Neil Morelli, Ph.D., Chief I-O Psychologist, Codility.
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AI developments are changing so fast that even experts in the field can barely keep up. As Ethan Mollick, Wharton professor and AI researcher, admits, "Honestly, the increasing pace [of AI development] is insane..."
The same could be said by anyone trying to keep up with AI's impact on hiring and pre-hire talent assessment. But fear not. In this article, I'll share insights from two national conferences of talent assessment experts and offer actionable guidance for talent acquisition, human resources and business leaders who need to steer their recruitment strategies.
This year saw a surge of interest among industrial-organizational psychologists in adopting generative AI systems for talent assessment. Large language models have not only spurred innovations among established assessment providers but also have ushered in new players. AI-powered tools boast more predictive power, enriched user experiences and heightened scalability. Yet, complexity abounds with ongoing technology developments, such as ChatGPT's multi-modal capabilities, and changing legal terrain, such as the EU AI Act.
Here are three key considerations for leaders navigating the changing landscape of AI-driven hiring tools.
1. Embrace AI's role in reshaping skills.
As AI cements its role in our workforce, it's reshaping work dynamics. Researchers estimate that nearly a fifth of all jobs will see most work tasks influenced by LLMs. Not only can AI help redesign and consolidate job tasks, but a Harvard study found that knowledge workers utilizing AI saw significant increases in productivity. Job change and competitive advantages from AI mean that more workers will adopt these tools organically and more organizations will find ways to incorporate them.
Greater usage and adoption of AI tools will necessitate new job skills, such as AI collaboration and proofreading. Other human skills like computational thinking and complex problem-solving will hold higher value.
Not only will assessed skills change, but AI will also offer new opportunities to analyze and compare jobs. Faster, more efficient job analyses help make skills-based talent management more viable.
The message for talent acquisition and HR leaders is clear: AI agents will only become more embedded in the workplace, redefining modern competencies. TA and HR leaders should not sit idle, hoping to keep manual or legacy hiring assessments. Now is the time to refresh how you measure the skills that predict modern work outcomes.
2. Look for more AI, not less, in hiring evaluations.
Assessment developers have applied machine learning and other algorithmic methods to talent assessment for several years with the aim of enhancing their potency, precision and impartiality. Since then, many researchers and assessment developers have wrestled with concerns about the job relevance, interpretability and potential bias of using AI for hiring.
However, the I-O psychology conference presentations revealed a growing number of assessment experts are turning their attention to what's possible with LLMs. I-O researchers are already demonstrating that LLMs fine-tuned with work theory can produce more relevant and valuable assessment outputs. Research is also showing that AI-generated assessment content can have similar validity levels as human-generated content.
Talent leaders are right to approach the claims of new AI-powered evaluation methods with a critical eye, but they also should recognize that AI-based evaluations are rapidly evolving and are already overcoming current limitations. With that said, it's vital organizations collaborate with vendors that follow an evidence-based approach when incorporating AI into their hiring products.
3. Prepare to balance the benefits and risks of AI assessments.
The allure of AI-driven evaluations is undeniable, promising cost-efficiency, scalability and candidate empowerment. Yet, the path to realizing these benefits may be bumpy due to changing regulatory legislation frameworks.
Laws like New York City's Local Law 144, the Illinois Video Interview Act and California's Employment Regulations Regarding Automated Decision Systems are already in place. Proposed regulations such as the "No Robot Bosses" Bill and the White House's blueprint for an AI Bill of Rights are on the horizon.
Early adopters of AI-powered assessments should stay attuned to emerging regulations while continuing to explore how AI can benefit their hiring processes. To navigate regulatory waters, leaders should collaborate with cross-disciplinary experts, including legal counsel, assessment specialists and technical experts. Because the AI hype may subside in the near future, AI assessment buyers should set realistic expectations with stakeholders to gain a competitive edge and mitigate risks.
Conclusion
AI is reshaping talent assessment, and it's not just a trend—it's the future. As the job landscape shifts, grasping AI's potential and navigating the legal and ethical terrain is vital. To stay ahead, harness AI's power in your hiring. The real value isn't in the hype; it's in revolutionizing talent discovery.
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