AI in hiring: Is it a help or a hindrance? The rise of artificial intelligence in the job market is causing quite a stir, making companies and job seekers alike question the future of employment. As the labor market shows signs of slowing, AI-driven tools are rapidly changing how we find jobs, and the results are, well, complicated.
More than half of the organizations surveyed by the Society for Human Resource Management in 2025 were already using AI to recruit workers. Moreover, a significant portion of job seekers, approximately a third of ChatGPT users, have turned to AI chatbots to assist with their job searches.
But here's where it gets controversial: Recent studies suggest that when job seekers rely on AI, their chances of getting hired actually decrease. Simultaneously, companies are being flooded with applications. This creates a challenging paradox.
Anaïs Galdin, a researcher from Dartmouth, co-authored a study examining the impact of large language models (LLMs) on cover letters. She points out a concerning trend: "The ability (for companies) to select the best worker today may be worse due to AI." Galdin and her colleague, Jesse Silbert from Princeton, analyzed cover letters from tens of thousands of job applications on Freelancer.com. They found that after ChatGPT's introduction in 2022, cover letters became longer and more polished, yet companies seemed to place less value on them. This made it harder to distinguish qualified candidates, leading to a drop in hiring rates and lower starting wages.
And this is the part most people miss: Employers are increasingly automating the interview process itself. A majority (54%) of US job seekers surveyed by Greenhouse, a recruiting software firm, in October said they've undergone an AI-led interview. Virtual interviews gained popularity during the pandemic in 2020, and now, many companies use AI to ask questions. However, this hasn't made the process any less subjective.
Djurre Holtrop, a researcher studying the use of algorithms and LLMs in hiring, warns, "Algorithms can copy and even magnify human biases. Every developer needs to be wary of that." Daniel Chait, CEO of Greenhouse, describes the situation as a "doom loop," where both employers and job seekers feel frustrated. Employers are embracing the technology—the market for recruiting technology is projected to reach $3.1 billion by the end of this year. However, state lawmakers, labor groups, and individual workers are pushing back, fearing AI could lead to discrimination.
This raises a crucial question: Could AI perpetuate biases? Liz Shuler, president of the AFL-CIO labor union, calls the use of AI in hiring "unacceptable," stating that AI systems can "rob workers of opportunities they’re qualified for based on criteria as arbitrary as names, zip codes, or even how often they smile."
States like California, Colorado, and Illinois are enacting new regulations to set standards for AI in hiring. While a recent executive order by President Donald Trump may create some uncertainty, existing anti-discrimination laws still apply. Lawsuits are already being filed, such as the case of a deaf woman suing HireVue, an AI-powered recruiting company, over accessibility concerns. HireVue denies the claim, stating its technology aims to reduce bias.
Despite initial challenges, AI in hiring appears here to stay. New AI developments have led to more sophisticated resume analysis, potentially opening doors for overlooked candidates. However, those who value the human touch in hiring are left wanting. Jared Looper, an IT project manager, found his AI-led interview "cold" and now worries about those who haven't yet mastered the new AI-driven hiring process. He fears that "Some great people are going to be left behind."
What are your thoughts? Do you think AI is a positive or negative development in the hiring process? Share your opinions in the comments below!
