In recent decades, there have repeatedly been technological hype topics whose impact was overestimated. Artificial intelligence will (in the long term) not be one of them.
On this page you will learn:
- Where does all the AI in recruiting come from?
- What are the areas of application for AI in recruiting?
- What are the differences between AI providers?
- What aspects should I pay attention to when selecting?
- How do I structure the topic of AI in recruiting?
Where does all the AI in recruiting come from?
At first glance, it is surprising how so many providers can offer such a complex technology as artificial intelligence. The background is that only for a comparatively short time have ready-made AI models and AI interfaces been available (for example, with ChatGPT from mid-2023). The interfaces also enable providers who have little or no AI expertise of their own to integrate AI into their processes. Among the most advanced AI interfaces are providers such as OpenAI (ChatGPT), who have developed generative AI models. These models are trained to create texts. This allows, for example, an ATS provider to easily integrate a feature for AI-generated job ads. Against this background, it becomes clear why there are so many providers and functionalities that focus on creating texts for job ads or messages. However, generative AI models have limitations in recruiting when it comes to matching and sourcing. Here, specific AI models trained for the use case are needed.What are the areas of application for AI in recruiting?
The flood of providers and value propositions makes it difficult to sort the market. It becomes clearer when you look at what contribution the AI providers want to make in relation to the central metric of recruiting: the applicants. Currently, three areas dominate the AI recruiting market. The solutions aim to provide added value in the generation, selection, or communication with applicants.Generation of Applicants
The core task of recruiting: attracting applicants. It is obvious that there are a multitude of providers who want to make this task easier. It gets interesting when you look at where the focus lies in this area: on the passive applicant market. The generation of applicants in the active applicant market is a standardized, largely solved task in recruiting. The biggest effort in this area is the textual creation of a job ad. Due to the previously described possibility that today providers can easily integrate existing generative AI like ChatGPT via interfaces, the automatic creation of job ads is currently and in the future standard in every modern ATS system.The Passive Market in Focus
The passive applicant market could previously only be reached in a time-consuming and inefficient way. In addition to performance recruiting through running campaigns on Facebook, Instagram & Co. – which is particularly suitable for blue-collar jobs – the passive market for professionals and executives revolves centrally around one approach: active sourcing, i.e., directly approaching suitable candidates via professional networks. What was previously unattainable is now within reach thanks to the possibilities of artificial intelligence: fully automated sourcing.The Sourcing Approach of US Providers
Worldwide, the USA still has the most providers of AI sourcing solutions. The providers advertise with up to 800 million candidates they can reach, as well as with advanced AI models. So, a safe choice if you are a company in the German-speaking region looking for a solution?Email Instead of Direct Messages
With most US providers, active sourcing is done via email campaigns and not via messages within a network such as XING or LinkedIn. There are two main reasons for this:- Cost: US providers purchase profile data independently of networks from specialized providers who have scraped this data from the publicly accessible areas of the networks, i.e., read it out automatically. Buying this data is much cheaper than purchasing recruiter access to networks like LinkedIn. At the same time, US providers have no way of reaching candidates via LinkedIn direct message. Instead, they approach candidates via email.
- Culture: In addition to a small proportion of private email addresses, the purchased data sets of US providers mainly contain business email addresses. If you imagine the implementation in practice, you quickly come to cultural differences: For most medium-sized and large companies in Germany, it would be unthinkable to contact the employees of their competitors directly at their business email address.
- Data protection: Approaching someone at a business email address touches not only cultural but also legal issues. The strict requirements of the GDPR do not exist in the US market and enable this sourcing approach, which would not be feasible in the German-speaking region.
Sourcing Providers for the German-Speaking Region
In the German-speaking region, active sourcing is predominantly done via direct messages in professional networks such as XING, LinkedIn, GitHub, Stepstone, Indeed & Co. (why XING is still an important sourcing source, you can find out here). Just like in the US market, most providers offer support but not a complete takeover of sourcing.Fully Automated vs. Partially Automated
A key question when selecting a suitable AI sourcing solution for you is: Do you want to continue sourcing yourself and be supported by AI? Or should AI take over the entire sourcing for you? If you already have your own active sourcing team in your company, both approaches can generally make sense. If active sourcing is an additional task for your recruiters, a gradual improvement is very unlikely to solve the central problem that active sourcing gets lost in the flood of other tasks. In addition to personnel service providers who claim to use AI, there are especially AI tools in the German-speaking region that raise the manual sourcing process to the level of partial automation. There are also providers who focus on a specific part of the active sourcing process, for example in the formulation of messages, or providers who use AI for matching in their own specialized data pool.skillconomy is the only provider in the German-speaking market that uses proprietary AI to fully automate the entire active sourcing process – with no effort for recruiters.
Selection of Applicants
Providers in the second category come into play when you have already generated applications and aim to improve selection—either in terms of the quality of selection and/or efficiency. The solutions range from co-pilots for better interviewing to scientifically based cultural analyses.Focus: High-Volume Recruiting
Many AI providers in the second and third categories, i.e., those focused on the selection of and communication with applicants, target high-volume recruiting in the blue-collar sector with their solutions. For professionals and executives, however, probably very few companies in the German-speaking region can imagine leaving the entire application and hiring process, from interview to contract creation, to AI. Currently, solutions that optimize the assessment of competency and personality traits with AI, especially at lower experience levels, are likely to be more relevant for the German-speaking region.Communication with Candidates
The third category of AI solutions in recruiting relates to communication with candidates. The occasions and times for communication are varied in recruiting and occur throughout all phases of the recruiting process. Therefore, it is not surprising that providers from all categories also offer functionalities for efficient communication. Nevertheless, there are providers who put this area at the center of their solution. Currently, solutions that communicate with candidates as conversational AI in the form of a chatbot predominate. These are often integrated on the career page to answer questions before the application process. However, there are also solutions that support from application to onboarding.Conclusion: AI Providers and Market Overview
The market of AI providers for recruiting is confusing and will remain dynamic for the foreseeable future. While you must especially consider the specifics of US solutions, which make up the largest share of the market quantitatively, the selection of an AI provider should be guided by where you currently see the greatest potential in your recruiting process. Therefore, you should first take stock of your own process, weaknesses, and potentials. If you then want to use AI to optimize the generation, selection, or communication with applicants, this market overview provides orientation.Do you want to reach the passive applicant market for your professional and executive positions? We are happy to support you with our AI sourcing platform.