February 2025. While some companies are frantically reviewing their AI-supported recruiting processes to meet the EU AI Act requirements at the last minute, others are remaining calm. They have used the previous months not only to ensure compliance, but also to fundamentally rethink how technology should be used in recruiting. 

Twelve months later, it will become clear that these different approaches have divided the industry into those who truly understand AI in recruiting and those who primarily view it as a technical and/or compliance challenge. 

2025: The year of coming of age 

The beginning of the year was marked by uncertainty: How do we meet the AI Act requirements? Will we have to shut down our systems? How expensive will that be? But over the course of the year, the most successful companies realized that regulation was not the problem, but rather the solution to the real problem: non-transparent, unfair recruiting processes that overlook potential and reproduce bias. 

The pioneers of the HR industry saw the requirements of the EU AI Act as an opportunity. They have not only made their recruiting technology compliant, but also fundamentally improved it. Saint Sass, for example, one of Europe’s most sought-after fashion labels, switched to data-based personality analysis during a critical growth phase and was able to fill five key positions in just four weeks, 50% faster than the startup average, with 50% fewer interviews. Or the CHAPTERS Group, an investment company that specifically builds start-up teams. It uses AI-supported assessments to identify who really brings entrepreneurial thinking and action to the table – and achieved a 25% higher interview-to-hire ratio in 2025. 

What these success stories have in common is that they have understood that transparency, traceability, and human oversight are not bureaucratic hurdles, but quality characteristics of excellent recruiting. 

The learning curve of the HR industry 

2025 was also a year of painful lessons. Companies that had implemented AI tools hastily and without careful consideration had experiences they would rather have avoided: algorithms that reinforced existing biases instead of minimizing them. Black box systems that no one in the company really understood. Candidates who felt devalued by non-transparent processes and withdrew their applications. 

The industry has learned that not all AI is the same. The crucial difference lies in the underlying technology and philosophy. While CV parsing systems enable historical patterns and, as a result, often discrimination, language-based personality analysis takes a different approach. It does not evaluate which universities are listed on a resume or which company names are impressive, but rather how people communicate, think, and solve problems. It reveals what traditional methods overlook: intrinsic motivation, teamwork skills, willingness to learn, and entrepreneurial thinking. 

The ROI of ethical AI 

Responsible AI is not only ethically imperative, it also makes good business sense. By 2025, more and more companies will have recognized this. In times when a bad hire can quickly cost six-figure sums and a shortage of skilled workers is becoming a limiting factor for growth, quality of hire is the decisive metric. 

Companies that invested in transparent, explainable AI systems in 2025 report measurable improvements: shorter time-to-hire with higher accuracy, lower turnover in the first twelve months, and more diverse teams without pressure to meet quotas. The ROI comes not from maximum automation, but from better decisions. 

The companies that understand this are likely to win the war for talent. Not despite the AI Act requirements, but because of them. 

Outlook for 2026: Mastering technology and human understanding 

What does this mean for 2026? The fundamental question of “Do we use AI in recruiting?” has been answered. The focus is shifting to “How good is our AI?” Quality standards for recruiting technology will become established, not only through regulation, but also through measurable business impact. 

2026 will be the year when AI becomes invisible in recruiting, but in the best sense. It will become as commonplace as email, but its quality will be the decisive differentiating factor. The leading companies will be those that think beyond compliance and use AI strategically: for potential prediction instead of CV screening, for team fit analyses instead of isolated individual assessments, for holistic people analytics instead of stand-alone solutions. 

Recruiters will continue to evolve into curating decision-makers who combine data-driven insights with human judgment. Empathy, contextual understanding, and strategic thinking will become more important, not less. The best HR departments will be those that master technology and people skills to an equal degree. 

The foundation has been laid 

2025 was the year that set the course. Companies that are now on the right side of this development – with transparent, fair, effective AI – have a competitive advantage that will be decisive in 2026. While they are already working on the next generation of recruiting innovation, others are still struggling with the basics. 

The year AI came of age in recruiting is also the year recruiting became more human. This apparent paradox is the real innovation: technology at the service of better human decisions. 

What a wonderful prospect for the coming year. 

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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What do you think: Beyond the hype – where does the HR industry really stand today when it comes to AI? 

Marcus: Looking at the big picture, I believe the fundamental question “Do we use AI in recruiting?” has been answered clearly. The focus is now shifting to the question: “How good are the AI systems we use?” Companies need to learn to ask the right questions when selecting AI providers. This is especially true in light of the EU AI Act, which sets out clear requirements for ethical use in HRM and has been binding since February 2025. The pioneers in the HR industry have embraced the requirements of the EU AI Act as an opportunity. They have not only made their recruiting technology compliant, but have fundamentally improved it. 

