The State of Adoption of AI in Recruiting

| Ameya Deshmukh
Artificial Intelligence, HR Digital Transformation | 7 min read
Get on the right side of AI for talent acquisition's adoption curve to secure a lasting competitive advantage

Did you know that 56% of HR organizations are using AI in recruiting right now? Did you know that by the end of 2021, you can expect to see 77% of HR organizations use this new recruiting technology?

In this article, I’ll discuss:

  1. What AI in recruiting is and how it is being used
  2. The 5 types of technology adopters using AI in recruiting
  3. How many companies have adopted AI for recruiting
  4. If AI for recruiting is actually effective
  5. Why Talent Acquisition leaders must adopt AI today

What is AI in recruiting and how is it being used?

Artificial intelligence for recruiting is a broad category that includes conversational AI, machine learning, predictive AI, and recruiting chatbots. Any recruiting technology that leverages AI in a meaningful way falls into this category.

The two main benefits of AI for recruiting are that it makes hiring teams more efficient and makes the candidate experience more positive. AI for recruiting can also integrate with your ATS, CRM, and HRIS.

What you might not know is that unlike previous innovative recruiting technology, AI is being adopted very rapidly by the world’s leading companies and the world’s largest staffing agencies. If you’re thinking about AI – you’ll want to think about the timing around when you’ll look to adopt.

To help with you with that – I’ve mapped the current and projected adoption of AI in recruiting to a technology adoption curve model. If you’re unfamiliar, the concept of the technology adoption curve was popularized by Everett Rogers in his book Diffusion of Innovations. This model is widely accepted as applicable to most technology adoption trends.

The 5 types of technology adopters using AI in recruiting

The adoption curve categorizes technology buyers as one of 5 subtypes. As you read through this section think about the way you’ve adopted recruiting technology in the past. Which type of technology adopter are you?

  1. Innovator
  2. Early adopter
  3. Early majority
  4. Late majority
  5. Laggard

the technology adoption curve
Here’s more information on the adoption curve from Stanford 

Are you an Innovator?

Don’t be offended, but innovators only account for 2.5% of technology adopters. I don’t think you are part of this group, but that doesn’t mean you aren’t innovative. This is just a term.

Innovators expose themselves to the greatest amount of risk. Their organizations are built to adopt recruiting technology rapidly. They’re constantly testing new technology and looking to create competitive advantages through adopting it.

There’s also very very few of them. 

Think about the talent acquisition and HR organizations that have earned your professional admiration. They are probably innovators.

Are you an early adopter?

Early adopters have more tolerance for the risk that can come with using new technologies. If you are an early adopter, you are aware of the competitive advantages that stand to be gained from recruiting technology.

You have a few experimental strategic initiatives running right now. While your organization isn’t built from the ground up to acquire or create new technology your culture and leadership support tech adoption.

Are you part of the early majority?

Because of their strong experimental cultures, innovators and early adopters have a greater appetite and ability to manage risk. For most talent acquisition teams, the best kind of recruiting technology adopter to be is a member of the early majority.

Early majority adopters use new technology after it has been proven to be effective by innovators and the early majority. If you’re part of the early majority it just means you adopt technology when you know it works!

This is the best way to adopt for most HR organizations.

Innovators & early adopters of AI for talent acquisition plan to scale its use by 200-400%.

Innovators & early adopters have been successful. They've moved onto scaling.

The late majority and laggards

The late majority waits to adopt until it becomes necessary to keep up with their competitors. You want to be proactive with your technology not reactive. Since you’re reading this article, I doubt you’re part of the late majority.

I also really doubt you are a laggard!

Laggards wait until the last possible moment. They’re constantly behind on technology adoption and slow to move. When it comes to AI in recruiting avoid being a laggard. If you wait till 84% of companies are using AI for recruiting you’ll be outpaced.

How many companies have adopted AI for recruiting?

A study based on a simple random sample of 484 HR professionals who worked at a mix of small firms, enterprise organizations, local and global staffing firms found that in 2 years’ time 77% of HR organizations will be using AI for talent acquisition.

The same study found that currently, 56% of HR organizations report already using AI for talent acquisition. Because 56% of HR organizations report using AI already, the data suggests that the adoption of AI for talent acquisition has surpassed both the innovators and early adopters.

The adoption curve is in the “early majority” exactly where you want to be, but that won’t last for long. 

statistics on the adoption of AI by HR organizations for talent acquisition

Of the organizations using AI for talent acquisition about a fifth use it to a high or very high degree, half of the remainder use it to a moderate degree, and the final half use AI to a low degree.

Self-reported adoption growth projections through 2020 and early 2021 add context and color to this picture. The adoption growth projections are the greatest in the categories of high and very high usage. Both of these were reported by talent acquisition and HR professionals to expand 300 and 400 percent respectively.

increased use

The data from Hr.com’s report definitively indicates that AI adoption for talent acquisition has seen nearly 100% acceptance by the early adopter segment. It is also showing strong indicators of achieving rapid adoption by much of the early majority.

