Q3 Recap: How AI is driving a skills-based hiring revolution

I’m officially declaring the death of the resume in 2025.

Next month marks the second anniversary of ChatGPT’s launch, and since that time we’ve seen generative AI integrated across business operations of all kinds. From the way we all write emails and talk to chatbots to Google DeepMind’s biology prediction tool for drug development–the AI revolution is here and it’s not slowing down. 

And if you’re in the hiring space, generative AI has done the thing we’ve long hoped for. It has killed the 100-year-old inference tool. Of course, resumes won’t go away completely, but their relevance is diminished to the point that hiring with them as a primary decision point for employment is counterproductive at best and harmful at worst. 

Let’s dig into the Q3 numbers, how we move through a landscape of generated cover letters and resumes, and the Great Reallocation as a real-world illustration of human potential. 

HireVue’s Q3 Platform Data

Every year the Bureau of Labor Statistics revises the jobs numbers, and this year we saw one of the largest downward revisions since 2009. But, and this is important, job growth was still historically strong, and we’re seeing that strength reflected once again in our platform data. 

In Q3, we saw significant sector-specific volume increases due to hiring campaigns in the following industries: Banking and finance (+137%), groceries (+186%), food and beverage (+92%), and technology (+287%).

As we all brace for the conclusion of the US presidential election and interpret what has been a continually paradoxical economic mood, my outlook remains largely positive. My outlook is in large part from seeing up close how our customers across industries are crafting smart strategies with a blend of caution and optimism. The good news, again and again, is that the labor market continues to show signs of resilience. 

Let’s dig into the collapse of the resume and the “Great Reallocation.”

A Copy of a Copy of A Copy

Industrial organizational psychologists have been warning us for decades that resumes are not predictive, but they’re even less so at a time when nearly every resume is generated by a large language model. In a paper published in the journal Nature, researchers demonstrated what “model collapse” looks like when an AI is trained on its output. Researchers used drawn digits to demonstrate collapse and the visuals were striking. While we’re not at a point of total resume collapse, the coverage should serve as a cautionary tale for hiring teams. 

Companies are going to need to validate skills in real-time and at scale to accurately predict successful hires.

Please don’t construe this as finger-wagging at candidates who use generative AI to write cover letters and resumes–they’re using what’s available to be efficient, present themselves in the best light, and to help get the best shot at opportunity. Using Claude for resumes is the 2024 equivalent of a calculator for math homework. It’s to be expected that people will leverage all of these tools. 

The "Great Reallocation" and Productivity Gains

A recent analysis by Recruitonomics discusses how worker churn might actually be contributing to the recent burst in productivity across various sectors. While high turnover can traditionally be seen as disruptive, in the current environment, it has played a role in reallocating talent more effectively across the economy. Julius Probst, PhD describes the stages of the productivity J-curve and it’s something worth keeping in mind as more businesses move toward a long-view of hiring and bringing on people from across industries:

• Initial Decline: When a worker first starts a new job, they are unfamiliar with the specific tasks, processes, and work environment. This unfamiliarity leads to lower productivity initially as they learn the ropes. 

• Adjustment Period: As the worker becomes more accustomed to their new role, their productivity starts to improve. They begin to understand the workflow, the tools, and the expectations. 

• Learning and Mastery: Over time, the worker’s productivity increases as they gain proficiency and confidence in their tasks. They become more efficient and can handle more complex responsibilities as they start to master their new role. 

In their recent session at HR Tech, Dr. Lindsey Zuloaga and Dr. Mike Hudy discussed the impact hiring teams will face in the coming years, including the fact that 69 million new jobs will be created between 2023-2027 and 25% of today’s jobs will be disrupted in the next 5 years. To respond to these seismic changes they emphasized the importance of skill clusters, which is the relationship between jobs that enables candidates to successfully transfer their skills to new domains (e.g. teachers are well-suited to become solution architects).

At the end of the day, the "Great Reallocation" is a macro reminder that a forward-looking, skills-based approach to hiring can actually unlock long-term innovation and growth.

Looking Ahead

Veterans of hiring may see parallels to previous technological leaps, but I sincerely believe that the changes just around the corner will be unlike anything to come before. With generative AI challenging traditional tools like resumes and the growing need for real-time skills validation, businesses must adapt quickly. The "Great Reallocation" highlights how embracing agility can contribute to productivity gains and long-term innovation. We’re already well on the way, but sooner than later, companies that embrace forward-looking selection tools like skill assessments will have an undeniable lead in the race for talent.