Impact of AI Adoption on Recruitment Efficiency: Evidence from Small- and Medium-sized IT Companies in Chennai, India

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Purpose Recruitment practices are undergoing a transformation owing to artificial intelligence (AI). Based on the technology-organisation-environment, resource-based view and socio-technical systems frameworks, this study investigates the influence of AI adoption on recruitment efficiency among small- and medium-sized enterprises (SMEs) in the IT sector in Chennai. Design/Methodology/Approach A cross-sectional survey design was employed to gather data from 201 SMEs. Confirmatory factor analysis and multiple linear regression were conducted using Python to validate the constructs and examine the relationships. Findings AI adoption ( β 3 = 0.501, p < .001) exerted the strongest direct influence on recruitment efficiency, followed by hiring digital competency ( β 4 = 0.335, p < .004) and organisational readiness ( β 5 = 0.078, p < .001). Hiring digital competency ( β 7 = 0.669, p < .001) exhibited a significant moderating effect. Practical Implications/Limitations The study suggests that SMEs in the IT sector should strengthen human–AI collaboration by aligning AI implementation with the human-in-the-loop approach and training recruiters/HR professionals in AI literacy. A comparative analysis of the effectiveness of AI-powered and blockchain-based recruitment systems may be undertaken in future research. Originality/Value This research demonstrates that hiring digital competency significantly strengthens the positive relationship between AI adoption and recruitment efficiency, whereas organisational readiness does not reveal a significant moderating effect.