Why Irish SMEs are drowning in job applications and what needs to change

Irish employers are receiving more job applications than ever before, yet hiring the right people is becoming increasingly difficult. The problem may not be a shortage of candidates—but a recruitment process that was never designed for the age of AI.

Guest post By Edward Bowman MSc, Organisational Psychologist 

Not long ago, the biggest recruitment challenge for many Irish businesses was attracting enough applicants.

Today, for many employers, particularly small and medium-sized enterprises (SMEs), the challenge has become something entirely different: identifying the right candidates from an evergrowing volume of applications. Irish SMEs are creating jobs at the fastest pace in nearly a decade.

At first glance, this seems like a positive problem to have. More applicants should mean more choice. Yet the evidence suggests that both employers and job seekers are finding recruitment increasingly frustrating. SMEs are facing a hiring crunch in 2026. With only 12% of small businesses fully staffed, unfilled roles are stalling growth, delaying projects, and increasing costs.

Recent hiring benchmarks indicate that approximately 15% of job applications resulted in an interview in 2016. By 2023, that figure had fallen to around 8%, while more recent research suggests interview rates now sit closer to 2–3% across many industries. In other words, candidates are submitting more applications than ever before, yet securing fewer interviews.

The reasons for this shift are complex, but one factor has transformed recruitment more rapidly than almost any other: artificial intelligence.

Generative AI has dramatically reduced the time required to create polished CVs and tailored cover letters. Candidates can now produce highly professional applications within minutes, optimise them for applicant tracking systems (ATS), and apply for significantly more roles than was previously possible.

While this undoubtedly benefits job seekers, it also means employers are receiving unprecedented numbers of applications that often appear remarkably similar in quality. This has led to what has been described as an AI Arms Race whereby companies have introduced more sophisticated filtering techniques which then leads to more AI being adopted by the job seeker to circumvent them.

For hiring managers, this creates a very different challenge.

Recruitment is no longer simply about attracting candidates; it is about finding meaningful differences between them.

Many organisations continue to rely heavily on applicant tracking systems that screen CVs using keywords and predefined criteria. While these systems are efficient for managing large applicant volumes, they are only as effective as the information they receive. Research by Harvard Business School and Accenture found that 88% of employers acknowledged that qualified candidates are sometimes filtered out because their applications fail to match the precise criteria configured within screening software.

This is not necessarily a reflection of candidate quality.

It is often a reflection of how recruitment systems process information.

For SMEs, the consequences can be particularly significant.

Unlike larger organisations with dedicated recruitment teams, smaller businesses often ask managers to recruit alongside their existing responsibilities. Reviewing hundreds of applications, many of which have been professionally written or AI assisted, consumes valuable hours that could otherwise be spent running the business.

The alternative is often to outsource recruitment to external agencies, an option that may cost between 15% and 20% of a successful candidate’s starting salary. For many SMEs, neither option is ideal.

Having worked in several countries and applied for many roles throughout my own career, I have experienced recruitment from both sides of the process. Like many professionals, I have invested considerable time tailoring CVs and cover letters, only to receive no response or feedback. Employers, meanwhile, frequently describe spending evenings reviewing applications while worrying that they may still overlook excellent candidates.

Both experiences point towards the same conclusion.

The current recruitment process is placing increasing pressure on employers and applicants alike.

Perhaps the most important question we should now be asking is whether we are looking at the right information first.

A curriculum vitae remains an important record of experience, qualifications and career progression. However, anyone who has managed people understands that successful performance depends on far more than previous job titles or years of experience.

Every role contains behavioural demands that rarely appear on a CV.

Some positions require individuals who thrive in highly structured environments. Others demand adaptability, resilience and comfort with ambiguity. Teamwork, communication style, motivation, learning agility, problem-solving and autonomy all influence whether someone is likely to succeed in a particular working environment.

These characteristics are often discovered only after interview or sometimes only after someone has already been hired.

The challenge facing modern recruitment is therefore not whether CVs should disappear.

They should not.

Rather, it is whether CVs alone provide sufficient information at the earliest stages of recruitment, particularly when advances in AI mean that application quality increasingly reflects access to technology rather than genuine suitability for the role.

The future of hiring is unlikely to involve replacing human judgement with algorithms.

Instead, the organisations that recruit most effectively will probably combine multiple sources of evidence: experience, structured assessment, interviews and professional judgement. Technology should support better decision-making, not replace it.

For Irish SMEs, this shift could be particularly valuable. Better early-stage information has the potential to reduce unnecessary screening, improve hiring confidence and create a more transparent experience for candidates, while allowing employers to spend less time sorting applications and more time engaging with the people who are genuinely suited to the role.

Artificial intelligence has undoubtedly changed recruitment.

Our hiring processes now need to evolve alongside it.

The CV is unlikely to disappear any time soon.

But in an era where almost every application can appear polished and professionally written, it may no longer be enough to begin and end the recruitment conversation.

Edward Bowman MSc is an Organisational Psychologist and founder of Psych-Fit, an Irish HR technology company researching assessment-first approaches to recruitment in the age of artificial intelligence.

He previously was a key member of the winning team and business concept in the An Forbairt Student Enterprise Awards at Dublin City University.

LinkedIn: https://www.linkedin.com/in/edward-bowman-msc-42a20259/

Website: https://psychfit.org

Email: ed@psychfit.org