As software development enters the human + AI era, companies face a growing problem: how to identify engineers who can excel alongside AI tools. Karat, the veteran in engineering talent evaluation, aims to solve this with the launch of Karat NextGen, its first human-led, AI-enabled talent evaluation solution.
The platform addresses a critical gap revealed in Karat’s 2025-2026 AI Workforce Transformation Report: while nearly 70% of engineering leaders plan to strengthen AI capabilities through strategic hiring, two-thirds of organizations still restrict AI use in interviews, and fewer than 30% have updated assessments or interviewer training to gauge AI-ready skills.
“Most companies are still hiring based on a pre-LLM rubric,” said Jeffrey Spector, co-founder and president at Karat. “In a world where people and AI work together, engineers need a wider range of skills, and the way we evaluate those skills needs to adapt.”
Why the Human + AI Interview Matters
Karat NextGen is designed to simulate the real-world engineering environment where human judgment and AI capabilities intersect. Instead of standard coding tests or take-home exercises, candidates work on complex, multi-file projects with an integrated AI assistant, collaborating live with Karat’s expert Interview Engineers. These professionals probe candidates’ reasoning, decision-making, and trade-offs—skills AI alone cannot replicate.
This combination addresses a common challenge: as AI tools can autocomplete or refactor code, traditional interviews no longer provide a reliable measure of skill. NextGen ensures engineers’ true abilities shine through, allowing employers to make data-driven hiring decisions in a rapidly evolving technical landscape.
Data-Driven Hiring for AI-Aware Organizations
Karat has long relied on a controlled, consistent dataset drawn from over 600,000 interviews across industries. This foundation has helped clients like Atlassian, Duolingo, and PayPal define and measure engineering quality for more than a decade. NextGen builds on this legacy, delivering a fully-managed evaluation solution that evolves alongside AI innovation.
David Lau, VP of Engineering at OpenAI, emphasized the urgency of evolving hiring processes:
“Frontier models are advancing so quickly that last month’s edge cases become this month’s baseline. Organizations must continually re-evaluate how they empower great people with the latest models, and design their software, workflows, tools, and hiring processes to let humans and AI multiply each other’s impact.”
For HR and engineering leaders, this translates into a system that keeps pace with AI advancements, ensuring that technical talent can leverage AI effectively without compromising quality, creativity, or judgment.
The ROI of AI-Ready Talent
Karat’s report also highlights a striking statistic: the ROI of a top-performing engineer is expected to triple over the next three years due to AI-driven productivity. With human + AI collaboration becoming a central feature of software development, the ability to identify engineers capable of thriving in this environment is rapidly becoming a competitive advantage.
Sagnik Nandy, CTO at DocuSign, noted:
“AI is transforming engineering, but the real breakthroughs happen when human judgment and AI capabilities work together. A human-led, AI-native interview is exactly the kind of solution organizations need to understand who can truly excel in this new model of development.”
For companies racing to integrate AI into their software teams, NextGen offers both benchmarks and insight, helping CTOs, CIOs, and VPs of Engineering make informed hiring decisions while ensuring fairness and consistency.
Implications for HR and Engineering Leaders
The launch of Karat NextGen reflects several broader trends in the intersection of AI, HR, and engineering:
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Traditional coding interviews are no longer sufficient. AI-assisted development demands assessment frameworks that evaluate collaboration with models, not just coding skill.
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Human oversight remains critical. Expert interviewers are needed to interpret reasoning, trade-offs, and judgment in context.
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Continuous evolution is required. AI tools and frameworks advance rapidly, meaning evaluation content must keep pace.
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Data-driven talent decisions are becoming strategic. Companies with strong, AI-ready engineering teams will gain outsized productivity gains.
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Recruiting fairness and benchmarking are essential. Structured, human-led evaluation reduces bias while validating skills that AI alone cannot measure.
For engineering organizations aiming to thrive in the AI era, Karat NextGen is not just a hiring tool—it’s a blueprint for aligning talent assessment with the future of work.
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