Gone are the days when Artificial Intelligence was seen as futuristic sci-fi that had limited short term benefits. Today, AI is permeating almost every business function, bringing unprecedented levels of efficiency. Most importantly, major AI-led transformations are actually helping companies optimize their processes leading to a significant impact on the bottom line.
Recruitment industry is an example where impact of AI is becoming evident
Recruitment is one of the sweet spots for AI-powered transformation. RIt has traditionally been an HR function that’s extremely human-intensive. So much so, that, most employers are a little hesitant about using AI.
But it turns out that AI can actually help recruiters in a big way. By automating a number of painstaking, labour-intensive tasks, AI enables recruiters to focus more on the strategic aspects of recruitment, such as better workforce planning, building the talent brand and improving the entire talent acquisition function in a more holistic way.
And it isn’t just about saving time and building efficiency. The use of AI in the recruitment process has major implications when it comes to the bottom line. In fact, more advanced recruitment startups are already helping employers save on recruitment costs in a big way.
This AI-powered startup has alone saved INR 10 crores in recruiting costs
Let’s look at CutShort as an example. This AI-powered recruitment platform has been around since 2016 and has already helped 8000+ companies close more than 5000 positions. But while these numbers are impressive, CutShort’s USP lies in the efficiencies it has brought to the recruitment process, saving significant time and money for its customers. Read the top AI-powered job search portals in India.
Let’s breakdown and do some math to understand how this startup uses AI and ML (Machine Learning) algorithms to accomplish this. Let’s say a recruiter has to review 300 profiles on an average in order to build a shortlist of candidates for interviews. Even if the review just comprises the recruiter manually skimming through the applicants’ resume, each review will still take at least 3 minutes. This means that on average a recruiter spends at least 900 minutes to review resumes and build a shortlist. On a side note, this fast skimming of resumes is prone to individual biases too.
With CutShort’s Machine Learning algorithms, recruiters easily get a sorted list of candidates as per their relevance to the job profile. The algorithm assigns each candidate a match score. This score not only uses factual data but uses recruiter preferences such as relevant industry experience, educational information, and even candidate interests such as startup mindset or leadership experience. It also incorporates actions taken by other recruiters for similar profiles to build a highly filtered, curated list of relevant candidates. As only highly relevant candidates are shown to recruiters, the number of applications reviewed is cut down by around 90%. So for the same job description discussed above, the recruiter will have to review just 30 highly relevant resumes, saving 810 minutes of their time.
Let’s now move on to the next step in the recruitment process — screening shortlisted candidates for further rounds of interview. This has two steps; scheduling a screening interview via phone or email (which usually takes around 10 minutes), and the interview itself. The interview ends up taking nearly 20 minutes because even though it’s just a screening call, a lot of information about the candidate like preferences, desired roles, and basic competencies are missing in the resume. So if the recruiter ends up shortlisting 50 resumes, she will spend a total of 1500 minutes on this process.
With CutShort, these steps are automated via an AI assistant which engages with the candidates via email using Natural Language Processing (NLP) as soon as they apply for a role. This helps to get the basic information recruiters need as early as possible. Since CutShort also does a competency check for technical skills, recruiters don’t have to focus on gauging that during the initial screening call. This means that the total duration of 30 minutes now gets reduced to 18 minutes instead. With CutShort’s relevant shortlist, the recruiter usually calls only 15 candidates for the initial screening which means the process now takes just 270 minutes.
Let’s come to the final step that takes place before the in-person interviews. In this step, the hiring team (tech/business) calls the candidate ensuring that the basic competencies are in place. Scheduling a 3-way call requires around 15 minutes and the interview takes another 25 minutes, bringing the total time per interview to 40 minutes. Assuming this interview takes place for 30 candidates, the total time would be 1200 minutes.
To solve this scheduling problem, CutShort offers an AI assistant that syncs with the calendars of multiple team members to pick the best interview times. Further, the duration of the interview is also reduced since CutShort has already analyzed skill competencies using short tests and work samples (like GitHub code). If we assume that there are 12 CutShort candidates who go through this process, and approximately 20 minutes are spent on each candidate, the total time comes to just 240 minutes.
So the total time spent on the recruitment process before advanced stage interviews are 3600 minutes without CutShort and just 600 minutes while using the platform. If we assume that the recruiter/hiring manager/interviewer/founder who is handling this process has an annual salary of Rs. 10 lakhs, the total cost per job without CutShort comes to Rs. 30000, and with CutShort it comes to just Rs. 5000. Given that 5000 jobs have been posted on CutShort in the last 5 years, the total cost savings comes to a whopping Rs. 12.5 crores.
The cost savings are set to increase exponentially with more companies adopting AI technology
The adoption rate of AI is increasing at a fast clip. While the first 10 crores were saved in first 3 years of operations, CutShort estimates that the next 10 crores in savings will come in the next 12 months itself.
According to Nikunj Verma, founder, and CEO of CutShort “The number of companies interested in using AI in recruitment is increasing rapidly. With our several industry-first features such as advanced ML algorithms and cutting-edge AI such as profile X-ray filters and higher brand recall, we estimate to save the next 10 crores for our customers in the next 12 months alone.”
Customers who have seen CutShort grow in the last four years agree.
Omkar Pradhan who looks after Talent Acquisition at UpGrad says, “We have seen first-hand the way our recruitment process has been transformed by CutShort. We are now able to save time on repetitive tasks and focus instead on a long-term recruitment strategy. And we’ve also seen how their tools have evolved over the years, refining and building a superior recruitment experience.”
Pawan Bhadauria, Country head at Tact.ai concurs, “We had to find talent that was not only competent but also passionate about building something big. CutShort saved us both time and effort by optimising the whole process with the use of AI”
It’s very heartening to see that AI isn’t just a futuristic myth anymore. Given that startups like CutShort are actually optimizing costs for so many employers across the board, AI should soon become an integral part of the mainstream recruitment process.