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How Managers Are Using AI To Hire And Fire People
by Tyler Durden
Friday, Aug 22, 2025 - 06:15 PM
The role of artificial intelligence (AI) in the workplace is evolving rapidly, and some are warning that using AI to make executive decisions without careful consideration could backfire.
AI is being used more and more in recruitment, hiring, and performance evaluations that could lead to a promotion or termination.
Researchers, legal experts, legislators, and groups such as Human Rights Watch have expressed concern over the potential that AI algorithms are a gateway to ethical quagmires, including marginalization and discrimination in the workplace.
This warning bell isn’t new, but with more managers using AI to assist with important staff decisions, the risk of reducing employees to numbers and graphs also grows.
A Resume Builder survey released in June found that among a group of 1,342 managers in the United States, 78 percent use AI tools to determine raises, 77 percent use it for promotions, 66 percent use it for layoffs, and 64 percent use it for terminations.
The use of AI as a human resource tool is already a cautionary tale. In an unprecedented 2023 workplace discrimination case, digital labor platform iTutorGroup paid $365,000 to settle a federal lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC).
The English language tutoring service was forced to pay damages to job applicants who were filtered out by its AI algorithm. The company used an AI algorithm that automatically rejected more than 200 applicants based on their age. The candidates were automatically disqualified if, in the case of women, they were older than 55 years old. Male applicants 60 years and older were also rejected.
“Hundreds of applicants lost out on employment during a difficult time for job seekers,” Timothy Riera, acting director of the EEOC’s New York District, said in a statement.
Avoiding Dehumanization
Civil regulations and government legislation are being put forward as a guardrail against the use of AI to evaluate and monitor employee performance.
In March, the California Civil Rights Council finalized its regulations surrounding AI decision-making systems in the workplace, which go into effect on Oct. 1. The regulations include protections for employees against the use of AI systems to increase company efficiency. This encompasses actions such as hiring assistance, firing, and promotions.
At the federal level, Sen. Chuck Grassley (R-Iowa) introduced the AI Whistle Blower Protection Act in May. If passed, the bill will offer employment compensation and protection from retaliation to those working directly with AI who choose to disclose issues with these systems.
“Today, too many people working in AI feel they’re unable to speak up when they see something wrong. Whistleblowers are one of the best ways to ensure Congress keeps pace as the AI industry rapidly develops,” Grassley said.
Additionally, the states of Illinois, California, and New York have proposed, introduced, or passed legislation aimed at protecting workers from AI algorithmic discrimination in areas including recruitment, hiring, promotion, employment renewal, discipline, and training.
Business owners, AI experts, and managers using these digital tools to make decisions affecting employees have stressed the need for human oversight.
“I’ve used AI in recruitment. Tools like ChatGPT-powered screening systems and resume parsers have been game-changers,” AI expert and consultant Peter Swain told The Epoch Times.
Swain is the CEO of a namesake company that focuses on helping entrepreneurs strike a balance between AI systems and their human workforce. He illustrated the pros and cons of using AI systems to handle executive tasks.
“Advantages? Speed and scalability—AI can process 1,000 resumes in the time it takes a human to read 10. It also reduces bias if trained properly,” Swain said.
“Disadvantages? Garbage in, garbage out. If the AI is trained on biased data, it perpetuates those biases. Plus, it lacks the human touch—cultural fit and soft skills can’t be fully assessed by an algorithm.”
Data-driven tasks are where AI tools tend to shine, Swain said, but using them for actions such as raises, promotions, and layoffs is “tricky territory.”
“I’ve dabbled with AI-driven performance analytics—tracking [key performance indicators], productivity ... but I’d never let it make the final call,” he said. “It’s a tool, not a decision-maker. The risk is dehumanization, reducing people to data points.”
Swain also called AI’s use in managerial decisions an ethical “minefield.”
“AI can amplify biases if not carefully monitored—think gender, race, or age discrimination baked into training data,” he said. “Transparency is key. Employees need to know how decisions are made and have recourse to challenge them. Accountability matters—if AI sc--ws up, who’s responsible? You can’t just blame the machine.”
Volumes of Data
Stephen Engel, CEO of Sanative Recovery and Wellness, told The Epoch Times that he recently used the AI chatbot ChatGPT to assist with deciding whether to fire an employee.
He said that although AI didn’t make the final decision, its ability to handle volumes of data quickly allows managers to think more clearly and “step back from the emotion of the situation” and analyze situations more objectively.
“To me, that’s the real value of AI in this context. ... It allowed me to think through the situation, weigh options more rationally, and ultimately decide on the best course of action,” Engel said.
“I also used ChatGPT afterward to help guide my thinking about what qualities and strengths to prioritize for my next hire. Again, not as a replacement for human judgment, but as a tool to focus my thinking.”
Some business owners use AI tools to identify employees who need help.
“Our AI voice simulations let new employees engage in realistic mock calls from day one. These interactions are scored automatically and paired with coaching opportunities. It’s a way to see quickly who’s progressing and who might need more support,” Lonnie Johnston, CEO of the training platform WizeCamel, told The Epoch Times.
“Our platform helps surface employees who are struggling early and tracks whether they are improving on an acceptable schedule.”
He gave a recent example of how AI evaluations provided data to help supervisors make decisions.