Florian: Many companies are currently undergoing restructuring processes. AI is primarily used here to increase efficiency and optimize performance management workflows. At the same time, the introduction of such technologies leads to intensive discussions with works councils to ensure that all processes are implemented in a legally compliant and transparent manner. I think the learning curve among HR professionals is higher than it has been in a long time. 

In your opinion, which assumption about AI in HR has turned out to be wrong in 2025? 

Florian: The expectation that AI would already have made a massive breakthrough in HR processes has not been fulfilled. Instead, it is becoming clear that sensitivity to regulatory frameworks – such as the EU AI Act – as well as data protection and employee participation are essential. AI can only have a lasting effect if these factors are taken into account from the very beginning. 

Marcus: In the past, the term “AI” was used as a synonym for “automation.” By 2025, I had heard less and less of the assumption that AI only adds value by improving efficiency and facilitating highly standardized tasks. With Zortify, we not only accelerate the psychological assessment process, but also improve the quality of recruitment decisions. 

How do you think AI tools have changed the role of HR managers – and where is it heading? 

Florian: HR managers today need significantly more expertise in legal and data-related issues. They also need to understand the models on which the tools they use are based in order to assess their actual added value and recognize their limitations. The role is thus evolving from pure process control to a strategic-analytical function.  

What will be the biggest challenge for people management in the next two years?  

Marcus: I think the biggest challenge will be integrating AI into learning and development processes and scaling the benefits of these technologies across the organization. This requires a high degree of internal stakeholder management and strategic communication.  

What skill do you think will be indispensable for managers in 2026?  

Florian: Active listening and truly understanding—that will be the key skill for making decisions that will help organizations stay ahead of the curve. AI will be the enabler here, supporting informed decisions without replacing the human perspective. 

Marcus: Last year, we measured increasingly lower levels of optimism with Zortify. I find this an alarming signal. What happens to companies or teams whose bosses are not confident? I consider it an indispensable skill for all managers to lead themselves. In today’s world, this also means managing one’s energy professionally and constantly rebuilding and communicating one’s own confidence.  

Was there a moment when you fundamentally questioned your strategy?  

Florian: Not in terms of content, but rather our go-to-market approach had to be adjusted. Reality showed that sales cycles take longer than expected, a factor that we had to strategically reconsider.  

What customer feedback challenged you the most or made you rethink your strategy?  

Marcus: Feedback such as, “I listen to my gut feeling; we don’t need psychological diagnostics,” is particularly challenging. Statements like this force us to communicate the benefits of our tools even more clearly and explain HR decisions based on data.

Where do you see the greatest untapped potential in the HR tech industry?  

Florian: I see great potential in democratizing HR understanding. Issues such as employee selection, culture, and leadership should not only be initiated by HR. They must be embedded throughout the entire organization.  

What would you like to do differently in 2026?  

Florian: I want to share more market perspectives and feedback to empower even more people. “Radical candor” is central to this. Personally, I’m paying more attention to sports again. Cardio training helps me organize my thoughts, and playing soccer with friends is the perfect way to completely switch off. This increases my performance, resilience, and mood and has a positive effect on my work.  

Marcus: I want to spend more time with our colleagues in the new year.  

Three-quarters of companies have announced in recent years that they will evaluate candidates more on the basis of their actual skills and competencies rather than formal qualifications. However, the Harvard study “Skills-Based Hiring: The Long Road from Pronouncements to Practice” shows a clear discrepancy between promises and reality: of all new hires in 2023, less than one in 700 was the result of having degree requirements removed.  

This figure is not a setback, but a reflection: it highlights how much potential remains untapped – and how much growth is possible when companies consistently focus on personality and skills. 

Research by Harvard Business School and the Burning Glass Institute also impressively shows where this journey can lead. Companies that have already made the transition — the so-called “leaders,” around three percent of the market — are hiring 18% more people without academic degrees in roles that previously required one. Above all, they achieve significantly higher quality hires and higher retention rates. Joseph B. Fuller (HBS) emphasizes that simply changing job ads is not enough. It requires a rethink among hiring managers, in corporate culture, and in hiring processes. The key insight: transformation does not come from better intentions, but from better systems.  

Analyze personality early in the process  

The first step toward recruiting that reveals a person’s true potential is to use technology-based personality diagnostics early in the process. Whether before, during, or after CV screening, the goal is to identify mindsets, cognitive abilities, character traits, and associated specific skills and development opportunities based on data before human selection decisions are made.  

A multi-measure approach that combines several dimensions is particularly effective. 92% of companies that take this approach report higher satisfaction with their hires. This is a clear indication of what is possible when personality is treated not as a soft factor but as a strategic variable. 

