artificial intelligence assessment tool

artificial intelligence assessment tool

Overall Summary

The founders of Knockri came face to face with the problem they are trying to solve with their artificial intelligence assessment tool. The CEO got rejected several times before he was advised by his friend to change his name. As it turned out, the name must have been the reason for his troubles because when he modified it, he received more replies from his recruiters. Many companies are unknowingly utilizing biased assessment approaches, which, to a greater extent, leaves out qualified candidates who may not meet their biased criteria for recruitment. The challenge is that most of these organizations are unaware of the skills they are filtering out because of their biased methods. The need to reduce the biases inherent in traditional human resource recruitment tools motivated the founders to create an AI recruitment tool. The aim is to guarantee fair and equal opportunities for all candidates.

Knockri founders understand the challenges first hand and are trying to help their clients overcome them by utilizing a recruitment tool that ensures a future proof workforce. The timing of the AI assessment tool is right because companies are moving away from traditional recruitment methods, and many are quickly adopting technology-based techniques. Knockri uses AI to eliminate the possible biases which exist in alternative recruitment tools. The company utilizes machine learning is the core aspect of AI, and even though mistakes may exist, there are measures adopted by the entity to minimize such. The market is broad, and this is an opportunity for Knockri to establish itself as the game-changer. The team is motivated and focused on solving a problem they have faced themselves. Having a committed team is suitable for a start-up like Knockri.

The Customer

Knockri identified a weakness in the recruitment processes and is providing a solution using its AI tool to assess specific skills such as empathy, collaboration, resilience, growth mindset, and client success (Exhibit 1). Companies have long failed to recruit the best candidates because of their biased screening criteria, which locks out qualified candidates. This problem has persisted over the years, and Knockri’s CEO is a victim of the flaws in the recruitment systems of companies. He failed to secure many opportunities not because he was less qualified, but because the recruitment process predisposes certain groups of individuals to failure. Knockri’s founders intend to reduce the subjectivity of recruitment systems adopted my companies. This system is not only bad for the candidates, but it is also bad for companies. Companies spend a lot in the recruitment process, yet the quality of candidates selected is relatively below par.

Knockri AI tool works to improve the situation by reducing the costs involved while boosting the quality of recruits. Clients have been able to reduce costs by an estimated 60%. Quality, NPS score, and diversity have improved by 23%, 22%, and 25%, respectively (Exhibit 1). The tool also offers a chance for companies to enhance their workplace diversity. The biases involved in the traditional recruitment methods result in a skewed selection and may screen out candidates due to their gender and race. Knockri’s clients are companies from different industries, and among them are KPMG, Microsoft, Education First, Blake’s, and IBM. For example, KPMG is an accounting firm, and Microsoft is a software company. These companies are aiming to hire the best candidates, and since the companies are operating globally, a more diverse workforce is increasingly becoming a necessity. These customers are looking for cost-effectiveness, quality, and service beyond what they are currently getting. Knockri’s pricing is suitable for the business model adopted by the company. The company charges a fixed fee per candidate screened.

Macro-environment

The external environment is friendly but challenging as well. And as an entity, Knockri is doing its best to keep up with the demanding external environment. The politics and legal framework surrounding human resources are tough. Currently, FTC is investigating companies, and most of the companies under investigation are into technology as a way of handling their HR affairs. FTC investigation is a dangerous zone, and Knockri seems confident in its recruitment process. The CEO believes that the company is prepared to explain the recruitment process and criteria for any candidate who may be dissatisfied with their assessment result. The commitment shows some highest level of transparency and accountability. The political and legal environment is challenging because any investigation into the company can damage the company’s reputation. The company should engage a legal team to protect itself from unforeseen yet damaging legal proceedings.

The economic environment of the company is stable, and there are no current threats. However, the company relies on the survival of its customers. Companies are known to downsize during periods of economic downturns, and this will mean loss of business for Knockri. The company relies on the growth of companies to increase their revenue, and this means that economic pressures affecting growth will harm the entity. Social factors consist of demographics, such as age, gender, education, and race. Knockri’s value proposition seems to revolve around the demographics. The company was founded based on biases that surround the recruitment process. The objective is to tame gender and racial prejudices by improving diversity in the selection process. The design of the AI algorithms used should minimize the biases as much as possible. Technologically, the company is ahead of its competitors and is employing the most recent developments to solve problems faced by its clients. The team should keenly study the technological trends which may render its AI tool redundant, and this way should be agile in its approach to ensure it stays ahead of the pack.

Industry

The industry is enormous and attractive. Many recruitment companies are entering the market intending to carve a niche for themselves. There is a rush among companies to adopt AI to enhance efficiency in their recruitment processes. Knockri understands the challenges facing the recruitment industry, and it would be easy for the company to navigate the competitive environment by providing unique solutions to its clients. The client base currently enjoyed by the company is an opportunity for growth. Its association with some of the most revered companies elevates the position of Knockri, enabling it to have a competitive edge over its peers. Its unique approach to solving algorithmic biases that exist in data sets trained by many entities offers an additional advantage for the company.

