Guess how much a bad hire can cost your company?
Anywhere between $25,000 – $50,000. That’s quite a heavy hit for any company.
Although these figures come across as daunting, Artificial Intelligence (AI) is increasingly being woven into recruitment workflows to prevent hiring managers from making less-favourable decisions to begin with. As resumes pile up, it’s challenging to determine which candidates are the best fit in terms of experience, knowledge, and cultural fit. AI not only eases crucial parts of the recruitment processes, but also provides several benefits for both recruiters and candidates.
Here are the top benefits of using AI in recruiting:
1. Removing bias from your recruitment workflow
The first aspect of any resume that catches a recruiter’s eye is the name printed across the top. That name indicates attributes about a candidate, like gender and ethnicity. Whether consciously or not, a candidate’s name can affect their likelihood of getting the first interview call. Bias in the hiring process is still one of the most critical hindrances to quality recruiting. This is evident in how minority job applicants are “whitening” their resumes by deleting references to their race in hopes of boosting their shot at landing the first interview. What’s concerning is that this strategy has been paying off. An article published by Forbes claims that hiring managers are more than 2X as likely to call a minority candidate for an interview after they submit a “whitened” name on their resume compared to candidates who reveal their race.
A common hiring practice across the world when meeting candidates face-to-face is judging candidates based on “gut” feel or unconscious bias stemming from a hiring manager’s upbringing or previous experiences. One way to eliminate hiring bias and improve workplace diversity is to implement an AI software for recruitment. Because AI algorithms stem from data intelligence, they can identify and eliminate biases, both conscious and unconscious. This increases the likelihood that candidates are chosen based on their talent, knowledge, and capabilities as opposed to their gender, race, or name.
2. Filtering out top quality candidates
The quality of your applications depends on the initial candidates you’re attracting. The type of candidates (as well as the volume) of candidates that apply to open positions at your organization correlate directly with the reputation of your organization and employer branding. In the early stages of the applicant filtering process, AI can help assess candidates based on criteria beyond what’s listed on a resume, like their intent and motivation.
Pro tip: One tool that can help you to screen and qualify candidates is impress.ai, an AI chatbot software for recruiters. The platform engages and assesses candidates based on pre-screening questions, scenario competency based questions, and knowledge based questions. According to Nisa Rahman from The Creative Square Company, “I like how the platform has changed my perception. When I look at what the candidate says on the screen, it shows a different side to them that I wouldn’t have seen on their CV. A lot of candidates are also able to share better insights when typing out responses. Plus, if the interview is recorded, I can refer back to it later for reference before having the the face to face interview.” Read more about her experience using AI chatbots for recruitment here.
3. Creating a more positive and engaging recruitment experience for candidates
Recruitment is the gateway into any company; it’s where first impressions are made. Since engaging candidates is an important part of the recruitment process, many AI recruitment tools are created with candidates in mind, making the hiring process a positive experience for both, recruiters as well as candidates.
When candidates can easily get answers to their questions and access information instantly, they’ll feel more compelled to stay connected with your organization. If they’re having a positive experience while applying to an open role, they’ll be even more excited to come onboard.
On the reverse side, if a candidate applies to a company and receives an automated rejection email without any clear reason, or worse – no reply at all, they are likely to walk away from that experience with a negative view of the brand. Candidates are very likely to share these negative experiences online, with their friends, and their family. According to CareerArc’s research, 72% of candidates who had a bad experience told others about it.
One possible reason why candidates go through experiences like these are because in-house recruiters are inundated with busy tasks, which can lead to applicants falling through the cracks or slow response times. You may be surprised to know that 65% of resumes are ignored at the top of the hiring funnel, and almost 2/3 of applications are missed by recruiters. And this is largely due to the burden of manual screening. Incorporating AI-powered chatbots provides a a better communication channel because recruiters have more time to spend on work that requires actual human interaction. Automation ensures that qualified candidates will stop slipping through the cracks.
It’s frustrating for candidates to send follow-up emails and wait endlessly. By eliminating hurdles in the hiring process, more candidates are likely to complete an interview application, creating a smoother recruitment experience for both parties. For example, Forbes published an article about how DBS Bank uses JIM, an AI virtual recruiter to respond to 96% of all candidate queries and improve completion rate of job applications from 85% to 97%.