Understanding outcomes instead of biographies  

This change can only succeed if there is a prior definition of what success in a role actually means. Many companies underestimate this phase. The “leader” companies from the study mentioned at the beginning take a different approach: they don’t ask what candidates need to bring to the table, but what they should achieve in the role. This shifts the focus from formal requirements to outcomes. Key questions include:  

Those who answer these questions in a structured manner will be able to identify talent that traditional processes would never have captured.  

Ensure fairness and objectivity in recruiting  

Even with clear success criteria, human bias remains an obstacle. We unconsciously favor people who are similar to us. When companies remove academic filters but do not set objective criteria, bias can actually increase. 

Leader companies counter this with consistent structures, including blind recruitment and standardized evaluation grids.  

84% of UK companies openly admit that unconscious bias has an effect. But the difference arises when this insight is translated into systems that reveal potential rather than reinforcing subjectivity. 

Scaling personality measurement with AI  

AI models trained on resumes inevitably reproduce patterns based on the past. Tools based on personality and performance data, on the other hand, open up completely new possibilities. Natural language processing, which analyzes open-ended responses, recognizes patterns of thinking and communication at a depth that traditional assessments cannot capture. For companies with high application volumes ­– especially in IT, consulting, and financial services –­ this creates a scalable, objective, and fair way to reveal personality and potential without compromising quality. AI thus becomes not a decision-maker, but an enabler of better human decisions. 

Closing the 1-in-700 gap  

Implementing this kind of personality- and competency-based talent logic happens in several steps:  

Measurable talent advantage  

Non-degree hires in roles that previously required a degree achieve on average ten percentage points higher retention and salary increases of 25%. They show above-average motivation because they are given opportunities that would traditionally have been denied to them. For companies, this means better matches, more stable teams, and access to talent that the competition will continue to overlook. 

Companies that understand personality as an economic value, recognize potential as a currency for the future, and design their recruiting processes so that impact, rather than biography, is the deciding factor, are very likely to come out ahead in the competition for the best talent very soon. The most successful three percent have shown how it’s done. Now companies must decide whether they want to be among the next 30% who will follow. 

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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Current data shows an average misplacement rate of 14%, and as high as 30% in junior programs. With 50 hires per year, this already results in losses well into the six-figure range. Much of this cost could be avoided if recruiting took into account not only the probability of success, but also the probability of termination.  

The true cost of employee turnover   

The well-known cost factors, such as recruiting expenses, onboarding, and training, are only the tip of the iceberg. In fact, depending on the role, hiring the wrong person can cost between €45,000 and €100,000, and in the case of executives, up to €300,000. The direct costs of searching for and training new employees alone add up to as much as €60,000.  

Added to this are hidden costs such as:  

Companies have it in their own hands to avoid these. This is because employees often resign not because of the job itself, but because of a mismatch between expectations and reality – patterns that would have been visible during the recruitment process.  

The unsurprising exit  

Current data shows that early turnover is rarely a coincidence. 14% of employees leave because the tasks do not meet their expectations, and 17% leave due to a cultural mismatch. The SHRM Global Culture Report confirms that 64% of employees who perceive their corporate culture negatively actively look for another job.   

The common denominator: a mismatch between expectations, culture, and personality. These risks are predictable, however, not through intuition, but through data-based personality analysis. 

Recognizing invisible red flags  

Truly costly mistakes are rarely caused by obvious warning signs, but rather by personality patterns that remain invisible during interviews. AI-based methods based on the Big Five and the Entrepreneurial Capital developed by Zortify make these risks measurable. 

Among other things, the Big Five show: 

Entrepreneurial Capital adds to this analysis with future-critical skills like resilience, self-efficacy, agility, and solution orientation – the very factors that determine long-term performance and retention. 

In combination, the Big Five and Entrepreneurial Capital reveal the invisible red flags that trigger early attrition: personality and context mismatches, fragile stress profiles, and unrealistic expectations. AI provides a solid basis for decision-making where gut feeling fails. 

Predicting retention with AI 

Modern NLP-based methods analyze how people think, prioritize, and deal with uncertainty. This results in a reliable prediction for long-term retention. 

Companies that use such data can reduce their misplacement rate by 30%. Often, avoiding a single misplacement pays for the entire technology investment.  

Typical green flags in applicants include:  

At the same time, companies benefit from presenting everyday work life in a blunt manner. The best talents prefer realistic descriptions. Surprises on the first day, by contrast, undermine trust and drive turnover. 

The business case: Data-driven decisions save a lot of money 

For a company with 50 hires, the picture is as follows: 

In addition to the financial effects, companies benefit from more stable teams, greater knowledge retention, better performance, and employer branding that signals long-term loyalty. 

What companies can do straight away  

Using AI to tackle talent shortages 

The most costly mistakes in recruiting are not the candidates who drop out of the process, but those who are hired and resign a few months later. Bad hires are not an isolated HR issue, but a strategic business risk in the six-figure range.  

