Almost every day I am confronted with some new product or service that promises to greatly enhance, and often to revolutionize, the recruiting function. I don’t think it has ever been clearer that our profession is evolving and changing more quickly than any of us predicted. The Internet is the centerpiece of most organization’s recruiting tactics and we now have tools to help us at every stage of the recruiting process. Unfortunately, we have a plethora of tools ó but a paucity of wisdom and skill in applying them effectively. Recruiters are confused, as are the senior management teams of most organizations, as to which technologies are essential to winning the talent war and which are fads. I often meet recruiters who equate technology with job boards, or who feel as if Internet searching is the only way to find candidates, or who have no idea as to what is good or bad in technology or what works and what doesn’t work. Tools and services are frequently purchased because the salesperson did an effective job in selling the benefits of their product, or because the recruiter is afraid that they will lose their competitive edge if they don’t have the latest tools. Unfortunately, recruiters rarely have a clear strategy on how to deploy and integrate technology into their recruiting process. In order to steer technology choices, there has to be an understanding of what is happening in the world of recruiting technology and there has to be an appreciation for the evolutionary nature of all technology. The rules of successful technology adoption are as follows. 1. Understand that change is the watchword of technology. Whatever software or Internet application you are using today, it will significantly change or be obsolete within one year. It may be upgraded, it may evolve or merge with some other technology, or it may simply be superseded by a better concept. You always need to understand this when you invest in a technology. Spend money to acquire a solution to a business need ó not because it is recommended by a friend or used by a competitor. Build into your internal sales pitch an understanding of the transitory and rapidly changing nature of many of these tools and the organizations that create them. On the other hand, don’t abandon a solution because of one or two missing features or because of minor technology issues. Switching from solution to solution almost never solves anything and almost always causes more problems. You should plan on three-year minimum commitments to a technology unless something very radical occurs. 2. Develop an overall strategy for your recruiting process. I am always surprised to learn that many (maybe most) recruiting departments really do not have an overall vision for where they would like to go or any plan to get there. But to have a successful technology strategy, you also must have a vision of what you would like to achieve. You need to have goals for performance improvement, quality, speed, and other parameters that are important to your organization. A good strategy requires that you involve stakeholders (hiring managers, new hires, recruiters, management, human resources, and others) in a discussion of where the recruiting function can add value. It requires knowing your organization and your staff well enough to judge its capabilities ó its strengths as well as its weaknesses. Engaging in a strategic planning session reaffirms your value and moves you beyond the tactical. 3. Know why you investing in the technology. As I mentioned above, technology should fit into your strategy and solve a business problem. It should ease your workload, help you improve candidate quality, or allow you to provide better customer service. All your technology acquisitions should take place against a master plan. This plan should list all the areas where you think you can or should apply technology and also list the sequence you would like to acquire and implement them in. The recruiting process can be broken into large “chunks” of processes: workforce planning, branding and marketing, sourcing, screening and assessing, tracking and scheduling, on-boarding, and perhaps retention. No single technology solution can help in every one of these chunks. The applicant tracking system, for example, is frequently the first (and often only) technology solution that is bought, yet it is most effective at the tracking and scheduling parts, and perhaps at the screening phase. Most applicant tracking systems, however, do not help you brand, source, assess, orient, or plan. Equally important, but often neglected, is the recruiting website. It is at the front of your entire process and is often the candidate’s first view of your organization. It’s a powerful marketing tool for your recruiting efforts. There is growing awareness of the need for sophisticated screening and assessment tools and also for better workforce planning solutions. It is important to know what you need and in what order. 4. Evolve your solutions and work for integration. Revolution may have its place, but in our world it is far better to adopt technology at a pace equal to your own, your recruiters’, and your hiring managers’ ability to use it effectively. Start with a single technology solution. When you are comfortable with it, add another piece. Continuously add technology according to your plan, enforce its use, train people to use it, and evolve toward your vision. Some organizations can move quickly; others take more time. But it you move at a pace that is fairly comfortable, you will find that the technology gets used and that recruiters and hiring managers actually begin to reply on it rather then on backup manual solutions. Technology is a tool and needs to be integrated carefully into processes that are evolving and adapting to ever changing business needs and priorities. The 21st century is one that will find many technologies moving into recruiting. We all need to learn how to choose the right solutions for the right problems.
I’ve been following the assessment market for the past 10 years and I am happy to say that it seems like people are finally starting to realize the value that assessment tools can add to their hiring processes. After five years of standing on my soapbox, I am finally starting to feel like I am not wasting my breath. While we still have a long way to go, I am feeling very encouraged lately and want to use this space to take a brief look at what I feel are some of the main reasons for the increasing interest in these tools. This article provides my opinion on the five main reasons for the increasing interest in these tools as well as a discussion of some of the major obstacles to their use. So why is online assessment gaining in popularity?
- Increased ability to create new and innovative products. Technology has fundamentally changed the world of assessment. Administrative burdens no longer present a barrier to the use of assessments. More importantly, companies on the cutting edge of this market are blending technology and assessment content to create systems in which the whole is greater than the sum of its parts. The rise of companies that are equal parts assessment and technology has resulted in the creation of products that can do much more than the paper-and-pencil products of the past.
