Monday, June 12, 2023

Artificial intelligence boost unemployment through hiring

Unemployment is not only a local issue of a given state. There are tens of millions of unfilled jobs right now worldwide. Thus, why there is unemployment? Why people are not able to find their next job? Is education the major problem for this situation? What about technology?

   In fact, artificial intelligence (AI) has a massive impact on matching candidates with jobs and the process of hiring today. AI can boost unemployment and other relative criteria of hiring. In general, unemployment is divided into the following four categories:

1. Frictional unemployment: When people voluntarily change jobs, it naturally takes time to find another job.

2. Cyclical unemployment: The variation in the number of unemployed workers over the course of economic upturns and downturns, such as an economic crisis or a pandemic event.

3. Structural unemployment: Stems from technological change in the structure of the economy in which labor markets operate, it can also be called technological unemployment.

4. Institutional unemployment: Results from long-term or permanent institutional factors and incentives in the economy.

   Companies in the past were getting only a few dozens of applicants for a single vacancy. Then, they had the time to choose the right candidates for the proper job. However, nowadays, in a fast-paced environment of competition and globalization, hiring is an extremely demanding process, limited by human capabilities.

   Companies worldwide and especially multinational organizations are getting hundreds, and even thousands of applications. Hence, software and AI solutions are mandatory to automate the process of looking through all these different candidates.

   Current human resources tools are not able only for screening resumes. For instance, hiring digital solutions can make candidates play games to analyze their personality. Printing a resume to send it to companies is not any more the way to recruit. Companies are using software to automate the hiring process. Such software is called applicant tracking system (ATS). The latter effectively tracks all applicants, then it analyzes their resumes, even by the meaning of words, and finally it finds the best match for job requirements.

   However, AI is not always fair against all candidates. Inevitably, a segment of candidates is being excluded or not fully represented through these software tools. If a candidate is not familiar with technology, she/he will find her/his resume rejected because AI systems cannot evaluate this as a professional HR could. Many applicants are still writing resumes thinking about how the human eye and the human sense can read this. Though, people must consider that most companies are using AI.

   Given this situation, many companies algorithmically rank candidates and decide who to hire. Therefore, while algorithmic discrimination is difficult to prove, candidates keep sending hundreds of resumes to a variety of companies aiming to beat the game against artificial intelligence and machine learning. This is not just a trend, but it is a reality. Human resources professionals must think of new ways to cope with this major issue worldwide. Human resources must maintain their quality!

Δρ. Κωνσταντίνος Μάντζαρης, Dr. Konstantinos Mantzaris, Economistmk

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