Personality-based assessments have thus become a business-critical tool. Organizations that can predict turnover make better decisions – and win in a market where talent is the scarcest resource. 

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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The application sounds flawless. Every word is perfect. Every phrase hits the right note. And that’s exactly the problem. Since ChatGPT & Co. have reached the application process, documents are becoming increasingly similar. Studies show that around half of all applicants already use AI tools to help them. Among students, the figure is as high as 57%.  

What began as the democratization of good applications is developing into a new challenge: if everyone’s wording is perfect, how can I still stand out as an applicant? And how can companies recognize who really suits them? 

From perfection to uniformity   

Resumes are smoothed out and cover letters are optimized, often losing their personal touch in the process. For companies, this means that traditional application documents say less and less about personality, motivation, or potential.  

At the same time, applicants are faced with the question of how they can show who they really are when AI helps them do everything “right”?  

Because one thing is becoming increasingly important: authenticity. Especially in a job market that is once again becoming more of an employer’s market in many industries, it’s no longer just perfect documents that count. What is needed are people who want to learn, who can adapt, and who deal with their strengths and weaknesses in a reflective manner. 

Personality is not expressed in clichés  

Psycholinguistic research – such as that conducted by James Pennebaker – shows that our language patterns are as individual as fingerprints. It is not what we say, but how we phrase things that reveals a lot about our way of thinking, decision-making logic, and values. That is why modern recruitment processes are no longer about delivering the perfect cover letter, but about showing how you think, act, and reflect.  

Open, situation-specific questions – for example, about real experiences, difficult decisions, or learning moments – create this space for authenticity. This is where human substance outstands the smooth surface of AI. A machine may be able to write convincingly, but it has no real attitude, no conscience, no learning curve.  

Smart selection – a win for both sides  

Technology can help to reveal these genuine signals – for example, through linguistic pattern recognition and NLP-based analyses. It identifies the essential personality factors for a role, creates an objective basis for evaluation, and facilitates the final assessment by an experienced recruiter. 

Old: CV screening – interview – assessment – hiring decision

New: Initial pre-selection – AI assessment – In-depth interview – Data-informed hiring decision 

For companies, this means spending less time on superficial CV and oh-so-smooth motivation letter screenings and focusing more on what really matters: potential, learning ability, and cultural fit.  

Gen Z, on the other hand, is generally open to such technology-based assessments if they are perceived as fair. At the same time, applicants who come across as honest, reflective, and authentic have a much better chance of standing out from the crowd in a personality-oriented selection process. 

Authenticity leads to the perfect fit  

Bottom line: The best talents are not those who shine with the most flawless applications, but those who show who they are, what they want to learn, and how they deal with challenges.  

When AI standardizes applications, a new level of differentiation emerges, especially in working with Gen Z: authenticity. Applicants can use this level to their advantage. Companies, in turn, have state-of-the-art AI technology at their fingertips to identify the qualities they value most in candidates. In the end, both sides benefit from a perfect match between role and person. 

Personality plays the key role in this. And regardless of perfect prompts, it remains unmistakable at its core. 

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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Speed in recruiting is not an operational detail, but a strategic competitive factor. Companies that take too long to make decisions systematically lose the best candidates to more agile competitors. Studies also show that longer processes do not result in better hires. On the contrary.   

It’s high time to replace outdated application rituals with new ones.   

The costly misconception: thoroughness takes time  

The average time-to-hire is now 44 days, and this figure is rising. Just a year ago, it was 31 days. Many companies believe that taking this time is a necessary investment in diligence. But while internal discussions are ongoing, something else is happening: almost half of all candidates already have several offers to choose from. The top 10 percent disappear from the market within a few days.  

In other words, every delay reduces the chance that the ideal candidate will still be available. What is internally understood as a thorough review is experienced as hesitation, bureaucracy, and a lack of appreciation by applicants. The fact that almost half of all US candidates have turned down an offer in recent years due to a poor recruiting process is just one symptom. The real damage lies in the fact that the best candidates don’t even wait for the decision.  

More interviews do not create certainty  

The widespread belief that additional rounds of interviews increase decision certainty is not confirmed by data. After three structured interviews, the knowledge gained about the candidate is over 85 percent, and after four interviews, it is almost 95 percent. Anything beyond that adds little value. 

Instead of clarity, this leads to overload. Teams with too many opinions, too many impressions, and too many data points don’t make better decisions, they make slower ones. Meanwhile, candidates have long since decided elsewhere. Speed in recruiting is therefore not the opposite of quality – it is its indicator.  

