AI in Recruitment: Potential Legal and Financial Risks for Companies

AI is entering both job searching and companies' recruitment processes. But using the tool in the selection process can become a legal headache. It can become expensive for companies, says law researcher Matilda Arvidsson.

» Published: August 31 2025 at 12:35

AI in Recruitment: Potential Legal and Financial Risks for Companies
Photo: Tomas Oneborg / SvD / TT

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AI can be used to streamline the recruitment process for companies. Matilda Arvidsson, lecturer in international law at the University of Gothenburg, says that the risk with recruitment systems is that AI is based on all the data that recruiters previously worked with manually.

Then you have all the grounds for discrimination that exist in the whole world, which human recruiters sit with, she says and adds:

It can be expensive for companies that use AI for recruitment if they rely on an AI recruiter recruiting in a non-discriminatory manner.

The use of AI in recruitment processes is assessed by the EU as a situation where the consequences risk being significant. It is therefore regulated by the AI Act. The difficulty with EU laws, however, is that it usually takes about five years before there are precedents.

It is a greater risk factor that you happen to do something that turns out to be illegal.

At the same time, it is difficult for companies to ensure that the AI tool they use does not discriminate.

It is very difficult to have the technical expertise to go in and determine whether the tool is balanced enough.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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