Paradigm Paralysis in HR Technology, Part 1

article by Dr. John Sullivan and Master Burnett

Anyone who knows either of us well knows that we often speak highly of the role that technology plays in the modern organization. For us technology has and will forever be an enabler: a tool that lets us accomplish more than we could without it.

In some cases it enables us to do something we couldn’t do before by expanding our capability, and in other cases it enables us to do more than we could before by expanding our capacity.

Unfortunately, it is becoming more and more clear that technology designed to support the HR function has become more of a barrier within the function than an enabler. Time and time again HR functional leaders have turned to technology to help reconcile the increasing demands of senior leadership, customers, shareholders, and government regulators, only to be let down by “solutions” that they perceive over-promise and under-deliver.

This article could very easily be a “beat-the-vendors-over-the-head-with-a-bat” kind of article, one that we know many corporate professionals would cheer for, but we’re trying hard to avoid assessing blame for the sorry state of HR technology today.

It is no secret that many corporate customers of HR solution providers are disgruntled, especially in the applicant tracking market where it has become common to bounce from vendor to vendor every few years despite a lack of significant differentiation in product/service offerings. As vendor-neutral advisors, we’re routinely asked to advise organizations on matters that pertain to technology, and can attest that the negative perceptions regarding the plethora of solution providers are both universal and run deep.

For every vendor than can produce a positive reference, the market can produce three that will share some pretty interesting stories behind the vendor’s back. In recent months the chiding has picked up, and more and more customers are using words like fraud and deception to describe the business practices of their providers. We agree that the vast majority of products available today s**k ? for lack of a better word ? but it’s not entirely the vendors’ fault.

Market Forces at Play

We said earlier that we weren’t going to assess blame for the rather sorry state of HR technology today, but that wasn’t exactly an honest statement. What we should have said is that all parties are to blame for where we are today, and that what’s most important is that we all recognize it, accept it, and move forward. Having met a number of the founders behind today’s leading HR vendors, we can attest that many of them set out with grand ideas ? concepts for products that would have revolutionized how we manage talent ? but found a customer base unwilling to embrace change.

Like all businesses, HR solution providers must walk a fine line; they must create and deliver technology that evolves a space forward, and at the same time ensure that the product will emerge within the boundaries of market acceptance. Market acceptance is tricky in that history is full of examples of companies developing boundary-breaking products to meet consumer needs only to see said customers not embrace the product.

An Ignorant Customer and an Opportunist Vendor

Vendors have done what was needed to survive; they played to the demands of their customers. Unfortunately the vast majority of the customer base has neither the scope nor the depth required to architect the role of technology in their own organizations. In the absence of such capability they have driven vendors down the road of administrative efficiency for so long that almost none of that innovative spirit that could have changed the talent-management paradigm remains. In the early days of applicant tracking, efficiency gains were enough for HR to demonstrate to senior leaders that they were “doing their part,” but after years of the same old story, the percentage of improvement in efficiency is so paltry that such efforts are for the most part futile.

Senior leaders expect more from HR these days; they expect HR to propose new models of managing talent with respect to the newly emerging dynamic business environment. They expect HR to understand the strategic objectives of the organization and to be capable of building human capital solutions that not only enable those objectives, but rather contribute to them.

The business world has changed, yet HR continues to cling to the historic notion of what HR was, and not what it could be. Few in the profession make an attempt to truly understand the product lifecycles of their organization, the competitive landscape, or market direction.

As a result, when HR functional leaders draft RFIs and RFPs they focus on what they know best: administration, operations, and compliance. Responding to those requests, vendors prepare generic responses that showcase core features and promise unlimited success. Some vendors go so far as to claim that their solution will “create heroes in the organization.” The sales professionals talk a great game, but they too lack the scope and depth needed to understand the client organization and to architect solutions that will impact business objectives versus HR objectives. While vendors use terms like innovation, quality, scalability, cooperation, and integration to sell their products, they deliver technology based on an archaic architecture designed to support centralized management of talent in a process isolated way.

Article Continues Below

Paradigm Paralysis in HR

In 2001 major companies were aggressively using labor arbitrage to reduce costs. They were shipping work outside the organization to vendors who would do it onshore, nearshore, and offshore. It was the start of a new labor model, one intrinsic to the newly emerging global economy, and it didn’t emerge from the function charged with developing systems to manage labor! Early adopters quickly realized that most ? if not all ? of the human resource systems in existence were relics of an era when staff was geographically concentrated, and that they did not provide the capability needed to manage a massively decentralized, short-term, project-based, diverse workforce. While outsourcing wasn’t new, almost no systems existed to support integrated management of the modern workforce.