Speed as a sign of quality 

Making decisions fast isn’t a sign of being shallow, but of being awesome. If you can make an offer in just a few days, it shows you’re clear on your criteria, have a solid process, and can make decisions. The offer acceptance rate of 81 percent in 2023 clearly shows that candidates are more likely to say yes if they get an offer on time.  

Even more important is the psychological signal. A fast, structured process conveys appreciation, professionalism, and agility. In times when most hires come from inbound applications and the candidate experience is crucial to reputation and employer branding, speed acts as a multiplier. Those who are fast not only win talent, but also build an ecosystem of positive feedback and recommendations.  

Combining quality and speed with AI 

Traditional processes waste valuable time in the wrong places. Manually reviewing CVs or conducting screening calls is inefficient, time-consuming, and increasingly inaccurate. The result: more and more interviews per hire, without any improvement in the quality of decisions.  

AI-supported assessments fundamentally change this dynamic by creating valid personality profiles with statements on cultural fit, motivation, and development potential in a very short time. The data is available in seconds and reduces the need for endless discussions. The principle is simple and highly effective: assess smart, decide fast, hire right.  

This does not mean that technology replaces human judgment. On the contrary, it frees interviewers from time-consuming screenings and enables deeper, more precise job interviews. Those who go into an interview with a validated profile can ask focused questions and gain more insight in one hour than in three superficial standard interviews. 

When speed creates a competitive advantage 

A company that uses speed strategically turns recruiting into a competitive advantage. The fashion label Saint Sass is one example: under enormous time pressure, seven key positions were filled within four weeks – twice as fast as the industry average. This was no coincidence, but rather the result of clear criteria, AI-supported pre-selection, and focused interviews.  

The result was not only cutting the time-to-hire in half, but also greater precision and an exceptionally positive candidate experience. Speed did not lead to compromises here, but to a structured, fair, and convincing process. 

Why old paradigms no longer work 

Many companies cling to paradigms that no longer match reality. The principle of “hire slow, fire fast” is a leftover from a time when employers had the upper hand. That time is over. 

Overly high expectations of consensus within teams also lead to delays and ultimately to mediocre solutions. The concern that top performers cannot be assessed in just a few interviews is contradicted by the data. And the argument that factors such as mindset, resilience, or the ability to build good working relationships with colleagues and customers are not measurable ignores the possibilities of modern AI-based assessments. 

The future belongs to the fast  

The best candidate doesn’t wait around. Neither does the competition. Those who are too slow today will soon no longer be able to decide for themselves whether they succeed or fail, but will instead have the market decide for them. 

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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And why brilliant resumes often lead to expensive hiring mistakes

The resume shines, the interview goes smoothly, the references seem flawless. But six months later, it becomes clear that although the new colleague is highly qualified, they have long since quit quietly. A classic mismatch that not only eats up salary and recruiting costs, but also destabilizes teams, strains customer relationships, and delays projects.

Gallup estimates the global cost of lack of engagement at $8.9 trillion per year. That’s almost nine percent of global GDP. Only 21% of employees are engaged at work, 62% do the bare minimum, and 15% actively work against their managers and teams. These figures illustrate that the problem does not begin on the first day of work, but already during the recruiting process. Many companies carefully check whether candidates can perform the tasks. However, the crucial question is: Will this person be really committed to the job?

What drives engagement

Engagement is not a “nice-to-have,” but rather the most important performance driver in modern organizations. Gallup and other studies identify three areas of relationships that have a significant impact on motivation, loyalty, and thus also results:

These relationships are not soft factors. They determine whether a project succeeds, whether a team sticks together, and whether customers remain loyal in the long term. Nevertheless, traditional interviews hardly capture factors that indicate a successful relationship on these three levels. A standard question such as “Are you a team player?” says nothing about whether someone can actually build functioning relationships in the work environment.

Personality as the key to engagement

Personality research has shown that traits such as conscientiousness, agreeableness, and low neuroticism scores (emotional stability) are reliable predictors of performance, loyalty, and customer focus. However, traditional questionnaires cannot measure these traits reliably. Instead, recruiters get:

Companies feel secure, but the results are distorted – and bad hires are inevitable.

Language reveals engagement potential

Companies that want to make sure they get engaged employees rely on a thorough personality analysis of their applicants, using the latest AI tech and Natural Language Processing (NLP). Studies show that people can consciously control what they say, but not really how they say it. Choice of words, sentence structure, punctuation – all of these reveal initial signs of personality patterns that are difficult to conceal. Based on open-ended text responses that candidates formulate in a relaxed atmosphere at their desk, AI recognizes factors such as an increased risk of egocentrism or a strong orientation toward cooperation –differences that are crucial for assessing engagement potential long before it becomes apparent in everyday work. Important: Higher scores aren’t a reason to disqualify a candidate, but they give the interviewer important clues about what questions to ask during the job interview. 

