AI hiring tool at Kmart saves company up to $6 million over the last three years
Kmart is saving up to $6 million and significantly reducing hiring time thanks to an AI hiring tool that its chief people officer said helped them screen hundreds of thousands of applications annually.
Kmart implements an AI hiring tool made by Sapia.ai, which runs applicants through a five-question chat that scores candidates on teamwork, helping others, adaptability, problem solving, and communication.
Tristram Gray, Kmart's chief people and corporate officer, described the technology to The Australian as a "blind tool."
"This is not an applicant tracking system or recruitment system, it's a hiring assessment tool," he told the news outlet.
"We don't ask people to provide a CV, that's the first bit. It's a blind tool, so it doesn't talk to the hiring managers and the recruiters about their age, their gender, their background, etc."
According to Gray, the tool is of "tremendous value" to the discount chain.
"We've probably saved $5m to $6m over the last three years, but secondly, it's actually improved our relationship with candidates and candidate experience, and all those candidates are customers at the end of the day," Gray added.
It also cut the hiring time at the firm from 44 days to 11.8 days, and allowed the company to assess all the job applications it receives, which is about 600,000 a year.
Risk of biases
The AI chatbot has replaced human applicant screening in more than 450 Kmart stores, but Gray maintained that human recruiters remain in the process.
The AI recommends the candidates to the human recruiters, who hire about 85% of the recommendations.
The implementation of the AI hiring tool comes amid concerns that the technology could reinforce biases during hiring. In Victoria, its government recently pledged to introduce regulations in using AI for recruitment to avoid potential discrimination.
Gray expressed that he initially shared the same concerns when it comes to AI use.
"I was quite worried that using an AI tool, we could end up in a situation where it actually created some level of bias," Gray told The Australian. "We've actually found the reverse on that."
He pointed out that the AI tool helps further diversify recruitment at Kmart, with First Nations people now accounting for 8.2% of those hired, surpassing a benchmark of three per cent.
More than 3.5% of successful candidates also disclosed a disability, according to the chief people officer.
AI in recruitment
HR leaders across Australia have long expressed concerns about using AI tools in the recruitment process.
The State of AI in Australian Human Resources report in 2024 found that 39.4% of organisations using AI tools believe that it discriminated against under-represented groups.
Amid these concerns, the report underscored the need for review and human oversight to ensure the responsible adoption of AI.
"Undertaking a review of any AI-enabled or automated HR technology both prior to its use and following a period of implementation is critical to supporting equity and diversity, and mitigating risks of bias and discrimination," it said.