Fast-forward four years and those solutions still don’t exist. Applicant tracking systems designed to enable the electronic handling of recruitment needs still support on one tiny faction of potential labor types available to the organization. While some vendors have acquired or developed capability to manage both professional and hourly recruitment, few have redefined their architecture to enable comprehensive recruitment of all labor types, including:

  • Employees (full-time and part-time)
  • Contractors
  • Temporary labor
  • Outsourced labor
  • Consultants
  • Strategic partner labor
  • Automation

By continuing to push forth products and services based on an outdated paradigm of labor, technology vendors and the products they produce have become more of a barrier than an enabler to world-class HR in the modern era.

Back in 1993, a former advertising executive named Joel Barker wrote a book called Paradigms: the Business of Discovering the Future. In that book, he writes that people immersed in a particular paradigm rarely understand the need for a new paradigm, and in fact usually actively oppose the emergence of a new one. We can attest to that. Often in the past when new concepts or emerging ideas have been introduced, the majority of the HR population who are actively engaged (a relatively small percentage) has evaluated the innovation on the grounds of compliance or efficiency ? an evaluation that almost ends in negativity. What’s interesting is that nearly every efficiency argument introduced against innovation focuses exclusively on cost and ignores benefit. There are two ways to drive efficiency: increase the top line while maintaining expenses, or maintain the top line while minimizing expenses. Trust us: the new era of business is all about the former.

Paradigm Paralysis ? An Example

Last week we wrote an article that had to do with using Google AdWords as a means to get in front of truly passive job seekers. While we mentioned that other search avenues existed, we opted to use Google as the example largely due to the current market share and user-acquisition statistics.

The immediate response was an accusation that we had a consulting relationship with Google, and that our reasoning was flawed. The responses also referred back to a case study that was written about the recruiting function at Google and their employee-to-recruiter ratio in particular. The case study argues that to arrive at the ratio of 14:1, someone at Google must have made one hell of a business case. The response to that article was one that balked of inefficiency, but not once was the word effectiveness introduced. The assumption is that any organization that would employ such a ratio is operating with blatant disregard to cost-control measures, shareholder value, and cost-benefit. Is that truly the case, or is it possible that one of the fastest-growing companies in the world looked at its business objectives, looked at the efficiency-driven solutions available, realized they were not effective at enabling their objectives, and invested in a human capital driven process that supports a new workforce model?

Google will no longer publicly discuss its employee-to-recruiter ratio, but one thing is clear: there appears to be little pressure to change the model inside the company, which just so happens to be full of some of the world’s leading systems architects!

Moving Forward

The historical paradigm that has guided the development of HR technology, and HR staffing in general, has exceeded its useful life. Current market conditions demand a new paradigm, one that includes real-time, global, workforce management capability that contributes to business objectives versus HR administration. Some companies are almost there in their thinking, but the vendor community is still years away. If you too see the paralysis in paradigm that guides HR, share your insight with us and the community. Post online or e-mail us at johns@drjohnsullivan.com.

Next week we will incorporate your thinking with ours and write a prescriptive article for change.

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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5 Comments on “Paradigm Paralysis in HR Technology, Part 1

  1. Let me say up front I have no experience in the Corporate HR industry. However, as a recruiter and IT Manager with 10 years of experience working for a small staffing (clerical/industrial, with occasional others) and contingency recruiting firm, I’d like to make some comments from that side.

    We recently converted from one software provider to another, because our original vendor’s company was bought out.

    Frankly, the experience was horrible. Some of the problem lay on our side (merging 3 databases into a single one is not recommended for the faint of heart!), much of it was a total lack of customer service, once the sale was made.

    That aside, there are issues that Dr. Sullivan either briefly touched on, or did not chose to cover, especially relating to the 3rd party world.

    A. Programs written for the convenience of programmers.

    B. ‘Gee-Whiz’ features are wonderful, but can you train or convince your users to actually use them?

    C. Does your staff NEED these features you are paying for? As an example, our software allows many complex search functions, including full Boolean SQL querries. Out of 16 users, possibly two, even with repeated training, know or want to know how to do that….

