid, as it could lead to an automatic disqualification. If your application feels impersonal or overly automated, recruiters may question your authenticity and ability to perform in the role.

Do Companies Use AI For Hiring?

Many companies now incorporate AI into their hiring process in various ways, such as implementing chatbots for recruiting, using AI to screen resumes, and other automated resources. This approach is becoming increasingly popular as it helps businesses efficiently manage the growing volume of applications they receive for each open position.

Should I Use AI To Help Write My Resume?

AI writing assistants can be a great help when drafting your resume. However, once you have the basic layout and key talking points, apply your own critical thinking to refine and personalize the final version. For more tips, check out our blog on how to create the perfect resume!

What Industries Are Using AI in the Hiring Process?

Several industries are increasingly leveraging AI to streamline recruitment and the hiring process. Technology and IT has been at the forefront of AI adoption, using it for everything from sourcing and screening candidates to automating initial interviews.

Healthcare organizations use AI to hire doctors, nurses, and support staff efficiently. AI helps filter through large candidate pools, suggest suitable roles, and even assess soft skills, crucial in healthcare professions.
Retail and E-Commerce relies on AI to fill positions such as warehouse staff, customer service representatives, and IT professionals.
Manufacturers use AI to address skills gaps and streamline the hiring of both full-time employees and temporary workers.
Financial Services are using AI to find talent in specialized areas like risk management, data analysis, and compliance.