How quickly some things change! The idea of a Walkman sounds positively archaic in today’s iPod world. Your kids (or interns) probably have no idea what an LP is, but say “MP3″ and the know immediately what you’re talking about. So perhaps we can all take some comfort in that fact that, even in our ever-changing world, there are still some terms that have tremendous staying power. In golf, a driver is still called a wood, even though these days it’s often 100% titanium. Coke is still Coke a century later, even if it’s now available in more varieties than its inventor, John Pemberton, ever dreamed of. And the system you use at work to manage your hiring process ó it’s still an applicant tracking system. Or is it? It’s interesting to see that the term applicant tracking system has enjoyed tremendous staying power since the 1980s, even while customer requirements and system capabilities have continuously evolved. It’s not that the term isn’t an accurate description of the raw purpose of the tool. On the contrary, Applicant Tracking System gets right to the primary purpose of these tools: tracking applicants from the point of application to the point of hire. The problem is that as tools and processes have evolved, it has become a limiting term that no longer accurately portrays the value of the tool’s potential ó or our needs as recruiters in 2004. Technology has ushered in new ways of thinking about and executing on talent attraction, selection, and acquisition. Applicants can be processed more efficiently and with greater care. Candidate relationship management, once reserved for top-tier professional applicants, can be realized across every level of job seeker. Proprietary talent communities provide companies with opportunities for targeted marketing and can ultimately reduce time to fill and cost per hire while increasing the value of the employment brand. These benefits provide a foundation for talent management to be in play at a broad and individual level. Don’t be mistaken. If the biggest pain point in your recruiting process today is that you have no way to track applicants electronically, an applicant tracking system may be exactly the relief you’re looking for. If, however, your recruiting challenges are even just a little more complex, applicant tracking almost certainly understates your needs. For example, applicant tracking isn’t about helping to brand your company as an employer of choice. It does not focus on providing a great experience to candidates on your corporate website when they apply for your jobs. It emphasizes administrative processes (e.g., tracking applicants) over process improvement (e.g., automatically screening candidates for their fit with a specific job). It doesn’t speak to providing integrated tools to enhance the efficiency of your recruiters, such as job libraries, correspondence templates, recruiter-to-recruiter communication tools, and reporting modules. In short, a decent applicant tracking system will certainly help you track applicants; it’s just not likely to help you win the best ones, collect the most useful data, or deliver the level of efficiency to your recruiting process that most of us need. And with smaller teams and more limited resources, we need these things now more than ever before. So, what’s better? Well, it may be no match for the cool factor of iPod, but hiring management system isn’t bad. It’s certainly much more descriptive of the requirements many corporate recruiters share today, in a world that’s a little more complex than the days when tracking applicants electronically was truly a differentiator. If applicant tracking has evolved to become something of a commodity, hiring management is still very much a differentiator in corporate America. Hiring management systems facilitate a more complete story of the power and flexibility offered by technology as a differentiator to leverage expectations, performance, and process. Let’s explore a few of the differences between hiring management and applicant tracking, with a goal of helping you to decide where your organization is heading and which approach is the best fit for you. For most recruiters, a basic applicant tracking system, even if it starts as an Excel spreadsheet or Access database, is a key to survival and certainly to efficiency. If anything, the urgency to implement even a basic system has only increased in the past few years, as the Internet has made it so easy for candidates to apply for jobs. If you don’t have an automated way to capture and search for candidate information, your job is going to be defined by performing administrative tasks that consume a significant portion of your available time ó time that could almost certainly be better spent on higher-level activities. The good news is that if you’re just getting started with applicant tracking, there are many good systems available today to fit almost any budget. Hiring management picks up where applicant tracking left off. Tracking your applicants efficiently is no longer a self-sustaining hiring process, and you will inevitably start focusing on the following areas to raise your recruiting process to the next level:
- Tight integration between the hiring management system and corporate recruitment site. This is key, because it is the basis for ensuring a consistent and positive job seeker experience. It’s also the most visible aspect of the online employment brand interface. The hiring management system needs to support the integrity of the company’s brand first and foremost, which, depending on the company, plays out at varying levels of complexity. An intuitive, flexible interface, supported by data capture, provides insight into the job seeker and drives the overall effectiveness of the system.
Any recruiter worth his or her salt knows that there are three essential elements to recruiting: 1) sourcing or finding names, 2) assessment, and 3) selling the candidate. Most corporate recruiters are weakest at the first stage, which is finding the names and contact information of the ideal candidate (the working professional that has the same job title as your open requisition). Fortunately, there is an easy solution to this candidate identification problem that, for some reason, 75% of the corporate recruiters and 98% of the managers I have worked with have never heard of. It’s puzzling to me that they don’t utilize it, because this solution to finding and targeting candidates is quick, relatively inexpensive, and essentially ends the candidate identification problem. The solution goes by a variety of names including:
- Names research
Few people nowadays would disagree that recruiting is a business-critical function. Accepting that maxim would naturally lead to the conclusion that the tools used to support something so important (i.e. applicant tracking systems) should lend themselves to the task. Unfortunately, these products tend to be hobbled by low expectations among users and an antiquated approach to recruiting in the organizations that use them. Buyers vs. Users Low expectations are chiefly the result of the fact the “buyers” and actual users of applicant tracking systems are two distinct groups of people. The buyers ó i.e. the people in charge of making the purchasing decision ó are typically HR or IT executives, or a combination of the two. The typical senior HR executive today came up the ranks as a generalist or as a lawyer from the employee relations side. Other specialties ó such as benefits, compensation, or recruiting ó are rarely, if ever, a path to the top. A few enlightened companies move seasoned business executives into HR, but they are the exception to the rule. Unfortunately, a pure HR background does not include much understanding of strategy and talent acquisition. An incident from my own past illustrates the problem well. At the time, I was implementing an ATS for a large company as part of an effort to deliver centralized HR services, including recruiting. The company’s employee relations team produced a 28-page flow chart of the recruiting process that they wanted supported by the ATS. The process ensured compliance at every stage, no matter how irrelevant. The senior employee relations executive put the priorities in perspective: In the event of an audit he wanted to be able to sit an OFCCP auditor at a terminal and provide irrefutable proof of compliance. Considerations such as quality of hire, talent pools, etc. did not even enter the picture. He never even bothered to ask executive management if there might be other goals associated with the implementation of the ATS. At the time I asked if he had computed the risk of non-compliance. This is a relatively straightforward equation: (probability of an audit) X (probability of being found in violation) X (dollar amount of the likely fine or loss) This equation produces a dollar amount that should be compared to the business impact of delays in finding talent or getting poor quality talent. Obviously such a calculation should not be the only justification in deciding on how to value compliance; there are higher goals and ethical considerations that supersede any financial calculation. But these numbers do help frame the debate. Businesses do these kinds of cost/benefit analyses all the time ó so why not apply the same to recruiting? The trouble is that quantifying data to decide on a course of action is not something that HR does very frequently or very well. The situation I found myself in is not atypical. More often than not an ATS is intended to serve as a compliance tool and little more. In 2003, the OFFCP audited 4% of the 192,000+ firms considered to be federal contractors. Of those audited, 1260, or 16%, were cited for violations. Do the math and you’ll see that the odds of being found in violation are about 0.7%. Consider, too, that there are no penalties for failing an audit, other than the risk of being debarred from doing business with the federal government. This is a serious consideration, but in reality it is an unlikely occurrence. Fewer than two hundred firms have been debarred since 1972. Considering that over a million firms have done business with the Federal government over the same period, the risk of debarment is 0.02%. Federal and state agencies would much rather work out a conciliation agreement than debar a firm. Even the most egregious violations don’t necessarily translate into huge risks. In 2003, twelve firms were considered for litigation stemming from systematic discrimination, but suits were only filed against five, resulting in damages of $6.2 million. Using the same formula above, the risk is