Summer Internship Project Report

on

Role of technology with emphasis on Artificial Intelligence in Hiring process

through Vendor’s Perspective

in Partial Fulfilment of
PGDM- Batch-29

Submitted to
Dr. Prachi Bhatt

Submitted by
Surbhi Vijay
Roll No. 291116
 ACKNOWLEDGEMENT

First and foremost, I would like to thank FORE School of Management in New Delhi

for providing me with such an incredible opportunity to pursue this research project,

for providing us with appropriate instructions and guidelines, and for providing me with

access to numerous research databases to aid in my research.

I would like to thank my mentor, Dr. Prachi Bhatt, for her invaluable guidance,

motivation, support, and meticulous attention to detail at all the stages of this report.

Working under her direction was a wonderful honour and privilege and has enhanced

my knowledge. She has played a significant role in completion of this project report.

I would also like to thank everyone who have directly or indirectly contributed for the

successful completion of this project. This study would not have been possible without

their cooperation.

Finally, I would like to express my gratitude to my family and friends for their

unwavering support throughout this research.

 DECLARATION

I, Ms. Surbhi Vijay Roll No. 291116 have completed my virtual summer internship

and has submitted this project report entitled Role of technology in Hiring process

with focus on Artificial Intelligence towards partial fulfilment of the requirements for

the award of the Post Graduate Diploma in Management (FMG-29) 2020-2022.

This Report is the result of my own work, no part of it has earlier comprised any other

report, monograph, dissertation or book.

Surbhi Vijay
15th July, 2021
 APPROVAL BY FACULTY GUIDE

Date: 16th July, 2021

 TABLE OF CONTENTS

1. EXECUTIVE SUMMARY .................................................................................................................... 1

2. INTRODUCTION ............................................................................................................................... 2
2.1 BACKGROUND ......................................................................................................................... 4
Figure 1: Unique Value Proposition ................................................................................................ 5
2.2 RELEVANCE.............................................................................................................................. 5
1.3 LITERATURE REVIEW ..................................................................................................................... 6
1.3.1 Artificial Intelligence: ............................................................................................................. 6
1.3.2 Artificial intelligence in Human Resource Management: ...................................................... 6
1.3.3 Role of Technology and Artificial Intelligence in Hiring Process: ........................................... 7
1.4 OBJECTIVES ................................................................................................................................. 11
3. RESEARCH METHODOLOGY .......................................................................................................... 12
4. CASE STUDY ANALYSIS .................................................................................................................. 13
4. CONCLUSION ................................................................................................................................. 29
5. LIMITATIONS ................................................................................................................................. 30
6. FUTURE SCOPE .............................................................................................................................. 31
7. REFERENCES .................................................................................................................................. 32
8. URKUND REPORT .......................................................................................................................... 36
9. SIP PROGRESS REPORT .................................................................................................................. 37
 1. EXECUTIVE SUMMARY

The widespread use of technology, particularly artificial intelligence, in numerous

industries has had a significant impact on how businesses operate. Given the

substantial impact on many processes, it has provided a multitude of benefits and

difficulties to business leaders and organisations.

This paper is an empirical study with the objective of understanding how technology

is playing an important role in the hiring process from the perspective of vendors, with

a focus on artificial intelligence, as well as determining whether the hiring process

should be entirely automated or with a combination of artificial intelligence and human

touch. The study relies heavily on secondary research in addition to primary research

to assess organisation and individual employee perspectives on the influence on the

workplace. It illustrates that artificial intelligence adoption benefits both businesses

and vendors/recruitment agencies.

The transition from manual hiring to AI based hiring faces many challenges with

regards to AI adoption, lack of skill availability, lack of infrastructure etc. but at the

same time has helped vendors in terms of predicting attrition rate, measuring

relevancy rate, 24*7 deployment and client satisfaction, giving them a competitive

edge.

Going forward, it will be necessary to combine the hiring process such that it contains

both artificial intelligence and human touch while still allowing the process to run

smoothly. Furthermore, a large-scale move to automation is likely in the near future;

as a result, both businesses and employees should work to be compliant, dynamic,

flexible, and jointly resilient.

1
 2. INTRODUCTION

It is a very well-known fact that human resource management is one of the most

important parts of any organization. Human resource management is primarily

concerned with influencing the efficacy of employees and employers, but it also

influences a wide range of stakeholders and has implications for the overall success

of the organization (Milkovich, 2004).

EVOLUTION OF HUMAN RESOURCE MANAGEMENT PRACTICES

With the current changing trends, many of the HR functions have evolved with time.

In the early times, HR department was known to be responsible for personnel

management and administrative work. HR's function is more complicated now than it

has ever been. The growing customer demands, globalization, intense competition,

government regulations, productivity concerns of employees, investors and other

stakeholders has led the human resource management to change its functioning in

order to fostering and enhancing creativity and innovation across the organisation to

succeed, grow and thrive. The focus has shifted from personnel management and

administrative responsibilities, to employee engagement and strengthening the culture

of the organisation, from process-centric to employee-centric, and from attracting

talent to retaining them (Duke II & Udono, 2012).

