As America’s labor market faces a slowdown, the integration of artificial intelligence in hiring processes, particularly through AI-led interviews and auto-generated cover letters, is reshaping the job search landscape. While these technologies promise efficiency, recent studies suggest they may not lead to better outcomes for applicants.
According to a survey by the Society for Human Resource Management, more than half of organizations reported using AI for recruitment in 2025. Additionally, approximately one-third of ChatGPT users have utilized the OpenAI chatbot to assist in their job searches. However, research indicates a troubling trend: job seekers who leverage AI tools may be at a disadvantage, as companies are inundated with applications.
“The ability for companies to select the best worker today may be worse due to AI,” stated Anaïs Galdin, a researcher at Dartmouth, who co-authored a study examining the impact of large language models on cover letters. Galdin and her co-author, Jesse Silbert from Princeton, analyzed cover letters from tens of thousands of job applications on Freelancer.com. They found that since the introduction of ChatGPT in 2022, cover letters have become longer and better-written, yet companies have begun to pay less attention to them. This trend has obscured the distinction between qualified candidates and the broader applicant pool, leading to a decline in hiring rates and average starting wages.
Silbert warned that without changes to enhance communication between workers and firms, the job market could suffer from a lack of clarity and efficiency. As the volume of applications rises, employers are increasingly automating interview processes. A survey conducted by recruiting software firm Greenhouse in October revealed that 54% of US job seekers have participated in AI-led interviews. Although remote interviews gained traction during the pandemic in 2020, the reliance on AI has not necessarily reduced the inherent subjectivity of hiring.
Djurre Holtrop, a researcher who studies hiring algorithms, cautioned that “algorithms can copy and even magnify human biases,” urging developers to remain vigilant. Daniel Chait, CEO of Greenhouse, described the situation as a “doom loop,” where both job seekers and employers are expressing dissatisfaction with the current state of hiring. “Both sides are saying, ‘This is impossible, it’s not working, it’s getting worse,’” Chait remarked.
Despite these challenges, employers are increasingly adopting AI technologies, with estimates projecting that the market for recruiting technology could grow to $3.1 billion by year-end. However, there is rising pushback from state lawmakers, labor groups, and individual workers, who fear that AI could perpetuate discrimination in hiring. Liz Shuler, president of the AFL-CIO labor union, referred to the use of AI in hiring as “unacceptable,” arguing that these systems may deny qualified workers opportunities based on arbitrary criteria like names or zip codes.
In response to these concerns, states such as California, Colorado, and Illinois are enacting new laws aimed at establishing standards for AI use in hiring. Meanwhile, a recent executive order signed by President Donald Trump risks undermining these state-level regulations. Samuel Mitchell, a Chicago-based employment lawyer, noted that while the order does not preempt state law, it adds to the “ongoing uncertainty” around AI regulations.
Notably, existing anti-discrimination laws remain applicable to hiring practices, regardless of whether AI is involved, and lawsuits are already emerging. In one case backed by the American Civil Liberties Union, a deaf woman is suing HireVue, an AI-powered recruiting company, over claims that its automated interview process failed to meet required accessibility standards. HireVue has denied these allegations, asserting that its technology aims to reduce bias through a foundation of validated behavioral science.
Despite initial challenges, AI’s role in hiring appears to be entrenched. Some developments in AI have enhanced the ability to analyze resumes, potentially benefiting candidates who might otherwise be overlooked. However, those who value personal interaction in the hiring process find themselves longing for a more traditional approach.
Jared Looper, an IT project manager in Salt Lake City who once worked as a recruiter, described his experience with an AI recruiter as “cold” and expressed concern for individuals unaccustomed to navigating an evolving hiring landscape that increasingly prioritizes AI compatibility. “Some great people are going to be left behind,” he cautioned, highlighting the potential pitfalls of an AI-dominated recruitment process.
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