Nearly one-third of hiring managers regret a hire. AI and VR promise to help — as experts say traditional interviews are 'barely better than chance'

“The resume was already a poor signal before AI-generated ones inundated us,” Gershon Goren, founder and CEO of hiring software company Cangrade, told Moneywise. “Both resumes and unstructured interviews have decades of research showing they perform barely better than chance.”

Now, companies are experimenting with everything from AI-powered screening tools to virtual reality simulations and gamified assessments in an effort to make better hiring decisions.

Traditional methods aren’t working

For decades, hiring has relied on a familiar formula: submit a résumé, sit through an interview and hope the person on the other side of the table can accurately judge whether you’re the right fit for the role. But research suggests that process may not be nearly as reliable as many assume.

In a survey of 2,200 U.S. hiring managers conducted by staffing firm Robert Half, nearly one-third said they had made a hiring mistake in the previous two years. More than half said the wrong hire contributed to additional turnover on their team.

Archie Payne, president of CalTek Staffing, says one reason is that employers often rely on signals that don’t necessarily reflect how someone will perform on the job.

“A confident interview or polished resume doesn’t necessarily predict how someone will collaborate on a software project or troubleshoot a production outage,” he told Moneywise.

Artificial intelligence is now adding another layer of complexity. Job seekers are increasingly using AI tools to write résumés and cover letters, while employers rely on applicant tracking systems to sift through hundreds — sometimes thousands — of applications.

But according to Goren, the industry’s challenges began long before ChatGPT arrived.

“What’s interesting is that the industry has known this for a long time,” he said. “The response has mostly been to make the process look more rigorous without changing what it’s actually measuring. Better software, shinier interfaces, the same underlying logic.”

Is gamified hiring the solution?

As companies search for better ways to evaluate candidates, some are turning to gamified hiring. Richard N. Landers, a professor of organizational psychology at the University of Minnesota, points to a hypothetical software sales assessment to explain how the approach works.

Instead of telling an employer how they’d handle a situation, candidates are asked to prove it. In one hypothetical software sales assessment, applicants pitch a product to a manager, chief financial officer and IT director while navigating client concerns, competing priorities and tight deadlines.

“The scenario is constructed to force the player to think critically and respond in such a way that the sale is made within seven days of simulated game time,” Landers told the Wall Street Journal.

While the concept may sound futuristic, some employers are already experimenting with game-based hiring assessments.

Consumer goods giant Unilever, for example, replaced portions of its early résumé screening process with a series of neuroscience-based games designed to measure traits such as focus, decision-making and risk tolerance. According to a case study, the company cut its hiring timeline from four months to four weeks after overhauling the process.

Looking ahead, Landers said employers could even shift to virtual reality headsets to fully immerse job candidates in these simulations.

The technology isn’t the real story

As employers experiment with video games and AI-powered hiring tools, experts caution that the technology is only as useful as the skills it’s designed to measure.

“A video game that measures reaction time tells you something about reaction time. Whether that predicts job performance depends entirely on the job, and on how rigorously the tool was designed,” Goren said.