about $32. Considering the cost of a high-end ATS, that’s an expensive insurance policy to protect against a rather small risk, if that’s the main purpose. If the buyer is an IT executive then the situation is even worse. Now the focus is entirely on factors like support and security. While these are not insignificant considerations, they should not precede functionality and value delivered. Then again, with no concept of value in recruiting, one can hardly blame IT executives for focusing on what concerns them most. Small wonder that ERP vendors find most of the successes for their recruiting modules at organizations where HR has abrogated the decision to IT. At the end of the day, what all this means is that buyers are hobbling users with second- or third-rate functionality. Their best recruiters are stuck with systems that provide support where it least counts. Suborning the creative talents of good recruiters to an administrative process destroys value. The better recruiters lose their ability to stretch their talents. Contact Management Functionality That Doesn’t Deliver Just one example of this limitation is the poor support among most ATS products for networking and contact management. Few ATS products, except for those targeted toward the staffing industry, offer capabilities that allow a recruiter to build and maintain a pipeline of talent. In many ways, contact management products such as ACT or Goldmine are far better as recruiting tools than your typical ATS, given how important networking is to effective recruiting. Even a free product such as Plaxo provides a more robust alternative to managing a network of contacts or candidates. The much vaunted resume database is not an acceptable alternative. There is usually no way to keep it updated with useful information and no tools beyond a search engine to tap what’s in it. Having the ability to just convert it into a skills database would at least be a beginning, but that typically requires third-party functionality. Contact management products like the ones mentioned above give users the ability to enter detailed contact information, cross-reference names, store documents, to view records of changes in the contact’s personal or business situation, and manage and view other useful information. Contact data can also be modified to suit a particular need. Reports can be generated that show the status of a relationship or activities relevant to a need. By contrast, an ATS maintains a candidate profile within rigid parameters, with virtually no ability to customize the profile. Details outside the profile are limited to notes that cannot be meaningfully reported on. The core design of an ATS has missed the point. Astoundingly, virtually all ATS products have glossed over the sourcing component, choosing to lump it in with workflow ó once again exposing the lack of business acumen in HR and IT. The significance of good support for sourcing capabilities cannot be overemphasized. Finding quality talent takes more than just having a career site or access to a job board. To state the obvious, the better candidates are almost always sought after and harder to find. An ATS, with its emphasis on process and treating candidates like so many parts on an assembly line, eliminates any ability to creatively source talent. This approach works for most entry-level jobs where little distinguishes candidates and the supply often exceeds demand, but it does not work well for jobs that require complex skills and extensive or unique experience. The supply-chain model of staffing that gets implemented with an ATS also fails because it assumes that supply will be available and delivered at the point where it’s needed. That may well be relevant for manufacturing toilet tanks or PCs, but it doesn’t apply to recruiting. This is why organizations pay search firms the big fees. The skill set required to find high quality talent is the same, whether it’s with a recruiter employed by a large organization or at small search firm. The recruiter at a search firm is not concerned about compliance and focuses instead on maintaining a network of contacts that can be tapped as needed. Hiring managers know that their in-house recruiters are forced to work within a straight jacket of regulations and compliance, regardless of the cost. Consequently, turning to a search firm is often the only option for filling critical jobs, with the less important jobs left to the in-house recruiters. What is needed in an ATS is a modular approach to functionality ó offering progressively more advanced functionality to the more talented recruiters. Better contact management is one area that needs to be addressed, but another can be simple override capabilities, that is, allowing the better recruiters to adapt a process to their needs. Of course, the compliance brigades would be apoplectic at the idea, but this is not exactly a unique concept. Accounting and financial systems all support overrides for those who know what they are doing. Every now and then that produces an Enron, but the overwhelming majority of users are not on a quest to create trouble or violate compliance requirements just because they have the opportunity to do so. In any event, for the small number of violators that exist, compliance is better enforced by management action than technology. An accident of history placed recruiting in the HR department. This was most unfortunate since HR has little understanding of or much desire to do anything with recruiting. Generalists do not aspire to be recruiters (there is not a single for-credit course on recruiting available at any accredited college or university anywhere in the country). HR is about predictability and stability: paychecks, benefits, and employee relations. HR is among the last bastions of socialism: equity and consistency is more important than speed and quality. Looked at through this lens the recruiting process represents a potential hotbed of radicalism. Left to their own devices, recruiters would simply focus on finding the best talent at whatever price the market requires them to pay, ignoring issues like compliance, pay equity, and that ultimate sacred cow, diversity. So an ATS ends up catering to the lowest common denominator instead of raising the bar. In this respect it’s not just about destroying value but also preventing value from being created. Recruiters working with an ATS are often forced to reach out to external search firms, adding to their organization’s staffing expenses, while depending on a resource that does not have any stake in the success of their organization. Providing a good recruiter with the functionality in a typical ATS is like putting training wheels on Lance Armstrong’s bicycle. There may be value in doing so for the novice or poorly trained recruiter, but they drag down a more talented professional. Anyone who has even average recruiting skills loses their ability to improve on them if they’re straight-jacketed by an ATS.
Here’s a riddle: Who is 18-25 on average, the first generation raised on the Internet since childhood, and ó strangely ó one of the last audiences for which companies leverage the Internet to recruit? If you guessed retail workers, buy yourself a ham sandwich! But the successes that some companies are having driving retail candidates to the web signal that the old days of walk-in applications and kiosks are soon coming to an end. In the last several years, companies like the Home Depot, Target, and Blockbuster have been written up in several publications for their use of job kiosks and IVR lines (Integrated Voice Response, i.e. phone lines that allow a menu of options that are then converted into an electronic application) to supplement their recruiting efforts while still realizing the benefits of automation. These efforts have largely paid off: millions in cost savings have been realized; hiring time has been reduced; and new hire quality and retention rates have improved. More importantly, perhaps, these organizations were able to overcome retail management’s fear of losing the ever-important walk-in applicant by taking an intermediate step towards full-scale online recruiting. The new generation of workers ó Generation Y ó represents the most wired generation that has ever lived. Research done by Carat Interactive last year showed that they use the Internet more than they watch TV. And this generation is now the primary target for retail and restaurant recruiting. So is it possible to recruit these individuals only on the web? The answer so far has been a resounding yes. Leaps of Faith Two Northwest retailers recently took their own leaps of faith into online recruiting, using applicant tracking systems that even I was skeptical were up to the task. Some of the common concerns they heard from hiring managers included:
- “It will take too long for people to fill out the application.”
Over the past few years we have dedicated a lot of time to understanding some of the major issues that are presenting obstacles to the adoption of online screening and assessment tools. Unfortunately for those of us who believe strongly in the value of these tools, there seem to be a heck of a lot of potential obstacles out there. Our continued belief that the benefits of online screening and assessment far outweigh the potential consequences has led us to address these obstacles head on by helping to promote an understanding of the reality behind them. So, in keeping with our mission of continuing education, this article provides an overview on the topic of security, which we feel represents one of the major areas of concern around the use of online screening and assessment. While security issues surrounding the use of online assessment tools are not usually in the top two or three reasons why organizations don’t use them, they do represent a real and legitimate concern. There are several types of security concerns that you need to be aware of. Although each concern is related, we feel they break down into four major areas:
- Security of assessment content. This includes ensuring that the contents of the test themselves are secure and that test items are not available to people who will be taking the assessment. Addressing these types of concern require several different types of security measures, including the use of technology to secure test content and the use of advance test development techniques to ensure that each person taking the test sees a different set of test questions. Any breech of this type of security can be a major problem, because it will severely limit the predictive value of assessment results.
