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Don’t Miss the Next Strategic Turn

by
Yves Lermusi
Nov 17, 2005

People who didn’t believe in the Internet as a sourcing medium 10 years ago started to look pretty foolish about five years ago. Likewise, some companies are still perplexed about accepting all of their new talent applications in a digital format, and, sure enough, research is starting to indicate that they too may look foolish tomorrow. But what comes after tomorrow? What do you have to pay attention to today to ensure your talent management practice is leading edge, and capitalizes on all the benefits of the latest technologies? To understand the answer, we will first review what companies have been doing when it comes to sourcing. We’ll see whether “we only accept online applications” is an acceptable practice for your company. What are other companies doing? Do you still have to accept talent applications on paper? Finally, we will contemplate where it will lead us tomorrow and what is the next strategic turn.

Sourcing

As the demand for talent intensifies, attention is again turning towards effective candidate sourcing methods. Many corporations have focused on retaining the high-value talent they already employ and are boosting the internal mobility initiatives in order to heighten employee satisfaction and reduce turnover through digital means. New web-based applications have even emerged that “webify” the standard concept of referral networks. The Internet and referrals represent the two most important sources for new talent and are supported by a digital medium. Agencies today often interact with organizations through portals that make this a digital medium as well, and of course job boards became a standard online classified medium. Nonetheless, the requirement for new external talent remains, and for growing organizations is under pressure.

Regardless of the balance of talent supply and demand, the need for speed and efficiency in managing candidates is clear. Notably, one key portal ó the corporate website careers section — has progressed. Throughout the economic turbulence and Internet technology developments, the corporate careers website has steadily grown in use and importance. It is today the main portal for candidates to interact with a corporation. According to our research, in 2000, 73% of Fortune 500 companies already had a direct link from their website home page to the careers section. In 2005 that number has barely increased to 79 percent and it is considered a standard practice. Although data does not indicate a major change, a closer analysis reveals an important evolution, specifically in the preferred method for accepting job applications.

Online Response Only

In 2000, only 27% of the Fortune 500 directed all candidates wishing to respond to job positions posted to the corporate careers website to a purely online response mechanism. But in 2005, 77% of the Fortune 500 do not give jobseekers the option of responding offline to job positions posted to the corporate careers website.

Fortune 500 companies with Online Job Postings
Figure 1. Fortune 500 companies with online job postings and online-only applications

Today, a fully integrated front-end/back-end approach prevails, with close to 80% of Fortune 500 companies not offering the choice to apply any other way than online. This is a clear sign that organizations have streamlined their processes to an integrated digital channel. The vast majority are avoiding steps such as fax, traditional mail, and scanning resumes into their digital software, which slow down the application process. Companies are aware that the inability to act quickly on offline applications can lead to the loss of quality candidates to the competition. Corporations can gauge the real dollars saved by avoidance of costs associated with the processing (handling and scanning) of paper resumes. Savings equal the volume of paper the corporate careers website ordinarily generates multiplied by the processing cost per resume. Since the volume of applications for many large companies exceeds one million, this is certainly substantial. Additionally, the online-response-only practice increases the speed of the hiring process (thus reducing the opportunity costs of unfilled positions) by eliminating the wait for candidate data to return from a cumbersome resume scanning process.

Evolution of Digital Medium

Remarkably, in 2000, 76% of the Fortune 500 were already displaying jobs online — but only 27% were accepting exclusively online applications to online job postings. It took five years to reach the same level of digitization for job posting and the medium for response. But can this be the only portal to accept applications of new talent? It often depends from one industry to another. Probably the industry that could find that practice the most challenging is the retail sector, where candidates often walk in to apply.

A previous Taleo research study on the top 100 retailers, We’re Always Accepting Applications, showed that indeed they were usually behind in the adoption of the careers website as a medium for application. However, some use other alternatives to the traditional ineffective paper process, such as the kiosk or a terminal-like application that enables the candidates to apply. If candidates can’t even use a kiosk, we have seen digital pens and digital paper as options. Those are pens that record the writing on an application form and translate it into a computer through a docking station. If the website is not the only place to apply, all applications can still be in a digital format for you to manage effectively. Moreover, sometimes all those technologies can be reduced to a simple card directing the candidates to go to the website from home or another public Internet access point. Those have been effective with some retailers whose employees are mainly younger.