The activities of a Human resource function usually consist of recruitment, selection,

training and development, payroll, rewards and recognition, appraisals, promotions,

compliances, legal requirements, etc. and has undergone lot of changes, such as:

• From recruitment to talent acquisition: Initially, HR department was only

responsible for hiring the talent in a strategic way like attracting talent,

2
 interviewing, selecting, extending the job offer and onboarding the candidate

and was much more short-term, known as recruitment. Now companies

emphasize on retaining the talent for a long-term basis in order to increase

productivity, strengthen the company to compete in the market by acquiring top

talent, thus, a shift towards talent acquisition.

• Training and development to learning and development: When an

employee joins any organization, they get undergo training and development to

upgrade and optimize their skills in order to work effectively and efficiently. It

also increases the motivation of an employee, important, for long term

commitment to the organization and enhances job satisfaction. In the

beginning, training was supposed to be one-sided, with employees simply

receiving knowledge in order to better their abilities. It has now developed to

learning and development as the focus has switched to improving an

employee's individual potential, which leads to personal growth, as well as

work-related skills, leading to organizational development.

• Compensation, benefits, rewards and recognition to Total rewards:

Compensation, benefits, rewards and recognition are very important in order to

motivate the employees to attain organizational goals. Apart from the roles and

responsibilities, salary etc., much weightage is given to the benefits that

employees will be getting in a particular organization. As a result, these words

are now classified as Total Rewards. It combines all of an organization's

investments in its personnel (such as pay, pensions, and learning and

development, flexible working hours and career prospects etc.).

• Employee Engagement: Most people think of employee engagement as

merely involving them in activities, providing them with incentives, and so on,

3
 but in reality, it is about aligning employee aspirations with organisational goals.

Employee engagement-focused organisations will always have higher

employee retention, lesser absenteeism, and more employee satisfaction. As

per Gallup survey, Because of the discretionary effort employees constantly

bring to the company, engaged employees stand out from those not engaged

and actively disengaged, and because of their emotional attachment to their

company, the engaged ones are eager to go above and beyond.

• Talent Management: One of the biggest challenges that companies face are

recruiting and retaining talent. Thus, companies are working on enhancing

employee experience by focussing on ‘Talent Management’ which means

attracting and maintaining high-quality personnel, expanding their abilities, and

consistently motivating them to enhance their performance and stay with the

organisation for a longer time.

2.1 BACKGROUND

About the Company

‘Hiringplug’ is an HR technology company based out of New Delhi, founded in

2016 by Mr. Vikramjit Singh Sahaye. The company operates as a RaaSTM -

'Recruitment as a Service' Marketplace, that combines Artificial Intelligence and

human touch, helping the employers in filling their positions faster with the right

candidate on a unified business-to-business platform.

The company acts as an online recruitment platform between employers and

specialized recruiting agencies, taking job requirements from employers and

passing them on to recruitment agencies to work on those requirements while also

4
working on those requirements to assist the employers, with filling the job openings

by giving access to a large pool of candidates.

The company focuses on overcoming the challenges with regards to hiring of the

candidates in the organisations, like, hiring on time, niche hiring, recruitment

automation, cost of hire etc.

Figure 1: Unique Value Proposition

2.2 RELEVANCE

There has been an ongoing debate, if Artificial Intelligence should replace HR,

especially hiring process. There has been a lot of research done in context of the

organisations, explaining the advantages and the challenges of the role of Artificial

Intelligence but not much work has been done towards exploring the impact of

Artificial Intelligence with regards to the perspective of recruitment agencies.

This case study will shed the light on vendor’s perspective on the adoption of

artificial intelligence in hiring process and compare it with the factors of the past

research.
5
 1.3 LITERATURE REVIEW

1.3.1 Artificial Intelligence:

Artificial intelligence has changed the way businesses operate has been adopted in

different fields for the effectiveness and efficiency of the work. As per (Ingalagi,

Mutkekar, & Kulkarni, 2017) in order for SMEs to sustain the competitive pressure,

there is a need for adoption of AI. To check the organisational AI readiness, (Johnk,

Weißert, & Wyrtki, 2020) structured the AI readiness factors into 5 categories, namely,

Strategic Alignment, Resources, Knowledge, Culture and Data and concluded how

organisations should be ready to adopt AI for transformation and gain competitive

advantage.

1.3.2 Artificial intelligence in Human Resource Management:

For a very long time, there has been a sparkling comparison between artificial

intelligence and human resource in terms of being better than the other. As per

(McClelland, Calum, 2017), implementing artificial intelligence in human resources will

result in the creation of jobs because it requires a human being to automate the digital

transformation especially jobs related to programming, robotics, engineering, etc. to

improve and maintain the automation, while also resulting in the destruction of jobs,

particularly low-skilled jobs. The transition will be extremely painful, as tens of millions

of people may lose their jobs due to a lack of required skills. Even (McKinsey Global

Institute, 2017) states that there could be displacement of 400-800 million people by

automation, around the world, out of which 75-375 million may need to upgrade their

skill set or change their occupation to be employed.

