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Author: Madeline Laurano

Madeline Laurano is the founder and chief analyst of Aptitude Research. For over 18 years, Madeline’s primary focus has been on the HCM market, specializing in talent acquisition and employee experience. Her work helps companies both validate and re-evaluate their strategies and understand the role technology can play in driving business outcomes. She has watched HCM transform from a back-office function to a strategic company initiative with a focus on partnerships, experience and efficiency.

Before founding Aptitude Research, Madeline held research roles at Aberdeen, Bersin by Deloitte, ERE Media and Brandon Hall Group. She is the co-author of Best Practices in Leading a Global Workforce and is often quoted in leading business publications including The Wall Street Journal, The Boston Globe, Yahoo News, The New York Times and The Financial Times. She is a frequent presenter at industry conferences including the HR Technology Conference and Exposition, SHRM, IHRIM, HCI’s Strategic Talent Acquisition Conference, Unleash, GDS International’s HCM Summit, and HRO Today.

In her spare time, she is a runner, an avid sports fan and juggles a house full of boys (where a spontaneous indoor hockey game is not unheard of!).

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Global TA Day: Recognizing the Recruiter Experience

If you are into HRTech or TATech, you got the memo that today is Global TA Day.

I just asked ChatGPT, ‘What is Global TA Day?” and it responded with;

“If “Global TA Day” exists, it could be a day dedicated to celebrating and raising awareness about talent acquisition (TA) practices and professionals. Talent acquisition involves finding, attracting, and hiring qualified individuals to fill positions within an organization. If this day has been established, it may involve various activities, events, or initiatives to recognize the importance of talent acquisition in the workforce.”

This a friendly, simple response, but if you are in this industry, building tech or following the work of recruiters and TA teams, you know that this day signifies much more. It is a day of appreciation for the people doing the work, connecting job seekers with meaningful opportunities, and helping companies grow.

We studied recruiter experience over a year ago and found that companies need a better understanding of this important role. Fifty-nine percent (59%) of recruiters believe that their role needs to be understood by leadership at their organization. They need to start with the following:

–       Understanding Today’s Reality: What pressures are recruiters facing, and how do they feel about their job and the future of talent acquisition?

–       Understanding the Role of the Recruiter: How are recruiters spending their time today, and what would they like to focus on?

–       Understanding What Resources Recruiters Need: What services and solutions will help recruiters in their jobs?

Talent acquisition is challenging. As companies invest in talent acquisition strategies and technology, they need to understand the challenges that recruiters face today. One in two companies state that IT is more involved in TA technology decisions, yet IT professionals are only sometimes aware of the realities of the labor market. Recruiters can only get the support they need if their reality is validated across the organization.

This divide in how leadership, recruiters, and IT perceive talent acquisition has created different technology adoption experiences. TA and HR leadership are happier with the recruitment technology (73%) they have in place and would be more likely to recommend it to other organizations (91%). One reason for higher satisfaction is that TA leaders are two times more likely to influence these technology decisions directly. Recruiters are more frustrated with their technology and the resources available. Many traditional technology solutions must be designed for the modern recruiter and integrate with their workflow or help them attract and hire talent.

As companies think about the future of TA Tech, they need to understand and validate the recruiter experience and build solutions that will help the individuals doing the work from sourcing to recruitment marketing to interviewing and onboarding new hires.

Happy Global TA Day to everyone working in this amazing industry!

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New Research: The New Era of Internal Mobility

The past three years accelerated the demand for internal mobility solutions. The movement of talent into new positions is not a new trend. Companies have been hyper-focused on internal mobility and career progression at various times periods of uncertainty. For many companies, internal mobility offers the perfect panacea to challenges facing both recruitment and retention by bridging the candidate and employee experiences and reducing turnover.

We launched a new study on internal mobility this year. And, despite this increased focus on internal mobility over the past few years, only one in four companies are confident with their strategies moving forward and 77% have lost talent due to a lack of career development opportunities. Many organizations have adopted a superficial approach to internal mobility by promoting jobs through internal career sites without offering individuals opportunities and development. For other companies, lack of ownership creates barriers for implementing programs and technology.

Fortunately, some companies are turning to skills-based internal mobility and prioritizing how they reskill and upskill their workforce to adapt to the future of work. They are empowering employees, leveraging technology, and encouraging collaboration across multiple stakeholders. A skills-based approach to internal mobility can help connect talent to the right opportunities, personalize the experience, and continuously update with every interaction. It transforms internal mobility from an employer-led initiative to a talent-first strategy.

As companies look to 2023, internal mobility needs to be more than a rally cry. It needs to be a clearly defined strategic investment that is less about moving an individual from job A to job B and more about driving value for the employee.

Here are some of the key findings from our latest study in partnership with Workday.

Metrics that matter: Companies need to consider a new set of metrics for measuring the success of internal mobility. Metrics should incentivize managers and recruiters to provide growth and opportunities for employees while supporting broader DEI and company objectives.

Internal mobility needs to be talent first: Current internal mobility strategies require employees to do most of the work to find their next opportunities for development. Companies promote jobs and employees are left on their own to find what might be next. The next era of internal mobility must make it simple for employees to understand their opportunities and develop the skills they need to be successful.

Internal mobility must empower hiring teams: One in two recruiters are feeling burned out this year and hiring teams are feeling additional pressure to find quality talent quickly. Internal mobility must be talent first, but it also must empower hiring teams by lifting the administrative burden and making it easier to find talent.

Internal mobility must provide personalization: Most companies are not personalizing internal mobility. Fifty-eight percent (58%) of internal candidates go through the same process as external candidates. Internal candidates are treated like strangers to their employer and often do not receive a response.

