AI Recruitment: New Regulations Require Employers to Audit Biases
AI technology is making significant strides in the professional world, particularly in hiring and talent management. However, with this great power comes great scrutiny, and employers must be prepared to embrace new regulations governing the use of AI in recruitment.
According to career-seeking tool Zippia, 65% of recruiters rely on AI to narrow down candidates, with 67% reporting that AI has improved the recruitment process. Nevertheless, AI systems can be prone to biases, much like humans. To address this concern, New York City has implemented Local Law 144, compelling employers to conduct annual audits of their automated employment decision tools (AEDTs) to identify and eliminate potential biases in the hiring process.
While this may be perceived as an additional compliance hurdle for employers, it could ultimately prove highly advantageous, cites Jonathan Kestenbaum, managing director of tech strategy at AMS, a company specializing in assisting employers with tech and talent acquisition.
Kestenbaum stresses the importance of ethical AI use, underscoring that AI shouldn’t be a get-out-of-jail-free card. He believes that Local Law 144 allows New York City employers to proactively address biases before future state and federal regulations come into play. Furthermore, these audits provide evidence of compliance with federal anti-discrimination laws enforced by the Equal Employment Opportunity Commission (EEOC), a national agency safeguarding job applicants and employees.
Kestenbaum suggests that the audit process is relatively straightforward. Employers are required to engage a third-party like AMS to test their tools for any overt biases. The audit assesses selection rates across various protected categories defined by the EEOC, such as race, ethnicity, and gender, comparing them to the category with the highest selection rate. For instance, it may compare the selection rate of Black women to that of white men. The results of the audit must be published on the employer’s website’s employment page. If a candidate suspects discrimination due to the AI tool, they have the right to request an alternative assessment process.
Though some employers may contemplate abandoning automated hiring tools due to the audit process, Kestenbaum asserts that doing so would be counterproductive. He believes that organizations can’t remain competitive without leveraging AI. However, organizations need to understand how AI is being utilized, the efficiencies it brings, and how to ensure compliant implementation within the hiring process.
Kestenbaum anticipates more AI regulations following in the footsteps of Local Law 144. Consequently, he advises employers beyond New York City to start auditing their technology. Auditing and revising AI tools to minimize biases can significantly impact a company’s recruitment process and diversity goals, emphasizes Kestenbaum.
Recognizing that all humans possess inherent biases, Kestenbaum suggests leveraging AI in a manner that dismisses irrelevant information, such as a candidate’s educational background or name. Used responsibly, AI can have a positive influence on hiring.
To navigate AI responsibly, Kestenbaum recommends employers partner with a third-party tech company that will not only perform audits and optimize technology for compliance but also guide hiring teams on effective AI tool utilization. According to Kestenbaum, even with identical technology, two companies can yield vastly different outcomes depending on how well-informed their employees are in using the tool. As impressive as AI is, it still requires effective management by knowledgeable individuals.
As the flourishing AI technology continues to shape the future, Kestenbaum urges all AI users to prioritize responsible use rather than waiting for regulatory action. He expects New York City’s Local Law 144 to be just the beginning, emphasizing that bias in hiring remains unacceptable under EEOC regulations.
As organizations navigate the AI landscape, let’s embrace these regulations as an opportunity to foster unbiased hiring practices. With the right approach, AI can revolutionize recruitment while ensuring fairness and equal opportunities for all.
