Where Have All the Flowers Gone?

At one time there was a popular folk song called “Where Have All the Flowers Gone?” You might remember it (it’s okay to hum along if you do):

Where have all the flowers gone? Long time passing…

Where have all the flowers gone? Long time ago…

Where have all the flowers gone? (Stop humming! You got the idea.)

The song lamented the loss of the way things were: the loss of promise, the loss of hope, the loss of a safe environment (at that time there was a real potential for global “warming” of the nuclear type). Today, the same song is being sung by those of us watching the recruiting marketplace. But we’re getting ahead of ourselves. Let’s go back a few years first, to the time when a very big stone dropped into the business pond. Taking our cue from the “Fifth Wave,” we’ll call our story the “Seventh Ripple”:

  • Splash! The World Wide Web becomes user friendly and easily accessible.
  • First ripple: Computer proliferation + Consumers + User-friendly graphic interfaces = Strong demand for web-based goods and services
  • Second ripple: Entrepreneurs respond by founding new organizations.
  • Third ripple: Demand for qualified employees skyrockets, creating a need for applicant tracking systems and job boards.
  • Fourth ripple: Unprofitable web-based organizations disappear faster than boiled shrimp at a senior citizens’ party.
  • Fifth ripple: Newly vaporized organizations dump employees back into the labor market.
  • Sixth ripple: ATS and job board revenue is no longer driven by market demand, and sales fall as a result.
  • Seventh ripple: It all depends…

Will the Seventh Ripple Be Marked by Cluelessness? Clueless vendors in the hiring industry are organizations where executives once sat around drinking Starbucks and watching sales multiply like dust bunnies. They thought their rapid growth was caused by brilliant marketing. Imagine their surprise, and then disbelief, when sales started slipping, slipping, and slipping. Despite their best efforts at cold calling and servicing accounts, Starbucks had to be replaced with a water fountain; the pool tables and pinball machines gathered dust; and staff was decimated again, again, and again. What happened? Who changed the rules? These brilliant folks missed the point. As luck would have it, they were fortunate to be in the right place at the right time. As long as demand exceeded supply, they were able to ride the updraft of market demand. But when the product rapidly matured and the product had to stand on its own merits, their high-flying balloons started losing altitude. An experienced balloonist knows when his balloon can no longer ride the updrafts. At that point, there are only a few ways to avoid crashing: throw excess weight overboard, repair leaks, pump in more gas, or find other updrafts. Clueless balloonists do nothing. They sleep “remembering the Starbucks of the good old days.” Web-based services were then, are now, and will always be, just another delivery method, not a panacea for all hiring problems. The “updrafts” of excess market demand are gone and will probably never return. Vendors that remain clueless will continue to crash and disappear. Will the Seventh Ripple Be “Eat or Be Eaten”? Vendors who still have a few bucks in the bank from the boom time might believe that survival depends on finding other balloonists in the same condition and tying their aircraft together. This might seem like a good short-term solution, but getting bigger won’t solve the problem of decreased market demand. But market forces are no longer a primary business driver. Merely managing huge numbers of applicants is not the problem. Better, and legal, hiring and screening practices remain the undiscovered country. Will the Seventh Ripple Be “Tree Huggers”? Tree huggers are “fractured” vendors who think recruiting is a collection of trees (as opposed to a forest). They embrace their interview tree, their job description tree, their database tree, their background-checking tree, their applicant tracking tree, their testing tree, their EEOC tree, their competency identification tree, and so forth. Tree huggers have no idea they live in a forest and that an individual tree is just part of the organic whole. Woe to them! Remember Lotus 1-2-3? WordPerfect? Dbase IV? Harvard Graphics? That’s what happens to tree huggers. Almost everyone buys a Microsoft suite these days. There is a lesson here. Who has the foresight to become the next ASP/recruiting suite? Will the Seventh Ripple Be “Snafu”? SNAFU is a venerable military term. It refers to a state of affairs where everything goes wrong. It also refers to the normal state of recruiting. For example, let’s presume the real purpose of recruiting, pre-hire screening, and HR is to find, screen, and manage fully qualified people (yeah, I know that’s a stretch). What do we need to accomplish this goal?

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  • A documented list of measurable competencies for each job family in the organization
  • Some trustworthy and reliable tools to measure each candidate’s qualifications
  • A source of potential applicants
  • A way to manage, track and record applicant flow for EEOC purposes
  • A way to manage and benchmark employee skills for succession planning and restructuring

Okay, good list. Makes sense. Now, what really happens?

  1. Everyone invents his or her own definition of “competency,” while HR writes job descriptions that describe what the person does, not how to do it.
  2. Error-filled resumes are screened in detail for keywords (as if smart applicants didn’t know how to get around the system).
  3. Companies screen based on interviewing skills but leave out competencies and evaluations.
  4. People buy tests on blind faith from vendors who never did a validation study in their lives (validation = proof the test predicts performance).
  5. Viable applicants are hard to find.
  6. Few people seldom, if ever, manage and track applicant flow as defined by the EEOC (the 80% rule).
  7. Once an employee is hired, they disappear into the employee pool void, with no way to manage, maintain or benchmark their skills.

Conclusion What now? Which “ripple” represents the future? Which vendor has the inspiration and motivation to become the next supplier of integrated recruiting tools? No matter what kind of technical rap Microsoft gets, you have to admit they did not grow from a DOS vendor to one of the largest corporations in the world by being a tree-hugger or clueless. They were savvy enough to buy the whole forest (take that, Harvard Graphics!) What happens in our neck of the woods, for now at least, remains to be seen.


