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The ROI of AI in hiring: time, cost, and quality

What is the ROI of AI in hiring?
AI in hiring saves time by automating tasks, reduces costs through efficiency, and improves quality of hire by matching candidates more accurately to roles.

Table of contents

  1. Introduction
  2. How ai saves time in recruitment
  3. How ai reduces hiring costs
  4. How ai improves quality of hire
  5. Real examples and best practices
  6. Conclusion

Introduction

Hiring teams face constant pressure to fill roles quickly, cost‑effectively, and with high-quality talent. AI is emerging as a game changer by streamlining recruitment processes, reducing operational costs, and ensuring better candidate-role matches. Let’s explore the measurable return on investment AI can bring to your hiring strategy.

How AI saves time in recruitment

AI-powered platforms take on time-consuming tasks such as resume screening, initial assessments, and interview scheduling. Instead of manually reviewing hundreds of applications, recruiters receive ranked shortlists within minutes.

Time-saving impacts include:

  • Automated pre-screening and candidate ranking
  • Integrated scheduling and reminder systems
  • Faster decision-making with data-backed insights

For example, Selectionlab’s competencies with video accelerates early-stage evaluations, freeing recruiters to focus on meaningful interactions.

How AI reduces hiring costs

When hiring cycles shorten, costs drop. AI minimizes the need for extensive manual labor, reduces agency spend, and lowers the expenses linked to bad hires. Predictive analytics help ensure resources are directed toward candidates with the highest potential.

Cost benefits:

  • Lower cost-per-hire through automation
  • Fewer bad hires reduce turnover expenses
  • Less reliance on external recruiters

Consider a consultancy firm using AI to cut screening time in half, this means fewer overtime hours for recruiters and faster billable placements.

How AI improves quality of hire

AI not only accelerates hiring but also enhances the quality of candidates selected. By analyzing data from cognitive tests, cultural fit assessments, and motivational profiles, AI identifies individuals who are more likely to perform well and stay longer.

Quality improvements:

  • Deeper insights into competencies and potential
  • Better cultural alignment for higher retention
  • Data-driven selection reduces human error

Selectionlab’s cognitive ability test and cultural preferences tools provide insights that lead directly to stronger hiring outcomes.

Real examples and best practices

Companies across industries are reporting measurable ROI from AI in hiring. Welten, a financial secondment agency, partnered with Selection Lab to modernize their recruitment process. By integrating AI-powered tools like automated WhatsApp intake, personality scans, and interview scheduling, they significantly improved efficiency and candidate experience. The result: faster responses, thousands of minutes saved in scheduling, and a more personal yet scalable selection flow. Their experience demonstrates how targeted AI use can directly impact both hiring speed and quality.

Best practices:

  • Combine AI insights with human judgment
  • Regularly review data to fine-tune models
  • Integrate AI tools with your ATS for a seamless workflow

Interested in reading how we integrated the selection flow for Welten? Click here

Conclusion

The ROI of AI in hiring is clear: faster processes, reduced costs, and stronger hires. By integrating AI tools with human expertise, organizations can elevate recruitment outcomes and build teams that thrive long term.

Ready to unlock the ROI of AI in hiring? Explore Selectionlab’s AI-powered assessments and start saving time, reducing costs, and hiring better today.

FAQ

Can game-based assessments promote diversity in the hiring process?

Yes, game-based assessments can support diversity by focusing on skills and behaviors rather than traditional criteria like résumés, which may contain unconscious biases. This gives candidates from diverse backgrounds a fairer chance to demonstrate their potential.

What is a game-based assessment?

A game-based assessment is a method that uses game mechanics to evaluate a candidate’s skills, competencies, and personality traits. While playing these games, candidates are assessed on aspects like problem-solving, cognitive ability, and behavior under pressure in an interactive way.

What are the advantages of game-based assessments?

Game-based assessments offer a more engaging and interactive experience for candidates, which can lead to a more positive perception of the hiring process—especially among certain groups. For employers, they provide deeper insights into both cognitive and behavioral traits, which traditional tests may miss. They also reduce the chance of socially desirable answers, as candidates tend to respond more authentically in a game environment.

How reliable are game-based assessments compared to traditional tests?