On the other hand, (PWC, 2017) states that artificial intelligence is assisting HR in a

variety of areas, including removing repetitive activities, speeding up the talent search,

and lowering employee turnover. It will assist small and medium-sized companies in

6
operating efficiently even with fewer employees and at a lower cost. Employees with

EQ, problem-solving skills, creativity skills, etc. will be valued higher by employers as

a result of intelligence digitalization.

1.3.3 Role of Technology and Artificial Intelligence in Hiring Process:

Attracting the right talent for the position, interviewing, analyzing the skill set and

potential, conducting background checks, filing of the papers etc., is not an easy task.

Thus, as per (Abbot, Lydia; Batty, Ryan; Bevegni, Stephanie;) 46 percent of the

companies believe that finding the top talent for an organization is one of the most

challenging tasks. Various ways in which artificial intelligence has automated and

optimize hiring process are:

• Automated resume screening: Traditionally, Human resources managers

used to go through all the resumes manually which was time-consuming and

exhausting and also led to a biasedness due to human exhaustion. Technology

has helped the organizations in finding the potential candidates, among a large

pool of candidates, by filtering out a large number of candidates that could be

fit for the role as per the requirements with the help of tools like Application

tracking system (ATS).

• Diversity hiring: Businesses have begun to identify workplace diversity as a

business strategy for increasing employee productivity, innovation, and loyalty

while serving the needs of their clients or consumers. Employers with a diverse

staff have access to a larger pool of candidates, increasing their chances of

employing the best person. In a competitive market, a company that prioritizes

people – regardless of colour, religion, gender, age, sexual preference, or

physical disability – has a competitive advantage over the competition. When

all of the employees at a company come from the same background, it might

7
 be monotonous to work together. As a result, diversity is vital while hiring for a

company in order to break up the monotony.

• Automated Candidate Engagement: As per the research by Technology has

automated invitation and reminder emails, along with the shortlisting and

rejection emails to the candidates. If a candidate has any query, introduction of

AI conversational Chat bots has made it easier for them to

• Saving recruiter’s time: Manually reviewing applications is still the most time-

consuming component of the recruiting process, especially when 75 to 88

percent of the resumes received for a position are unqualified. Recruiters can

use AI for recruiting to save time on repetitive, time-consuming operations

including automating resume screening, automatically triggering evaluations,

and scheduling interviews with candidates.

• Unbiased decisions: Recruiters evaluate résumés as a common method of

screening applicants prior to an interview. Several studies have demonstrated

that this method results in severe unconscious bias, and that a vast pool of

applicants is overlooked. Many current AI recruiting tools have problems, but

they can be fixed. The beauty of AI is that it can fit specific requirements.

Instead of forcing time-constrained humans to adopt biased algorithms to

shorten the pipeline from the start, AI can review the entire pipeline of

candidates.

• Improving the quality of hire: Artificial Intelligence (AI) standardizes the

matching of candidates' experience, knowledge, and skills to the job's needs

leading to a quality hire. Also removes the issue of early attrition due to

unmatched roles, responsibilities and experience.

8
According to (Nawaz, 2019), recruitments done through artificial intelligence

outperforms human recruiters in terms of fairness by eradicating human judgment and

speed. Artificial intelligence, on the other hand, needs to make the process more

automated but cannot replace human interactions. As per (P & R., 2018), there is a

need to change the perception that artificial intelligence will replace human resource

managers but in reality, it only simplifies the job by automating the repetitive tasks and

providing valuable insights without cognitive biases to provide enhanced results along

with gaining competitive advantage. As per (Bongard, 2019), Artificial Intelligence

helps with massive volume of information without any assistance and deduces the

candidate’s performance and fitness while recruitment. It will also help in the face

recognition to identify the candidates during hiring process and avoid duplication of

the candidates.

However, (Tambe, Cappelli, & Yak, 2019) concluded that AI continues to be an

extended shot in any domain of human activity, very little progress has been made in

issues related to managing the employees using Artificial intelligence. The reason

behind this finding is its complexity in nature along with the dynamic environment of

the field, business as well as human nature, also the data that is currently available

has a lot of complexity. There aren’t any ways to measure the constituents of a “Good

Employee” because the complexity of the work environment consists of “Group

performance” additionally, neither there are “Standard” variables that employers must

keep as a part of their HR operations. During the data generation stage, the old data

which is available is biased therefore the output of the AI program will be biased.

Explaining a result generated by a program’s algorithm, based on 10s or 100s of

factors, is a very tedious task. The first principle applicable to tackling these obstacles

across the stages of the AI Life Cycle is causal reasoning, which substantially aids in

9
issues of fairness and explainability. Randomization is a second principle that may

help with algorithmic-based decisions, in part, recognizing that what constitutes “noise”

in modelling is useful for improving algorithmic models. The fairness and the explain

ability of HR decisions can be improved significantly by acknowledging that the

algorithms are not very valid and including an explicit element of randomness in the

decision process.

