Artificial intelligence use in recruitment has surged 428 per cent since 2023, while communication gaps between employers and job seekers continue to plague the hiring process, according to a new industry report.
The 2025 State of Online Recruiting Report from iHire found that 25.9 per cent of employers now use AI in their recruitment efforts, compared to just 4.9 per cent two years ago. The survey of 1,421 job seekers and 529 employers across 57 industries was conducted in July 2025.
AI transforms hiring practices
Employers are primarily using AI to write job advertisements, with 73 per cent of AI adopters reporting this use case, according to the report. Another 68.6 per cent use the technology to compose messages to candidates, while 49.6 per cent use it to send communications during the hiring process.
The technology has also expanded into candidate screening, with 32.1 per cent of AI-using employers now leveraging it to screen applicants and resumes, up from 11.6 per cent in 2024, the report found. Additionally, 16.1 per cent are using AI to interview candidates, a practice that was not reported in the previous year’s survey.
Job seekers are also embracing AI tools. The report found that 29.3 per cent of candidates have used AI to write or customize their resume or cover letter in the past year, compared to 17.3 per cent in 2024.
Ghosting remains top challenge
Despite technological advances, communication breakdowns persist as the primary frustration for both parties. The report found that 59 per cent of job seekers cited applying for jobs and not hearing back from employers as their top challenge, while 50.7 per cent of employers reported frustration with candidates who fail to respond to outreach or show up for interviews.
Nearly half of candidates (47.4 per cent) expect ghosting to impact their job search or career growth in the coming year, according to the survey.
Employers struggle with candidate quality
Receiving too many unqualified applicants remains the biggest challenge for employers, affecting 59.7 per cent of respondents, though this represents a slight improvement from 63.3 per cent in 2024 and 62.6 per cent in 2023, the report said.
Other significant challenges include the cost of using job boards (50.3 per cent) and receiving too few applicants (34.2 per cent). Age discrimination has emerged as a growing concern, with 28.1 per cent of job seekers citing ageism as a challenge and 48.2 per cent expecting it to impact their future job search.
Alternative hiring strategies gain traction
Employers are increasingly turning to non-traditional talent sources to address ongoing shortages. The report found that 42.3 per cent of organizations focused on internal mobility in the past year, promoting or moving employees laterally instead of hiring externally.
Other strategies include hiring from talent pipelines (36.9 per cent), rehiring former employees known as “boomerang” workers (30.8 per cent), and investing in upskilling or reskilling current staff (27.8 per cent).
Job boards remain central
Despite industry turbulence, job boards continue to serve as the primary recruitment channel. The survey found that 68.6 per cent of employers conduct “all” or “most” of their hiring through these platforms, while 79.5 per cent of job seekers rely on general job boards for their search.
However, both groups use multiple channels. Among employers, 71.3 per cent use employee referrals, 49.5 per cent use company websites, and 46.1 per cent use professional networking sites like LinkedIn, according to the report.
Key concerns about AI emerge
While AI adoption grows, employers express concerns about fake or fraudulent candidates (24.4 per cent) and inauthentic applications and resumes (24.2 per cent), the survey found. For job seekers, the primary AI concern is that the technology will replace their jobs or diminish their roles, a fear expressed by 24.3 per cent of respondents.
The report also revealed that hiring activity increased 5.8 per cent year-over-year, with 80 per cent of employers actively recruiting as of July 2025, compared to 75.6 per cent in the previous year’s survey.