When well-designed, game-based assessments can be just as reliable—or even more reliable—than traditional tests. They assess a wide range of behaviors and cognitive abilities in a dynamic setting. However, the quality of these assessments varies greatly, so careful evaluation is essential.

How does a game-based assessment work?

Candidates participate in interactive games designed to measure specific skills and behaviors. Evaluation goes beyond just the final score—it also considers how the candidate makes decisions, handles challenges, and responds to different scenarios. These insights reveal underlying thought processes and behavioral patterns.

Are game-based assessments scientifically validated?

The main drawback is that many game-based assessments are relatively new and have not yet been extensively researched by independent academics. Providers often cite their own research, which is rarely externally validated. Without independent studies, the reliability of these assessments remains uncertain—something to keep in mind when selecting one.

How can game based assessments contribute to a better candidate experience

This can vary significantly by audience. The playful, interactive nature of game-based assessments can lower stress levels for some candidates compared to traditional tests. However, research shows that certain groups, especially those over 35, may find them more stressful. Men also tend to rate the experience more positively than women.

Can you practice game-based assessment?

You can familiarize yourself with the style of games used, but it’s difficult to "practice" for them in a traditional sense. These assessments are designed to measure natural reactions and authentic behavior, so repeated practice typically has less effect on performance than with traditional tests.

Will game-based assessments replace traditional tests in the future?

It’s likely that game-based assessments will become more common in hiring processes, but they probably won’t fully replace traditional tests. Both approaches have value and can complement each other depending on the role and the company’s needs.

How are the results of a game-based assessment analyzed?

Results are analyzed based on predefined criteria such as problem-solving ability, reaction time, and behavior under pressure. Advanced algorithms collect and interpret this data to provide a reliable, objective evaluation of a candidate’s strengths.

What kind of skills do game-based assessments measure?

They assess a wide range of abilities, including problem-solving, adaptability, decision-making under pressure, teamwork, and emotional intelligence. Depending on the design, they may also evaluate cognitive skills like memory, attention, and pattern recognition.

How long does a game-based assessment take?

Typically, these assessments last between 15 and 60 minutes, depending on the game’s complexity and the number of skills being tested. They’re usually shorter and more engaging than traditional assessments, making for a smoother candidate experience.

Are game-based assessments suitable for all roles?

They are especially effective for roles that require flexibility, creativity, problem-solving, and strong interpersonal skills. For highly technical or specialized roles, additional assessments may be needed to measure specific knowledge.

What’s the difference between a game-based and a gamified assessment?

A gamified assessment adds game-like elements (such as points or rewards) to a traditional test to increase engagement. A game-based assessment, on the other hand, is a standalone game designed specifically to evaluate certain competencies. The game itself is the primary evaluation tool, not just an enhancement.

FAQ

How can I improve my company’s retention rate?

The retention rate can be improved by investing in employee development and satisfaction. This includes offering training, career opportunities, and recognition for their contributions. A culture of open communication and attention to work-life balance can also contribute to higher retention. Additionally, offering competitive compensation and involving employees in decision-making can strengthen loyalty.

What are the benefits of growth opportunities for employee retention?

Growth opportunities can promote employee retention by giving staff a sense of direction and motivation. When they have the chance to learn and develop professionally within the company, they feel valued, which increases their loyalty. This can prevent them from leaving to seek better opportunities elsewhere. kunnen het behoud van personeel bevorderen door medewerkers een gevoel van richting en motivatie te geven. Wanneer zij de kans krijgen om te leren en zich professioneel te ontwikkelen binnen het bedrijf, voelen zij zich gewaardeerd, wat hun loyaliteit vergroot. Dit kan voorkomen dat ze vertrekken om elders betere kansen te zoeken.

What are the key factors that influence employee retention?

Key factors that influence employee retention include salary and benefits, opportunities for professional development, work-life balance, company culture, and the relationship with supervisors. Employees tend to stay longer when they feel valued, challenged, and supported in their work environment.

Why is employee retention so important for organizations?

Employee retention is important because it helps reduce recruitment and training costs for new employees, and it contributes to retaining knowledge and experience within the organization. High retention also ensures continuity within teams, leading to a more stable company culture, higher customer satisfaction, and improved business outcomes.