    Just some meanderings, folks. On a final note, Dr. Sullivan’s comment on ‘increased revenue’ is dead on. I’ve never met a business owner or executive who will balk at spending money if it makes more money.

    Google has delightful recruiters, by the way. When your standards are sky high, you commit the resources to meet those goals! I’ve referred people to Google recruiting contacts, knowing they don’t pay fees, just because I thought that person would love the company.

    I would love to connect with my fellow ERE members on LinkedIn.

    Sincerely,

    Jon Williamson IT Manager, Webmaster, Candidate Recruiting

    Williamson Employment Services, Inc.
    213 Hilltop Rd.
    St. Joseph, MI 49085

    Are you LinkedIn? If so, send me a connection request!
    If not, visit my profile at https://www.linkedin.com/in/jonwilliamson for information.

    My Main Phone: 269-353-4735
    Fax: 269-983-8955
    Cell Phone: 269-325-5559
    Corporate Office: 269-983-0142 or 800-226-6801
    Skype: williamson_jon
    Gtalk: williamsonjon
    email: jw@williamsonemployment.com

    Other IM contact information available on request

  2. I’m pretty sure that not a single ATS provider was ever an agency recruiter.
    I have not seen a single ATS that comes close to providing what ACT or Goldmine provide let alone PC Recruiter or the CAPS systems (MRI centric).

    Clearly recruiters are more like sales professionals than HR professionals. (This is not a knock against HR, just an acknowledgment that we are different)

    Is there a single ATS that allows for passive candidate management, competitive corporate intelligence, and A WAY TO MANAGE THE DAILY CALL ACTIVITIES of the recruiter?

    Clearly no one at these ATS companies has ever tried to manage calling 40-50 people a day, day in and day out managing a passive candidate pipeline!!

    If corporate recruiting would simply stand up and demonstrate that we are profit centers as clearly as the sales teams, we could demand the same tools and rights as the sales organization.

    Who would want or suggest CRM tools that only tracked the customers that called you for a quote?

    This is just the tip of the iceberg as great CRM tools cut across the organization from sales to manufacturing to receivables. What if your Recruiting CRM cut across the human capital game into employee referrals, on-boarding, compensation, development, talent management, succession planning and alumni networks allowing the recruiter to integrate to the rest of the company?

    Well that is ‘too much for the recruiting role’ you might say. Well, what would sales say to being cut off from the rest of the organization?

    The point is that the modern ATS does more to isolate and reinforce the notion that we are simply HR process than it does to integrate us into the business. The ‘Executive’ team now takes pride in the fact that we can effectively manage 30-60 requisitions and points to cost per hire and time to hire as the Holy Grail.

    What has this done to the quality of our work?
    What is going to happen to us when it is not just one or two positions for which there are no qualified applicants and stay open for 365 days?

    The return to a candidate’s market will crush these recruiters when they have 30-40 open positions without a candidate/applicant in sight…but they sure can track that they don’t have a candidate.

    I don’t mean to lay the blame at the recruiter’s feet, rather if me/you/we don’t start seeing the world as flat, the world as one in which candidates rule and start changing the way we add value in this world…simply put…you will be outsourced.

    Regards,

    Jim Poirot
    ADVO http://www.advo.com
    Sales Talent Acquisition Manager
    860.285.6212 / jfpoirot@advo.com

  3. John,
    How about this as a paradigm technology shift;

    ? The ‘Big Picture

    Premise #1- The recruiting applicant tracking and ‘job search board’ field is highly fragmented and is ‘ripe’ for consolidation for the purpose of better standardized tools. The confusion and lack of credibility of ‘closed’ systems that do not provide value, lend to this proposition that Client Companies would benefit by having 5-10 major vendors that provide much better solutions based on the type of problem a company wants to ‘solve’ and the solution that can be provided in each category.

    Out Bound Recruiting Processes

    #1- Applicant tracking systems that are integrated with resume search tools (Like Infogist/TalentHook) for an ‘Out Bound’ Recruiting process.

