This column is written by Stacey Harris, chief research officer and managing partner of Sapient Insights Group, an independent research and advisory firm focused on HR technology.
One of the most volatile areas in HR technology is recruiting. News of M&A deals and strategic partnerships comes across our desks weekly—and that’s not an exaggeration. One driver of the activity is the ongoing trend across HR tech to consolidate. Big companies acquire smaller ones—sometimes because they lack functionality in legacy solutions, and sometimes to gain new customers and market share.
The other deals driver is AI. Recruiting is the HR functional area where AI may have the greatest and most immediate potential. Instead of investing the time and money to add AI functionality to existing solutions, major players are acquiring companies with AI-supported capabilities, intending to integrate AI functionality and tools into their legacy offerings.
Sapient’s 2024-2025 HR Systems Survey (conducted annually for 30 years) analyzed usage trends, replacement plans, user experience and vendor satisfaction in the recruiting tools category. We combined that with briefings from solution providers to provide some highlights.
Adoption Trends
Of all the systems involved in talent management, recruiting had the highest adoption rate. An overwhelming majority of organizations (88 percent) used some type of recruiting or talent acquisition solution. The high adoption rate is directly related to the ongoing need for organizations to find individuals with specialized skills or to expedite the recruitment and hiring process.
Typically, recruiting systems include a range of functionality—candidate management and tracking, candidate assessments, background checks and sometimes onboarding processes. In 56 percent of the surveyed organizations, recruiting solutions were highly integrated into corporate ERP or HR management systems. When that’s the case, replacing an existing recruiting system can be painful and costly. That explains why only 6 percent of organizations surveyed had decided to switch their current solutions, and only another 6 percent had active RFPs (compared with the 21 percent of organizations planning to switch their payroll solutions).
Scoring The Vendors
Each year, the “Voice of the Customer” section of our HR Systems Survey identifies the vendors that received top scores from customers in two areas: vendor satisfaction and user experience.
The following companies scored the highest across three customer size categories for user experience. (Italics designate the vendors with the highest scores; the remaining four vendors appear in alphabetical order.)
- Enterprise (5,000 or more employees): iCIMS, Indeed, Microsoft LinkedIn Recruiting, SAP SuccessFactors, Workday.
- Mid-Market (500 to 4,999 employees): Indeed, ADP, Greenhouse, Microsoft LinkedIn Recruiting, Workday.
- Small and Mid-sized (fewer than 500 employees): Bamboo HR, ADP, isolved, Paycor Newton, Workable.
The following providers had the highest vendor satisfaction scores:
- Enterprise (5,000 or more employees): iCIMS, Indeed, Microsoft LinkedIn Recruiting, SAP SuccessFactors, Workday
- Mid-Market (500 to 4,999 employees): ADP, Greenhouse, iCIMS, Indeed, Workday
- Small and Mid-sized (fewer than 500 employees): Workable, ADP, Bamboo HR, isolved, Paycor Newton
Characteristics that earned solution providers high scores included innovation and updates, easy integration, flexible configurations and vendor responsiveness. Respondents also cited ease of use for non-HR staff and personalized messaging.
The reasons given for low scores included data inaccuracies, security issues, integration issues and cost concerns.
Enter AI
The HR Systems Survey revealed that 24 percent of respondents were using some form of AI functionality for recruiting. In comparison, 9 percent had budgeted for or forecasted the use of AI for recruiting. The most common use case for AI in recruiting has been the generation of job descriptions. However, AI agents are rapidly being developed—and in some cases already in use —for other recruiting tasks:
- Candidate sourcing and screening. AI can analyze large datasets to identify possible job candidates—even those with unconventional career paths—and screen résumés more efficiently.
- Automated communications. Chatbots and AI assistants can engage with job seekers in real-time, answer common queries, provide updates and even conduct initial interviews.
- Interview scheduling. AI-powered tools can automate the coordination of schedules between candidates and hiring managers, streamlining the process.
- Document generation. In addition to creating job descriptions, AI can draft candidate summaries, take interview notes and write drafts of offer or rejection letters.
Well-designed AI agents also enhance the candidate’s experience by quickly answering routine questions, improving scheduling efficiency and providing them with prompt updates on the hiring process.
AI can also analyze large amounts of internally and externally available data to identify passive candidates and build robust talent pipelines based on specific skills or experience—a significant benefit for companies with skills gaps in particular areas.
Real Risks
Advanced AI functionality comes with risks, often depending on (1) the amount of training that has gone into the development of the product’s algorithms and (2) the way the customer implements the product.
For instance, experts often cite the reduction of hiring bias as a benefit of AI-enabled recruiting tools. However, algorithms based on data points such as household zip code, specific schools and even past work experience can introduce inadvertent bias. Algorithms based on historical hiring results can inadvertently reinforce past discrimination.
These risks are real and can be costly. Claims of hiring discrimination based on built-in algorithm bias have led to several high-profile pending lawsuits against employers and vendors.
We urge decision-makers to exercise caution when implementing AI-driven recruitment tools and carefully weigh the potential benefits and risks. At a minimum, a company needs resources for the ongoing monitoring and training of the AI, the development of strong governance guidelines with designated accountabilities and human oversight of the process. Tool selection decisions must factor in proven vendor transparency and the system’s maturity. Being first to market in this category isn’t necessarily a selling point for a vendor.
Sapient is currently analyzing the data from its latest HR Systems Survey, which represents feedback from approximately 5,000 organizations globally. We look forward to discussing the results with attendees at November’s Finance & Accounting Technology Expo.