Engaged employees accept leadership

An often overlooked aspect: commitment depends not only on how well a manager leads, but also on whether employees can recognize and accept good leadership. A study from 2021 shows that employees with high self-efficacy and openness remain more committed even under mediocre leadership, while others are quicker to withdraw. This means that it is not only managers who are responsible for commitment. The personality of the employees also determines whether leadership is effective. Those who accompany change constructively, place trust in others, and support decisions remain motivated longer, even in difficult environments. These qualities are critical to success, especially in demanding industries such as consulting or finance, where uncertainty and regulation are part of everyday life, or in the tech sector, where priorities are constantly shifting.

Employee engagement drives business success

The economic effects of high employee engagement in companies are measurable:

This contrasts with the immense costs of hiring the wrong person. On average, this costs 1.5 to 3 times the annual salary and often runs into six figures for senior roles in IT, consulting, or finance. A more precise selection based on authentic personality profiles costs only a fraction of this. And usually pays for itself already by avoiding a single wrong hire.

From skill match to commitment match 

The crucial question for CEOs, HR executives, and recruiters today is no longer: Can this person do the job? But rather: Will they be engaged in doing it? AI-based personality analyses and the evaluation of open-ended text responses provide a valid answer to this question. These methods are difficult to manipulate and can be integrated into the recruiting process immediately.

Those who identify tendencies toward relationship skills in the three critical areas – with managers, teams, and customers. Before the first interview not only make better hiring decisions, but also strengthen the resilience and competitiveness of their organization.

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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EU AI Act: How smart companies are using regulations to outperform competitors

What HR Must Do Now. The EU AI Act has been in force since August 2024, and further compliance deadlines passed in August of this year. For companies that use AI tools in recruiting and human resources development, this means that the legal gray area is over.

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The EU AI Act is getting serious. And that’s exactly where the big opportunity lies for companies that have their compliance under control. The first sanctions have been in place since February 2025. New regulations came into force in August. 

While many companies are still hesitating or relying on outdated tools, the pioneers can now extend their lead. This is because EU regulation separates the wheat from the chaff in recruiting: those who work with the right, compliance-ready providers can continue to take full advantage of AI. Those who have chosen the wrong partners are facing a problem – and should change course now. 

Costy consequences  

The EU AI Act provides for fines of up to €35 million or 7% of global annual turnover – whichever is higher – for violations of prohibited AI practices. Other violations can be punished with fines of up to €15 million or 3% of annual revenue, while providing false information to authorities can result in penalties of up to €7.5 million or 1.5% of revenue. The first sanctions have been in effect since February 2025. 

Important to know: HR teams bear full responsibility for compliance, even when using external AI tools. We show what this means in concrete terms and how companies can ensure they are well aligned. Detailed guidance on how to proceed can be found in the free white paper. 

Overview of deadlines: Action is required now   

The EU has set a gradual timetable for the implementation of the EU AI Act:  

The February deadline was already critical: Since then, HR teams have been required to be trained in AI. Companies that still fail to act now risk being non-compliant.  

Why AI in recruiting requires special attention 

The EU AI Act classifies AI systems into different risk categories. Tools for recruiting, performance evaluation, and HR decisions automatically fall into the high-risk category. This means stricter requirements: 

What companies need to request of their AI providers   

One of the most common misperceptions is that “the provider is EU-compliant, so the company is too.” This is not true. Companies remain fully responsible and must actively request the appropriate documentation:   

At Zortify, for example, customers receive a complete compliance package with all the necessary documents, transparency texts, and practical implementation aids to ensure smooth, legally compliant implementation. 

Governance structures: Tailored to every size of company 

The good news is that companies don’t have to reinvent the wheel. Depending on the size of the company, there are proven governance models: 

Small companies (up to 250 employees): A simple committee consisting of the HR director, compliance manager, and IT manager is sufficient. Semi-annual reviews and basic documentation are all that is required. 

Medium-sized and large companies: Here, an interdisciplinary team consisting of HR tech, legal, IT security, data protection officer, and CTO is needed. Quarterly reviews and 1-3 dedicated full-time positions for AI governance are the norm.  

Startups and micro-enterprises: Compliance is possible even with minimal resources. An HR manager plus a technical founder, plus external legal advice if needed, can meet the requirements. 

Incident management: When things go wrong   

Even the best preparation cannot protect against all problems. This makes well-thought-out incident management all the more important. Typical scenarios in the field of AI in HR:   

The emergency plan must contain clear time frames: Immediate measures within two hours, complete damage assessment within 24 hours, and in the case of data breaches, the GDPR reporting requirements apply within 72 hours. 