Applicant tracking systems have, since their inception, followed a one-size-fits-all model. Originally this was a sensible strategy, since the market was small and the primary need was support for compliance. But the needs of the market have matured far beyond what was required to avoid being fined following an audit, and despite the fact that users are increasingly sophisticated, vendors, with a few exceptions, continue to produce products for the mass market. This situation has produced the anomaly of dozens of applicant tracking systems with identical functionality offered at widely differing prices. There is also an increasing disconnect between cost and value the larger the organization a product is targeted at. I emphasize targeting, since differentiation between applicant tracking systems is now largely based on marketing and little else. To state the obvious, it’s no coincidence that the best known vendors are the ones that have spent the most on marketing. The achievement isn’t simply that they’re best known, but they’re perceived as “top tier” as a result of their spending. This point was driven home recently when a company I know of chose to replace a “high-end” ATS with a product generally considered as being from the low end ó that is, a second or third tier ATS. The company found that the low-end ATS had identical, if not somewhat better, functionality and was available for literally a fraction of the price of the high-end ATS. Once case should not be considered representative, but this is not an isolated example. A comparison of functionality across vendors generally demonstrates that there are few differences of consequence between products from different tiers. With the exception of functionality that supports global needs (languages, date formats, currency, etc.) it’s very hard to discern the value provided by a “high-end” ATS that justifies the difference in price. The usual bases for explaining the difference include 1) that these are “enterprise” systems, and 2) they are supported by domain expertise. Let’s examine each of these. Enterprise Systems Any product categorized as an enterprise system is generally considered as being suited for large organizations. The term derives from enterprise resource planning products such as PeopleSoft or SAP ó the assumption being that lower-end products cannot meet the needs of a large organization or enterprise. But what exactly is an enterprise system? The word is in the same league as “paradigm shift,” “mission critical,” and “empowerment.” Bullfighter (the application from Deloitte that eliminates jargon) describes it as “often overused: a grandiose word that isn’t very specific.” A kinder definition in a white paper from Parente Technology defines an enterprise system as, “a company-wide software program, which brings together the key functional areas of your business into one system.” So “enterprise system” has nothing to do with organizational size or functional complexity. For a large organization there are usually no viable alternatives to an ERP for effectively managing financials and business processes. But this is simply not true for an ATS. An ERP supports highly complex business and manufacturing processes as well as financial and accounting practices. In a large organization this can translate into literally millions of transactions subject to tens of thousands of rules and requirements on a daily basis. An applicant tracking system, on the other hand, supports the intake of resumes and hiring workflows. Admittedly, recruiting needs vary based on geography, job type, etc. But the differences are not of the magnitude of accounting practices or manufacturing processes. The fact is, a low-end product is perfectly capable of meeting the needs of most organizations. Domain Expertise I would think that any company that has produced a software application has some domain expertise. So it seems strange that domain expertise is touted as a differentiator. Margaret Thatcher once made the comment, “Being powerful is like being a lady. If you have to tell people you are, you aren’t.” Well, the same can be said of expertise. If you have to tell people about it, you obviously don’t have much. Then again, what does having domain expertise really mean? All the claims of expertise seem unable to produce anything truly innovative. Any expertise, such as it may be, doesn’t seem to do much for crafting solutions that can supercharge any client’s recruiting strategy. This should not be a surprise, since the “expertise” is directed at developing the product. Vendors either allow no customizations in the name of efficiency and ease of upgrades or else allow clients to dictate what customizations they need. The vendor’s own expertise rarely enters the picture. One gets the impression that claims of domain expertise are just so much marketing spin ó a modern take on the salesperson that put “honest” before his name. The current state of affairs can partly be attributed to an attitude towards customers that is born of arrogance, an attitude that assumes customers are not savvy enough to discern their own needs but rather take their cues from marketing. Allowing this situation to continue is not in the best interests of either the industry or their customers. Consider what is happening in the light of Michael Porter’s Competitive Strategy Model. Briefly, Porter’s model posits that a company can only succeed through a strategy of either cost leadership (being the low-cost producer in the industry) or a strategy of differentiation (unique on some aspect that is valued by others, i.e., can command a premium price). Anything else results in being “stuck in the middle” with low profits and a shaky grasp of market share. A few vendors grasp the significance of this approach. They have either chosen to offer very low priced products or else differentiated themselves by products that are created for very specific needs (hourly staffing) or industry groups (staffing agencies). Others are very much stuck in the middle. The high-end of the market is being rapidly dominated by ERP vendors. Their applicant tracking systems, after some bungled starts and missteps, are increasingly getting better. ERP vendors will continue to stumble along to near total domination of the high end. This is inevitable given that they already dominate the high end of the market for business process management. There will be a market for generic applicant tracking systems, but this is a swamp of low profits and customers that will gravitate to the low-cost providers, as they should. Instead of trying to win a race to the bottom, the smarter vendors should focus on differentiating their products. There are plenty of unique needs in industries such as healthcare or other specialized industries that a generic ATS does not serve. Other niches to be served (or better served) include hiring college graduates, just-in-time hiring, maintaining specific candidate pools, government needs, outsourcing, high growth, downsizing, etc. Some of this will require building genuine expertise to provide the necessary consulting. Expertise will be required if these needs are to be successfully served, instead of continuing the fallacy that the software will solve all problems. The opportunity is like buying toothpaste from Proctor & Gamble instead of Microsoft. It suggests expertise beyond software, an expertise that might be integral to a company’s business and could be extended to management styles to include learning platforms, performance management platforms, etc. There’s also the global aspect. Support for multiple languages and currencies are just the beginning. Developing specialized versions of applicant tracking systems that can span different compliance requirements, cultural norms, and business processes will not be easy ó but it needs to happen. If the approach continues to be that of building generic products, then the industry will suffer the fate of automakers that have attempted to build a “world car.” Anyone remember the Ford Fiesta or Contour? The Fiesta was supposed to be the new beetle. It takes more than putting little flag colors on the logo.
