In our analyst research, Fosway talks to a lot of mid and large companies. Nearly every one of them has a common story about their challenges to reinvent recruiting at the level they need to support their business and its future direction. Skills and talent gaps are growing, not narrowing, and companies can’t find good people to fill those gaps. The war for talent rages strongly, as does the competition to attract their attention. Lots of focus on employer branding means little if you cannot find suitable candidates, or if the way you communicate with them is out of date or ineffective. Even modest successes can easily be undermined by poor application processes, and a bad applicant experience.
Recruitment needs fixing, and it needs fixing now. Not just to meet current needs but also to make it fit for the future.
Why is this important?
The war for talent rages and skills gaps are growing
Almost every research study from every corner of the globe shows that executives are worried about the skills and talent gaps in their organisations. And in our own research, 87% of organisations believe skills gaps will continue to widen. As the pace of business speeds up further through changing workforce demographics, digital transformation, or the gig economy, these gaps are growing and assumptions about jobs are changing faster than ever.
We can’t find the talent to hire or bring it on fast enough when we can find it
Our research also shows that recruiting is broken in most companies. Recruitment teams and their external supply chains have not kept up with changing organisational needs, consumer-grade user experiences and globalisation. Recruiting systems have been locked into the mindset of processing applications and managing administration.
At the same time, the supply of potential candidates is evaporating, and expectations of potential employees are rising. All the while, the tolerance of applicants for bad user interfaces, poor company or job information, or inability to submit in one click from their smartphone are becoming untenable.
Note: this priority for recruiting systems change is reflected in HR’s investment priorities. From our latest data, 53% of companies are looking to increase investment in recruiting systems. Onboarding and recruiting systems are also number one and number two on the intention to change list. 56% of companies intend to change onboarding systems, and 51% intend to change recruiting / talent acquisition systems within two years.
Innovation in the market is at fever pitch: new recruiting models, new tech and now AI
If both previous points have related to organisational challenges, the third relates to the massive innovation happening within the market and the rate of change of technology.
Historically dominated by application tracking systems and job boards, following the rise of LinkedIn and other disruptive technology providers, recruitment technology has been changing rapidly; expanding beyond the traditional hiring administration processes to encompass candidate relationships and marketing, interviewing, assessment and validation and a whole gamut of related areas. Recruiting technology is now typically called Talent Acquisition, and it is an ecosystem of interconnecting needs and technologies, almost all of which are now deployed in the Cloud.
Still run in many companies as a silo process, disconnected from other talent management and development activities, talent acquisition technology has probably had the fastest innovation of any of the markets that Fosway analyses. The potential to transform corporate recruiting and onboarding processes is enormous, but it needs radical surgery. As our research shows, the time is now!
Everything we’ve said so far about innovation in recruiting has already happened. But now on top of all this, the advent of Artificial Intelligence and Machine Learning is blowing things apart all over again.
Fosway does independent briefings with most of the main vendors in this market and every one of them has an AI story and is already building AI into their solutions. The level of change this will bring is enormous. Here is not the place to discuss in detail – but understand this, AI will only accelerate innovation faster, changing the ‘art of the possible’ in all parts of the talent acquisition cycle.
What should you do?
If that’s why reinventing recruiting and talent acquisition is important, what should you and your organisation be doing about it?
Take it seriously; recruiting assumptions are busted and you need a radical shift
Firstly, recognise the need for change and work out who you need to engage internally to make it happen. Based on our insights from corporate conversations, you will often find it difficult to avoid the noise and dissatisfaction with current recruiting processes and solutions internally. And if you do any external candidate research, prepare for a shock; it is worse than you think. The challenge is not to find the problems, but to prioritise them and join up the dots to work out what can really be done about the all. Deconstruct your assumptions and diagnose the problems. Yes, build a strategy, but you must execute fast.
Think holistically about future talent, where to find it and how to hire it
Don’t assume that an infinite number of candidates are just waiting for you to tempt them to apply if only you had better systems. The challenge is across the whole space, not just in one process. Yes, you want to streamline the applicant process. Yes, you want to make better hiring decisions. Yes, you need to find out where the talent is, and how to start building relationships. Yes, you need to better integrate new hires into your business. Yes, you need to join up key processes that drive end performance and retention of key talent. You need to do all these things. And that means thinking holistically and building a connected talent acquisition ecosystem.
