In a world ever more defined by AI, the way we hire is going through a tectonic revolution. President Donald Trump’s most recent executive order endangers the supremacy of state-level regulations on how specifically AI can and cannot be used in employment. This news comes at a moment when employers and employees alike grapple with the effects of new AI technologies. Since the arrival of ChatGPT in 2022, the game has totally shifted in how applicants are able to self-promote.
ChatGPT’s release didn’t just represent an incremental improvement, it was a quantum leap in the effectiveness of written human conversation. Once again, job seekers started writing complex and elevated cover letters, even using AI to make their personal stories shine. This new level of quality has forced companies to make a hard look at how much they’re willing to pay for these documents. Firms are quickly learning to navigate this brave new world. Many are using more inclusive indicators of candidate suitability, often doing away with outdated measures such as cover letters.
Liz Shuler, the head of the AFL-CIO labor union, cited her fears over AI used in hiring. She worries it will erode equitable access to good jobs. She called it “unacceptable,” explaining that algorithms can reinforce the same bias that already exists. “AI systems rob workers of opportunities they’re qualified for based on criteria as arbitrary as names, zip codes, or even how often they smile,” Shuler stated, underscoring the risks associated with algorithmic decision-making.
Anaïs Galdin, a PhD researcher at Dartmouth, has just published exciting new research on large language models (LLMs) and cover letters. Her research shines new light on this very important topic. Led by Galdin and her co-author Jesse Silbert, the researchers used machine learning to analyze tens of thousands of job applications submitted on Freelancer.com. Their findings suggest that the ability for companies to select the best worker may actually diminish due to AI’s involvement in hiring processes.
“The ability (for companies) to select the best worker today may be worse due to AI,” – Anaïs Galdin
That’s a big change as we move to AI-led interviews. Recent surveys indicate that a staggering 54% of U.S. job applicants have experienced these interviews. Perceptions of fairness for AI-led interviews are even lower. Yet, in a recent survey we conducted with Greenhouse, only 8% of job seekers feel that these interviews are equitable. Daniel Chait, CEO of Greenhouse, gave pretty blunt advice. He underscored that this has created a “doom loop,” causing employers and job seekers alike to become more frustrated and disengaged with the hiring process.
“Both sides are saying, ‘This is impossible, it’s not working, it’s getting worse,’” – Daniel Chait
As companies navigate this new terrain, states like California, Colorado, and Illinois are taking proactive steps to establish regulations aimed at creating standards for AI in hiring practices. Samuel Mitchell, a Chicago-based environmental lawyer, noted that the new executive order has deepened the “continuing haze of uncertainty.” This uncertainty particularly relates to the implementation of the new regulations.
The Society for Human Resource Management reported that over half of organizations surveyed used AI in their recruitment efforts in 2025. The market opportunity for these technologies has never been greater. Recruiting technology overall is a boon of a market, expected to reach a staggering $3.1 billion by the end of this year. For all this growth, industry pros are sounding alarms about the unregulated use of AI in hiring.
Djurre Holtrop, a voice in this exchange, said it well regarding the fundamental dangers of hiring practices automated by algorithms. He stated that “algorithms can copy and even magnify human biases,” reinforcing Shuler’s earlier assertions about the potential pitfalls of AI systems.
As companies increasingly adopt AI tools, the need for transparency and accountability in hiring practices becomes central. As more firms adopt these technologies, it becomes increasingly important for industry leaders and policymakers to ensure that they are utilized responsibly.
“If we do nothing to make information flow better between workers and firms, then we might have an outcome that looks something like this,” – Jesse Silbert