Recruiters tend to fall into one of two camps. The first rejects most technology as unnecessary. These recruiters feel that traditional recruiting methods still work fine and that, except for perhaps a few emails, telephone and face-to-face contact with both clients and candidates is best. This article is not about these folks, as they are becoming scarcer every year and are a dying breed. They are sort of like those who refused to give up the horse for the automobile and saw only the problems, rarely the benefits. There is no question that technology is the key to recruiting success and will become more so over the next few decades. There are many benefits to using technology, including the ability to lower costs and vastly improve productivity. Technology also extends geography and provides information about candidates at greater depth than can be done in any other way. But the second camp of recruiters ó those who have willingly adopted emerging technology ó has done so in ways that are frequently less than optimal. The recruiting technologies now in place have not delivered the value they promised. In many cases, million dollar investments spent developing websites, acquiring applicant tracking systems, purchasing equipment, and paying for consultants to implement the tools and make them work later on has cost far more than was returned. This has been a common theme in technology adoptions over the past 30 years in all areas. Manufacturing, transportation, information delivery, and the military have all stumbled in their implementation of technology. 80% Optimization With the benefit of people’s experiences in other industries, we have learned that the most important thing you can do is to invest more time and energy on improving processes than on implementing technology. The basic rule of automation is that you cannot automate manual systems by duplicating what people do. For example, people may have to do things sequentially that a computer can do in parallel. People may need time to complete actions that computers can do instantly, and so forth. Computers and technology in general are very good at automating administrative tasks that do not require complex communications or expert skills. They are less effective at face-to-face interactions, selling, and activities that require emotion to be successful. Technology can also enable humans to do things better. For recruiters, technology has certainly assisted the sourcing process by allowing us to search the Internet and use job boards. Redefine Your Needs But before we can put the technology in place to do any of those things, we need to examine what recruiters do and decide what is administrative, routine, and predictable. We need to take the recruiting process apart and look at it with fresh eyes. In re-engineering terms, this is “zero-basing” the process, or re-inventing it from scratch. You might simply ask: How would I put this function together if I had the ability to start from scratch and do anything I wanted? You could ask yourself what you could eliminate, modify, or do differently ó even without technology ó to make the process as efficient as it could be. This is the core of process improvement and refinement. It should precede any other decision or effort. Only after you have designed the new process flow can you begin to apply what you know about technology to each part. Compromise: Choosing the Technology That’s 80% Right Choosing the right piece of software or the right computer system is often not as difficult as we think. If we know exactly what we need, then it is generally a straightforward process to find out whether or not various products have the needed functions. But what you will find is that no single product will be able to do everything you want. The art of choosing technology is to go for those solutions that have the most reliable and cheapest blend of key features. Always choose the simplest tool to do what you need to get done. This minimizes costs, simplifies installation, and shortens the learning curve. And, because technology evolves rapidly, it gives you budget and flexibility to adopt emerging products. My rule is to choose whatever product meets roughly 80% of your needs. Do not require or expect that a product do everything you think it should ó you may be wrong, and you may find that it limits you as you learn how to use the technology effectively. Tweak, Modify, and Change None of us is good enough to architect a system on paper that will be flawless. In fact most of our processes ó even, or perhaps especially, new ones ó are filled with bugs and overlooked errors. The best strategy is to accept upfront that any new technology will require a back and forth process of tweaking the process to accommodate the technology and the technology to meet the requirements of the process. This constant process of minor improvement and change will evolve your processes. Measure Everything The only way you can see improvement is to have a baseline of performance in as many areas as you can and measure what happens to each of those as you adopt the technology. When you take this step you will be able to show both the technology supplier as well as your own management team where the technology is showing a productivity boost and where costs are being shaved. By carefully monitoring and tweaking various aspects of the process, you will know which steps are the real levers of productivity and which are not. Adopting technology is a process in itself, and to see any result requires careful thought and constant monitoring.
With this article I begin a series on improving applicant tracking technology. My previous two articles provided an overview of the bigger issues that (in my opinion) currently prevent applicant tracking systems from being effective solutions for recruiting. First, to determine what makes for an effective recruiting solution requires that we consider the recruiting process in its entirety ó not just what we see in an ATS. What we see in most applicant tracking systems is a focus on efficiency, drawing on concepts from supply-chain management and process automation. Most applicant tracking systems exist to support workflow, starting with the intake of candidates and ending with the hiring decision. But this myopic approach ignores the bigger picture: that is, all that comes before and after. Sourcing Concerns For starters, effective recruiting requires effective sourcing. An ATS is much like a car without any gas. Without the right gas, it makes little difference if the car is a Lexus or a Chevy ó it’s not going anywhere. Sourcing provides the fuel that makes the hiring engine move. The emphasis that ATS vendors place on processing is placed on the wrong thing. Processing is akin to miles per gallon ó very different from the price of gasoline. If you can’t get enough of the right gas, who cares what kind of mileage you get? So sourcing needs to be better supported, but how? Currently, the only support for sourcing in an ATS is to connect with job boards. This would be fine, but unfortunately job boards provide only a minority of hires for most corporations, and a small minority at that. Job boards once held the promise of being the chicken ranch of recruiting. As it turned out, they are more like strip clubs ó lots to be seen, not much to be had, and expensive at that. A recent article in The Economist (March 25, “A Monster Success”) makes the point well:
Not every job can be filled online… Though the online job market works well for workers and employers who know what they want, it works badly for the vague or tentative. If your resume says clearly that you want to be a pool cleaner or an aerospace technician, the filters will ensure that it reaches the right human resource departments. If it is unclear, they will confine you to electronic darkness. The old saying among human resources folk was that “you kiss a lot of frogs before you find your prince,” says Mr. Taylor [Jeff Taylor of Monster]. On the Internet, you kiss fewer, but only those frogs who really know what they want will find themselves on the end of their princess’s puckered lips.
This the second part in my article series on the limitations of applicant tracking systems. Part 1 provided a global perspective on some of the major issues impacting ATSs. Here in Part 2, I’ll focus specifically on some of the current limitations in the way applicant tracking systems are handling key areas of the hiring and talent management process. Identification of Talent Needs In order to accurately identify recruiting and talent needs, an organization must:
- Determine the talent and skills it needs to meet its corporate objectives
Towards the end of 2003, I invited ERE readers to participate in my second annual Online Screening and Assessment User Survey. The goal of this year’s survey was to pick up where last year’s survey left off by continuing to identify important trends in the usage of online screening and assessment tools and by providing data confirming that usage rates for online screening and assessment tools are on the rise. I’d like to say thank you to all of the ERE readers out there who were kind enough to spend some of their valuable time completing my survey. Thanks to you, I was able to collect a wealth of information. In fact, the survey provided so much good information that we had to present the results in two installments. To provide a quick recap, a total of 78 persons responded to my survey. They held a variety of staffing-related jobs and were spread relatively evenly across organizations of all sizes. Their responses revealed the following trends:
- Almost all organizations are using the web as a part of their staffing process.
