In my humble opinion 2004, has been a great year for the online hiring industry. I believe this is due to the development of the following trends:
- The ATS industry has finally started to get it! The jig is up for companies that have promised to increase quality of hire but fail to offer infrastructure capable of fulfilling the promise. Market demand has required that ATS vendors of all sizes begin to evaluate how they can deliver this essential, but often missing, ingredient. To their credit, most vendors have reacted accordingly and are working hard on a new generation of products that provide the substance required to help their customers make quality hiring decisions.
- Established assessment vendors have finally start to get it! More and more established assessment companies that have been the cornerstone of the testing market for decades are starting to understand the need to do more than merely deliver tests via the web. These organizations are finally spending money for the R&D needed to help ensure they deliver their content in a more cutting-edge manner.
- Organizations are finally starting to get it! Finally, organizations are starting to gain interest in the use of some form of measurement tools that can help them to systematically increase the quality of their hiring decisions. This is a significant trend for several reasons. First of all, it shows that organizations are evolving their thinking about hiring and are interested in using technology to support innovative processes. Secondly, increased interest levels help vendors to justify the outlay of cash for the development of new products and systems.
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My experience working with both ATS and assessment vendors, as well as the consumers of their services, leads me to believe very strongly that these three trends will definitely lead to increases in the development of more innovative hiring practices in the year to come. The use of screening and assessment tools will represent a significant part of this trend. I myself welcome this trend, because I believe that it will continue to fuel a fundamental shift in the market. This shift will be marked by consumer demand for tools that will provide them with the ability to support innovation and provide an understanding of the value associated with their investment in hiring technology. This demand will continue to be driven and supported by vendor R&D efforts. I believe the winners in 2005 will be those vendors who will be able to offer tools that support the following best practices:
- Breaking down barrier between the major steps in the hiring process. The current viewpoint of the hiring process is still compartmentalized. That is to say, sourcing, candidate management, and maintaining quality of hire are often handled using different systems that are not tightly integrated. The hiring process is a continuum, and the outcome of each element in the process is limited by the step that comes before it. This past year has seen the beginnings of change in the right direction. Several of the larger ATS companies are building out platforms that integrate each of these major functions. This currently exists mostly for the big end of the market. This is unfortunate though, because companies of all sizes can benefit from this approach.
- Movement away from a “test centric” mentality. The assessment industry has traditionally focused on the use of discreet tests in order to help organizations predict which applicants will be the best fit for a specific job. While this methodology can be highly effective when used correctly, it can be a bit cumbersome. Any hiring professional knows that jobs are complex and that often times the ability to differentiate between star performers and average ones requires a set of tools that are mapped closely to job requirements. The most effective way to do this is via the ability to take elements of various tests that are relevant to a particular job and combine them in a manner that allows for optimal prediction. One test is rarely enough to provide a solid foundation for making accurate predictions. The modern hiring process demands that the industry begin to think in terms of creating flexible systems that offer efficiency via the measurement of each of the major elements that combine to define job performance.
- The ability to provide a solid foundation for understanding performance. Effective hiring cannot occur in the absence of an understanding of the requirements of the job in question. While most technology-based hiring systems provide some way to help users identify key performance drivers, this continues to be a weakness. Best practices demand a system that provides users with the ability to verify and document the critical ingredients required for successful job performance. All subsequent activities in the hiring process should then be based on this definition. This process is not only the key to effectiveness, it’s the law! This issue has been defined by the need for systems that can be rapidly configured and those that offer a strong foundation for the measures used in the hiring process. Best practices for the future demand careful attention to this issue.
- The ability to help organizations measure success versus key business outcomes. One of the challenges continually faced by hiring professionals has been the ability to demonstrate the value of various elements in the hiring process. This is definitely not an easy task, but the development of technology systems that can support the collection and analysis of various streams of hiring-related data is a great step forward in this area. I believe best practices for vendors involves a methodology that includes both assisting clients in understanding key outcomes as well as providing technology that demonstrates the hiring process’s influence on these outcomes. This is a definite step towards the application of business intelligence to the hiring process, a trend that I believe will become more common over the next five years.
- Ability to link assessment results to other key parts of the hiring process. For years, I have been suggesting that the data collected during the hiring process has value beyond the initial hiring decision. Assessment data is rich in information that can be used for helping organizations create development plans and facilitate the on-boarding process. An increasing number of vendors are beginning to catch on to this idea. I have seen a few examples of these types of tool surfacing lately. However, it will take a bit more time for the market demand to really accelerate the development of these tools. Organizations simply aren’t thinking this far ahead yet and must first learn to integrate the hiring process itself before attempting to cross this frontier.
While vendors represent one side of the best practice equation, organizations also have a related set of best practices that they should be focusing on for 2005. I am very optimistic about the increased adoption of these best practices, as I believe increased assessment-related educational opportunities and increased levels of interest in using assessment are leading organizations to become more concerned with following them. My best practices for organizations for 2005 include:
- Continuing to integrate the hiring process. Organizations need to strive to break down barriers between the various parts of the hiring process. Sourcing and branding must be seen as integral parts of the hiring process that directly influence the quality of hiring decisions. Quality outcomes clearly require that assessment be tightly integrated into various stages of the hiring process.
- Demanding more from your ATS. Organizations need to demand that their ATS is able to provide them the tools required to make informed hiring decisions. The mere management of applicant information should not be considered as a sufficient level of service.
- Defining key outcomes. Start doing what it takes to hire using these key outcomes. This best practice will never go out of style. The key to successful hiring is documenting what it is you are looking for, and then working backwards to ensure you create a process that will facilitate your ability to find it.
- Tracking various elements of the hiring process to business outcomes. The real value of creating a best-practices-based hiring process is a clear understanding of its impact on the bottom line. While this can be a challenge, there are an increasing number of tools available to help you understand the impact of hiring on the bottom line.
- Experimenting with assessment. Organizations that have not given assessment a second look need to snap out of it. The use of scientifically based predictive tools has saved organizations billions of dollars over the past few decades. The introduction of technology into the mix has made the benefits of assessment more accessible then ever before. It is important to understand that assessment is not a panacea, as it is should be only one part of a carefully planned hiring process.
My warm fuzzy feelings for 2005 come from the fact that both sets of best practices outlined here provide momentum for one another. As vendors begin to sniff increased interest, they loosen their purse strings for R&D. As more organizations begin to experience success based on the integration of best practices for technology, the work will continue to spread, creating increased demand. The increases in demand will continue to help spark intense competition (hopefully via the roll out of world-class products), which will result in organizations continuing to use a combination of innovation and best practices to create more effective and efficient hiring processes.