The Future of Recruiting: A Retrospective

In a recent ERE article, I made some predictions about the world of recruiting circa 2010. Based on what I saw at the recent HR Technology Conference in Chicago, it turns out I’m wrong. It looks like the predictions will come true much sooner than suggested.

Along with the ERE Expo, this is the one other conference you should attend if you’re in corporate recruiting. Corporate recruiters need to be technology junkies looking for new and better ways to find and hire top talent more efficiently. While there is no way to eliminate the one-on-one relationship aspect of recruiting, properly chosen and correctly implemented technology can eliminate much of the administrative burdens. However, to get the most from these vendors, their customers must become much better users and buyers of technology.

From what I’ve seen, much of the corporate recruiting departments’ disappointment with technology is more the fault of the users, not the providers. Other business functions (accounting, sales, marketing, engineering, operations) get much more from their investment in technology than HR/recruiting. From what I can tell, it’s because few recruiting managers are sophisticated enough to look under the hood before buying, and few recruiters are willing to learn how to use what was bought.

Following is a quick tour of what I saw at the conference to justify the above conclusion as well as validate some of my predictions.

Outsourcing

My prediction is that companies will only consider outsourcing the whole recruiting function (using RPOs) when they see hiring average people as an improvement.

The industry analysts spent a lot of time on this topic. While much of their discussions involved outsourcing HR functions other than recruiting, their conclusions were reasonably unanimous: 1) few business process outsourcing vendors were making money; 2) consolidation was inevitable; and 3) don’t outsource strategic functions, only admin processes.

I’m okay with outsourcing recruiting to handle high-volume positions, if the RPO group is a specialist in the field and it doesn’t also recruit for your competitors. Using a third-party recruiter is not outsourcing, and I believe independent recruiting firms will continue to thrive.

Applicant Tracking Systems

My prediction is that candidate tracking systems as they exist today will become extinct. Their replacements will actually help companies hire and retain better people and be far easier to use.

There is consolidation going on in our industry, and the BrassRing/Kenexa announcement is one of many to come. Since few applicant-tracking system vendors are making money, which is typical when everyone competes on price, some consolidation is necessary. The industry analysts made some big points regarding lack of major technological advances, especially at the architectural level, which suggests this is a big clue to the poor state of health of the applicant-tracking system industry.

However, there are a few companies bucking the trend. One is Authoria. The company will soon be introducing a major redesign of the Hire.com applicant-tracking system that it purchased last year with a refocus toward meeting the needs of hiring managers.

VirtualEdge (which ADP recently acquired) also seems to be making some good progress in improving recruiting processes. Perhaps it’s because they hired Roger Coker to help on creating the product map. Roger is a well-known and highly regarded recruiting manager who knows how to use technology.

Search Technology

My prediction is that companies will use state-of-the-art search engine optimization techniques as the de facto standard for how candidates find your opportunities. This will help to eliminate all of the middlemen, including aggregators. Just-in-time referral systems and new CRM technology will allow top people to connect directly to hiring managers.

Using search-engine technology in new ways was quite evident. Doug Berg’s Jobs2Web clones and reconfigures your career site to make it easier for candidates to find your jobs using Google, Ask, Yahoo! and MSN. The Jobs2Web team is pushing SEO techniques to make it far easier to bypass job boards as the primary means for candidates to find your jobs.

VirtualEdge has created a customer-relationship management application that’s been unbundled from their applicant-tracking system product. Using a new Web-facing version of its Engenium search engine, users are able to search for potential candidates, not using skills as keywords.

This, coupled with a robust customer-relationship management module, allows a company to stay in touch via a variety of email campaigns. Trovix has launched a new applicant-tracking system that seems to have a very powerful underlying search engine. The company is designing it to be easy enough for hiring managers to use without recruiters involved.

The Corporate Recruiting Model

My prediction is that corporate recruiters will become more important, but more specialized by process and function. (Here’s an article describing the positions on the recruiting team of the future.) As part of this, hiring third-party recruiters for corporate positions will turn out to be the wrong decision, since the independent, Lone-Ranger commission agency model will no longer be appropriate for corporate recruiting.

Most of the vendors I spoke with consider the majority of their users unsophisticated when it comes to using technology. This certainly isn’t proof that mimicking the agency model isn’t appropriate for corporate recruiting, but it highlights reality. In my opinion, the only way a corporate recruiting department can compete with outside search firms is to create a different model that embraces the latest technology and uses it to the max.

