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Should You Use AI in Hiring? A Simple Guide for Businesses

by | May 12, 2026 | Hiring Tips

Short answer: Yes, use AI in hiring for the slow, repetitive work, and keep a person on every decision. AI is good at drafting job ads, sorting a big pile of resumes against your must-haves, drafting screening questions and turning recorded interview answers into text. People should decide who gets an interview, who gets hired and why. Before you start, check the AI hiring laws where you hire.

This guide is for owners and managers who do their own hiring and want to know whether artificial intelligence for hiring is worth it. It covers what AI does well, where it goes wrong, the AI hiring laws that apply today with their start dates, and five tips to start safely. It ends with the questions to ask any vendor. The laws and numbers were checked in October 2026.

What does AI in hiring actually do?

AI in hiring means software that writes, sorts, scores or summarizes during the hiring process. It often comes built into tools employers already use, such as an applicant tracking system (ATS).

Most businesses do not use AI yet, but the share is growing. In the U.S. Census Bureau's Business Trends and Outlook Survey, 23.8% of businesses said they used AI in any business function in the last two weeks, up from 17.7% in the first survey of 2026. Among firms with 250 or more employees, 36.5% did (U.S. Census Bureau, Business Trends and Outlook Survey, National and Employment Size Class data files, collected September 21 to October 4, 2026, released October 8, 2026). That figure covers every use of AI, not hiring alone.

Here is where AI fits in each hiring step, and what a person should still do:

Hiring stepWhat AI can doWhat a person should still do
Job adsDraft a full ad from a few job detailsCheck pay, hours and must-haves, and cut anything you cannot promise
Resume reviewTurn resumes into searchable data and score each one against your requirementsRead the top and borderline resumes, and never reject someone on a score alone
Screening questionsDraft pre-qualifying questions from the job descriptionKeep only questions tied to the job, and drop anything that touches age, health or family
Video interviewsTurn recorded answers into text you can skimWatch and score the answers yourself, on the same scale for everyone
The hiring decisionNothing. Keep AI out of itDecide after a live interview, and write down why

Where AI helps most in hiring

AI helps most with work that is slow, repetitive and easy to check: the first draft of a job ad, the first sort of a big applicant pile and the first draft of screening questions. In each case you can see the output and fix it before a candidate is affected.

Writing job ads faster

An AI job ad writer turns a job title and a few details into a full draft in seconds. The draft is a starting point. Add what only you know: the real schedule, the pay range, what a good first month looks like and why people stay. Our guide on why job ads stop working and how to fix them shows what to add.

Sorting a big pile of applicants

AI resume matching compares each resume with the requirements you set and puts the closest matches first. That saves the most time when one job gets dozens or hundreds of applicants. Treat the order as a reading list, not a verdict: a career switcher or a strong candidate with a thin resume can land low. See our resume screening tips for what to look for when you read the list.

Drafting screening questions

AI can write pre-qualifying questions from your job description, such as "Do you have a valid driver's license?" or "Can you work Saturdays?" You pick the ones that fit. One IdealTraits customer in insurance described it this way:

"The Pre-Qualifying Questions that were generated using AI are excellent. It was very easy to navigate and pick and choose what questions to ask based on the subject of the job posting. This is a great feature and a complete time saver."

IdealTraits customer, insurance

Before you turn screening questions on, decide what actually disqualifies a candidate, so every knock-out question rests on a real job need.

Skimming recorded interview answers

When candidates record a one-way video interview, AI transcription turns each answer into text. You can skim the text to find the answers worth watching in full. Our guide to one-way video interviews explains how to score the answers fairly.

Want to see AI job ads, resume matching and screening questions in one hiring platform? See IdealTraits AI recruiting tools.

Where AI in hiring goes wrong

AI in hiring goes wrong when people trust its ranking without checking it. The two biggest risks are bias the AI learned from its training data and candidates who lose trust when they feel judged by a machine.