Applicant tracking systems are somewhat unique in the level of frustration and dissatisfaction they engender among users. The churn of clients between ATS vendors ó and the inability of any vendor to establish serious profitability or grow much beyond the definition of a small business ó is indicative of the fact that the industry has a long ways to go before it emerges from infancy. Applicant tracking systems have been around for some twenty years now, but they have failed to deliver on their promise of revolutionizing recruiting. These systems were supposed to make recruiting a more effective and strategic function. Unfortunately, much of this has not happened ó and based on current trends, it seems unlikely to occur. Why hasn’t this happened? The reasons can be grouped into ATS vendors’ shortcomings in three areas: vision, expectations, and standards. Vision Vision, or the lack thereof, is the principal problem facing most ATS vendors. ATS vendors have demonstrated an utter inability to expand the definition of an ATS beyond what the name requires them to do ó applicant tracking. Applicant tracking systems are essentially process management and reporting tools. Admittedly, recruiting is a lot about process ó but automating these processes does little to improve recruiting on its own. True, applicant tracking systems bring efficiency to the process. But they don’t bring much in the way of effectiveness. Gains through efficiency can only go so far. A floor is reached quickly, beyond which any improvements in time or reductions in cost are minimal. Also, this does nothing to improve quality. The industry in general, and some vendors in particular, would have users believe that adapting concepts such as supply chain management, client relationship management, etc., through their technology improves recruiting. This is mostly hype, as even a cursory examination of the claims would establish. Case studies of the value provided by an ATS, trotted out as proof, are little more than exercises in creative writing. The “results” are based on assumptions that make most theories in economics look like hard science. Further, the concept of “value” would not be accepted in any business. One manifestation of this problem is the recent emphasis on “sub-optimization” ó a convenient excuse designed to highlight a system’s presumed value by blaming under-utilization on users. With every new release, ATS vendors simply prove that they are afflicted by the “Microsoft Office disease.” Changes in functionality are sometimes interesting but are largely designed for demo value. Functionally, they are worthless for the most part. The undisputable fact is that almost no ATS delivers functionality beyond a very small aspect of recruiting. Though this myopia on the part of vendors is hard to explain, it is very prevalent. For example, in 2000, the INS (now Homeland Security) started a pilot program to allow employers to verify employment eligibility electronically. Given the volume of hiring taking place through applicant tracking systems, it would seem that supporting this service, even at a fee, would be an obvious way for an ATS to expand its value (and the vendors’ revenue streams). Yet not a single ATS vendor participated in the pilot program. Expectations The ATS industry and its clients together are a textbook case of misaligned expectations. There’s plenty enough blame to spread around to both users and vendors. The industry is partially to blame for having created expectations that are impossible to deliver on. With software products the temptation is always to over-promise and under-deliver ó but the ATS industry has plumbed new depths in this. The industry would like users to believe that their products are a silver bullet aimed at the heart of all recruiting problems. The problem is that recruiting is a far more complex process than most realize. The principal functionality in applicant tracking systems is centered on managing workflows as if they were linear, with predictable inputs and outputs. But as any recruiter will attest, recruiting is anything but linear. The inputs do not behave like so many components on an assembly line, and the outcomes are usually far from certain. With no hope of delivering anything that even comes remotely close to the promise, the industry has little choice but to put the best possible spin on what it offers and continue the illusion that the value provided is far in excess of the reality. But it takes two to tango. Users share in the blame for the misalignment. Few users grasp just how complex an activity recruiting really is and what needs to happen for it to become an effective, strategic function. Given the tangle of laws, corporate policies, the unpredictability of candidates, communication problems, and data requirements, it is extraordinarily difficult to create technology that can allow a user to effectively navigate through the complexity. Compounding the problem is the fact that recruiting is a profession still considered by many to be more of an art form than a discipline. Technology for such needs is difficult to engineer, but that does not deter users from believing that products can be developed to satisfy all their needs. Vendors can hardly be blamed for trying to fill this void between expectations and reality with their claims. The temptation to hype the value of products is made greater by the fact that there are few significant differences between products. Just as the success of Microsoft Office has little to do with functionality, the success of applicant tracking systems is more dependent upon positioning and marketing than it is on any intrinsic value. Shootouts at industry shows don’t count. As anyone who has attended one will attest, winning a shootout has more to do with the person working an application than the application itself. And of course, as every vendor knows, there will never be a long-term study comparing the effectiveness of their product against others. Standards The industry has no standards, period. Much of the dissatisfaction of customers could be addressed if the industry were to make its products compatible with other applications that support aspects of recruiting not supported by any particular ATS. Standalone products do exist to support most activities associated with recruiting, from sourcing to on-boarding. But the lack of technology standards, particularly for data exchange, makes it difficult if not impossible for these products to work together. Just establishing a stable link to move data from an ATS into a payroll system is a struggle for many vendors, as legions of customers will attest. Despite the clamor from customers to change this situation, the industry is strangely reluctant to do anything about it. Many vendors have actually made the situation worse by creating proprietary standards, as the many flavors of HR-XML that have been developed (and mercifully discarded in some cases) prove. HR-XML is an effort with some promise, but its acceptance has been limited. Many pay lip service to the concept by getting “certified,” but do little thereafter to have their products support the standard. Certification itself is largely meaningless, since it is simple to obtain and imposes no obligations on the vendor being certified to continue support for the standard. The result of this lack of standards is that customers end up with Rube Goldberg implementations involving a host of products, if they ever hope to expand support for their recruiting activities beyond process administration. What is perplexing is that virtually all shortcomings of ATS products are well known and have been for a long time. Postings in forums, blogs, comments at user groups, and speakers at HR conferences all lament the inability of the industry to move beyond a very narrow feature set. Yet there is no evidence to suggest that the industry plans to do much about expanding what it has to offer. Obviously the situation will improve (if only because it’s hard to see how it could worsen) with the advent of web services and a likely shakeout among vendors forcing the survivors to truly differentiate themselves. In two future articles to follow this one, I will address the specific limitations of applicant tracking systems and offer a few of my own suggestions on how the situation can be improved.
Artificial intelligence (AI) is a revolutionary technology tool that has started to change the way that many of us search for and find candidates. If you have an applicant tracking system that does something called “concept searching” or allows you to easily find candidates that have similar levels of experience, you have likely used AI technology. Now get ready for it to change the way that candidates search for and find our openings. AI is poised to create an adaptive, dynamic candidate experience that will have a profound impact on how candidates experience employment websites. Artificial Intelligence: What It Is and How It Works Put simply, artificial intelligence is the science of defining and simulating logic. It is a way of automating the evaluation of information and making decisions based on that evaluation. A great example of AI in action is the Mars Rover project that has been trolling all over the red planet. Thirty-five million miles is a bit too far of a distance for even the best radio-controlled cars to operate, so how do Spirit and Opportunity know to avoid large objects or potholes and how to get around them? Through AI technology. This AI technology starts from ground zero by teaching the Rovers what an obstacle is and then the list of possible techniques to avoid them. The next time it encounters such an obstacle, it has “learned” what to do in that situation. Within today’s applicant tracking systems, AI technology serves a somewhat related purpose. Recruiters who wish to avoid and steer around the unqualified candidates may use AI in their ATS to do so through technology provided by companies like Burning Glass and Engenium. These recruiter-facing AI tools can analyze the content and structure of thousands of resumes (this is called natural language processing), compare them to the resumes of candidates deemed qualified for that position or those that were hired, and return search results of resumes that are ranked, despite not having gone through a pre-screening process. On the surface, this sounds like the ultimate tool for the recruiter who is too busy to create job-specific pre-screening questions or who is not adept at Boolean searches. I would caution, though, that AI is not a substitute for human logic, and that given the diversity of human nature, not all of the best candidates fit into the norm of what you would expect. Always keep in mind that Einstein was a patent clerk and Bill Gates never graduated from college ó yet these are the types of individuals that most companies would love to have working for them. That said, AI can be and is a very helpful tool to weed through large numbers of resumes or to find individuals with similar experiences. Using Artificial Intelligence To Create an Adaptive Experience Just the other day, something absolutely amazing happened. As I was thinking about the crown molding I have to put up in one of the bedrooms of my house, I visited Amazon.com. On the front page of Amazon.com, in my Recommendations section, I saw an advertisement for a miter saw that was perfect for cutting crown molding. Of the hundreds of thousands of products Amazon sells, from books and CDs to household appliances and toys, Amazon was recommending the exact product I was interested in at that exact moment. I almost fell out of my chair when I saw it. After a thorough search, I decided that no listening devices had been planted in my office and no chip had been implanted in my brain to read my thoughts. So how did Amazon know that I might be looking for a miter saw? At Amazon, AI is used to analyze a combination of my past purchase data, what items I’ve looked at in the past, and the types of offers to which I’ve responded. This is cross-referenced with customers who have bought similar items own purchasing habits to determine what I am likely to buy and when I am likely to buy it. They use this information to create a highly customized, relevant experience, one that adapts to my individual tastes ó an experience that is so customized that it’s almost scary. Future Applications for Recruiting On a smaller scale, AI has the potential to be used to make candidates’ experiences much more relevant while providing very tangible benefits for the recruiting team. Just as recruiters have a difficult time sorting through hundreds or thousands of resumes, candidates have just as difficult a time sorting through hundreds or thousands of jobs to find the ones for which they are most qualified. Given the diversity of job titles, descriptions and words used to describe them from company to company, keyword and category searching are truly hit or miss. This is part of the reason why so many unqualified candidates apply in the first place ó they can’t find the right position for them. So where does AI fit in to the candidate experience? We can use the same AI technology that we provide to recruiters to allow candidates to perform their own concept searches. We can serve up related jobs to users so they don’t miss other opportunities that they might not have found on their own. We can give candidates a ranked listing of job titles based on their qualifications and experience. We can even adapt the content on our employment sites to match up to individual users’ tastes, experience levels, past application behavior and even where they are in the hiring process. The examples above are only scratching the surface. The potential for candidate-facing AI is only limited by our imagination and initiative.