    In-Bound Recruiting Processes

    #2- Job boards that are better integrated with ‘matching’ services that do not only allow candidates to match their resume to jobs posted and ‘push out’ a typically not very accurate response profile of jobs listed, but an introverted ‘push’ that matches the clients job orders to match the candidates skills posted on the career boards (as well as candidate resumes that they have accumulated on their own hosted web sites) and providing a list of ‘matches’ so that instead of wading through 1,000’s of resumes with hundreds of staff, their recruiting staff could be 4-5 times more productive (looking at a summary list of the top candidates in the particular ‘bandwidth’ 90-100% ‘fit’, 80-89% ‘fit’ etc. ) so that one recruiter could work on 3-5 job postings per day/week based on the amount of candidates the ‘match’ produced (instead of wading through 1,000’s like they do now to try to manually/mentally make a ‘match’ based on their experience or knowledge of the title/role which may or may not ‘match’ the picture the hiring manager has for the same role (So communication can be administered more quickly and a new ‘understanding’ profile/criteria can be put in to more quickly ‘drill down’ the requirements and improve process (from 45 days beta efforts to >30 days (27-29 average) times as well).

    ? 12,500 resumes received on their web site
    ? 2,500 candidates (80% Reduction – 20% ‘top performers)
    ? 73 candidates identified (3% top performers ‘fit’)
    ? 15 second round interviews (.0012 % ‘fit’)
    ? 2 Hired so far in week 3
    ? ========================================================
    ? 45 day + recruiting/interviewing/hiring cycle reduced to >30 days (27-29) average
    ? Reduced recruiter head count by 1/3
    ? Made current recruiters 4-5 times more productive
    ? How long do you think it takes 3, 5,?? Recruiters to get through this many resumes before they identify a ?candidate?, contact them, and BEGIN a 45 day PLUS Interviewing/Hiring process?
    The ‘inverted pyramid’ of sales
    Premise #2- There is still a lot of potential for a ‘push’ (DCOM) Model for candidates. If the client is not ‘spammed’ with resumes (or even if they are) and they received all candidates from the ‘Top 3’ career boards (Careerbuilder, Monster & DICE as examples), now the value proposition becomes:
    #1- Companies do not have to pay the outlandish cost of the job boards, top 50 recruiting firms will subscribe to them, ‘Harvest resumes with tools like Infogist & TalentHook (as well as public information from Broadlook.com/Profiler & Eclipse) and be able to submit RSS like ‘FEEDS’ directly to the clients (Business model below) who can afford them. The eliminates recruiters as the ‘middle men’ to all but the 3rd tier firms who cannot afford the price of the ticket to get ‘first swing’ at the best candidates and they are continually left to the 3rd tier ?pick of the litter? type candidates and that drives the Forbes Platinum 400 list to newer highs and the bottom feeders to new lows or non -existence. This paradigm and shift causes the automation of the slowest part of the recruiting process (on the Client Interface side for Recruiting/Interviewing/Hiring process) to become more efficient for the Big F500/1000 to compete against smaller/more nimble competitors who smaller size may give them a hiring advantage, but a less competitive financial advantage in acquiring people.
    #2- The built in ‘Screening’ and ‘matching capability eliminates the ‘time overhead’ experience by most large organizations who do not have an ‘out bound’ recruiting methodology’ (Searching for candidates actively or using supplemental firms to provide them with candidates but for very exclusive or sensitive searches (Retained & Contingency) or contractors. The ‘One Stop Shopping’ Aspect could consolidate the ‘Direct Hire’ and Contractor chasm that currently exists and marry the capabilities to provide for both in one place as a result of the separation of the types of worker/resource vs. the type of interface needed to hire/recruit/retain these resources. Large ORGS sifting of inbound web site traffic is reduced so that ‘outbound’ efforts can be accomplished as well. College recruiting and other functions can be integrated into this picture in a fairly seamless manner as well. The ‘first impression’ factor of meeting ‘face-to-face’ on the college campuses and making an impression can be supplemented by fast turn around response to impress the candidates that the recruiting company is not only interested, but efficient and organized in their efforts to succeed.