The studies that used TOE framework concluded that AI significantly influences the

workplace, giving a competitive edge to organisations and thus has direct effect on AI,

partially moderated by transaction costs (Yuan Pan, 2021). As per (Hoti, 2015) the

factors like support from the top management, expected relative advantage,

organisation readiness, IS knowledge and innovativeness, effects the adoption of AI

in SMEs. The study (AlSheibani, Sulaiman; Cheung, Yen; Messom, Chris;, 2018) is

still in progress and uses TOE and DOI framework for AI adoption in organisations

and concludes that the emerging adoption of AI in different organisations has a lot of

challenges but focuses on preparing the organisations for successful implementation.

Though these kinds of work have been done with respect to Artificial Intelligence in

Hiring process, along with the implementation of TOE framework. But there are gaps

like the research (Pan, Froese, Liu, Hu, & Ye, 2021) was done on IT intensive industry

in China which may not apply to India because of cultural differences. (Bongard, 2019)

leaves out the areas that requires human touch while recruiting such as interpersonal

skills, candidate’s experience, emotions etc. Most significantly, these studies do not

establish whether the recruiting process should be done entirely by AI, human

involvement, or a combination of both, as per vendor’s perspective, which my research

will try to establish.

10
 1.4 OBJECTIVES

With the change in environment, the way organisation function is also changing. One

of the major differences in the traditional practices and modern practices is the use of

technology – which has helped the organisations to gain a competitive edge by

effective and efficient working. There is a lack of literature on the impact of technology

from the vendor’s perspective. While the past literature focuses on the role of

technology in hiring process in the form of general perspective, the present literature

focuses on the vendor’s perspective. While keeping these gaps in mind, the following

research objectives have been developed –

1. To assess the impact of artificial intelligence, with reference to the vendor’s

perspective, as per TOE framework, along with considering the factors

identified in the past research.

2. To analyse if the hiring process should be done entirely by AI, human

involvement, or a combination of both.

11
 3. RESEARCH METHODOLOGY

Data Collection: Data was collected through Interview method. The questions

revolved around the strengths and challenges the organisation faces with the use of

Artificial Intelligence in Hiring process.

Sample Size: The sample size included Hiringplug employees along with 10

employees of different companies acting as vendors.

Data Analysis: Qualitative Insights were drawn based on the results obtained from

the interview. Case study method is used. All the insights obtained from the

respondents are bifurcated under strength or challenge in either technological aspect,

or organisational aspect, or environmental aspect and given ranking to analyse the

most important to least important strength and challenge.

Secondary research was also used by studying articles and research papers from

various journals and newspapers to understand the past and present impact of

technology, specifically, artificial intelligence in hiring process.

12
 4. CASE STUDY ANALYSIS

One of the main processes of Human Resources Management is the recruitment and

selection of people, because it involves the selection of individuals based on their

characteristics, competencies, values, and motivations, all of which must be aligned

with the company's strategic goals, assisting in the implementation of actions that lead

to success.

In line with the market scenario, which requires greater agility of all stakeholders, the

use of AI in Recruitment and selection processes can be a strong strategy as a

decision support system, assisting in the mapping and searching of the most

appropriate professional profiles to fill the open position, reducing the average time of

completion of the activity, and reducing the average time of completion of the activity.

Changes, such as those brought about by the introduction of new technology, might,

nevertheless, leave employees feeling insecure and/or demotivated. It is critical that

the organisation prepares for this new era. Transparent communication is also a

decisive component in success, since it ensures everyone's dedication to the

company's advancement.

When asked Mr. Vikramjit Singh Sahaye about his idea for starting an HR technology

company despite coming from a marketing background, he explained that he began

his career in sales and marketing but was fortunate enough to work in a variety of

sectors, including FMCG, consumer durables, and telecom, rather than being stuck in

one. He pursued his MBA in marketing and international business. There was a huge

shift in the economy's privatisation; the insurance sector opened up with a slew of

prospects, and he was able to work in it as well. He also served as a Regional Head

13
for one of the corporations, where he began to see recruitment as a more significant

market play. Prior to that, as a manager, he was tasked with employing a large number

of employees and dealing with a variety of issues, including the need for fast hire,

suitability, and high-quality candidates. He began working as a solution provider and

started thinking of the ways to improve the recruitment system's efficiency and

effectiveness. Following some market research, he discovered that the majority of

businesses are experiencing issues with employee engagement. As a result, he

developed an online system that engaged all types of employees on a single unified

platform with regards to awards, compensation, and much more.

He saw Artificial Intelligence in Recruitment as a qualified need and decided to fill it,

launching Hiringplug in the process. One of the most difficult obstacles he had to

overcome was a lack of finance. Another challenge was coming up with a unique

proposition. He considered the recruiting business to be extremely competitive and

attempted to carve out a niche in order to compete; but, due to the large number of

existing recruitment companies, he discovered the blue ocean (differentiation).