Pro tip: HR software can guide candidates through a step-by-step interview process so their interest is acklowelged and appreciated. These systems can be programmed to let selected candidates know of next steps in the process immediately. And if candidates aren’t suitable for the role, they can be notified of better fit opportunities within the organization.
4. Saving time by automating manual tasks
Recruiters spend up to 1/3 of their time dealing with tasks like scheduling and screening. When these tasks aren’t taken care of, workflows can are disrupted and candidates are left wondering about next steps in the hiring process. Most mundane tasks that recruiters would rather not deal with can be automated using AI. Many of these tasks involve repetition and are time-consuming. One way to save time and automate these low-value tasks is by introducing an AI system into the recruitment process. This frees us time for your recruiters to focus on the high value activities, like building relationships with quality candidates.
Building relationships is key. When you’re able to establish true connections with applicants, they get excited about your company’s values and goals. Your new hires become intrinsically invested in the organization, encouraging them to stay around longer, while also allowing your team to get more done.
Pro tip: From resume screeners to scheduling software, the HR technology industry is overflowing with automation software created for recruiters to overcome these common everyday challenges. AI chatbots offer a great way to improve efficiency and save time. Read our featured case study about a Singapore bank that saves up to 40 man-hours per month using AI recruitment bots.
5. Hiring that is cost effective
Advertising agency fees, recruiter salary and benefits, employee referral bonus, employee relocation costs, sign-on bonuses, and more. These all factor into hiring costs and depending on the industry your team works in, hiring costs can range anywhere between $1,000 – $5,500.
Although AI systems normally come with costs to the department, it should be seen as a long term game with a positive impact on long-term ROI.
Not only will AI reduce your need to hire additional recruiters to complete manual tasks which could have been otherwise automated, the system can help hiring managers make more informed decisions so the right candidate is given an offer letter the first time around. You’ll also see reduced turnover rate and save money on training, signing bonuses, and other expenses associated with onboarding new employees.
6. Optimizing recruitment processes
If recruitment processes are lengthy and complicated, top talent can easily turn to your competitors. When determining how optimized your team’s hiring process are, start by looking at recruitment metrics. This is an area where AI excels – compiling large amounts of data and turning it into easy-to-understand charts. Recruiters who haven’t been trained in analytics are often able to extract just enough insights to see where their process is lacking and how to use data for improvement.
Common recruitment metrics to track include:
Time to hire
Time to hire is the number of days between contacting a candidate until the time that candidate accepts the job offer. In other words, it measures the time it takes for the candidate to move through the hiring process once they’ve applied. Time to hire provides an indication of how the recruitment team is performing. This metric is sometimes referred to as ‘Time to Accept’.
Cost per hire
The cost per hire is the total cost invested in hiring divided by the number of hires.
= Total recruitment cost/Total number of hires
= Total internal cost + Total external cost/Total number of hires
Employee retention rate
Employee retention rate is a helpful statistic for an employer to calculate, both as a benchmark as well as periodically.
Here is the formula: Divide the number of employees who left during a specified time period by the total number of employees at the end of a period to get the percentage.
|Sample Inputs||Sample Calculation|
|Period of Time: First QuarterTotal Employees at Beginning of Q1:25Total Employees Terminated in Q1: 5||25 – 5 = 20 20 / 25 = .80.80 x 100 = 80%|
Standard employee retention rates fall anywhere from 70% – 85% but vary based on industry and calculation method.
Pro-tip: If you’d like to see what your recruitment metrics dashboard could look like, email firstname.lastname@example.org to start optimizing your recruitment processes.
PwC named AI one of the top eight technologies in business, and IDC predicts AI will be a $47 billion market by 2020. AI is a disruptor, and it is making the world of talent acquisition smarter. If you’re not adding AI into your recruiting process, or at least reading up on the possibilities, you’re definitely missing out.
Is your team ready to experience how AI can improve recruitment processes? Email email@example.com today. We’ll show you a easier way to overcome your hiring challenges and transform how your team finds top talent in 2019.