Bad Hires Can Cost You Thousands to Replace — and AI May Be to Blame. Try These 3 Ways to Ensure You Don't Fall Into Its Trap. Over-relying on AI-driven hiring tools means taking human intuition out of the hiring process. The result? You miss out on top talent and risk stifling long-term growth.
By Sabeer Nelli Edited by Kara McIntyre
Key Takeaways
- The excessive reliance on AI in recruitment may lead to overlooking unique talent, costing businesses up to $840,000 over two years due to poor hiring.
- Incorporating video interviews and context-specific questions can help companies capture the human essence in hiring, reducing dependency on AI-generated responses.
- Enhancing job descriptions to focus on problem-solving skills and adaptability promotes a more inclusive and engaging recruitment process, benefiting both employers and applicants.
Opinions expressed by Entrepreneur contributors are their own.
A bad hire can cost your business up to 30% of that employee's first-year salary. But what if your reliance on AI-driven hiring tools is causing you to miss out on top talent altogether? The expenses ranging from recruitment, onboarding and training to lost productivity and potential re-hiring will cost you around $840,000 in two years.
For start-up founders and entrepreneurs looking to make the hiring process more streamlined, AI is certainly a valuable solution. But, if AI systems are merely cycling through generic resumes and filtering candidates based on keywords, there is a good chance that you will overlook the out-of-the-box thinkers — those who could drive your business forward.
In the current job market, there is intense competition for top talent. For new firms, missing out on the right hires doesn't just affect day-to-day operations — it directly impacts innovation and long-term business success. In smaller companies, the financial and operational risks of bad hiring decisions are even greater than in large organizations.
AI tools, while efficient, often lack the human intuition needed to recognize qualities that don't fit neatly into keyword searches or algorithms. Balancing the efficiency of AI-integrated hiring practices with layers of personal interaction ensures you don't sacrifice growth potential for convenience.
Related: AI Is Changing How Businesses Recruit for Open Roles — and How Candidates Are Gaming the System
AI vs. AI
It is common to see HR teams using AI-generated interview questions to test the knowledge base of candidates. There are even AI tools to perform this function depending on the industry and job role. Hiring managers also use AI-powered systems to collect and sort applications. At the same time, a candidate's use of AI is something that is generally frowned upon.
I have observed professionals voicing their concerns about the complexity and repetitiveness of application processes on platforms like LinkedIn. These processes are often lengthy and tedious. They are also expected to provide custom resumes and cover letters tailored to specific positions and the company.
So, the question arises: Can applicants be really faulted if they themselves use AI tools to streamline the time-consuming pre-employment assessments?
After all, candidates face a system that demands perfection at every stage, often without providing clarity on what exactly hiring managers are looking for. In many cases, candidates use AI not out of laziness, but as a means of navigating a system that can feel mechanical and unforgiving. They're simply trying to level the playing field against AI-driven applicant tracking systems (ATS).
Candidates are not always aware of the AI systems filtering their resumes, and as such, they may use AI-generated responses in an attempt to match the specific keywords and formats required to pass through Applicant Tracking Systems (ATS). The irony is that both sides — employers and job seekers — are increasingly using AI to "game" the system, rather than engaging in a more human and meaningful interaction. It's a cycle where AI is being used to outmaneuver AI, raising the question: How can we bring the human element back into the hiring process?
Related: How to Use AI to Streamline Your Recruitment Practices
The solution
With AI being integrated into almost all operational processes to save time and resources, to argue that AI should be eliminated from HR practices is folly. However, I do think that more human intervention is necessary during the critical stages of the hiring process.
1. Incorporate structured video interviews
With the proliferation of generative AI in the professional space, perhaps it's time employers ditched written assessments in favor of video interviews. For pre-screening purposes, one-way video interviews with a limited response time could be an effective solution.
One-way video interviews reduce the likelihood of AI-generated answers, as candidates are required to think and respond in real time, showcasing their communication skills, problem-solving abilities and even cultural fit. By using a structured format, employers can ensure consistency in the questions asked while still allowing for more authentic, human interactions early in the hiring process.
2. Introduce context-specific, behavioral interview questions
Recruiters have the responsibility to evolve their practices and introduce better interview questions in the early stages itself. Let's not start another interview with a redundant "Tell me about yourself," "What are your strengths and weaknesses?" or "Why should we hire you?" These questions often lead to rehearsed and generic AI-generated responses that fail to provide meaningful insights into a candidate's suitability for the role.
Instead, recruiters should focus on context-specific, behavioral interview questions that prompt candidates to share real experiences and demonstrate their problem-solving skills. There is a reason that "tell me about some of the most difficult problems you worked on and how you solved them" is Elon Musk's favorite job interview question. This allows recruiters to reduce reliance on AI-produced responses and foster authentic interactions.
3. Custom job descriptions with flexible criteria
Write job descriptions that emphasize skills, problem-solving ability and adaptability, rather than a laundry list of keywords that candidates can easily target with AI-generated resumes. Instead of stating "five or more years of marketing experience and knowledge of Adobe Suite," you can ask, "Have you developed a successful marketing campaign? Tell us what tools you used and how you measured success." Broadening the language in job descriptions encourages diverse candidates to apply and prevents applicants from merely tailoring their responses to match keywords.
Related: 7 Founders On Their Simple AI Fixes For Common Business Problems
Building stronger connections
Establishing a rapport with your candidates in the initial stages of hiring is crucial to improving employer branding. When you reject candidates after an engaging interaction, they are more likely to leave a positive impression of your company, even if they don't get the job. So, business leaders should focus on making themselves attractive to future talent and building a reputation for a thoughtful and human-centered hiring process. After all, the first impression of employees about a firm will be formed during this phase. So, don't make it feel impersonal, automated and detached.
