Research indicates that anywhere between 42% and 72% of organisations use AI systems in recruitment. Whatever the true figure, it is likely to increase over the next few years. Employers therefore need to be aware of the significant discrimination risks these tools may present. We offer top tips on reducing the risk of discrimination and combatting the AI skills gap.
Understanding AI discrimination risks in recruitment
Recent research from the University of Melbourne has highlighted significant concerns about discrimination risks associated with AI recruitment tools. In particular, these tools may discriminate against applicants who wear headscarves, with names perceived as black and applicants requesting adjustments to accommodate a disability. The study also found that non-native English speakers, and those with a health condition affecting their speech, tended to score lower in AI interviews because of inaccurate transcription. This leaves employers exposed to claims for discrimination under the Equality Act 2010.
The study warns that use of such systems during the hiring process could entrench hiring discrimination and create new vulnerabilities for discrimination to occur in recruitment practices. The study’s authors point out that data is not neutral and data bias is likely the most common source of “algorithm-facilitated discrimination”. An AI system’s functionality largely depends on the data used to train it and, when this data is not inclusive or embeds discrimination, this impacts the overall system outputs. The social biases of those designing and developing the AI hiring systems, and the incorporation of general societal norms and values, also lead to discrimination becoming embedded in AI systems.
Addressing the UK’s growing AI skills gap
Alongside discrimination concerns, AI is also creating significant skills shortages in the UK technology sector. The Digital Leadership Report 2025 from Nash Squared reported that the UK is experiencing its largest technical skills shortage in more than 15 years, with AI now the most in-demand IT skill.
This skills shortage coincides with a significant increase in AI investment, with 89% of UK technology leaders now reporting they are either piloting AI or investing in AI developments, up from 46% in the previous year.
Despite this growing skills gap, more than half of UK companies are not upskilling employees in generative AI. This presents both challenges and opportunities for employers and employees alike as the market grows and demand increases.
What should employers do?
AI will undoubtedly have significant implications for employment practices and an organisation’s skills requirements, so it is vital to take a considered approach when implementing new practices or tools into existing frameworks. There are steps you can take now to ensure your organisation is positioned for success in the age of AI:
- Preventing AI discrimination
- Review your training and development programme to ensure workers can adapt to the changing technological landscape. It will be increasingly critical for staff operating AI tools to have sufficient understanding of AI, especially in HR, which is an area of AI use with particularly high risk.
- Ensure there is sufficient human oversight of any AI tools you deploy. Most importantly, final hiring decisions should lie with human managers.
- Conduct regular audits of your AI recruitment tools to check for potential patterns of bias or discrimination.
- Train (or ensure the provider trains) the tools you deploy on diverse data sets.
- Be transparent with candidates about how you use AI tools and how you will process their data.
- Develop an AI governance framework, with clear policies on how you will use AI tools (particularly in recruitment) and allocate responsibility for overseeing those AI tools.
- Addressing AI skills shortages
- Regularly assess your workforce’s AI capabilities to identify specific training needs.
- Create role-specific AI training that focuses on practical applications rather than technical development.
- Where appropriate, implement low-code or no-code AI solutions that do not require extensive technical expertise.
- Pair technical AI experts with subject specialists to maximise knowledge transfer and practical application.
- Develop relationships with universities and colleges to create talent pipelines for AI-skilled graduates.
As ever, successful organisations will strike a balance between mitigating legal risks and positioning their business to gain a competitive advantage by building a workforce that is equipped for the future world of work.
We are delighted to invite you to our upcoming webinar on 19 June 2025 exploring the transformative impact of AI on employment practices and workplace dynamics. This interactive session, led by Elouisa Crichton, will provide further valuable insights. Please register here.