Bias copied from data

AI models can repeat patterns in the data they learned from. In a University of Washington study, researchers ran more than 550 real resumes against more than 500 job listings through three AI language models. The models favored resumes with white-associated names 85% of the time and Black-associated names 9% of the time, and they never favored Black male-associated names over white male-associated names (University of Washington, October 2024).

The study tested open-source models, not a specific hiring product, so it does not prove that any one tool is biased. It does show why you check who your tool moves forward, instead of assuming software is neutral.

Candidates who walk away

Many job seekers are wary of AI in hiring. In a Pew Research Center survey, 66% of U.S. adults said they would not want to apply for a job with an employer that uses AI to help make hiring decisions, and 71% opposed AI making the final hiring decision (Pew Research Center, survey of 11,004 adults, December 2022). Views may have shifted since then, as more people now use AI. The practical lesson still holds: tell candidates how you use AI and that a person makes the call.

Missing what a resume does not show

AI can only match what is written down. It does not see how someone is likely to work with customers, handle pressure or follow a process. That is why personality can tell you more than a resume for many roles.

AI hiring laws: what applies to you

There is no single federal AI hiring law in the U.S. Federal anti-discrimination laws apply to every hiring decision, and a growing set of state and city laws add notice, audit and review duties when software helps decide. New York City requires a yearly bias audit for some tools, Illinois requires notice, California's anti-discrimination rules cover automated-decision systems, and Colorado's law applies to hiring decisions from January 1, 2027.

This section is general information, not legal advice. If you hire in these places, check the official page for each law and ask an employment lawyer.

WhereLawIn effectWhat it asks of employers
New York CityLocal Law 144, automated employment decision toolsEnforced since July 5, 2023A bias audit within one year before you use the tool, a public summary of the results, and notice to candidates and employees 10 business days before use
IllinoisArtificial Intelligence Video Interview ActJanuary 1, 2020Before AI analyzes recorded video interviews: tell applicants, explain how the AI works and get their consent. Share videos only as needed, and delete them within 30 days of a request. Since 2022, employers that rely only on AI analysis of video interviews to pick who gets an in-person interview must report applicants' race and ethnicity to the state each year
IllinoisHuman Rights Act amendment, Public Act 103-0804January 1, 2026Bans AI use that has the effect of discriminating against protected classes, and using zip codes as a stand-in for them. Requires notice when AI is used for these decisions
CaliforniaCivil Rights Council rules on automated-decision systemsOctober 1, 2025Makes it unlawful to use an automated-decision system or selection criteria that discriminates against applicants or employees on a basis the Fair Employment and Housing Act protects
ColoradoSB 26-189, automated decision-making technologyApplies to decisions made on or after January 1, 2027Clear and conspicuous notice to applicants at the point of interaction with a covered tool, a plain-language description of the tool's role within 30 days after a decision with an adverse outcome such as a rejection, the right to correct wrong personal data and ask for human review, and records kept for at least 3 years
FederalTitle VII of the Civil Rights Act and other federal anti-discrimination lawsIn effectNo AI-specific rule. These laws ban discrimination in hiring, and they make no exception for decisions made with software
Timeline of U.S. laws on AI in hiring: Illinois AI Video Interview Act January 2020, New York City Local Law 144 enforced July 2023, California automated-decision system rules October 2025, Illinois Human Rights Act AI amendment January 2026, Colorado SB 26-189 January 2027.
When each AI hiring law starts. Sources: Illinois General Assembly, NYC Department of Consumer and Worker Protection, California Office of Administrative Law, Colorado General Assembly. Checked October 2026.

What changed at the federal level

Federal enforcement has shifted since 2025. Executive Order 14281 (April 23, 2025) told federal agencies to deprioritize enforcing laws to the extent they include disparate-impact liability, the legal theory that a neutral-looking practice can still discriminate through its results. Executive Order 14365 (December 11, 2025) directed the Attorney General to set up an AI Litigation Task Force to challenge state AI laws, and it names Colorado's earlier law as an example.