Have you considered AI yet?

Is AI for recruiting actually effective?

L’Oreal is using AI for recruiting to support screening over 1 million applicants to find qualified candidates for its 15,000 jobs. The results have been quite positive.

One of the stories, L’Oreal publicly shared was that for an internship program with 80 open spots, AI for talent acquisition was used to screen 12,000 applicants. L’Oreal saved 200 recruiting hours and hired their most diverse group of interns to date.

The world’s leading brands and staffing agencies use AI for recruiting. 

L'Oreal's results from using recruiting AI

Deploying AI has created positive results by delivering efficiency gains and enabling L’Oreal to further it’s diversity initiatives. But how was AI been received by their candidates?

The AI system succeeded in engaging 92% of the candidates it reached out to in conversation and received nearly 100% positive feedback from the candidates. L’Oreal reports that candidates say that the experience of interacting with their AI for talent acquisition was easy and felt personalized.

Recruiting AI makes recruiting teams more efficient, improves diversity, and creates positive candidate experiences.

 

Is now the right time to adopt AI for talent acquisition?

The effectiveness of AI in recruiting is proven. It’s been adopted and is being used successfully by many of the world’s leading Fortune 500 brands including L’Oreal and PepsiCo. AI has also seen significant adoption by leading staffing and RPO firms including Adecco, Advantage Solutions, and Sevenstep.

Innovative AI for recruiting startups are well funded and backed by leading VCs 

The market for recruiting AI has seen significant development. Billions of dollars have been invested by VC firms and AI innovators into the AI marketplace.

Venture capital funding in 2019 alone for HR tech hit 5 billion dollars. Purchasing AI for talent acquisition today means navigating a highly developed marketplace.  Solutions are available to suit a plethora of customer needs from the needs of a small 15 person staffing firm to the vastly different requirements of corporations with thousands of employees and millions in annual recruitment costs.

AI for recruiting is proven, well-built, and startups are well funded. 

Venture Capital Funding for recruiting technology in 2019

McKinsey forecasts significant financial benefits for AI adopters  

There is a significant financial benefit for AI adopters. McKinsey estimates that overall, AI could add $13 trillion to the global economy by 2030, with quick to act adopters doubling their cash flow over that period.

While the McKinsey projection was not specific to HR, it did consider the HR function, and reports from companies like L’Oreal demonstrate that AI does make recruiting more efficient, leading to time and dollars saved.

Gartner reports “the speed of adoption of AI is accelerating”

This supports my finding that AI for talent acquisition is being adopted by the early majority. Gartner reported a substantial acceleration in the adoption of AI by leading companies. Their study also found that adopting automation technology that could manage automated screening and robotic interviews were the 2nd most important project type.  Building more efficient talent acquisition was named as a primary motivator for adopting AI by 20% of respondents.

Josh Bersin believes AI for recruiting is a transformative technology

Josh Bersin believes that AI will cause a bigger disruption to HR than any technology or challenge has over the last 25 years. On July 30th, 2019, in his article HR in the Age of AI: Lots of Change Ahead, Josh Bersin wrote, “For us as HR leaders, AI will change every process we touch. The way we source, assess, hire, train, develop, pay, and move people is all being informed by AI.”

A quote from Josh Bersin on the impact of AI on HR

Recruiting AI is already expanding from sourcing and screening automation to offering full life-cycle support. Soon, AI technology will be used beyond talent acquisition. The companies that adopt it now will be in a better position to later use it across the entire employee lifecycle.

Talent Acquisition leaders must adopt today or face challenges later

The market is showing strong and compelling signs that indicate right now is the best time to adopt AI for talent acquisition. Waiting too long to adopt AI could place your company in the late majority or even in the laggard category.

The late majority begin to adopt technology when more than 60% of the market is already using it, and the laggards don’t adopt after nearly 85% of the market. While waiting for the late majority or laggard stage may have worked with HR technology in the past, the disruptive impact of AI makes it dangerous to wait.

The power of machine learning compounds the effects of AI over time

The longer you wait to adopt AI for recruiting the greater your risk of being disrupted by a competitor with mature AI capabilities.

AI becomes more powerful and intelligent over time through a process called machine learning. Machine learning is powered by large amounts of data that the AI gathers overtime.

Innovators and early adopters have already gained significant competitive advantages simply from adopting AI in its current form. As AI continues to operate and grow in its recruiting environments it gathers data.  It’s trained on this data and becomes even more effective over time.

Machine learning will create an even greater divide between organizations that adopt early and those that adopt late. With recruiting technology as powerful, increasingly pervasive, and transformational as AI for talent acquisition, you need to be wary of missing the boat.

In the next article, I’ll cover the types of AI for talent acquisition available on the market today as well as the questions you should ask recruiting AI vendors to help you determine which vendor and solution type is best suited for your needs.

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