Why Corporate Recruiting May Be Doomed

Productivity change in the nonfarm business sector, 1947-2009

How different is what you do today from five years ago? Are you able to find and hire top-notch people faster than before? Have you invested in systems, technology, and process improvements to lower costs and improve the speed to find and present qualified candidates? If not, you are clearly lagging behind those who have, and will have a tough time catching up. The corporate recruiting world is soon to be under full assault from the third-party and RPO world.

The evidence shows that increases in productivity significantly lag the investment in tools and process improvements. We normally first use new technologies to emulate what we already do in another way. It’s only after significant time that we begin to find new and innovative ways to use the tools and adjust our processes accordingly.

An example is the introduction of the typewriter. In the early days of the typewriter a manager would dictate to a stenographer who would take shorthand and then use the typewriter to create a document. This took two people and three steps. It took decades before we got to the point of eliminating the stenographer by having the manager learn to type and enter the document directly. But when this occurred, the profession of stenographer disappeared (as did shorthand), efficiency went up, and the number of people an office needed went down. While this is a very simple example, it illustrates what I mean: It takes a lot of time from the introduction of a new technology for people to learn how to use it and to adjust processes and structures.

From the 1970s through the mid-1990s organizations globally were investing heavily in computers and software and everyone assumed that because of those tools, productivity would soar. For anyone old enough to remember, that did not happen, and lots of economists called this the productivity paradox. It seemed that no investment in technology, computers, or software caused any major change in productivity. Then, around 1995 everything changed. Suddenly productivity began to climb. It has now settled back into a comfortable 2.4 percent per year growth which is still greater per year than before 1970. The great lesson is that investments in technology and process improvements pay off — but it takes time for that to happen.

Recruiting has seen no surge in productivity, and corporate recruiting functions may even be losing ground as the talent market becomes more complex and employer needs change. Relative to most other functions in an organization, HR and recruiting have made little investment in technology and even less in process improvements. A recruiter from 1970 would be very comfortable in most corporate recruiting departments today except for learning to use the computer.

My concern is that recruiters have been and still are too focused on the short term to see that investments they make today will eventually pay off — and pay off tremendously. If you have not made the investments, you are not only behind, but it may be impossible to catch up. Being able to use technology requires a learning curve that early adopters get from the beginning. Look at how hard it is for a middle-aged person to grasp the power of social media or to fully realize the capabilities of the iPhone compared to someone younger who has been working with these technologies from the beginning of their careers. Time is not our friend when it comes to adopting technology, so early investments pay off the most.

Here are a few ideas on what kinds of investments you should be making:

Invest in software that will increase your ability to interact with candidates. This includes all sorts of things from websites and highly-targeted marketing systems to candidate relationship management tools. Most of you are still focused on the zero-value-add backend systems that do nothing directly to serve your customers: the candidates. Applicant tracking systems may be convenient, but they are the equivalent of order entry systems for salespeople. They are not going to make you better at finding candidates or getting them interested in your clients. You will need to refine how you source candidates and try to reduce the number of people you need to do each step of the hiring cycle. The goal might be for a single person to attract, source, screen, and present a candidate while the administrative tools automatically track everything that is happening and generate the appropriate reports and paperwork. RPOs and agencies have been working on these things for at least a decade and are about to reap its benefits.
Invest time in thinking through how you recruit people today. How many steps, people, tools, and touchpoints are average? How much time does a recruiter spend per hire? What could be done to shave seconds or minutes off that? What would you have to do differently if a recruiter were to deal with twice as many requisitions as they do today? The answers to these questions can form the backbone of an improvement strategy that will pay back high dividends down the road. Several RPOs have made big strides toward integrating automated processing and tools into what they do. This has given them the ability to charge lower prices while maintaining customer loyalty. Over time, they will refine and improve the technology until it will offer them such a large time and cost-saving that very few will be able to compete with older and less technology-enabled methods.
Move on from legacy systems and old technologies. Even if you have not recovered your investment, hanging on to obsolete applicant tracking tools, old databases, and inefficient processes will hurt you. Anything you own or use that is more than three years old and has not been upgraded is a candidate for the dust bin. Most technology has moved into the cloud or is delivered from an ASP. No software sits on your own servers unless your organization is large enough to need its own instance of the software. Almost every kind of software is being delivered as an app that can be installed on your mobile devices as well as your computers. Social media is dominating the sourcing arena and search is becoming easier to do, is likely to be built into applications, and is more powerful than ever. Resumes are being served up along with compilations about the candidates that have been scraped together from many different sources. Candidates are delivering their own “social resumes” that expand the information on the usual resume. You need to be able to accommodate all of this easily and quickly. Recruiting productivity will go up — I think exponentially — very soon. Most of this improvement will come from third-party agencies and RPOs. Unfortunately, the corporate recruiting world is still mired in yesterday and is unable to make the investments needed to move productivity up and to ensure success.