Cover letters were a treasure for recruiters, until AI turned them into wet paper

The rise of AI has significantly altered the landscape of job applications, rendering traditional cover letters largely ineffective in the recruitment process. This shift is a consequence of the ease with which AI can now generate such documents, diminishing their value as a differentiator for candidates. The impact is particularly felt in the European job market where digital transformation is rapidly evolving. A study conducted by researchers from Princeton University and Dartmouth College analyzed over 2.7 million proposals on Freelancer.com. The research, titled "Making Talk Cheap: generative AI and Labor Market Signaling," focused on the impact of large language models (LLMs) on cover letters. The study showed that before the widespread use of AI, a well-crafted cover letter increased the chances of getting hired. This research indicates that the increasing use of AI tools to generate cover letters has devalued them. The focus has shifted toward other ways of evaluating a candidate's suitability, which affects job seekers and recruiters alike. This shift could lead to new strategies for candidates to stand out in the European job market.