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AI in recruiting: where it is used, the opportunities and the limits

In short

AI is arriving in recruiting – from automatic job postings through CV parsing to chatbot interviews. It promises efficiency and objectivity but carries risks such as bias, loss of control and low acceptance among applicants. Here are the main uses, the pros and the cons.

Key takeaways
  • 47,4 % of recruitment agencies already use AI tools (Barometer Personalvermittlung 2022).
  • Uses range from automatic job postings through CV parsing to chatbot interviews (robot recruiting).
  • The biggest risk is bias: skewed training data leads to discriminatory decisions.
  • 64,7 % of applicants reject AI in recruiting (IU study) – transparency is a must.

Hardly any topic is as present as artificial intelligence (AI). It is finding more and more uses in HR too – particularly in recruiting, that is in selecting applicants. Some companies already use systems that support the selection or take on whole steps of the process.

What is artificial intelligence?

A clear definition is difficult. AI is usually understood as an umbrella term for applications in which machines perform human-like feats of intelligence – learning, judging and solving problems. Among them are machine learning, computational linguistics (NLP) and computer vision, but also reasoning, planning and optimization. In recruiting, the systems that matter most are those that understand language and derive patterns from large volumes of data.

How can AI be used in recruiting?

AI can potentially accompany the whole application process. At the start there is the automated creation of job postings; in first contact, chatbots answer applicants' questions and even conduct first conversations – so-called robot recruiting. In screening, systems take on CV parsing, that is reading out and pre-sorting CVs automatically.

Beyond that, talent can be approached actively on platforms such as LinkedIn (social recruiting), and analysis tools draw conclusions from conversations about skills and later job performance. The range therefore runs from simple support to largely automating whole steps.

What are the advantages of AI in recruiting?

According to Barometer Personalvermittlung 2022, 47,4 % of recruitment agencies already use AI tools; in HR departments it is 19,9 %.[1] The appeal lies above all in Efficiency: routine tasks get done faster and more cheaply, which noticeably relieves HR and frees up time for strategic work.

On top of that comes the Availability – chatbots answer around the clock and often in several languages. And in theory AI brings more objectivity, because it decides by consistent criteria rather than by how the day is going and unconscious prejudice. Whether that promise holds in practice depends heavily on the underlying data.

What risks does AI in recruiting carry?

That is exactly where the biggest risk lies too: bias. If the training data is skewed, the AI makes discriminatory decisions – by gender or origin, for example. Anyone relying on external tools also enters into dependence on the vendor, since the dataset, its further development and its availability are not in their own hands.

Another problem is loss of control, because AI rejections are often not given traceable reasons. Not least, the Costs for purchase, operation, maintenance and onboarding are considerable – and acceptance is low: according to an IU study, 64,7 % of applicants take a negative view of AI in recruiting.[2]

AreaOpportunity with AIRisk / danger
EfficiencyFaster pre-selection through CV parsingHigh purchase and operating costs
objectivityConsistent selection criteriaBias from skewed training data
AvailabilityChatbots around the clock, in several languagesLow applicant acceptance (64.7% negative)
ControlDecisions based on dataLoss of control, rejections hard to justify

What should companies bear in mind when using AI?

Using it needs good preparation. Companies should think four points through from the outset:

  • Cover it legally: comply with data protection (GDPR, BDSG) and the German General Equal Treatment Act (AGG).
  • Secure the systems: protect sensitive applicant data from manipulation and unauthorized access.
  • Train people: make HR staff, users and admins familiar with the tool.
  • Stay transparent: disclose when AI is used – and offer a traditional alternative.
Worth knowing

The biggest lever at present is not fully automatic selection but taking routine off people's hands – with full transparency towards applicants.

Conclusion

AI in recruiting is a young approach with real efficiency potential, but also with uncertainties – from bias to low acceptance. Anyone using it should start small and transparently, stay on the right side of the law and not replace human contact entirely. Used properly, AI becomes a tool that supports people in recruiting – not one that replaces them.

Frequently asked questions

What is artificial intelligence (AI)?

AI is an umbrella term for applications in which machines perform human-like feats of intelligence such as learning, judging and solving problems. Among them are machine learning, language processing (NLP) and computer vision.

How is AI used in recruiting?

Typical uses are automated job postings, chatbots for applicants' questions and first conversations, CV parsing for pre-selection, social recruiting on platforms such as LinkedIn, and analyses of skills and job performance.

What risks does AI in recruiting carry?

The biggest risks are bias and discrimination from skewed training data, dependence on the vendor, loss of control where decisions cannot be traced, high costs and low acceptance among applicants.

What do companies have to bear in mind when using AI?

They have to comply with data protection (GDPR, BDSG) and the German General Equal Treatment Act (AGG), secure their systems, train their people and stay transparent towards applicants – including offering a traditional alternative.

Sources
  1. Barometer Personalvermittlung 2022.
  2. IU Internationale Hochschule – study on the acceptance of AI in recruiting.
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The Pactos editorial team
HR & technology

The Pactos team writes about the external workforce, AÜG compliance and vendor management, close to practice for procurement, HR and finance.

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