Conversational AI
4 min read
January 31, 2024

CEOs think almost half of the hiring process is inefficient. Here's why — and how to fix it.

PWC's annual global survey of CEOs found that hiring is considered one of the least efficient organizational processes. They've also found that it's one of the biggest drivers of growth. We identified a critical reason why that disconnect exists, and how organization can solve for it.

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Don’t you love it when data confirms your prior beliefs?

New data from PWC says that CEOs see hiring as the 3rd most inefficient process across their businesses. Specifically, they believe 40% of their entire hiring process is inefficient.

Actually, let me clarify. This is recent data, but it’s not really new. 

Last year, Harvard Business Review found that nearly ¾ organizations weren’t satisfied with their hiring effectiveness. And frankly, the pitfalls of the typical hiring process have been known for so long that they could’ve been written in cuneiform. 

Research shows that solving hiring inefficiencies is one of the best things a business can do to boost their employee retention and profit margin. And 77% of CEOs say hiring is their most critical growth driver.

AKA: problems surrounding hiring inefficiencies are problems you want to solve.

Luckily, the solutions are already out there. 

In the grand scheme of things — yeah, this stuff is complex. There are a lot of reasons why hiring can be inefficient. But there’s one critical factor behind the inefficiency metrics, and smart companies have found a way to turn that inefficiency into a competitive advantage.

Why recruiting inefficiencies occur.

It’s pretty simple probability. 

The more steps you have in a system, the more likely it is for bottlenecks to occur. 

And most hiring processes have a lot of steps:

  • Capture candidate
  • Screen for qualifications
  • Schedule interview(s)
  • Have the interview(s)
  • Send an offer
  • Onboard the candidate
  • Get them to show up for Day 1

In most cases, you cannot eliminate these steps. So your only hope to have an efficient process is to maximize the efficacy of each individual step. The problem? There is limited time in the week to do all of these things. It’s extremely difficult to be both entirely manual and entirely efficient, at least at scale.

Say you have to hire 50 people in one month and your recruiting team is manually screening and scheduling everyone. Human error occurs. Someone forgets to respond. 

The more inefficient your recruiters are, the worse of an experience it is for your candidates, who are then more inclined to abandon the process altogether. We’ve seen this happen time and time again. A lack of an optimized workflow brings about inefficiency, which brings about profit loss.

For example, let’s take a look at a little company you might’ve heard of named Nestlé. 

Nestlé was having recruiters manually run every step of their hiring process. When those recruiters wanted to get an interview scheduled, they had to manually spend the time to figure out the logistics themselves. And, of course, things didn’t always go swimmingly. Candidates wouldn’t respond, or they’d have to reschedule. And those poor recruiters had to juggle dozens of these instances, all at once.

The result: 8,000 hours a month scheduling and rescheduling interviews alone. Nestlé wasn’t satisfied. We’ll get to how Nestle solved their problems later, but for now, just know they’re not alone. 72% of organizations aren’t pleased with their hiring effectiveness. 

This happens everywhere, all the time. 

If you have a recruiter with 20 requisitions to fill, they can only dedicate two hours a week per req. before they have to start working nights and weekends. That’s already a very finite amount of time to perform valuable tasks.

When that time is further bogged down with administrative noise, they’re just not going to get stuff done. 

And worst of all, when PWC interviews your CEO, they’re going to say that your hiring process is inefficient. 

Here’s how to fix it.

The thing is that this problem is entirely avoidable. And there’s a simple formula for solving it.

PWC asked those same CEOs what action they most associated with long-term business viability. They said adopting new technology to advance organizational capabilities. 

And what technology could that be?

Oftentimes, it’s AI automation.

Josh Secrest, former global head of TA at McDonald's, recently mapped out where automation is being used to minimize inefficiencies across 5 different types of roles commonly seen across industries.

But don’t take it from the AI company. Take it from the companies that use AI: 97% of organizations that automate parts of their TA process believe that automation is valuable. 

Remember Nestlé? Well when they implemented AI automation into their hiring process, they began having a conversational AI assistant text candidates automatically to screen them for qualifications, and then schedule qualified applicants for interviews. Simple enough.

But just that was enough to create a major efficiency improvement.

Nestlé was able to save 8,000 hours a month, just from automating the scheduling that their recruiters used to do manually. And what did they do with that time? Refocus the hours in their day on spending time with people — and hiring top talent to help the business. Oh, and also interviewing candidates, since they also scheduled over 600% more interviews after AI was implemented.

To the tune of 25,000 applicants in just one year.

And Nestlé, again, is not alone. Time and time again, we’ve seen companies with inefficient hiring processes implement AI automation, and then be like, “Holy smokes, this is game changing.” PWC even noted that 75% of CEO’s that have adopted generative AI believe the technology enhances trust between organization and candidate.

Here’s another example: Shay Johnson, VP of TA at Compass Group, is tasked with keeping the world’s largest food services company in the world fully staffed. That’s a tall task, with direct financial implications. 

Compass Group’s bottom line is directly tied to their ability to hire. They’re essentially a staffing business — their ability to function relies on having bodies available to work. If they can’t hire thousands of people every year, then millions of people around the world’s offices, schools, and hospitals will go underserved.

For Compass, hiring inefficiencies were business inefficiencies. And they were running an inefficient process. Until they implemented AI automation to ensure their entire process ran smoothly. 

“The job process used to be slow and clunky — managers constantly had to help candidates through the application process,” said Johnson. “[With AI] it’s so much simpler.” 

This report may be new. But the data isn’t. The solution to your hiring inefficiencies is out there, and it’s AI automation.

Written by
Jack Dimond
Contributing Author
Jack Dimond
Written by
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