Philippine employers see AI as top recruitment opportunity but lack readiness, Marsh study finds

Philippine employers see artificial intelligence (AI) and automation as the biggest opportunities to transform recruitment, but fewer than one in four organisations are fully prepared to deploy the technology in their hiring processes, according to a new study by professional services firm Marsh.

The company's 2026 Talent Acquisition Study, which surveyed 91 organisations representing 93 business entities across the Philippines, found that 80% of respondents identified AI and automation as the leading levers for improving talent acquisition over the next three years. However, only 23% said they were fully prepared and actively using AI in their recruitment workflows.

The gap between ambition and implementation is also reflected in AI governance, with 43% of participating organisations reporting that they do not have defined AI governance roles.

The findings come amid persistent recruitment challenges, with 78% of employers identifying talent attraction as their primary operational hurdle. Despite a relatively stable labour market, organisations continue to face difficulties securing workers with the capabilities required for business growth.

The study found that 74% of employers were struggling to keep pace with changing candidate expectations, while 69% cited limited talent pools for specialised skills.

"Even in a labor market that looks resilient on paper, Philippine employers are finding it harder to secure the talent they need to grow," said Sean Darilay, Workforce and Rewards Practice Leader at Marsh Philippines.

"The supply of future-ready talent remains limited, while candidates themselves are becoming far more selective about who they choose to work for," he added.

Among organisations already using AI, adoption remains largely focused on administrative and efficiency-related activities rather than complex hiring decisions.

Around 48% of surveyed employers use AI to write job descriptions, while 46% apply it to source and engage applicants and 45% use it to generate recruitment marketing content.

However, applications involving more complex decisions, such as automated candidate scoring and end-to-end recruitment management, remain limited.

The study also highlighted a shift towards skills-based hiring, with employers increasingly moving away from traditional indicators such as educational qualifications, job titles and previous tenure.

Half of the organisations surveyed identified skills-first hiring as a strategic priority for 2026. Meanwhile, 76% have updated job descriptions to focus on dynamic capabilities, while 54% have introduced competency-based interview frameworks.

Although 72% of employers use candidate assessment tools, challenges around technology integration and data interpretation continue to limit their effectiveness. Around 61% cited poor integration between assessment platforms and core HR systems as their primary obstacle, while nearly half said they lacked the internal expertise to interpret candidate assessment data effectively.

"Many organizations use assessments as a screening step rather than a strategic tool," Darilay said.

"Used well, skills-based assessments give employers an evidence-based view of capability while reducing hiring bias," he added.

The research also pointed to changing candidate expectations, with compensation no longer the sole consideration influencing employment decisions.

Competitive pay, employee benefits, corporate reputation and workplace perks emerged as the leading attraction factors, each cited by approximately 61% of respondents. Continuous learning opportunities followed at 58%, while 52% identified clear career advancement pathways as an important consideration.

Hiring efficiency also remains a concern. While 70% of organisations consider candidate experience critical to recruitment, 39% reported that lengthy hiring processes remain a challenge. Another 33% said their post-interview feedback processes require significant improvement.

"Employers that combine a strong employment proposition with a fast, transparent hiring process, skills-based assessment, and a clear approach to AI will be best positioned to attract and retain the talent they need," said Paulo T. Garcia, Chief Executive Officer of Marsh Philippines.

The findings suggest that while Philippine employers increasingly recognise AI's potential to improve recruitment, closing gaps in governance, technology infrastructure and workforce capabilities will be essential to translating adoption ambitions into effective hiring outcomes.