The costs of non-compliance  

Although reduced penalties apply to small and medium-sized enterprises and start-ups, the risk of fines far exceeds the costs of compliance. For most companies, the latter mainly consist of organizational measures. The investment in proper documentation, training, and processes is minimal compared to the financial and reputational risks of non-compliance.  

Practical immediate measures for companies: 

1. Create an inventory of all AI tools used—including those outside of HR. 

2. Request the aforementioned compliance documents from all providers. Set deadlines. 

3. Train HR teams (the deadline was already in February 2025) and document evidence.  

4. Revise privacy policy and communication with applicants. 

5. Establish review routines: At least semi-annual fairness and accuracy checks. 

Conclusion: Compliance as a competitive advantage 

The EU AI Act may seem like a burden at first glance. In fact, it offers companies the opportunity to position themselves as trustworthy employers. This is because candidates are becoming increasingly sensitive about how their data is handled and AI-based decisions are made.  

Companies that act proactively now will gain a competitive advantage: they can be transparent about their use of AI, offer candidates security, and at the same time benefit from the efficiency gains of the technology. 

It is only a matter of time before EU AI Act audits begin. But one thing is clear: not using AI in recruiting is not a solution. The results are too impressive, and the advantages for talent acquisition and retention are too significant. The coming months will determine who will stay ahead in the long term when it comes to using smart AI tools in recruiting, who is well prepared, and who will be caught off guard when the first audits begin.

Download the white paper now with the most important steps to take. 

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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Extraversion has long been considered an indicator of leadership quality, which is why extroverted candidates have a clear advantage in selection processes. However, recent studies show that this preference often has little to do with actual performance. This highlights a key problem in executive search: traditional methods overlook introverted top talent. Companies are thus missing out on some of their strongest leaders.    

This bias can have serious consequences, especially in high-profile industries such as finance, insurance, and consulting, where strategic depth and risk awareness are crucial. 

The hidden pitfalls of traditional selection processes 

Assessment centers: performance over substance 

The problem lies in the DNA of traditional assessment procedures. Studies show that 60% of interviewers make their decision about candidates within the first 15 minutes, and 5% even within the first minute. These snap judgments are inevitably based on superficial factors such as charisma, eloquence, and “executive presence” — qualities that favor extroverted candidates. 

Assessment centers further reinforce this bias: in group discussions, the louder voices naturally dominate, while thoughtful contributions are lost. What is considered assertiveness is often just another form of information processing. 

The cultural fit illusion 

Harvard professor Youngme Moon sums it up: “Soft stuff” is often just a euphemism for bias. People hire individuals who are similar to them, who they feel comfortable with, who look, act, and speak like them.  

The supposed “cultural fit” thus becomes a gateway for similarity bias. Introverted candidates are rejected as “unsuitable,” even though they may be professionally and strategically superior to extroverted applicants. 

Network effects reinforce homogeneity  

A study of 123 German executive search consultants revealed a significant in-group bias: male headhunters unconsciously favored male candidates. Comparable mechanisms also operate among extroverts: those who are well connected and skilled at marketing themselves are more likely to be “discovered,” regardless of their actual performance. 

What companies are missing out on      

Strategic advantage in volatile times     

Current research also shows that introverted leaders excel in “intellectual stimulation” and “empowering leadership,” leadership styles that offer key advantages in complex, dynamic markets.      

These qualities are highly valued in the sometimes heavily regulated industries in the DACH region. Examples:   

The self-awareness advantage 

A Korn Ferry analysis of 486 companies with 7,000 employees revealed that organizations with weak financial performance had executives with 20% more “blind spots” and a 79% higher likelihood of low self-awareness.  

Introverted leaders tend to have greater self-awareness, a competitive advantage that translates directly into business performance. 

Leadership of the future  

Other studies have found that introverted leaders are better than extroverted ones when it comes to leading proactive teams. In a working environment where initiative and empowerment are crucial, managers who are perceived as “reserved” prove to be more effective.  

AI-supported solution: Objectively assessing personality potential  

The limits of human assessment  

The figures should make companies pay attention: 48% of neurodivergent people report in the “Neurodiversity at Work Report 2024” that they find recruitment processes unfair and biased. This is a group that often exhibits introverted characteristics.  

The problem becomes even more apparent in blind hiring: it increases the likelihood of women being hired by 25 to 46%. This shows how strongly superficial impressions influence hiring decisions and systematically disadvantage people. Training on unconscious bias is of little help: 48% of HR managers still admit that bias influences their decisions. 

Data-driven alternatives  

The solution lies in objective, AI-supported personality analysis. It gives decision-makers a truly realistic first impression of a candidate. Within a very short time, AI tools can use the extent of certain personality traits to predict expected business performance and teamwork.

Specific advantages:  

Integration into existing processes 

Important to note: AI does not replace human evaluation, but rather complements it intelligently. While traditional methods rely on subjective first impressions, data-driven assessments can reliably predict actual leadership competence, regardless of personality type. 