One of the great things about reviewing online staffing assessment tools is seeing how psychological science and technology come together to positively impact people’s lives through better hiring decisions. Better hires lead to happier, more productive employees. This in turn leads to more effective, profitable companies that result in stronger economies, more stable societies, and a generally better world. But given the benefits of online assessment, we find it troublesome that so many companies do not take advantage of these tools. Our research suggests that the slow growth in the use of assessments is due to three main obstacles:
- Many staffing professionals do not understand how online assessment tools work and are either unaware or skeptical of their value.
Part 1 of this article series reviewed the benefits that can come from using automated staffing solutions for hourly jobs. Here in Part 2 we’ll discuss the risks associated with automating the hourly hiring process. While these risks are significant, they are also manageable. They should not deter you from using technology-enabled tools and systems to support hourly staffing. However, deploying an automated hourly staffing system, particularly for a larger organization, is not an easy task and requires a commitment to doing the little things needed to ensure the system’s success. Technology-enabled assessment solutions can be double-edged swords. If used correctly they lead to huge increases in staffing efficiency and effectiveness. But if the wrong system is chosen or if the right system is deployed incorrectly, it can do significant damage to a company’s hiring processes. Potential problems include:
- Decreasing access to quality candidates
Recruiting and talent management is more technology-enabled than ever. Technology tools support everything from candidate attraction and assessment to workforce planning and performance management. This means that vendors will interface with a large portion of your candidate and employee populations and will directly impact your brand. Before you make another technology purchase, you’ll want to consider some of the potential impacts they can have on your brand. The Good, The Bad and The Ugly Your brand is defined as the target audience’s collective thoughts, feelings, and perceptions of you as a company and a workplace. These perceptions are defined by consumers’ and candidates’ interactions with your brand, including but not limited to your advertising, your on- and offline interactions with the target audience, and past purchases or hiring processes. With each major technology addition, you add another touch point to your brand. Correspondingly, there can be good, bad, and ugly effects on your brand. Despite the fact that the vendor you use may be ultimately responsible for the bad or ugly parts, it remains a direct reflection on you, not the vendor. The net impact can be customers who are more or less willing to purchase your products, candidates who are more or less willing to apply to your openings, and employees who are more or less willing to stay in their jobs. A look at some of the major technology investments demonstrates the effect it can have on your brand. Employment Website Content and Design Good employment website content and design can form the foundation of an employer brand advantage. Consider your employment website as your opportunity to:
- Create differentiation between your employment offering and the competition’s
Applicant tracking systems have been around since the early 1990s. Most large organizations have installed applicant tracking systems now, and most recruiters who have worked in large organizations have used one. The situation is much different for smaller organizations. Fewer than 10% of small organizations in the U.S. have an applicant tracking system. Smaller firms continue to handle resumes with manual systems or Excel spreadsheets and simple databases. The reasons are not hard to fathom if you look carefully at the situation. The first reason is cost. Most of the well-known applicant tracking systems cost several thousand dollars a month to license, and that comes after several thousand more for installation and customization. The second is simply that many organizations don’t do enough hiring in a month to even come close to recovering this cost in savings. There is a threshold of volume that has to be there consistently for an ATS to make sense. Finally, the level of complexity in choosing a system, and the effort and maintenance required to make them effective, strains even the staff of larger organizations. The obvious solution to these problems is to share resources. A single ATS, as used by large organizations, can handle the volume of several smaller ones. However, it also takes effort to get a group of organizations together to jointly purchase and maintain an ATS for the benefit of the entire group. And while costs are shared and labor is spread out, it requires someone willing to devote the time and energy to architect the arrangement. Some of the ATS vendors may eventually move into offering a shared system, but if it is available today I am not aware of it. I suppose that it would be an expensive proposition for an ATS vendor to try and put together and operate. At first, perhaps, it is better to let the solution come from the needs of the users and evolve from there. I am in New Zealand as I write this, speaking at the Human Resources Institute of New Zealand’s annual national conference. Over the years I have had the opportunity to frequently come here, work and speak, and have met a number of recruiters and HR professional. One person, in particular, has been visionary in how to leverage the power of an ATS. Andrew Norton, the General Manager of Human Resources for the New Zealand counties of Manukau and Waitemata District Health Boards, has been building a shared service model for recruiting here in New Zealand that holds promise for smaller organizations. He is supported by the local representative firm for the ATS, Haines Communication, and by the Hire.com ATS vendor itself. By all three of these groups working together, a new model for sharing services has emerged that is now growing. The health boards have created websites and brands that give them each the ability to be unique, while at the same time sharing a common ATS and talent pool. By doing this, they have decreased their recruiting costs by more than one million New Zealand dollars (approximately US$600,000) over the past year in reduced agency fees and advertising costs. They are also able to reach more candidates ó both within New Zealand and around the world ó than they ever could hoped to have reached using traditional print advertising and agency methods. They are creating a worldwide brand for healthcare and have successfully attracted U.S. and European health professionals to New Zealand. Andrew is now hoping that other heath boards within New Zealand (there are about 20 of these within the country) will join in partnership to even more widely share this ATS and talent pool. I had the opportunity to attend a few meetings and dinners with the leaders of these organizations and listen to their concerns. There are difficulties and objections, of course, to doing anything like this. I can imagine many of you, as well, are bringing up the same objections in your mind as you read this. Here are a few I have heard and my answers to them. Objection 1: Who controls the ATS? How can I be sure my interests are being protected? The first step in putting together a shared service model is to establish the rules and protocols of control upfront. This is being done with joint meetings, discussions, and, I imagine, the creation of a group of people who are given the right to make collective decisions about how the system will be used, modified, or enhanced. The time involved in this is mostly upfront. Once the working model is in place, it should take very little time to maintain. Anyone who has purchased and implemented their own ATS will agree that the amount of time spent in deciding the way the ATS should be configured, used, and customized takes lots of time, even if it’s within a single firm. The payoff here is much lower costs and shared operating resources. Objection 2: I really don’t think that a shared talent pool is a good idea. I want my own talent pool. Each user can have a private talent pool, at least for a while, when candidates are in the initial process of discovering an organization and applying. The idea is to let each health board, in this case, have their own