He believes that as artificial intelligence is implemented in HR, particularly in

recruitment, all of the monotonous and repetitive tasks will be automated, but value-

added work will continue to be done by humans. Because HR is about people,

technology will never be able to replace the human aspect. Organisations cannot

depend solely on technology. Human touch will still be required for elements that

require a human mind, such as empathy, body language assessments, and so on.

People must, however, learn to be at ease with technology and be willing to try new

things.

14
When discussing evolution, the importance of human resources has come up. HR was

formerly known as the personnel department and served as a simple support function.

When service sectors such as BPO and KPO began to emerge, individuals realised

that hiring the appropriate people is critical because of their bulk requirements, and

that being able to hire personnel on time gives businesses a competitive advantage.

HR has also played a significant role in making India more service-oriented.

3.1 TOE Framework:

When an organization adopts and implements any technological innovations, it is

influenced by various aspects.There are many theories and studies of technology

adoption and innovation such as: Technology Acceptance Model (TAM) (Davis, 1989)

and (Davis, Bagozzi, & Warshaw, 1989); the Technology-Organization-Environment

(TOE) framework (Tornatzky & Fleischer, 1990); Theory of Planned Behaviour (TPB)

(Ajzen, 1991); Diffusion of Invention (DOI) (Rogers, 1962); Unified Theory of

Acceptance and Use of Technology (UTAUT) (Venkatesh, Morris, Davis, & Davis,

2003). TAM and T-O-E theories are aimed specifically at technology acceptance and

are used to explain end-user adoption at the organisational level in many researches,

thus are critical for effective human resource management. The focus of TAM model

on technology, neglects social and psychological factor whereas the TOE framework

considers all the factors related to technology, organisation and environment while

adopting the technology.

3.2 TOE framework with respect to Artificial Intelligence in hiring

15
Various technological, organisational and environmental aspects influencing the

adoption of artificial intelligence are:

1. Technological context: Internal and external technologies that are significant

to the firm are included in the technological context. It also includes usefulness

and the characteristics of the technology.

TECHNOLOGY
STRENGTHS SECONDARY RESEARCH
Eliminates human biasedness (Duret, 2020)
(Broek, Elmira van den; Sergeeva,
Fair evaluation
Anastasia; Huysman, Marleen;, 2019)
CHALLENGES SECONDARY RESEARCH
Risk of amplifying deficiencies in the
(Tambe, Cappelli, & Yakubovich, 2019),
historical data
Technical complexity (Tambe, Cappelli, & Yakubovich, 2019),
Privacy concerns (Kodiyan, 2019)

Strengths:

• Fair evaluation: Artificial Intelligence removes judgement from decision-

making and just considers the requirements, resulting in accurate

results. But if the algorithm is learnt by a biased recruiter, it runs the risk

of perpetuating rather than eliminating bias in the recruiting process.

(Broek, Elmira van den; Sergeeva, Anastasia; Huysman, Marleen;,

2019)

• Eliminates human biasedness: As per (Duret, 2020), AI can eliminate

unconscious biases by designing it to fulfil a number of useful

requirements. The key premise is that AI should be built in such a way

that it can be audited and any bias discovered can be removed.

Challenges:

16
 • Risk of amplifying deficiencies in the historical data: According to

(Tambe, Cappelli, & Yakubovich, 2019), if there are any biases in the

historical data, AI will learn automatically. Because males accounted for

the majority of employees in an organisation in the past, the presence of

previous prejudice in the data used to create a recruiting algorithm is

likely to lead to a model that disproportionately selects males, repeating

the historical data's demographic diversity—or lack thereof. Since

companies are moving towards diversity and inclusion, AI may hamper

it due to past data.

• Technical complexity: According to (Tambe, Cappelli, & Yakubovich,

2019), though AI has made things easier, it is extremely important and

difficult to train an AI model that meets the requirements. That structure

has a lot of dimensions, and measuring it precisely for most operations

is challenging.

• Privacy concerns: As per (Kodiyan, 2019), most AI systems require

training before they can be used, which necessitates the use of a training

data set, which in the context of hiring might include personal

information. This raises concerns about the privacy of personal data and

data consent. With the progress of AI in various employment processes,

the requirement for more and more data increases the potential of

privacy breaches.

2. Organisational context: The organisational context relates to a company's

characteristics and resources, such as its size, degree of centralization,

managerial structure, degree of formalisation, etc.

17
 ORGANISATION
STRENGTHS SECONDARY RESEARCH
(Jatoba, Gutierriz, Fernandes, Teixeira, &
Organisational effectiveness
Moscon, 2019)
(Jatoba, Gutierriz, Fernandes, Teixeira, &
Saves time
Moscon, 2019)
Competitive advantage (AlSheibani, Cheung, & Messom, 2018)
(Yams, Richardson, Shubina, Albrecht, &
Innovation
Gillblad, 2020)
CHALLENGES SECONDARY RESEARCH
AI Adoption (Readiness of client and
(Gartner, 2019)
candidates)
Huge costs (Hoti, 2015)
Lack of skill availability (Gartner, 2019)

Strengths:

• Organisational effectiveness: According to (Jatoba, Gutierriz,

Fernandes, Teixeira, & Moscon, 2019), AI can improve organisational

effectiveness by reducing errors by considering the application of

multiple calculations under the most diverse data variables; reducing

problem resolution times; increasing productivity and flexibility by

considering the possibility of information preservation and better human

action.

