Harnessing the Power of AI in Hiring and the Promising Future of Interview Intelligence: Why We Invested in Pillar

by Shawn Ellis and Carolina Rojas

Today, the hiring process is inefficient and unscientific, resulting in low retention, a bad candidate experience, and high costs. It typically takes weeks or months to hire a candidate, while the top 10% of candidates are only on the market for less than 10 days. On average, it takes 33–49 days to fill a role, and 31% of new hires turn over in the first 6 months; a failed hire can cost a company as much as $240,000 per person. In response to this problem, Pillar has built an enterprise grade interview intelligence platform that coaches and guides teams to hire faster, better, and more equitably.

Problems Plaguing the Hiring Process Today

The past few years have been a time of unprecedented change in the workplace, primarily catalyzed by the COVID-19 pandemic. This significantly impacted all employment sectors, creating a noticeable gap in the labor market. According to the U.S. Bureau of Labor Statistics, the dislocation between job openings and new hires that commenced in late 2021 has not subsided: in April of 2023, there were 10.1 million job openings (up from 9.7 million in March), while there were only 6.1 million new hires (See figure below). Historically, when there was a rise in voluntary attrition, workers were typically leaving their jobs to pursue better opportunities elsewhere. However, the current wave of attrition is unique. Instead of switching to similar roles at different companies, employees are now leaving to take on completely different positions or even choosing to leave the workforce altogether. According to a survey by McKinsey from Q1 2022, half of the employees who left their jobs voluntarily stated that they have no intention of returning to work within the next six months, creating a challenging environment for talent acquisition.

Job Openings, Hires and Separation Levels, Seasonally Adjusted

Since COVID-19, the labor market has transitioned into a completely different structural reality, marked by significant changes in workplace priorities and expectations. With millions of job opportunities available in the United States, workers are now seeking roles that align better with their needs and preferences, such as more flexibility and work-life balance, and are leveraging their advantageous position to secure higher salaries and improved benefits. They are making it evident that they expect more from employers and feel empowered to voice their requirements. Considering these broader hiring shifts, there have been several key challenges for hiring teams and managers in 2023 including:

• Finding and Vetting Top Talent Efficiently: The top 10 percent of job candidates are hired by companies within 10 days meanwhile, it takes 27 business days, on average, for corporations to make a new hire, up from 18 days in 2021. Given the rise in remote work, there is an added layer of complexity when trying to find and connect with potential candidates, elongating the time-to-hire metric.
• Repercussions from a Candidate Experience: A negative candidate experience can have lasting repercussions on a company’s ability to hire top talent. On average, 64% of applicants would share negative application experiences with friends and family, and 27% would actively discourage others from applying to the respective employer. What’s more, according to a survey by CareerPlug, nearly half (49%) of job seekers declined a job offer because of a negative recruiting experience, while a significant majority (81%) stated that a positive experience played a crucial role in their decision to accept an offer.
• High Employee Turnover and the Great Resignation: The labor market has entered a new era where modern workers are confident in their ability to find a role that satisfies their needs, whether with higher wages, benefits, or a stronger work/life balance. A structural labor supply gap has emerged due to an insufficient number of traditional employees available to fill the existing job openings. On a macroeconomic level, in 2022, 70% of all job separations were made up of “quits” in the United States, marking the highest annual level reported by the BLS JOLTS program; a total of 50.6 million U.S. employees voluntarily left their jobs in 2022, averaging approximately 4.2 million departures per month. Gallup reports that the cost of replacing a single employee can range from half to two times their annual salary. For a company with 100 employees earning an average salary of $50,000, turnover costs can amount to as much as $2.6 million annually.
• Large Cost of Bad Hires: Once within an organization, the cost of a bad hire can be exorbitant, ranging from $17k — $240k, depending on the role, given the time and expenses associated with onboarding, training, recruiting, and productivity in the role. Thus, it’s essential for hiring managers to make the best decisions regarding who they’re bringing into the fold and ensuring a succinct end-to-end vetting and onboarding experience to retain the right talent.
• Rising Recruiting Compliance: Employers must stay informed about evolving HR Recruiting Compliance globally, particularly regarding AI regulations in recruiting. New York City’s Automated Employment Decision Tool law (AEDT) is just one example of recent regulatory changes, but it emphasizes the broader importance of compliance within the interviewing and recruiting process.

