The problem isn't AI, the problem is companies don't know how to properly select between candidates, and they don't apply even the basics of Psychometrics. Do they do item analysis of their custom coding tests? Do they analyse the new hires' performances and relate them to their interview scores? I seriously doubt it.
Also, the best (albeit the most expensive) selection process is simply letting the new person to do the actual work for a few weeks.
How do you control for confounders and small data?
For data size, if you're a medium-ish company, you may only hire a few engineers a year (1000 person company, 5% SWE staff, 20% turnover annually = 10 new engineers hired per year), so the numbers will be small and a correlation will be potentially weak/noisy.
For confounders, a bad manager or atypical context may cause a great engineer to 'perform' poorly and leave early. Human factors are big.
Might as well use https://en.wikipedia.org/wiki/E-meter
> Also, the best (albeit the most expensive) selection process is simply letting the new person to do the actual work for a few weeks.
What kind of desperate candidate would agree to that? Also, what do you expect to see from the person in a few weeks? Usual onboarding (company + project) will take like 2-3 months before a person is efficient.