Neither order repeals a state or city law. Until a court or a legislature changes them, the laws in the table still apply to employers who hire there. Colorado has already rewritten its law once: SB 26-189, signed May 14, 2026, replaced the 2024 Colorado AI Act before that law took effect.

A simple self-check you can run

The federal Uniform Guidelines on Employee Selection Procedures give a rule of thumb for spotting a problem: a selection rate for any race, sex or ethnic group that is less than four-fifths (80%) of the rate for the group with the highest rate is generally regarded as evidence of adverse impact (29 CFR 1607.4(D)). For example, if your tool moves 50% of one group to interviews and 30% of another, 30 divided by 50 is 60%, which is under 80%. That is your cue to look closer at the tool and your criteria.

How to start using AI in hiring: 5 tips

Start small, with one task you can check, and keep a person on every decision.

  1. Pick one task. Job ads or resume sorting are the easiest places to start, because you can see every output before a candidate does.
  2. Write your must-haves first. AI matches against what you give it. A clear list of skills, schedule and licenses makes the ranking better and easier to defend.
  3. Keep a person on every decision. Let AI sort and summarize. People reject, interview and hire, and they write down the reason for each rejection.
  4. Tell candidates. One plain line in the job ad or invite is enough: what the AI does and that a person decides. In New York City and Illinois notice is the law, and in Colorado it will be for decisions from January 1, 2027.
  5. Check the results every quarter. For each job, compare who applied, who moved forward and who got hired. Run the four-fifths check above, and change your criteria or the tool if a group falls behind.

If you are rebuilding the whole process, our guide to improving your hiring process shows where AI fits among the other steps.

Questions to ask an AI hiring vendor

Ask these before you buy, and keep the answers on file. A good vendor answers each one in plain words.

  • What does the AI do, and what does it decide on its own? You want tools that rank and draft, with people making the decisions.
  • Can I see why a candidate got their score? A score with reasons is easier to check and to explain to a candidate.
  • Can I turn each AI feature off? You may want a process without AI for some jobs or candidates.
  • Has the tool had a bias audit, and can I see the summary? New York City requires one for covered tools.
  • How do you handle notice, consent and video deletion requests? Illinois requires all three when AI analyzes video interviews.
  • Where is candidate data stored, and who can see it? Ask how long it is kept and how to delete it.

How IdealTraits helps

IdealTraits is an all-in-one hiring platform with AI that helps businesses hire for fit, not just experience. The AI job ad writer and AI resume matching are included on every plan. AI resume matching gives each candidate a fit score with strengths and gaps, so you can see why a candidate ranks where they do. Other AI recruiting tools include an AI resume parser, AI pre-qualifying questions written from the job description and AI video interview transcription.

A resume shows what someone has done; IdealTraits shows how they are likely to work. IdealTraits pre-hire assessments use validated personality assessments, and its assessments were independently validated by Central Michigan University. IdealTraits one-way video interviews let you hear and see candidates before you meet them. 18,000+ businesses have used IdealTraits to hire. For cost questions, see IdealTraits pricing.

AI in hiring FAQ

Is it legal to use AI in hiring?

Yes, you can use AI tools in hiring in the U.S., with conditions in some places. New York City, Illinois and California add rules on audits, notice or discrimination, and Colorado's rules apply to hiring decisions from January 1, 2027. Federal law bans discrimination in hiring whether or not software is involved.

Do I have to tell candidates I use AI?

In some places, yes. New York City requires notice 10 business days before a covered tool is used. Illinois requires notice, an explanation and consent before AI analyzes video interviews, and notice when AI is used in employment decisions. Colorado requires notice for covered tools from January 1, 2027. Elsewhere it is still good practice, because many candidates distrust AI in hiring.

Can AI write a job offer?

AI can draft the wording of an offer letter. A person should set the pay, start date and terms, and check every line before the offer goes out, because an offer is a promise your business has to keep.

Does AI remove bias from hiring?

No. AI can apply the same criteria to every resume, which helps consistency, but it can also copy bias from the data it learned from. Keep a person on every decision and check your results by group every quarter.

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