• Saves time: As per (Jatoba, Gutierriz, Fernandes, Teixeira, & Moscon,

2019), AI matches only those candidates whose experience aligns with

the roles and responsibilities of a particular role. Thus, Artificial

Intelligence removes the pain of going through resumes irrelevant to the

job requirements and saves time. The goal of incorporating AI

technology into traditional hiring is to save a human from performing

different boring tasks during the hiring process. It is undeniable that AI

can help speed up the hiring process and save time, but when used

incorrectly, it can backfire.

18
 • Competitive advantage: As per (AlSheibani, Cheung, & Messom, 2018),

AI enables a company to lower costs, expand into new markets, boost

top-line profits, and increase bottom-line profits enhance human

intelligence and increase efficiency, thus, giving a competitive edge

other the competitors. (Pan, Froese, Liu, Hu, & Ye, 2021) concluded that

the companies gain competitive advantage because of the significant

influence of AI but there is a need to reduce AI complexity and make it

user friendly. TOE framework showed the direct effect of technology,

organisation and environment on AI moderated by transaction costs.

• Innovation: According to (Yams, Richardson, Shubina, Albrecht, &

Gillblad, 2020), AI can automate ordinary processes, allowing

employees to spend more time on innovation and repurposing their work

to include innovation as a primary activity. Employees can use AI-

assisted technologies to make better decisions if they work in a data-

driven organisation. Organizations must reach higher levels of AI

maturation in order to realise their full potential of democratising

innovation using AI.

Challenges:

• AI adoption: According to (Gartner, 2019), around 42% of the

respondents don't fully comprehend the benefits and applications of AI

in the workplace. For business and IT leaders, quantifying the

advantages of AI projects is a huge challenge, thus making AI adoption

in terms of organisational readiness more difficult. As per (Baier, Jöhren,

& Seebacher, 2019), organisations also face challenges while deploying

Artificial Intelligence, resulting into unwillingness in AI adoption

19
 • Huge costs: Some organisations face significant obstacles in their

pursuit of technological innovations, and their survival is frequently

dependent on their ability to use information systems to develop new

organisational models, compete in new markets, or improve internal and

external communication relationships. Small firms, in comparison to

major businesses, have been hesitant to adopt technology innovations

(Hoti, 2015).

• Lack of skill availability: According to according to a Gartner Research

Circle survey, (Gartner, 2019), approximately 56 percent of the

respondents among business and IT leaders agreed that there is a need

to acquire new skills because of lack of skill availability.

3. Environmental context: The environmental context includes the size and

structure of the business, along with the challenges that arise in the realm of

business, such as competitors, regulatory environment, and business partners.

ENVIRONMENT
STRENGTHS
Create jobs opportunities (People have
upskilled themselves)
Technological advancement
CHALLENGES
Job loss for lower or middle level skills
Competitive Pressure
Lack of Infrastructure
SECONDARY RESEARCH
(McKinsey Global Institute, 2017)
(AlSheibani, Cheung, & Messom, 2018)
SECONDARY RESEARCH
(McClelland, Calum, 2017)
(AlSheibani, Cheung, & Messom, 2018)
(Ingalagi, Mutkekar, & Kulkarni, 2017)

Strengths:

• Create job opportunities: As per the report by (Mckinsey & Company,

2017), jobs in the development and deployment of new technologies

20
 may expand, and overall technology spending might rise by more than

50% between 2015 and 2030. Approximately half of the budget would

be spent on information technology services. Technology adoption could

result in the creation of 20 million to 50 million employment globally by

2030.

• Technological advancement: The prospect of losing a competitive

advantage encourages an organisation to accept a new innovation,

which is referred to as competitive pressure. Competitive pressure has

been identified as a role in the diffusion of innovative innovations based

on extensive empirical study. According to Gartner (2017a), building an

AI strategy is the most important strategy for technology advancement

in 2018 (AlSheibani, Cheung, & Messom, 2018).

Challenges:

• Job loss for lower or middle level skills: As per (McClelland, Calum,

2017), While being aware of the fact that Introduction of artificial

intelligence would create job opportunities, it will also lead in job loss for

lower or middle level skills, especially those not well versed with the

technology.

• Lack of infrastructure: According to (Ingalagi, Sanjeev S; Mutkekar, R R;

Kulkarni, P M;, 2017), despite the fact that small and medium-sized

businesses are the backbone of the country's (India) economy, they are

far behind in terms of AI adoption. The lack of basic understanding of AI

benefits, as well as restricted resources for AI adaption, are the primary

causes for AI integration failure in SMEs.