    #3- AJAX technology that enables better ‘real time’ results instead of dated (7,14,30 or Greater) Candidates lists. Daily, Hourly candidate submission to Job Board sites that allow the Client to ‘station’ recruiters’ on the boards so that like a ‘stock market’ exchange, a candidate can expect a response. One of the biggest fallacies and disappointments of the Internet is a ‘lack of response when applying for a job. What if putting your job on a job board was like ‘blasting’ your resume to 8,000 recruiters and 10M companies at once. Once you were available, you post your resume, it gets screened by the system for employers/recruiters that are looking for a ‘skills match’ or DNA of the resume and within minutes an RSS ‘feed’ gives back a 95% accurate match to the candidate and the client on the paid subscription model and like a posting on E-Bay for an auction, a ‘Bid’ is produced (By artificial Intelligence algorithm or neural language matching system) from the inquiring company either via technology or a in-house person auditing a ‘resource board’ who bids for the resource (by $ amount to secure a place in line to call or contact the candidate/resource so they are not overwhelmed with phone calls or emails. The candidate see’s the ‘top 10′ and can view investigate the company online (Hot Gigs Views capability’) and respond to the opportunity that they like the best, and the Platinum/Gold/Silver/Bronze companies get exclusive access to make a call/email based on
    The subscription model they have established (See Business Model below). The Client Companies are the first to monitor the page as they see as opportunities and get the first contact ‘privilege’ and opportunity to present their career opening/opportunity, The candidate gets some ‘choice’, that only after clicking on the first 10 opportunities do they get the next 10 and so on.

    I do not know how much money or how technically involved your client wants to get, but if they have a site or usage for ‘real time’ data being available on the internet there is a new term ‘AJAX’ that has been grouped with a technological capability (Asynchronous Java and XML) that allows the company to ‘push’ data from the server out to the web site and gives capability that is currently ‘new and exciting’ as well as offering a competitive advantage (if there is an application like ‘pushing out candidates to clients that are available that are on an ‘opt – in’ list to get the first candidates ‘preview’ available (before their competitors) and a subscription model to this ‘Hot List’ and a limited amount of clients (100 – 1000) that receive the ‘Hotlist’ in a highest bidder ‘Supply/Demand’ Relationship (Those who pay for the ‘Platinum’ access get the Candidates for 5 days FIRST before their competitor in the ‘Gold’ category gets them for 3 days SECOND then to the SILVER category for 2 DAYS THIRD to the Bronze Category who gets them for 1 Day LAST).

  4. Heroes in the Organization

    Dr. Sullivan,

    Fantastic article. Probably the most accurate and well articulated state-of-the-HR-Technology-state I?ve seen. As the author of the claim that ?our solutions create heroes in the organization? (it?s nice to know that message cut through the clutter), I couldn?t agree more with your assessment of our space.

    Implementing HR or HR Staffing software generally doesn?t make someone a hero, and likewise it shouldn?t take a heroic effort to pull it off. However, as senior leaders do expect more from HR in supporting the strategic objectives of the organization, many na?vely look to technology and system integration as the cure-all. ?If we can just get the data from our performance management system to flow into our ATS, Onboarding and compensation systems, and link that to our training catalog via competency library we can create an enterprise-wide, integrated talent strategy, complete with pre/post employment assessments, behavioral-based interview questions, SMART goals, pay-for-performance (take a breath), incentive management, succession planning, career pathing, Offboarding, contingent worker programs, alumni portals, CRM, passive candidate tools, and workforce planning.?

    Pick any two of those functions, go to senior management with a cogent business case to integrate them, develop some key metrics to support business decisions and organizational objectives and your CEO or CFO may actually hug you. Then they?ll give you all the money you need.

    Now go to the head of Compensation and the head of OD, you?ll need to bring in IT of course, and don?t forget to bring the head of Corporate Recruiting in (you?ll just be asking for a few changes to the way they do business) and you might want to get some line managers involved so they don?t feel ?left out? of the purchase decision. Anyone we missed? Well probably, but you won?t know until the passive-aggressive stuff really starts to undermine your efforts.

    Now, convince all these folks that the way they?ve been doing business in their silos is about to change. Exactly.

    Without question the technology has stalled in delivering diminishing returns on process efficiency and cost reduction, in many cases. Moving data, integrating systems, developing metrics and improving processes across functions is at the heart of every technology solution and easy by comparison with changing the organization?s behavior.

    Innovation isn?t dead inside the vendor walls, it simply has little application in a world so desiring of integrated ?value?, yet so resistant to change.

    On the front lines of HCM, where real people try to bring real change, we are absolutely witnessing heroes at work. Not because they implement an application or two, of find a nice fit for technology, but because they brake down the walls and crush the silos and focus on the people, NOT the technology. The implementation alone didn?t make them a hero, the fact that they were able to get people, teams, departments, and locations excited about the possibilities of sharing, collaborating and winning together did. And finally, they aren?t being heralded as heroes by us ? the vendor, but by their own people in their own words, who roar about their amazing ability to get folks working together.

    Thanks for the great discussion.

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