With the EU classifying AI-enabled recruitment tools as “high-risk,” HR leaders must balance regulatory compliance with technological innovation.
By Maggie Mancini
As artificial intelligence (AI) is integrated into the daily operations of organisations across the globe, HR leaders are facing an onslaught of regulatory changes aimed at ensuring the use of AI is ethical and fair. The EU’s AI Act—a foundational piece of legislation that provides a legal framework for organisations adopting AI systems—classifies AI-enabled recruitment software as “high-risk,” requiring human oversight and ongoing risk mitigation. To understand what this means for talent acquisition leaders in the EU and beyond, HRO Today spoke with Daniel Grace, director of international HR consulting at IRIS Software Group, to discuss the impacts of the AI Act on organisations embedding AI into their talent acquisition processes.
HRO Today: How will the EU’s recently-enacted AI Act reshape the use of AI in hiring?
Daniel Grace: The EU’s recent AI Act imposes strict regulations on high-risk AI technologies, including employment-related software like talent sourcing or automated screening tools, due to their significant impact on people’s livelihoods. This will reshape hiring by placing stricter controls on how AI can be used in these processes, requiring HR teams to ensure that all AI tools are used to supplement—not replace—human decision-making, especially in high-stakes areas like applicant screening.
Non-compliance with these new requirements could lead to severe penalties, such as fines of up to 7% of global revenue or 35 million euros and potential criminal repercussions. To ensure compliance, HR teams and recruiters must have human oversight, work with legal teams to audit AI systems, adapt governance practices for transparency and ethical AI use while staying informed on evolving regulations to avoid penalties.
HROT: How can HR leaders utilise AI to enhance their talent acquisition processes while adhering to an ever-evolving regulatory environment?
Grace: HR leaders can enhance talent acquisition by conducting routine risk assessments to identify biases in AI systems and implementing checks and balances to mitigate risks. Rather than replacing human decision-makers, AI tools can help to support human judgment and streamline tasks like automating job descriptions or gathering insights to improve candidate experience.
At IRIS, we embed AI in our recruitment products while maintaining human oversight. HR leaders should vet third-party AI software by asking questions about compliance, transparency, bias mitigation, and whether human oversight is built into the hiring process. Building AI literacy into your organisation can help enhance diversity, reduce unconscious bias, and create a more efficient and transparent hiring process.
HROT: How do you think that the AI Act will impact global talent acquisition outside of the EU? Do you anticipate more regulatory systems following the lead set by this legislation and applying guardrails to the deployment of AI in hiring?
Grace: The EU AI Act will likely set a global precedent, much like what we saw with the General Data Protection Regulation (GDPR). Countries such as the U.S. and U.K. are expected to follow suit by introducing similar regulatory frameworks, which will lead to heightened scrutiny of AI in hiring. This shift will place greater emphasis on responsible AI usage, transparency and the reduction of bias.
Organisations will need to be prepared to comply with both local and international regulations, especially if they operate across multiple jurisdictions. In the future, we may see the development of a universal framework for AI governance in hiring to emphasise fairness, transparency and bias mitigation.
HROT: Anything else HR leaders should keep their eye on when it comes to AI?
Grace: AI technologies will continue to evolve, and while concerns about job displacement are top of mind for many individuals, history has shown that humans continue to adapt as demands shift. AI should augment, not replace human capabilities.
As we move towards more general-purpose AI models, maintaining a balance between technological advancement and regulatory compliance will be critical. Companies must stay adaptable, keep humans in the driver’s seat, and ensure they understand not just how AI works but the broader implications of its deployment, especially as regulatory frameworks like the EU AI Act become more common across the globe. Despite its potential, AI is not infallible and requires constant monitoring and regulation to ensure they operate ethically and in line with emerging laws.