If a company is unwilling to pay generous commissions to their corporate recruiters, they won’t attract the best third-party recruiters. If these same recruiters are given too many reqs to handle, without using the best technology, all they can do is run boring ads and throw a bunch of semi-screened resumes at their hiring managers to sort through.

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Push Candidates Directly to Hiring Managers

My prediction is that workforce planning, better assessments, scalable hiring processes, and hiring managers handling most of their hiring personally will become standard operating procedure within five years.

Trovix and Authoria are already designing their products to be used directly by hiring managers to find candidates with limited recruiter involvement. Authoria has also developed a unique way for hiring managers to forecast their hiring needs for future quarters. This can easily be rolled up to create a company-wide workforce plan.

In addition, eContinuum, a new player in the business, has come up with a unique way to assess sales people, pushing finalists directly to the hiring manager. Using an interactive series of multiple questions, candidates are asked how they would respond to expected scenarios. This is being combined with appropriate assessments and a creative means to induce candidates to stay involved.

Metrics

My prediction is that process-control metrics will drive the recruiting process optimization process, minimizing the reliance on historical metrics.

If you don’t know how your recruiting department is performing today, you won’t ever be able to get better. Using metrics that are a month old is an acceptable way to observe trends. However, if you want to implement rapid change, you need to use forward-looking metrics to anticipate problems and process control metrics to see what’s happening in real time.

Here is my short list of metrics I’d start tracking on a daily and/or weekly basis:

  1. Sendouts per hire per recruiter
  2. Sendouts per week per recruiter
  3. Candidate quality
  4. The change in the size of the candidate pool by position
  5. Changes in the workforce plan next quarter by position
  6. Performance by sourcing channel, including complete Web analytics
  7. Number of great referrals per employee
  8. Number of great referrals for each passive candidate called

These metrics will give you a realistic snapshot of what’s going on every day. If you wait for the historical reports to tell you what happened, you’ll need to wait too long to see whether the changes you have implemented are working. Cognos Business Systems is developing a recruiting department reporting package that will work with any applicant-tracking system. It probably won’t be ready for a year, but this could be one of the most important HR software products you’ll ever purchase.

Job Boards

My prediction is that job boards and the concept of posting ads will become irrelevant.

If all of the above occurs, the obvious loser will be the job boards as they’re now configured. But don’t worry: they’re spending their money to develop new ways to handle these latest trends. You can accelerate this shift by rewriting your advertising to meet the needs of the most discriminating candidates rather than people who get excited by reading a list of qualifications.

Technology is changing the recruiting landscape. Some of it is good, much of it is just hype. I’m not recommending any of the vendors noted above, just suggesting that they’re all worthy of evaluation.

The common theme: technology is getting better, major changes are underway, and many of the approaches being taken involve pushing candidates directly to the hiring managers. This is classic disintermediation (eliminating the middleman), but the underlying reason is line management’s disappointment with their corporate recruiting department’s inability to consistently deliver top candidates.

From what I can tell, HR technology would be far better served if it had more HR people who knew how to use technology.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

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2 Comments on “The Future of Recruiting: A Retrospective

  1. In the ?Outsourcing? section of today?s ERE newsletter, a sweeping and uncomplimentary assumption that all RPO firms are the same is made. But not all outsourcing firms are alike. If you?re outsourcing and not getting better than average results there?s a problem with the firm you hired, not the RPO model. Thousands of companies have realized tremendous efficiencies and cost-savings using the RPO model when all parties involved are fully dedicated to delivering on their part of the process. If the RPO is maintaining its side of the bargain, they will have taken the time to fully understand their clients? needs, including the culture, nuances, and other intangibles that are necessary in finding the perfect candidate. A good RPO firm applies process that takes all of these factors into account. If you?re not getting this added value from an RPO, switch providers!

  2. I noted with interest the idea that HR users fail to maximize the opportunities presented by technology, as compared to their corporate colleagues in Sales, Finance etc.

    I’m wondering if anyone has heard of any independant research into successful implementations with corporations that might help us evaluate this more?

    It seems to me that users alone can’t be to blame for their dissatisfaction and low levels of interest, software companies should inspire, provide excellence in their services and function to relieve the stresses and strains of daily workload, combined with departmental leaders that know what to do with the resulting management information we can deliver…win in this way (and I think some of us are trying hard here) and HR users will find software as vital as accounting systems to finance.

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