Artificial Intelligence in HR and Virtual Interviewing Opportunities

The utilization of artificial intelligence in HR processes is an emerging trend that’s shown to increase productivity and mitigate costs for companies. According to the Stanford Human Centered AI Index for 2023, Global AI private investments in 2022 were $91.9 billion in 2022, almost 18x greater than 2013, and the U.S. led the charge with over $47 billion invested into AI technology. Of this general market, the AI powered HR Tech market was estimated to be $3.9 billion in 2022 and is expected to reach $17 billion by 2027, growing at a compound annual growth rate (CAGR) of 35.3%.

Further, virtual interviewing, an HR area that’s ripe for further AI and ML innovation, became a necessary tool for most companies when traditional, in-person job interviews were abruptly halted in 2020 due to the COVID-19 pandemic. In 2020, the use of video interviews in the hiring process more than doubled to 58% compared to 22% in 2019, primarily due to the COVID-19 pandemic. Meanwhile in 2022, 55% of respondents reported using video interviews, indicating a relatively stable adoption even after the reopening of the world in 2021. Regarding the ROI, recruiting technology and automation saves companies on average $30,000 per recruiter even before considering cost from failed hires and turnover. Overall, virtual interviewing has become an established practice in the hiring process, offering convenience and flexibility for both employers and candidates. As artificial intelligence continues to embed itself into the interviewing process, artificial intelligence will too become crucial to creating a streamlined hiring process.

Pillar’s Solution

In response to these behemoth labor market and hiring shifts, Pillar’s team has built an interview intelligence platform that enhances the hiring process, increasing its efficiency, impartiality, and effectiveness. Although certain hiring managers have been hesitant to adopt AI and ML enabled platforms given biases that can emerge due to biased training data,, Pillar’s software does not replace the human role that interviewers play in the candidate decision making process. Instead, interviewers leverage the technology to augment live interviews via their current video communication platforms (e.g., Zoom, Microsoft, Teams etc.), resulting in reduced time to hire and improved quality of hires. Further, given their focus on the real-time interview process, Pillar is creating a new data source for hiring. By analyzing the historical interview data and outcomes of hiring decisions, biases can be identified and addressed moving forward.

Pillar’s Interview Intelligence Platform optimizes the interview process by:

Improving Hiring Operational Efficiency:

(1) Interview Guides: Pillar can guide interviewers in real time by displaying a standardized interview guide, created in collaboration with the hiring manager.

(2) Interview Highlights: Teams can access post-interview recaps and highlights via a condensed “highlight reel” of responses, which ensures a seamless information exchange across members of the team.

(3) Interview Insights: Interviewers can access post-interview candidate sentiment analysis and interview optimization features, which allows the interviewers to gain valuable insights into areas where they may be falling short, enabling them to make necessary improvements and realign their approach.

Assisting in the Candidate Selection:

(1) Skills Comparison: Teams can compare candidates side-by-side through video and transcription highlights, and search for times that each candidate described a specific skill set, such as Leadership skills.

(2) Candidate Scoring: Pillar simplifies the candidate scoring process by enabling team members to individually evaluate and rank candidates based on their responses to essential questions.

Assisting in Internal Interviewer Training:

(1) Automated Training and Interviewer Analytics: Pillar coaches team members to improve and grow in their interviewing skills and creates interviewer specific guidelines for improvement.

Partnering with Pillar and What’s Next

We are thrilled to share our partnership with the Pillar team, which is made up of exceptional industry leaders with extensive expertise in building and expanding global SaaS businesses. Among these individuals are Mark Simpson, Pillar’s CEO, who has successfully built SaaS businesses from the ground up, achieving remarkable growth. His notable accomplishments include leading the development of Maxymiser (later acquired by Oracle) and Acoustic Insights. Additionally, we have Jordan Sherer, CTO, who previously held the position of Head of Engineering at Nativ and served as a Senior Engineering Manager at Zapier, and Withe Thompson, VP of Customer Success, who has a wealth of experience as an Account Manager at On Hiatus, a VP at Transfix, and a VP of Customer Success at Maxymiser, where he worked closely with Mark. Overall, the team has demonstrated success in building startups and achieving key business milestones. We are thrilled to work closely with Pillar as they lead the way in revolutionizing the interview sphere.

Interested in learning more and following Pillar’s story?

• Follow them on Linkedin.
• Sign up for their bimonthly newsletter, called the ‘AI Skim’ which is a news roundup pulling together the latest insights and updates on all things AI related to talent acquisition.
• Schedule a personalized demo.

If you are a company, investor, or simply someone interested in the intersection of AI and employer solutions, please don’t hesitate to reach out to us at shawn@distributedvc.com and carolina@distributedvc.com.