How CFOs can break through hiring’s ‘AI doom loop’

The résumé has been a standard part of the hiring process for about 75 years now. But thanks to AI, it’s not as trusted or clear an indicator of job candidate quality as it once was.

“Some of our research shows that there’s more noise than signal right now in the résumé,” Paul Todgham, CFO of hiring and application tracking platform Greenhouse, told CFO Brew.

Candidates are using AI to tailor their résumés to specific roles, but in some cases, they’re applying to jobs they’re not really qualified for. Companies, in turn, are using AI to sift through the large numbers of résumés they’re getting. And job seekers are finding ways to get around automated and AI-enabled systems, using methods like prompt injection. This phenomenon of more AI use begetting more AI use has been dubbed the “AI doom loop.”

Fraud prospects. The loop’s a concern for finance leaders, or should be, because it’s driving up costs and making hiring more difficult. In a Robert Half survey, 84% of HR leaders said recruiters’ workload has grown due to AI, and 65% said AI has made it harder to identify candidates’ genuine skills.

AI is also contributing to candidate fraud, Todgham said, which can range from more mundane forms like exaggerated credentials or fake references to state-sponsored espionage. (Yes, really. The FBI is investigating a campaign in which remote IT workers from North Korea landed jobs with US corporations, according to the Federal News Network.)

Most instances of candidate fraud aren’t quite so dramatic, Todgham said, but the problem’s still widespread. Greenhouse data shows that 91% of recruiters and hiring managers have suspected or experienced job seeker deception. By 2028, Gartner estimates, “one in four candidate profiles worldwide will be fake.”

Some companies are going analog, Todgham said, noting that some Greenhouse customers are even flying candidates in for face-to-face interviews. Other employers are using take-home assignments, but even these aren’t infallible.

“If you haven’t changed that take-home test, it’s probably being done by AI,” Todgham said. “We still think there’s value in that exercise, but a lot more of the value is in the debrief and the thought process and understanding someone’s thinking.”

Talk to the bot. One answer to the résumé deluge may be AI interviews, Todgham said, which Greenhouse offers. “People share much more in a 20–25-minute interview than they can put on a piece of paper,” he said, but between the call itself and scheduling, they can take an hour of a recruiter’s time. Recruiting teams can use AI interviews at the “top of the funnel” to weed out unsuitable candidates, he said.

Job candidates give AI interviews mixed reviews: Greenhouse’s research shows that 44% of US job seekers are uncomfortable with them, and 38% have dropped out of a hiring process that included them. But AI interviews do come with a convenience factor: Candidates can conduct them at a time of their choosing, Todgham said. “The number that we see happen after 8pm, for instance, is quite high,” he observed.

Will this sci-fi-sounding tech take the humanity out of hiring? Not if it’s done right, Todgham believes. Techniques like AI interviews can let personnel spend more time “on the handful of candidates who are ideally going to be the ones that your hiring manager is deciding between,” he said, rather than those who clearly aren’t a good fit. At the top of the funnel, humans can ask the “knock-out” questions, he said, “but it’s probably not necessarily where the recruiter wants to spend more of their time.”

And when it comes to the handshake stage, Todgham is clear: For both legal and philosophical reasons, he said, “it’s absolutely critical that a human is making every decision.”

People ops is for finance. Ultimately, CFOs might want to spend more time thinking about the people side of their organizations. Finance, Todgham says, typically treats these functions “as a cost center,” partly because outcomes from good and poor hires aren’t readily measurable in dollars and cents.

“Intuitively, I think CFOs understand the return on investment of your hiring, of your retention, of your development,” he said, “but it’s not necessarily reflected in the practices that a lot of companies take.”

Getting on the same page with HR can reap rewards, Todgham said. “It takes real partnership and education to get finance and people teams talking in shared language,” he said, “But the returns of doing so are high.”