21
The above factors with respect to the adoption of Artificial Intelligence in hiring have

been taken with the help of research support.

3.3 TOE factors from vendor’s perspective:

While organisations face different challenges, same goes with the vendors. When

interviewed different vendors for their perspective and asked them to rank the factors

influencing the adoption of artificial intelligence in hiring process with regards to

Technological, Organisational and Environmental context, the strengths and

challenges faced by them are:

1. Technological context:

TECHNOLOGY
STRENGTHS
Eliminates human biasedness
Scalability
Flexibility
Efficiency and Effectiveness
CHALLENGES
Risk of amplifying deficiencies in the
historical data
Untapped human potential
AI needs to rapidly evolve

Strengths:

1. Scalability: Artificial Intelligence is revolutionising every business

concept by bringing scalability to numerous HR activities. Artificial

Intelligence has the ability to operate with a wide range of requirements,

both large and small organisations. When it comes to hiring for different

companies, some vendors require AI for resume evaluation, while others

require it for the onboarding process, resulting in scalability.

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 2. Eliminates human biasedness resulting in fair decision making: AI

eliminates biases such as confirmation bias, which happens when

interviewers ask different questions to different candidates. Recruiting AI

uses enormous amounts of data to find and filter candidates. It uses

algorithms to aggregate these data sets and generate predictions about

the fitness of the candidate for a particular job role. The results can also

be validated, resulting in fair decision making.

3. Flexibility: In comparison to Artificial Intelligence, humans are extremely

resistant to change. Humans have a tendency to adopt a specific

perspective about various topics at times, and they also require time to

assimilate new information or modify when necessary, however Artificial

Intelligence is more adaptable.

4. Efficiency and effectiveness: There's always the risk of making a human

error throughout the hiring process, such as shortlisting an applicant

while examining resumes because they go through so many for even a

single job opening. When AI is applied, however, this is not the case. It

does tasks more rapidly and efficiently than humans, and it does so in

the exact manner in which it has been educated.

Challenges:

1. Risk of amplifying deficiencies in the historical data: AI must be taught

utilising historical data. If there is an inaccuracy in the historical data, AI

will automatically learn about it and repeat the mistake unless it is

repaired, which is the most difficult problem.

2. Untapped human potential: Artificial Intelligence does not take into

account numerous elements like as an applicant's soft skills, how a

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 candidate will perform under pressure, fitness of the candidate for

leadership roles, and so on, which could lead to the hiring of the wrong

candidate.

3. Rapid evolution: Because different clients have varied requirements for

an open job position, Artificial Intelligence must swiftly adapt to keep up

with shifting trends in order to succeed in a competitive market.

2. Organisational context:

ORGANISATION
STRENGTHS
Predict attrition rate
Client Satisfaction
24*7 deployment
Process Standardisation
CHALLENGES
AI Readiness
Integration
Managing AI and huge amount of data
Huge costs

Strengths:

1. Prediction of attrition rate: Vendors provide businesses with a guarantee

period during which candidates should not leave the company they have

joined. Artificial Intelligence predicts attrition rates using predictive

analysis, allowing for better decision-making when hiring candidates and

a lower attrition rate.

2. Client Satisfaction: Artificial Intelligence aids in the timely shortlisting of

only those resumes that are relevant for a specific position preventing

revenue loss due to late hires and productivity loss owing to the review

24
 of junk CVs, resulting in a pleasant hiring experience and client

satisfaction.

3. 24*7 deployment: Artificial Intelligence is available 24 hours a day, seven

days a week, unlike humans. For example, AI might automatically

choose or reject an applicant who applied for a specific post at any time

of day. Conversational AI is also used by many hiring agencies to

streamline the recruiting process.

4. Process standardisation: Artificial Intelligence helps an organisation to

improve the operational performance by making less errors. It also saves

time by using a single workflow, synchronising candidate actions, and

avoiding duplicates getting a competitive edge over competitors, saving

time and standardising the process.

Challenges:

1. AI readiness: One of the biggest challenges that vendors face is of AI

readiness. While some employers still give importance to human touch

in the hiring process, some candidates are also not comfortable with Ai

while giving assessment or giving interviews etc. Employees and

applicants who aren't technologically savvy are also resistant to AI

adoption.

2. Integration: When a company uses Artificial Intelligence in different

processes whether big or small, then it must be integrated to ensure

smooth functioning, which itself is a challenge, to ensure smooth

functioning without any error during the hiring process.

3. Managing AI and huge amount of data: Raw data must be turned into

meaningful information that the system can interpret in order for Artificial

25
 Intelligence to function successfully. Technology must be updated on a

regular basis to keep up with market trends, which necessitates a

significant level of effort in handling Artificial Intelligence and large

amounts of data.

4. Costly: Although Artificial Intelligence lowers employers' costs, but for

vendors, introducing and upgrading technology at the initial phase

comes at a high cost that small or medium-sized businesses may not be

able to afford. Vendors may also have to hire someone who can take

care of Artificial Intelligence tool, which can be difficult for vendors, due

to lack of skill availability as not everyone is comfortable using the

technology.

