AI has been lauded as the solution to numerous problems — from drunk driving, to cancer, to financial strategy, and now, to helping people find fulfilling careers. But whether or not it’s actually lived up to this hype is certainly debatable.
From LinkedIn, to Angellist, to Indeed, to Woo, most job seeking platforms now use AI to rank and match jobs to candidates based on factors such as:
- Relevancy (title, seniority, job description)
- Location (commute time is a major factor!)
- Salary prediction
To match candidates with jobs, these platforms train an algorithm to give users relevant results — much like Google, Facebook, and other AI-driven platforms surface relevant posts to the top of results. Are these platforms really helping people land their dream jobs, though, or are they just giving access to a greater wealth of options?
Data Shows Job Satisfaction Has Gone Up, But Employment Is The Same
To gain an understanding of the effects of AI on the employment landscape, we focused on how LinkedIn, Indeed, and Woo (the AI-powered startup used by Lyft, Microsoft, WeWork, and other disruptive tech companies) have impacted employment rates and job satisfaction in America. Notably, this survey does not focus on Europe, which has been lagging behind the States in terms of recruiting platforms (the largest European platform, Stepstone, has been making small acquisitions in the U.S. in an effort to compete with LinkedIn, according to a former Stepstone senior level executive).
To choose these companies and the focus on this study, we consulted with one of the first hires at LinkedIn, as well as numerous former employees at Indeed and Stepstone.
These experts noted that the intent of platforms like LinkedIn is not necessarily to target people who are unemployed — rather, it’s to help paying users (recruiters and job seekers) find each other. It makes sense, then, that despite the fact that LinkedIn launched in 2003, Indeed launched in 2004, and Woo launched in 2015, there’s been no tangible effect on employment rates. Unemployment peaked in 2010 and 2011 (at over 9 percent), and has been steadily decreasing ever since (it’s currently around 4 percent).
“If a company has a position to fill, they will fill it.” explained the former LinkedIn employee. “This is the case regardless of how many platforms are out there or how many job seekers there are. The factor that impacts employment rate is the overall health of American businesses.”
The more salient way to measure the impact that these platforms have is through employee satisfaction and retention. Both metrics reflect how happy the employee is with their job, and the company cost associated with hiring. Data shows that happy employees are more productive, and furthermore, that new hires cost companies billions of dollars per year.
By these two metrics, it would appear that AI-powered candidate platforms are doing their job. For the past six years in a row, job satisfaction has improved year over year — and for the first time since 2005 it surpassed the 50 percent mark, meaning that over half of all employees are satisfied in their jobs. According to the former Indeed employee, this satisfaction is in large part due to accelerated wage growth and the increase of employee “perks”. But the reason that enterprises are improving employee pay and perks is because of increased competition for talent — which is due in large part to the wealth of targeted options that candidates have via AI-powered job platforms. “There’s a wealth of options for any candidate out there, and employers realize they have to do more than just meet salary requirements to retain talent,” he explained.
Job churn — or how often people switch jobs — has slowed. Since the year 2000, median job tenure has lengthened, and job churn in the past 17 years has been just 38 percent of that between 1950 and 2000. This indicates that the competition for talent and improved employee perks has also likely affected how long employees stay in their jobs. If a candidate already has catered lunches, a comped gym membership, and their desired salary, they’re less likely to proactively try and switch jobs — which accounts for the increased job tenure over the past few years.
The advent of digital job platforms has not directly impacted job tenure or job satisfaction, but it has pushed employers to offer better work experiences to improve retention and employee happiness. By giving candidates targeted job opportunities — not to mention, enabling recruiters to reach out to candidates who aren’t even looking — AI-powered job platforms spurred employers to compete for top talent. And in the end, this resulted in higher employee satisfaction and longer job tenure.
AI isn’t going to improve your chances of getting a job — but it will improve your chances of landing your dream job
Employment rates are largely a factor of the overall economy, stressed the NewtonX experts. But job satisfaction and tenure are factors of how much employees like their jobs.
AI in recruiting offers more precise matching to help job seekers find the perfect position, gives a greater pool of relevant options (“there’s an important distinction between relevant options, and just options,” pointed out the former LinkedIn employee), and more opportunity for job switching if an employee is unhappy. On the employer side, AI has also helped recruiters and hiring managers precisely identify the best candidate for any given position.
As the data on employee satisfaction indicates, platforms such as LinkedIn, Indeed, and Woo have helped job seekers find their dream jobs. Was AI responsible? In part, yes — it has helped job seekers identify their ideal jobs from a large pool of options.