website and identity. Only after there is the decision that there isn’t a good match with each other is that candidate put into the common pool. This means you can have your cake and eat it too. You can hire the candidates that meet your needs today, but you don’t lose the ones who you may want tomorrow. They simply become part of the common pool. Over time, a shared system such as this, especially in a vertical sector like healthcare, will be a repository of a huge amount of knowledge about candidates and available skills, and could be a powerful source of information for workforce planning. The problem is not about ownership. The real issue is working out the protocols and procedures for sharing. Objection 3: What happens if I am not happy with the results? No one is as locked into this type of arrangement. You would be more limited in choice if you purchased your own ATS. By sharing, you lessen the potential impact of changing direction. If a member is dissatisfied, they can leave at the end of some previously agreed-upon commitment period. It you purchase your own system, you have to live with it, even if you are dissatisfied with it. Objection 4: What about internal candidates? Internal candidates should have the same access to the jobs in the shared system as external people. There is no technical reason to limits their access, although unfortunately, many organizations want to do this. Organizations have to change their thinking about the rights of current employees to apply to potential new positions. But this should mean opportunity for both parties. In the end, when the dinners are over and people have had a chance to probe into the pros and cons of sharing, many are moving toward becoming a part of this experiment. I think there is great potential in this model to give smaller companies the reach of larger ones, as well as access to potential candidates worldwide at a lower cost than they can today. I hope to see some of these collaborative arrangements start to happen in the U.S. and other pats of the world. Best of luck to all of you in New Zealand, and thanks for pioneering a thoughtful and creative solution.
Before you read this article, please take a moment to help us learn more about your organization’s online hiring process. Rocket-Hire and ERE are currently conducting our second annual online screening and assessment usage survey. The data we collect from this survey will help to provide members of the ERE community with important data about trends in the usage on online screening and assessment tools. We plan on reporting our findings in an upcoming ERE article. Visit www.rocket-hire.com/survey to take our short, 10 minute survey and register for a chance to win a free copy of the Rocket-Hire Buyer’s Guide. As always, all results will be kept completely confidential. The use of online pre-screening tools has grown tremendously over the last few years. The basic idea behind pre-screening is to ask candidates direct questions about their skills, experiences, and interests. These questions are asked early in the hiring process to screen out unqualified applicants from the candidate pool. Applicants must pass pre-screening before they can be considered for interviews or other more in-depth staffing assessments. Most pre-screening tools use relatively simple questions to assess basic skills and qualifications. Common questions include, “What is your level of skill using Excel?” or “How many years of experience do you have as a manager?” Rocket-hire’s review of the online staffing assessment market uncovered over 20 vendors who offer pre-screening tools. Although they differ in sophistication and functionality, every pre-screening system we have seen allows clients to write and score their own questions. Some systems also provide clients with recommended pre-screening questions for different types of jobs or skills. Popular publications such as Business 2.0 and the Wall Street Journal have noted the growing use of pre-screening and called attention to potential problems with these tools. However, little objective systematic research has actually been done to evaluate whether using pre-screening tools truly leads to hiring better candidates. This prompted us to conduct our own investigation into the effectiveness of pre-screening. To do this we looked at information from several sources including:
- Statistical analysis of pre-screening data collected from several thousand candidates applying for a variety of professional and hourly jobs at a Fortune 500 company
Staffing systems have the potential to become the first in the family of HR systems to become truly global. I define a global system to be one that is based on a database having one single “instance.” This definition does not rule out distributed databases, but is intended to exclude regional standalone systems. Global Staffing Systems Staffing systems have passed the technological and conceptual milestones that make a truly global function within reach. Network infrastructure has progressed, with the widespread availability of broadband and high-speed Virtual Private Networks (VPNs), to the point where the Internet is capable of supporting a global staffing system. Staffing systems themselves have reached key business application milestones, such as role-based security and configurable workflow. The cumulative effect of these developments means that all divisions and locations of a corporation may use a staffing system based on a single database, in a global yet decentralized process. My previous article, A Global Workforce Calls for a Global Database, explains that a centralized database works best in any multi-location situation, no matter what the scale. The global database conveys advantages to a staffing function in candidate sharing, process consistency, coordination of recruiting efforts, and reporting. Localization in HR Systems HR systems must go through a process of localization to both languages as well as applicable laws, rules and regulations. A payroll system, for instance, must be localized to the tremendously complex systems of employment, accounting, and taxation rules that have evolved over decades of business practice. Each jurisdiction has its own unique system of rules and regulations, often with opposite implications for localization. The complex systems of rules and regulations across different jurisdictions may make it impractical to have one global HRIS that localizes to each jurisdiction. There are no savings to be had in trying to localize a single global HRIS or payroll system across multiple jurisdictions; in fact, greater costs due to the complexity of the job are the likely consequence. By comparison, there are fewer barriers to merging regional staffing systems into a global platform. Data Privacy Do localized data privacy laws pose an equal barrier to creating a global staffing system? In fact, data privacy principles around the world are increasingly becoming harmonized. Though there may be differences between jurisdictions, they largely uphold the same legal principles. Informed consent, right of access, accountability, and limits on data transfer are some of the fundamental principles common to legislation in jurisdictions around the world. Some jurisdictions go further than others in the rights and protections given to individuals concerning their personal information. The trend to international harmonization of data privacy legislation was set by the European Union, which demands that all countries trading with the EU pass data privacy legislation that is substantially similar to its own. It is a good corporate practice to meet and even exceed data protection requirements. A company can generally satisfy the requirements of all jurisdictions that it does business in by adhering to the standards of the jurisdiction with the strictest requirements. Payroll, taxation, and accounting rules and regulations are not as neatly aligned across all jurisdictions, so companies have to go through the detailed task of localizing to each one individually. The Future of Global Staffing Systems Once a company uses a staffing system based on a single database platform, it can then migrate all hire types onto the one platform, to optimize the performance of the entire staffing function. For instance, merging all hire types into a single platform will provide decision makers with better analytics for workforce planning. Increasingly, companies will leverage the configurability of staffing management solutions that are based on a robust centralized database to gain advantage in their staffing process.