Despite the existence of competition, the company protects its proprietary information, which it learns from the recruitment videos. The learning is its proprietary information, and competitors have no access to such valuable information. The proprietary information is a barrier that lets Knockri enjoy its creativity. Such protection cushions the company from any likely entry into the industry. An analysis using Porter’s five forces indicates that the sector is structurally attractive. The company faces no serious threats from new entrants because of its unique value proposition. Buyers have limited bargaining power, and this is an opportunity for Knockri to increase its revenues, especially integration fees. Substitutes are not a significant threat to the company since it enjoys a proprietary advantage. The company has a good working relationship with cloud providers and thus enjoys an excellent cloud package. Knockri faces established competitors backed by a large pool of experienced employees. Some have unmatched financial resources and infrastructure. As a result, Knockri should carefully consider enlisting top of the class personnel in critical areas such as machine learning.

Revenue structure

The company has two streams of revenue; charges per screened candidates and integration fees. And the CEO gives a rough estimate of $2 million in revenue, which is okay for a start-up. The cost per screened candidate is dependent on the number of candidates screened, and this works well when the companies are known for favorable HR policies that are attractive to a large pool of employees. Knockri earns significant revenue from reputable companies respected for their fair and equal treatment of employees. The company receives a respectable margin within the range of 80% to 88%, with its charge of $5 per candidate screened. The cost driver, in this case, is the number of candidates screened by Knockri, and the total revenue will increase with an increase in candidates screened. The profit margin is indicative of the lucrative nature of the industry.

Building an efficient system will ensure the company earns enormous profits because it can reduce its administrative costs and other expenses. Additional revenues from integration fees based on the complexity of the recruitment process, making the process subjective. The company is a start-up whose funding base is $200 million, and according to the founders, the funds are not enough to allow the company to engage aggressively in sales and marketing. The company still outsources some of the functions, such as the IO psychologist. Currently, the company focuses on growing the customer base with the expectations for a merger or acquisition t inject more funds into the company. With a growing market share, the company expects to secure more finances after achieving a $5 million revenue target using existing funds. As a technology company, the payback period maybe ten years or more, and the founders rely on its institutional investors. The company is considering an IPO because it seems to be an option for the company as it aims to secure more funding. Knockri should develop a clear framework on how it plans to achieve the revenue targets within the stated period. The company also needs to look into its funding and ensure it can allow the company to operate at an optimal level before it can get additional finances. Such a move will help the company better prepare for future uncertainties that can destabilize the company.

Key Personnel

Jahanzaib Ansari is the CEO and co-founder of Knockri. Together with Faisal Ahmed and Maaz Rana, they founded a company whose goal is to foster ethical AI and inclusivity in recruitment. The CEO and his co-founders speak at conferences to enlighten HR professionals about unconscious biases associated with the recruitment processes used by companies. The American Psychology Association and Vector Institute provide them with a platform to create awareness on how biases exclude candidates. The CEO is also a contributor to Forbes.com. A common goal of eliminating prejudices and enhancing inclusivity drives the team to utilize AI in the recruitment process. With their AI video assessment tool, they plan to achieve this objective. Their shared background is a good starting point. The CEO and CTO are childhood friends, and the CEO has known the COO for the past 15 years before their start-up. The background suggests an excellent working relationship that will help the company grow.

The achievements of the company have seen the CEO selected a member of the World Economic Forum on Equality and Inclusion. The company was also awarded as the Innovator of the Year by Ascend. Such achievements are no simple fetes, and it shows the commitment and leadership of Knockri’s team. The executives g by a great group of specialists, including software engineers, machine learning engineers, and graphic designers (Exhibit 3). The board includes the top executives and an IO psychologist who advises the team on organizational psychology. Generally, the team is formidable, but most of them are yet to acquire industry experience. The type of clients they are working with is enough evidence of the strong the team is. Microsoft and IBM are global companies, and working with Knockri is evidence of the team’s commitment. Additionally, the team is focusing on growing the company, and the short-term profitability is not their chief objective. Most start-ups fail because of a narrow focus, and Knockri is keen at ensuring the company grows before they can even think of making profits.

Ethical Framework

The foundation of the AI assessment tool fronted by Knockri fosters inclusivity. Many speculations surround the debate on AI because the media is full of dystopian stories about AI and the future. The thoughts have clouded the actual capabilities of AI and how technology is solving problems in a variety of ways. The company recognizes this fact, and its approach to AI will set an example on the positive impact of AI. The company’s algorithms will erase any existing unconscious biases which exist in the recruitment process to assess soft kills of candidates in a more objective and unbiased manner. The intention is to increase workforce diversity and ensure that all candidates get equal opportunities.

Many companies, especially those working globally, have employed different measures to boost diversity in the workplace. Still, the unconscious bias, which is inherent in most of the recruitment schemes, has always failed them. And Knockri’s AI assessment of soft skills provides a better and more transparent way of solving the problem without an increase in recruitment costs. Companies that have used the tool have reported a substantial reduction in costs. Such ethical recruitment protects the company from reputational damage due to bad publicity. FTC is sweeping through the tech space. And many companies that have utilized technology in their recruitment are facing increased scrutiny from the regulator. Knockri is better prepared to handle such a hurdle because ethics drives its business model.