The hiring process can be time-consuming and burdensome. Finding the candidate with the right skills can be an arduous task. It takes approximately 3 to 6 months to fill an open position.
Meanwhile, current employees are overburdened with work, and customer satisfaction plummets.
However, thankfully AI-assisted hiring is a viable solution. AI assists talent acquisition by using algorithms to “identify” resumes with relevant experience and machine learning to “ analyze historical data” to help recruiters find the best fit. AI-assisted hiring can screen resumes “70 % faster than manual methods”.
However, California aims to place onerous regulatory oversight on AI hiring practices. States such as California, Colorado, and Connecticut have either passed or proposed regulations requiring “impact assessments” to be reported to state regulatory agencies to protect against bias.
A recently proposed law in California not only imposes reporting requirements and corrective measures but also presents hurdles for firms looking to deploy AI systems for talent acquisition. This law is bad for business in California. Because AI is covered under federal law, it will cause more companies to move out of state, and regulators will not consider self-selection bias.
The additional oversight is overkill when federal laws already address employment discrimination. Title VII of the Civil Rights Act established the EOCC to investigate hiring and workplace discrimination. EOCC has already clarified that Title VII applies to algorithms selecting job candidates.
Making the defense a computer made the selection a toothless argument in court. Even FTC chairwoman Lina Khan agrees that the “existing laws” already apply to AI.
Despite the naysayers, many people are optimistic that AI can improve discrimination. 53 % of Americans polled believe that AI will decrease bias in the hiring process. EOCC commissioner Keith Sondering stated that “carefully designed” AI could improve workplace diversity. Heavy-handed regulation could hamper the tool’s effectiveness in reducing hiring bias.
It is no secret that the regulatory climate in California is less than hospitable. California-based firms are subject to “nearly 400,000 regulations”, approximately triple the national average.
Navigating the maze of red tape increases costs and makes conducting business more cumbersome. No wonder California ranks as one of the worst states to do business in. Restricting tools that expedite the hiring process will only make California less friendly to commerce, leading to more companies leaving.
Many companies have already chosen to vote with their feet in favor of less daunting regulations. Companies ranging from Oracle to Telsa have abandoned California for the looser laws of Texas, which likely contributed to the decline in jobs throughout the state. The state regulatory burdens have also eaten into corporate tax revenue, placing more financial strain.
Another blind spot is that the Civil Rights Department of California might not consider self-selection.
Take engineering. 86.3% of engineers are males, the byproduct of more men majoring in engineering, not hiring discrimination. Forcing companies to have their hiring results analyzed isn’t going to convince more women to earn engineering degrees and doesn’t justify regulatory overreach.
AI has the potential to make hiring more efficient and less biased. California regulators requiring firms to “pull back the curtains on” their hiring algorithms could create a chilling effect on this innovation in talent acquisition. The extra red tape is unnecessary because federal law already covers AI, causing more companies to leave California and ignore occupational self-selection.
Inverted logic 