Artificial intelligence is now a key factor in hiring decisions for companies of all sizes, with nearly one in five organisations requiring managers to prove a role can’t be automated before bringing someone onboard, a new report has found.

The State of Spend report by procurement platform ZipHQ, is based on a survey of 1,030 business leaders around the world who are responsible for supplier spend.

It found that organisations across sectors are shifting to an AI-first model, and this is particularly prominent when it comes to hiring and procurement.

‘Tech being eaten by tech’

According to the report, nearly three in four companies are already using AI in staffing and hiring decisions, and 17 per cent are requiring managers to prove a role can’t be done by AI before filling it.

This is more common among tech and telecommunications companies, the report found.

Nearly 60 per cent of respondents said that AI substitution is encouraged in their workplace but not mandated, while just over 20 per cent said AI is having no impact at all on hiring.

“It’s a case of ‘tech being eaten by tech’: industries closest to this technology are most aggressive in applying AI to workforce planning,” the report stated.

Several large tech companies have recently implemented rules around hiring, with managers forced to prove a position can’t be done by AI first.

In May, Duolingo implemented an “AI-first” mandate that allowed teams to only hire new people if they could prove the work could not be automated first, and to “gradually stop using contractors to do work that AI can handle”.

Shopify has also introduced a similar policy, with managers required to show “why they cannot get what they want done using AI”.

Several other large tech firms have either constrained hiring or cut jobs in order to focus on automation and AI.

A confidence gap

The ZipHQ report also uncovered a striking disconnect between business leaders’ confidence in their AI strategies and their actual readiness to deliver on them.

More than 80 per cent of the business leaders surveyed said they’re confident their use of AI will succeed, but most also admitted that they don’t yet have the skills needed to make it happen

“Business leaders see AI as inevitable and are confident in its promise, yet preparedness remains uneven, and execution paths unclear,” the report said.

“Closing this gap requires action. Businesses must seize this moment and direct their spend to shape their futures, or risk falling behind those who do.

“AI isn’t something happening to us or an inevitable force in business. It is a catalyst to rethink how we work, hire and spend.”

Nearly 85 per cent of those surveyed said they feel “somewhat to very prepared” when it comes to AI, with over a quarter saying they are very prepared.

IT leaders are far more confident when it comes to AI compared to other workers, including procurement and finance staff, who are more cautious about the technology.

“Leaders overwhelmingly believe they will ‘successfully’ leverage AI in procurement and finance over the next two-to-three years,” the report said.

“This optimism is inspiring but may be misplaced. The data suggests a potential mismatch between expectations and reality.

“Organisations believe success is inevitable, but the real test is whether preparation and strategy can keep pace.”

Smaller-sized organisations are also slightly more confident in their implementation of AI compared to large enterprises.