Can you defend how you hire?

Most hiring teams now use software to screen, score, schedule and summarise. The technology is no longer the question. The question is whether you can account for it. 

When a candidate asks why they were rejected, when your board asks whether the business can stand behind its hiring, or when a regulator reviews your privacy policy, you need a clear answer. “The system decided” will not do. 

Two reforms are about to make that a legal requirement rather than a matter of good practice. 

THE PRIVACY ACT'S NEW TRANSPARENCY RULES

From 10 December 2026, the Privacy Act 1988 will require organisations to state, in their privacy policy, where they use automated decision making that significantly affects a person’s rights or interests. The change comes from the Privacy and Other Legislation Amendment Act 2024. 

Recruitment is covered. A decision to progress or reject a candidate affects that person’s interests, and most hiring now involves automated steps. If you use cut-off scores, automated shortlisting, or any system that helps decide who moves forward, you will need to explain it in plain language to the people it affects. 

THE GOVERNMENT'S AI POLICY

At the same time, the Australian Government has raised its own standard. Version 2.0 of its Policy for the responsible use of AI in government took effect on 15 December 2025. It sets clearer expectations for governance, accountability and transparency when agencies use AI, including in recruitment. Agencies must assess their in-scope AI uses, and review existing ones by 30 April 2027. 

If you hire for the public sector, this applies to you now. If you supply to government, or want to, it is the benchmark buyers will hold you to. 

AI AND ADM ARE NOT THE SAME THING

This is the point most teams miss. People treat “AI” and “automated decision making” as the same idea. They are not, and the difference decides which rules apply. 

Automated decision making, or ADM, is any use of a computer program to automate part of a decision. A cut-off score that progresses candidates is ADM. 

AI is one method that can be used inside ADM. It is not the only one. Most automated scoring in assessment runs on fixed rules, not AI. 

The Privacy Act’s transparency rules apply to ADM. The Government’s policy applies to AI. To meet both, you have to know which is which in your own process. You cannot disclose or explain a step you have never mapped. 

What a defensible process looks like 

Being defensible does not mean removing automation from hiring. It means being able to stand behind your decisions when someone questions them. Five things make the difference. 

  1. You know where AI and ADM sit. You have mapped your recruitment and assessment tools, and you can say which steps are automated and which are not. 
  1. A person owns each decision. Automated results inform the decision. They do not make it. A named person is accountable. 
  1. The logic is clear and stable. You can explain how a score or recommendation is produced, and that logic does not change over time without anyone noticing. 
  1. You disclose it. Your privacy policy matches what you actually do, and it is updated before December 2026. 
  1. You govern it. Scoring models and reference data are checked, results are monitored for fairness and consistency, and every automated feature has a policy and a review behind it. 

HOW TO PREPARE

You have time to do this properly. A practical starting point: 

  • Audit your hiring technology. Find every step that uses personal information to make or support a decision about a candidate. 
  • Question your vendors directly. Does the tool use AI to score, rank, shortlist or reject candidates? Does the scoring change over time? Where is candidate data stored? What security certifications does the vendor hold? If a vendor cannot answer, that risk becomes yours. 
  • Review your privacy policy against what you actually do, and plan the update now rather than close to the deadline. 
  • Record your human oversight. Write down who reviews what, and where a person signs off. 

The opportunity 

Good technology still belongs in hiring. Assessment science, automation and data, the foundations of Hiring Intelligence, help you hire faster and more consistently than judgement alone, and they reduce bias when they are built and used well. The new rules do not ask you to slow down. They ask you to show your work. 

For employers who chose their tools with care, that is straightforward. For those who did not, it is a real risk. It comes down to one moment. When a hiring decision is challenged, can you give a clear, documented answer that a person stands behind? 

Testgrid was built around that question. Assessments are scored using established psychometric methods, not AI. Automated steps stay transparent and under the customer’s control. Candidate data is held in Australia. Disclosure is built in. If you are working through what these reforms mean for your hiring, we are happy to show you how we have approached it. 

 

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If you want to talk to one of our experts about our tailored solutions, get in touch with our team here, or call 03 9040 1700 to learn more.

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