3. Environmental context:

ENVIRONMENT
STRENGTHS
Increase the innovation Capacity
Competitive edge
CHALLENGES
Destruction of jobs
Keeping up with the changing trends
Lack of Infrastructure
Lesser value of human skills

Strengths:

1. Increase the innovative capacity: Organizations used to undertake in-

house hiring, but as time went on, they began to struggle to locate the

perfect applicant due to an excess of supply over demand, requiring

them to work for days, if not months, to fill the position. A few posts also

necessitated specialty hiring, which posed a hurdle. As a result,

26
 recruiting firms began using artificial intelligence (AI) to boost their

innovative ability and make the hiring process easier.

2. Competitive edge: Organizations in India are transitioning from manual

to artificial intelligence in a variety of domains. Only a few recruitment

agencies, in the HR industry, are utilising AI. As a result, you will have a

competitive advantage over your competition.

Challenges:

1. Destruction of jobs: While it is true that the arrival of artificial intelligence

will generate job prospects, it will also result in the loss of jobs for

individuals with lower or middle-level abilities, particularly those who are

unfamiliar with the technology. Even organisations, that use AI hire

individuals who are well-versed in the technology, resulting in

destruction of the jobs that need monotonous, repetitive tasks with little

variation.

2. Keeping up with the changing trends: All organisations are busy

establishing a distinct proposition to thrive in the market while

transitioning to AI, which necessitates ongoing upgradation and keeping

up with new trends in order to survive the competition, which can be

challenging for small businesses.

3. Lack of Infrastructure: Because India is a developing country, not every

organisation has the necessary infrastructure to make the transition,

making it difficult for small businesses to afford the infrastructure or

continue doing manual labour.

4. Lesser value of human skills: Artificial intelligence has lowered the value

of human skills. Rather than recruiting more humans, many companies

27
are depending on artificial intelligence to complete their tasks. In hiring

process, the majority of tasks that formerly required human expertise

have now been automated.

28
 4. CONCLUSION

With respect to the adoption of Artificial Intelligence in hiring process, the primary and

secondary research suggests the following:

• Factors like fair evaluation, elimination of human biasedness, technological

advancement, efficiency and effectiveness of Artificial Intelligence, 24*7

deployment, innovation capacity and competitive advantage remains same in

case of both, organisations and vendor’s perspective.

• The advantage that vendors are getting is the prediction of attrition rate using

predictive analysis and fast hire which in itself is a huge challenge that

companies are facing and the revenue loss associated with it.

• As per both primary and secondary research, untapped human potential will

always be the concern which suggests that the combination of both Artificial

Intelligence and human touch is essential in the hiring process.

• When implementing artificial intelligence, it is important to consider both the

employees' and the organization's readiness.

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 5. LIMITATIONS

• While an attempt was made to comprehend the usage of artificial intelligence

in the employment process from the vendor's perspective, the sample size was

relatively small, which may be a restriction.

• The research conducted was based on Hiringplug as well the recruitment

agencies associated with the company, and thus may not be applicable to other

companies.

• Personal interviews may have provided more information to help improve the

research. However, the employees, on the other hand, appeared to be a little

hesitant to provide specific information.

• There was also a time constraint in completing the task because the research

survey had to be completed within a certain time range in order to improve the

accuracy of the results. However, respondents may have given improper

responses in order to avoid divulging information in some circumstances.

30
 6. FUTURE SCOPE

• A large sample size can be used in a similar study. The outcomes of this study

may be more generalizable if the sample size is increased.

• The AHP framework can be applied to compare and quantify the components

in the TOE framework based on their importance in the study.

• Finally, the concern regarding what the future of ‘business as usual’ would be,

still remains. A further study can be conducted to understand the impact that

Artificial Intelligence is having on vendors or recruitment agencies in the long

run.

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8. URKUND REPORT

36
 9. SIP PROGRESS REPORT

Roll No: 291116

Name of the Student: Surbhi Vijay
Name of the Faculty Guide: Dr. Prachi Bhatt

Meeting-1

Date of Meeting: 11th May, 2021

Topic/Work Discussed: Topic and Methodology

Signature of Student Signature of Faculty Guide

Meeting-2

Date of Meeting: 26th May, 2021

Topic/Work Discussed: Literature review

Signature of Student Signature of Faculty Guide

Meeting-3

Date of Meeting: 2nd June, 2021

Topic/Work Discussed: Topics to be covered in the introduction of the report

Signature of Student Signature of Faculty Guide

Meeting-4

Date of Meeting: 15th June, 2021

Topic/Work Discussed: Factors for research paper and data analysis

Signature of Student Signature of Faculty Guide

37
Meeting-5

Date of Meeting: 5th July, 2021

Topic/Work Discussed: Format of data analysis, Conclusion of the report.

Signature of Student Signature of Faculty Guide

38