4 Comments on “Where Have All the Flowers Gone?

  1. If I am not mistaken, Martin, your comments are in violent agreement with mine. Trends are just that–trends–and trends do not affect everyone equally, nor do they follow a linear path.

    My point is that the days of wine and roses are over for the ATS marketplace…Will some organizations survive? Of course. Will the market continue to be driven by excess demand? Hardly.

    The future winners will be the ASPs who do more than ‘drop off’ a candidate at the door step. They will get smarter, more legally credible and more effective…but it will take more than web-searches, high-tech paper management and a few on-line tests to achieve that goal..

    Any vendor who wants to see how far it has to go does not have to agree with my opinions…Just visit the 1978 Uniform Guidelines on Employee Selection Procedures. Anyone not following the ‘Guidelines’ is: 1) asleep at the switch; 2) not providing better-qualified employees; and 3) opening the customers to legal challenge.

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  2. I’m not sure who Wendell has been talking to in the industry, but we have more action than ever. We are seeing some drop off from large corps, in line with Capex most everywhere, but we are seeing more from medium corps and startups, and recruiters are feeling OK again. Lots of RFP?s are being worked on today around the biz.

    Lotus 123 was one of the greatest hits ever- a few billion $$ later in impact, it?s hardly relevant that they are no longer in their original form. Peoplesoft will probably be no more, but they scored billions and changed many a market too.

    I dont think the analogy of Balloons is apt for this market- its more like a sea, and in this sea, the preyfish have gotten stronger and smarter, and so have the other predator fish. Everyone is eating a little less, and working a little harder to do it.

    The preyfish themselves feed on the macro-plankton, whose overall state tracks pretty well with ATS sales charts in the end.

    The firms that are smarter, burn less energy, and have wider ranges and appetites will last longer. Those that can adapt quickly will last longest. Those that require a lot of easy feeding are going to suffer.

    As for the forest and the trees, some would say that a bit of bark alone (or a spear of grass, of course) contains multitudes- the only limit is human imagination. You can?t keep winners down for long, even if you get ahead of them.

    The market will decide what it wants from these companies- trees or forests, and these firms will bring new ideas to the table. Some firms will live on quietly, and some will make a short ruckus. Some will dominate, and some will subordinate. Some will merge. Some will die. This is the way of things.

    The next wave may be in communications, or social-network mapping, or radical integration with other data sources, or even in commanding human capital management markets yet to be empowered by entrenched teleworking, self-development, and self-employment; who can tell with all of these trees in the way?

    I would not say that we are at any turning point or cliff moment in the ATS business today, although that could change with world events in a moment, as it could for much of tech and staffing.

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  3. What an inciteful article about the recruitment industry. Almost poetic in its wording.
    Recruitment is a cyclical industry. When the tide rises, everyone moves up (reguardless of their standards or practices). Whe the tide is down we all lose, but the more imaginative and creative companies weather the storm.

    I know I harp on about this but unles R&S embraces the concept of metrics, which measure and analyse the ROI of their efforts, then all we can expect, at most, is to grab a tree (which signifies the latest fad) and forever lose sight of the forest.

    Get this!! There is no oracle, or right answer to recruitment. We constantly fumble around for a perfect solution but it does not exist. All we can do is analyse and measure the tools that are available to us and through metrics, show the fruits of our toils (or as the case may be, the failure!!) At least by measuring we can understand the outcome of our eforts and adjust them accordingly to produce the best results.

    Microsoft took an idea that Xerox invented and turned it into an empire. Why?? because they did it better tha anyone else. An original idea is not in itself a ladder to sucess, it is mearly a starting point. I cannot remember who said it but their sentiment was ‘ I’d rather have an A team selling a B class idea then a B team selling an A class Idea. People make the place and people set the pace. Recrutment and selection is the most important function any company does, because its not new ideas that revolutionise the market, it’s how people position and place that idea that makes the difference.

    In a knowledge society you have got to hire the best, because anything you do now can be replicated. R&S is one of the few competitive advantages companies have left!!!!!

    I have studied all the methods available to companies, and advised on a few. There is no perfect solution. Nothing, not behavioural interviews or psychometric tests provides an exact science, but it’s the best we have. If you optimise this process then you give yourself a competitive advantage.

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  4. WW

    I do agree with you on your key ideas, and I enjoy and appreciate your work. Naturally that’s why I review your stuff and give you a hard time.

    re. Your points about helping clients stay legal:

    We have embedded language in our solutions pointing to the Guidelines website, language at the test design stage regarding legal usage, and job description template stage regarding job definition. We are very careful about our communications regarding defensibility and we regularly train our consultants on the key concepts. I don?t think I have seen an RFP that asked cogent questions about defensibility as an integrated system requirement.

    Re. ATS benefits in the future: I agree, they will get much smarter. I’m not sure that they will remain branded, monolithic solutions- the interfaces between ATS and other systems / providers are becoming the most important parts of some projects, where end-users are not involved and the software ‘brand’ is a non-attribute. The game now is managing the data flows in and out on multiple levels.

    At some point, the management of everything comes down to people, roles, groups, and events, which are, by happy coincidence, the precise data elements that good ATS systems are built around.

    Re. Excess Demand; never heard of it. The world supply of ATS software is safe for the foreseeable future 😉

    In the words of an economist / futurist regarding the current world economy: The place to be is in North America, creating intellectual property that transforms human capital management. These opportunities have tremendous wealth creation potential.

    Baby needs new sails, so I sure hope so !

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