Five Years Forward?

What will the next five years bring? The trend in the Fortune 500 to an entirely digital recruiting process is evident when one considers the number of companies for which the online channel is now the only way to express interest in a job position posted to the careers website. The goal of digital recruiting is to transform the recruiting process into a paperless, consistent business process. The Internet represents a revolution in talent management not so much because it is the single largest source of candidates ever, but because the information stream coming from that source has the potential to be put into a uniform electronic format. Many companies are posting notes like this one from Merck:

Merck statement
Figure 2. Statement from Merck

The benefits to a corporation of online response derive from the efficiencies accrued from the digital formatting of candidate information. In short, the conventional resume format will disappear within five years as a means to manage talent. The resume will transform into a biography, often online, that will serve as an introduction. As Fortune 500 corporations became more fluent in capturing candidate qualifications in a digital format and not just advertising online, the future will concentrate on competency profiling and data mining refinement. To accomplish this, the basic requirement is the format of the candidate information and the platform and database in which it resides. Although digitizing the resume is a positive step towards a more efficient process, capturing candidate qualifications in a systematic and structured way powers a more effective staffing process and provides the basis for all associated talent management activities such as workforce planning and performance management.

Data-Rich Systems

Increasingly over the next five years, corporations will focus on key data predictors. Online applications will be combined with online assessment tools, providing a more accurate method of identifying the right candidate and driving additional value. Talent management will be viewed holistically and include talent inventory and development, talent sourcing and retention, talent monitoring, and assessment. Systems that support talent management will align with and become central to corporate goals. This evolution is made possible by the switch from analog information (paper resumes) to digital candidate applications triggered by the medium of the Internet. As a practitioner today, the key for success for the next five years is to have a system that enables the foundational platform to categorize skills, competencies, and assessment to deliver the core building blocks for an integrated talent management solution. Questions such as “How do you categorize the skills of your candidates?” or “Is there more than a questions filtering tool?” or “How do you go deeper than contextual search on resumes?” are key to making sure you won’t be obsolete soon!

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Martin Snyder

    It would be interesting to know. if the job itself does not require any computer skills or use of a computer, my reading of the guidelines says that no application procedure requiring skills not used on the job may be required, although one may be used allowing other options.

    I naturally dislike semi-arbitrary rules and restrictions- and I wonder how many of the ‘top’ hires at these organizations ‘apply’ online as the gateopening procedure (rather than a downstream chore after the courtship is on)

    martin

  2. Charles Lufkin

    The idea behind ‘Don’t Miss the Next Strategic Turn’ has a major flaw. While going all electronic is a great forward looking concept, we as employers need to look at our diversity objectives and ensure SOX compliance.

    By going all electronic in the application process we tend to discriminate aginst the older worker who might not have a computer or might not even be computer literate.
    Are we as employers going to adversely impact potential employees by taking the electronic high road? The answer is yes, while it makes the role of the recruiter easier in many cases and in some cases even removes the recruiter from having to do the most basic of work ‘speaking with the candidate’ by being all electronic.

    When we look at the non-exempt workforce of today we have a mix of older people, disadvantaged people and foreign nationals who only want to be productive. A move to an all electronic process will have a major adverse impact on the manufacuring, healtcare and agricultural sectors of this country, since these are the industrial sectors that employ the majority of the non-computer literate employees.

    In short the idea of moving toward an all electronic process, while a nice idea, has little merit if we as a country are to forge ahead as a global leader during this century, who is going to build and repair our cars, maintain our roads, ensure we have fresh produce to eat, who will clean and maintain or hospitals? I sure hope we can teach computers to do all of the above mentioned jobs, Oh yes I forgot we can use robotic systems, Oh I forgot we have no one to build the robotic systems because we couldn’t hire because they did not know how to apply on line

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