New report reveals major shift in hiring decisions amid AI implementation
Artificial intelligence is emerging as a "hiring gate" for organisations as the majority of leaders globally cite it as a new factor in staffing decisions, according to a new report.
Insights from Zip's State of Spend report on how companies approach procurement revealled a major shift in recruitment processes across organisations.
"For the first time in history, companies are looking at everything through the lens of AI," said Nick Heinzmann, Head of Research at Zip, in a statement.
It found that 75% of companies now factor AI into hiring decisions, with 17% requiring proof that AI cannot perform a role before approving new positions.
"AI has become a hiring gate," the report reads.
More than half of executives (58%) said AI substitution is encouraged but not required, while only 21% said AI has no effect on hiring plans, according to the report.
When it comes to skills, 56% of executives also noted AI and automation fluency will be the "most critical skill moving forward."
AI's impact has 'fully arrived'
Heinzmann said their findings indicate that AI's anticipated impact on the workforce "has now fully arrived."
"When they do hire people, companies are prioritising AI fluency above all other skills, while cutting consultants and analysts across the board," Heinzmann said.
The top cost reduction or savings targets for this year are professional services, contingent labour, as well as travel and events.
"Executives echo this pattern, putting their greatest scrutiny on consultants, gig workers, and legal services," the report reads.
And while cuts on these functions happen, the report noted that IT departments are expecting to expand.
"The exception is IT, which anticipates growth as it takes on evaluating, deploying, and governing new AI systems," the report reads.
The findings reflect recent events where employers are cutting contractor roles and considering at workforce reductions as AI is further deployed in their systems.
Accenture announced in September it would cut staff unable to adapt to AI roles and Anthropic CEO Dario Amodei warned in May that AI could wipe out half of all entry-level white-collar jobs and increase unemployment by up to 20% in the next one to five years.
Amazon CEO Andy Jassy told his employees in June to expect a reduction in the total corporate workforce "in the next few years" amid AI implementation.
According to Zip's research, 70% of organisations are already testing or using AI in business operations. This includes 17% that are deploying it widely across multiple processes.
"We are witnessing the transformation of business in real-time," the report reads. "The results show AI adoption is moving faster than expected and already influencing business decisions across nearly every function."
