Human Potential & Hiring Trends: CEO’s Q1 Update

The first quarter of 2024 is officially behind us, and as usual, there was no shortage of significant world news:

1. The European Parliament adopted the Artificial Intelligence Act (AI Act), the first of more regulations coming in the year.
2. Workday acquired HiredScore as the trend toward market consolidation continues.
3. The Bureau of Labor Statistics (BLS) reported that the U.S. economy added 303,000 jobs in March, a clear acceleration in hiring.

The world isn’t slowing down, so businesses must design hiring strategies to withstand seismic shifts. Let’s dig deeper into AI regulations and how companies should navigate vendor selection, as well as how to make smart tech stack choices in a consolidating market with high demand for skilled workers.

Artificial Intelligence Regulations & Actions

From January to March candidates completed nearly 20 million assessments on our platform. This included Virtual Job Tryouts, game-based assessments, coding challenges, and video interviews. Since many of our assessments are built upon sophisticated algorithms, let’s dive into recent AI news and what it means for you.

We’re seeing more nuanced conversations every day as world leaders lean into the expertise of practitioners and researchers, and the result is substantive work toward AI safety and regulation. In March, the European Parliament adopted the Artificial Intelligence Act (AI Act), and just a few weeks later the US and the UK signed a bilateral agreement to work together on testing advanced AI. The regulatory environment is going to get more complicated before it gets better, and according to our Global Trends Report, businesses are taking note: 34% have an internal team assessing the compliance of current products and 21% have sent requests to vendors for compliance documentation. But a significant number of leaders haven’t done anything to shore up compliance.

Why it matters

There are significant efficiencies to gain from smart implementation of these new technologies, but choosing rigorously tested products that are ahead of compliance trends is more important than moving quickly.

At a time when new products with lofty AI-based claims are being rolled out daily, it’s more important than ever to select partners that prioritize transparency and ethics. This is especially critical with hiring where there are longstanding, clear, and enforceable standards for fairness like the 4/5ths rule that needs to be upheld alongside these rapidly evolving state, local, and federal AI laws.

Hiring technology isn’t something to bootstrap, leaders need partners with robust internal compliance teams that contribute to groups like the U.S. Artificial Intelligence Safety Institute Consortium. A vendor that doesn’t have readily available 3rd party audit results and an AI Explainability Statement is not suited to handle one of the most consequential aspects of your business.

Assessments that uncover a candidate’s potential and conversational chatbots to engage candidates are absolutely essential in today’s competitive hiring environment—and they both have to be built on a rock-solid foundation of ethics compliance.

The Stabilizing Power of HR Technology

Although the US has stayed out of recession, and many economic indicators are positive, it’s undeniable that the general feelings towards the economy aren’t stellar. And if you’re a talent professional it’s easy to see why. These teams have been hit particularly hard, especially in industries such as technology and media. Still, even with topline budget reductions, 30% of talent leaders report increases in their HR tech budgets.

So now let’s connect that to market consolidation. Budget increases and consolidation show that companies want to get more done with one vendor and they see technology as a stabilizing force against constant change.

In the first three months of the year, our more than 1100 customers conducted millions of interviews and sent tens of millions of chat and text messages during their candidate interactions. There were volume increases across many industries, including retail (+14%), hospitality, recreation, and leisure (+39%), government (+146%), and communications (+244%).

Companies have a volume problem that isn’t going anywhere. They don’t want to use one vendor for chat, one for video interviews, and one for assessments. They want best-in-class products designed to flex for different hiring use cases and prefer most of it to be in one place with a solid ATS integration.

Why it matters

A seamless integration with your applicant tracking system (ATS) has always been important, but it’s more important than ever with more originating from a single vendor. Practically, this means choosing to work with vendors that have certified integration partnerships with the multiple major players in the space.

It’s looking less likely that the Fed is going to cut interest rates this summer, and budgets aren’t likely to increase. Get your leadership to see HR not just as a cost center but as a strategic talent incubator and make a clear case for return on investment from the hiring tech stack.

In our globalized economy where large language models have become de rigueur, legacy HR systems that rely on resume screening and profile scraping stick out like a sore thumb. It is long past the point where leaders can pretend there’s a difference between customer and candidate experience–bad hiring technology can sow doubt about the rest of the business.