Recommendations for HR and C-level executives 

Short-term measures: 

Investing in AI-supported tools pays off by reducing the costs of bad hires while increasing leadership quality and team satisfaction.     

Conclusion: The silent paradigm shift    

The future should belong not to the loudest, but to the most capable leaders. Introverts often have skills that are needed in the modern workplace. Leadership research shows the measurable advantage of introverted leadership in proactive teams, i.e., those that perform at their best in demanding and rapidly changing environments. So it’s worth keeping your eyes and ears open, making the nuances audible, and reading between the lines. AI technology makes it easy for you and reliably ensures that the right people end up in the right positions.   

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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These figures are not just a symptom of political uncertainty, but an expression of a deeper problem: HR professionals often choose the wrong personality types when hiring executives. The fascination with charismatic, extroverted candidates leads to personalities with high self-presentation skills reaching top positions – often at the expense of character and substance. 

The lure of first impressions 

The Childhood Leadership Study of 2025 already showed that in 96% of classes, children with a strong self-expression are chosen as leaders. This pattern continues in professional life. Charismatic candidates shine in job interviews, appear self-confident, inspiring and present convincing visions. Meta-analyses confirm this: Especially in application and selection processes with strangers, such personalities are systematically preferred. 

Charles O’Reilly from the Stanford Graduate School of Business warns: 

“We see the 10% of self-promoters who succeed and call them visionaries. We ignore the 90% who fail and do damage.” 

This effect reminds us of fast, aggressive brands like Shein or Temu: shiny promises, quick wins, but often with unseen costs and long-term damage. 

Introverted beats loud 

Studies confirm that introverted CEOs are more successful in the long term than their extroverted colleagues. These quieter leaders make more considered decisions and act more sustainably. Nevertheless, many selection processes still favor the opposite: loud, shiny, extroverted. 

The short-term effect is tempting, and yes, sometimes legitimate in terms of quick success: A charismatic candidate can, for example, inspire stakeholders, generate momentum and attract media attention. In the long term, however, they often lack strategic depth, genuine team orientation and the ability to maintain calm and foresight even in difficult phases. Impulsive decisions or risky prestige projects lead to higher fluctuation, declining trust and often to financial losses and damage to the company’s image. In the medium term, the initial “gain” turns into a painful “pain” for the entire organization. 

The true cost of bad hires 

According to McKinsey and Kienbaum, bad hires in management positions can cost up to three times the annual salary. For C-level roles, these losses quickly add up to millions. In addition, there are serious follow-up costs that are difficult to measure: toxic corporate cultures, increasing fluctuation, risky takeovers or manipulated share buybacks. 

All of this not only reduces company performance, but also jeopardizes the trust of employees, investors and markets, with long-term consequences for reputation and competitiveness. 

Young executives in constant self-promotion mode 

Our 2021 study for Harvard Business Manager with almost 10,000 German participants shows that self-promotion-oriented tendencies are widespread among German managers. Young executives are particularly likely to succumb, exacerbated by social media and the trend towards personal branding. Three critical patterns stand out: excessive self-centeredness, impulsive risk-taking behavior and strategic manipulation to assert one’s own interests. These developments clearly show how important alternative selection methods are for companies. 

AI instead of gut feeling 

Traditional assessments are reaching their limits here. They are usually based on self-assessments, a playing field in which self-promoters are particularly adept. NLP-based analyses (Natural Language Processing) take a different approach: they work with candidates’ open text responses and uncover unconscious language patterns that allow conclusions about key personality dimensions. This makes manipulation much more difficult, while at the same time providing a deeper, more objective assessment. 

Such approaches not only help in the selection of new leaders, but also in the further development of existing top managers. They provide a sound basis for coaching, succession planning and long-term cultural development that goes far beyond mere recruitment decisions. 

Character as a competitive advantage 

Companies that rely on objective, technology-supported personality analyses at an early stage gain more than just security when filling key roles. They create a corporate culture in which character, integrity and long-term thinking count. This creates a real competitive advantage: teams work together with greater trust, strategic risks are reduced and the retention of key performers increases. 

In the end, it’s not about devaluing charisma. Rather, it is about combining it with character, substance and foresight. This is the only way for companies to ensure that their managers not only shine in good times, but also provide orientation, create trust and ensure stability in times of crisis. 

Prof. Dr. Florian Feltes

Prof. Dr. Florian Feltes is co-founder and co-CEO of zortify and a forerunner in AI-supported HR innovation. Together with his team, he develops intelligent personality diagnostics and helps companies identify the perfect candidates—without expensive assessments and without bias. His vision: a world in which every company can effortlessly form high-performance teams and create work environments that allow human potential to flourish.

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