Article by Jana Cave-Ayland

The use of AI and automation in recruitment has grown at speed in recent years. There are hundreds of tools on the market that profess to match candidates with vacancies or undertake reference checks at the press of a button.

But in doing so, AI has worsened an already terrible situation, while also creating a whole new set of challenges, adding insult to injury. This is because AI can’t fix a broken system. It can only accelerate it and find workarounds. And the current recruitment process is beyond repair.

A failed system
Consider for a moment traditional hiring practice. At its heart is the CV, which has barely changed since Leonardo da Vinci first introduced the concept some 400 years ago.

In a bid to deal with such outdated documents and manage the information within them, CVs are saved in centralised databases. These are a hacker’s delight, offering a wealth of personal data for identity theft. Inevitably, there have been high profile cases of data breaches. For example, when the US recruitment site Ladders exposed 13 million user profiles[i].

Meanwhile, job adverts engage in a ‘spray and pray’ approach. They’re often badly written, poorly targeted and result in either too many unsuitable applicants or not enough relevant ones. This leads to the Herculean task of wading through CVs, 63 per cent of which hold misinformation,[ii] costing businesses £23 billion annually.[iii]

Then comes the highly subjective interview where people are turned down for ‘not being right’ before the laborious job of referencing successful candidates. Inevitably, a third of those hired leave within 90 days[iv]. To say this is a poor process is an understatement of epic proportions.

A troublesome solution
To tackle the situation, practitioners have embarked on one of the biggest mistakes any digital transformation project can make: trying to automate a bad process with AI.

Why on Earth would anyone automate a broken system? It’ll certainly speed things up, but it’s like putting a McLaren engine in a Morris Marina. Start it up and the wheels will soon fall off. Not to mention the doors, seats and windows.

Yet this is exactly what’s happening. And it’s creating a raft – actually, a super tanker – of problems. Firstly, with such a damaged and fragmented framework to operate within, AI’s been forced to make decisions about who gets hired or even who sees job ads.

This can lead to indirect discrimination and bias. In fact, UK GDPR rules restrict employers from making solely automated hiring decisions[v]. The ICO is now investigating rule breaking[vi]. The EU and US are also legislating.

Secondly, once AI has chosen candidates, it has the task of referencing. Or in other words, checking to see if a candidate is lying. Really? If the hiring process worked, referencing wouldn’t exist. Every word on a CV would be true.

Rather than address the problem, AI begins digging through hundreds of databases to get every detail it can about the applicant. Credit scores, social media posts, tax status, education, convictions. It’s muckraking on an industrial scale. Perhaps even stalking. There’s no regard for relevance to the job, let alone privacy. In short, employers are overstepping the boundaries massively.

Thirdly, in doing all of this, AI draws upon huge volumes of data that humans can never hope to understand. As a result, it cannot ‘explain’ its decisions simply. The AI becomes a sealed black box that holds people’s futures inexplicably within. It obscures the thousands of turns it took to get to the destination precisely because the journey was so arduous.

With this in mind, HR leaders need to ask themselves whether they want to allow people’s livelihoods to be decided by a supercharged bull rampaging through the china shop of recruitment at a thousand miles an hour. It’s not good for jobseekers, could be in breach of the law and puts the reputation of employers under the spotlight.

The looming battle
This begs the question, what can be done? What solutions can enter the fray to fight off troublesome AI? The answer lies in fixing the recruitment process. Enter Web3 technologies. These include blockchain, decentralisation, digital identities and verifiable credentials. Together, they form the backbone of what could be the world’s first modern hiring ecosystem.

In such an instance, jobseekers would have an upgraded, smart CV held securely on their phone in a decentralised app-based wallet. This can grow alongside their career and would hold verified proof of qualifications from education and skills bodies. It would be easy to share and would allow employers to find jobseekers based solely on the skills needed, rather than identity.

Meanwhile, employers would have access to an open, skills-based hiring platform, built on verifiable credentials. Instead of having to publish job ads, employers would be able to approach relevant, verified candidates. And because qualifications and skills are authenticated by awarding organisations through Web3 technologies, there’s no need for referencing.

How Web3 will win the fight
To paint a picture of how it may work, imagine a graduate seeking a role with one of the big four accountancy firms. All currently use the same skills assessment to hire graduates. As such, applicants must sit the same test multiple times and are unable to claim ownership of the results. It’s time-consuming and inefficient.

With Web3 technologies, the candidate could sit the exam once, claim their score and store it in their mobile wallet. The assessment provider would then verify the credential using blockchain technology. The same goes for their degree. The accountancy firms could then choose candidates solely on their assured skills, with the addition of a chemistry meeting if needed.

No need for traditional CVs, job ads, multiple tests or referencing. It’s fairer, simpler and more secure. AI could be introduced to this ecosystem to manage processes but would have few of the challenges associated with the way it’s currently deployed.

It’s clear AI and Web3 are lining up for a battle royale. AI has landed the first blow. But in doing so has shown just how unstable and unready it is for such a fight. While it might win other battles better suited to its strengths, when it comes to facing Web3 in the recruitment arena, it’s in the for the fight for its life.

I for one, won’t be betting on it.

[i] Job recruitment site Ladders exposed 13 million user profiles, TechCrunch, May 2019

[ii] New Study: 63% of Job Applicants Admit to Lying on CV!, OnRec, March 2020

[iii] Recruitment fraud now costs businesses £23 billion annually, People Management, April 2019

[iv] Why 33 Percent of New Employees Quit in 90 Days, Psychology Today, March 2019

[v] The legal pitfalls of using AI in recruitment, People Management, January 2022

[vi] AI recruitment systems to be investigated over discrimination worries, Personnel Today, July 2022