It also means stepping back to consider what kind of talent you are looking for, and how it ties into your business context and priorities. For example, at face value, the retail and investment banking sectors are probably not that similar. The challenges of retail to deal with volume hiring and staff churn, are completely different to finding specialist knowledge workers within a highly paid elite. But whatever the core drivers, both businesses need the right talent, in the right roles and the right time. The dynamics of recruiting may be different, but many of the underlying aspirations and challenges are the same.
Put yourself in their shoes; are they an applicant or a candidate? What will make them engage?
As we’ve said already, if you think the internal noise about your recruiting process is loud, just go outside and see what it looks like from that perspective.
Sometimes that’s hard for recruiting professionals to do, but it is critical, and it should help you understand what is broken and/or why internal assumptions are wrong. One pattern we have noticed, is the stories we hear of companies only really acting on how bad their systems are, when a child of one of their senior execs tries to apply for a job and gives up. Only then do business leaders get the message of how bad it might really be. This might not be that scientific, but sometimes that kind of personal insight can actually prove very decisive is forcing change.
Accelerate your investment in technology to ramp up innovation and simplify the experience
As our research shows, talent acquisition is high up as a priority for investment, and for the need to change systems inside two years. What are your investment plans for talent acquisition and can you accelerate it? Which systems are priorities for replacement? What is your solution strategy – is it to change component systems, or to buy in a talent acquisition suite that address multiple parts at once? How should this tie into your broader HR and talent management strategy / transformation agenda?
There are many questions to resolve and we suggest you get good impartial advice to navigate the uncertainties and vested interests. Whatever you do though, we would suggest remembering that innovation is not a one step process, it is cyclical, it is multi-dimensional, and it is accelerating. Also remember to make the end experience simple, no matter what the perspective of the user – whether outside your company or inside it. Life is too short for difficult systems that don’t enable us to be agile and flexible.
Don’t accept mediocrity! The gap is widening and competitors are innovating faster
Finally, if you read the above, you might think that almost anything modern is better than what you have. And you might be right to a limited degree, but that misses the point; being better is not good enough, you need to be the best. That is what the market leaders always try to be, but in the disproportionate world of the 21st century, being mediocre at addressing the talent challenge just means you are falling behind.
There are no prizes for second place. Your competitors are all grappling with the same problems and coming to the same conclusions. You need to fix talent acquisition now to survive, but you also need to fix it to thrive. That’s an important difference. Why would mediocre ever be good enough?
From all Fosway’s research across many years, we’ve never seen an imperative for change as strong as it is now within recruiting and talent acquisition technology. Recruiting processes are not fit for purpose to meet the challenges businesses are facing. The war for talent is raging, and we don’t have the tools and ammunition to fight it. Skills gaps in companies are widening. Talent processes are not able to cope, and talent acquisition is a clear priority for increased investment and technological innovation.
But talent acquisition is not a single solution, it is an ecosystem that is expanding and evolving rapidly. The supply-side of the market – the talent acquisition vendors – have been busily embracing new answers to key recruiting questions and innovating with new business models and new technology. With AI this will only accelerate faster.
Corporate priorities and vendor innovation together are changing the talent acquisition landscape. It is time to engage. It is the time for radical change!
This Viewpoint is just the beginning. As we’ve already discussed, Fosway has been monitoring and analysing the talent acquisition market for some time. And now we’re turning that data into actionable insight for HR professionals dealing with the challenges that exist in recruitment today.
Our next paper, published in the new year, explores the critical factors that drive success in talent acquisition. Then later in 2019, we’ll publish the first Fosway 9-Grid™ for Talent Acquisition. These unique five-dimensional models are the only independent vendor analysis designed for European companies evaluating next gen HR solutions. They are your first step to understanding the market and already exist for Cloud HCM, Talent Management, Learning Systems and Digital Learning. Talent Acquisition is a highly fragmented market and we expect the new 9-Grid™ will make interesting reading.
Recommended Fosway Reading
In the meantime, for further Fosway analysis relating to this topic, please see the following papers or resources:
• European HR Realities Research 2018-19
• Fosway 9-Grid™ – Cloud HCM
• Fosway 9-Grid™ for Integrated Talent Management
• Transforming Talent in the Modern Workforce
• The Truth about Digital HR Transformation
• 5 Strategies to Win the War for Talent
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