Which recruitment strategies help improve retention?

Recruitment strategies that can improve retention include identifying candidates who align with the company culture, using assessments to evaluate soft skills, and providing transparency about role expectations during the hiring process. Employees who feel connected to the organization and have clarity about their role are more likely to stay longer.

How can a good onboarding process contribute to higher retention?

An effective onboarding process can contribute to higher retention by helping new employees quickly adapt to their role, the company culture, and expectations. By providing support and clear information from the start, their engagement is increased, and the likelihood of them leaving early due to feelings of being overwhelmed or lacking guidance is reduced.

What is the role of company culture in retaining employees?

Company culture plays a crucial role in employee retention. When employees feel heard, valued, and connected to the values and norms of the company, they are more likely to stay. A positive culture that fosters collaboration, respect, and personal growth can significantly enhance employee motivation and satisfaction.

How can leadership and management style influence retention?

Leadership and management style have a significant impact on retention. Leaders who inspire, support, and coach their team can increase employee engagement and satisfaction. Offering autonomy and trust can lead to higher loyalty, while inefficient or negative management styles can contribute to dissatisfaction and increased employee turnover.

What is the importance of recognition and rewards for employee retention?

Recognition and rewards play an important role in employee retention by showing staff that their work is valued. This can increase their motivation and loyalty. In addition to financial rewards, compliments, promotions, and other forms of recognition can also contribute to satisfaction and retaining employees.

What role does work-life balance play in improving retention?

A balanced work-life balance plays an important role in increasing retention. By reducing stress and improving job satisfaction, employees are more likely to stay with the company. Initiatives such as flexible working hours, remote work options, and respect for personal time can contribute to this balance.

What does increasing retention mean within a company?

Increasing retention within a company means implementing strategies to keep employees with the organization for longer. This can be achieved by improving job satisfaction, offering growth opportunities, and fostering a positive and supportive company culture.

How do I measure the success of my retention strategy?

The success of a retention strategy can be measured by tracking retention rates and turnover rates, and by gaining insights from exit interviews. Additionally, employee satisfaction surveys and feedback from performance evaluations can provide valuable information about the effectiveness of the strategies applied.

What are the costs of a low retention rate?

A low retention rate can bring significant costs, such as increased expenses for recruiting and training new employees. Furthermore, the loss of experienced staff can lead to lower productivity, reduced knowledge transfer, and a negative impact on company culture.

How can I increase employee engagement?

To increase employee engagement, involve them in decision-making processes, regularly ask for their feedback, and recognize their contributions. Offering development opportunities and maintaining transparent communication can also contribute to greater engagement.

How can technology help improve employee retention?

Technology can be a tool for improving employee retention by facilitating communication, feedback, and development. By using online platforms for training, recognition, and evaluation, companies can create a more engaged and satisfied workforce.

FAQ

How long does it take to complete the tool?

Less than 10 minutes. You’ll answer 30 guided questions and get a summary of what to look for in your next assessment platform.

Can this checklist help me compare assessment providers?

Yes. By clarifying what matters most to your team, it makes comparing providers' features, pricing, and strengths much easier and more strategic.

How can I use this checklist if I’m not doing a formal RFI?

It’s equally valuable for internal evaluations, exploring new tools, or improving your current hiring process even if you’re not issuing an RFI or RFQ.

What should I look for in a modern assessment tool?

Prioritize platforms with user-friendly design, mobile compatibility, strong analytics, ATS integrations, and inclusive features like neurodiversity support.

What types of assessments should I consider in 2025?

Leading tools combine cognitive testing, situational judgment tests (SJTs), behavior assessments, and predictive AI to evaluate candidates more holistically.

Who should use an assessment checklist?

HR professionals, hiring managers, and procurement teams evaluating pre-selection solutions, especially those comparing AI-powered or compliance-driven assessment platforms.

How does this checklist help with RFIs and RFQs for assessments?

The checklist helps you define your exact requirements so you can confidently draft or respond to Requests for Information (RFI) or Requests for Quotation (RFQ) for assessment tools.

What is an assessment tool in hiring?

An assessment tool evaluates candidates’ skills, behaviors, and fit during the recruitment process. It helps improve hiring decisions and streamline pre-selection.

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