Internal mobility is most successful when it involves multiple stakeholders: Nearly 50% of companies stated that leadership and CHROs are either owning or directly responsible for internal mobility efforts. They are driving these initiatives and looking to work closely with key stakeholders and creating opportunities for employees.

Skills are a priority: According to this study, 82% of companies identified skills as a priority. Companies are increasing their investment in skills this year and the number one driver is to provide more career development opportunities for talent.

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New Research: The State of Sourcing

Aptitude Research conducted a survey in July 2020, during the height of the pandemic, and found that the most critical capability gap in TA involved sourcing candidates. Three years later, sourcing remains the biggest challenge for talent acquisition teams, even with a possible economic downturn. We recently published a new study on the State of Sourcing with relode. Companies need help identifying and attracting the right talent regardless of industry or hiring activity, even with new solutions and opportunities. Sourcing is often reactionary as companies are left scrambling to find and compete for talent in a short period of time.

Companies built out internal expertise, outsourced sourcing activities, or leveraged technology that included job boards, sourcing solutions, talent intelligence, and contingent workforce solutions to fill this capability gap. And, no surprise, with new solutions and the impact of AI, companies turned to technology to help fill the gaps and provide immediate solutions. But, not all sourcing providers are the same.

And the result is that many sourcing strategies fail to deliver results. We found several challenges with sourcing, including:

– Dissatisfaction With Sourcing Strategies: Seventy-five percent (75%) of companies are unhappy with their sourcing strategy.

– Lack of ROI: Sixty-five percent (65%) of companies don’t measure the ROI of their sourcing investments.

– Too Many Sourcing Solutions: One in three companies uses more than five sourcing tools.

– Lack of Expertise: Many companies lack the expertise and capabilities to source effectively.

– Sourcing Diverse Candidates: Companies rely on the same job board, job aggregators, and sourcing channels to find candidates without thinking more broadly about diversity. Additionally, many companies are not tracking the sources of hire to know where they are finding more diverse candidates.

– Difficulty Finding Candidates in the ATS/CRM: Search is frustrating with many ATS and CRM systems. Search is limited to keywords, and many candidates have incomplete or outdated profiles. Aptitude Research found that recruiters spend an average of 10 hours a week looking for candidates in the ATS.

– Limited Inhouse Expertise: Companies do not have expertise in sourcing. Some companies building outsourcing functions shuffle recruiters or HR professionals into a sourcing role without considering the expertise needed.

Companies are responding to these challenges by rethinking their approach to sourcing and focusing on building a more effective process. Companies are shifting their view around the following:

– Shifts in the Definition of Talent: Companies must think more holistically around talent and include contingent workers in their sourcing strategies.

– Shifts in Sourcing Channels: Companies have shifted sourcing channels over the past year, and determining what option works for the future is a key priority in 2023.

– Shifts to Quality: Sourcing must balance both efficiency and quality.

– Shifts to Data-Driven Approach: Sourcing can no longer be ad hoc. Companies need data to gain insights and drive decision-making around sourcing strategies.

Our latest research report (in partnership with relode) provides some guidance and recommendations for organizations making these shifts.

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Key Takeaways from Eightfold’s Cultivate Event

Last week I attended Eightfold’s Cultivate event in San Francisco. It was an impressive two days focused on the trends impacting HR Technology and the future of work, including skills, AI, and talent intelligence. One theme that stood out was the need to embrace change. With the shifts in the labor market and economic uncertainty, companies need to innovate and rethink traditional processes and technology. Companies at this event were asking the tough questions, finding a better way, and creating agile workforce strategies that harness skills and the power of AI.

Eightfold has set the pace for change and transformation in HR Tech. Its skills-based approach gives companies a complete view of talent while empowering individuals to control their career paths. Its platform includes solutions across talent acquisition, talent management, and contingent workforce management (Flex). These pillars are built on a talent intelligence platform which includes a skills matrix, explainable AI, and talent insights. And last week, Eightfold launched its Skills-Based Talent Planning- allowing companies to stay prepared and agile in determining short and long-term talent needs.

With over 1B profiles, 1M skills, and 1M titles, Eightfold has access to more data and intelligence than most of its competitors. Here are my top takeaways from Cultivate.

A Skills-Based Approach to Talent is Not Optional: Every company attending this conference was focused on a skills-based approach to talent. Skills are not a passing trend. It is the number one conversation happening in HR Technology today, and organizations that adopt a skills-first approach will be included. CEO Ashutosh Garg kicked off the event by discussing how skills and the power of AI are changing the nature of work. A skills-based approach can help connect talent to the right opportunities, personalize the experience, and provide more visibility into the workforce’s capabilities. Employers benefit from improved efficiency and stronger talent pools, while individuals benefit from greater opportunities to control their career paths. Skills provide a roadmap for the future and a bridge between talent acquisition and talent management. Aptitude Research found that companies that invest in skills development are:

● Twice as likely to improve retention

● Twenty-eight percent (28%) more likely to improve DEI initiatives

Skill-Based Talent Planning: One of the most exciting takeaways from the event was the announcement of Eightfold’s Skills-Based Talent Planning. This product was heavily influenced by customer input and direction and aimed to give companies the data and action they needed to plan. Many companies do not have visibility into talent, and workforce planning uses Excel spreadsheets once a year. As a result, decisions are made rapidly without any data or insights, often resulting in losing quality talent, layoffs, and missed opportunities. A skills-based approach to strategic workforce planning allows business leaders to understand how macro trends impact the needs of their organization. Eightfold feeds this insight into its Talent Acquisition, Talent Management, and Talent Flex solutions, allowing organizations to execute skills-based talent strategies at scale. Our latest study on strategic workforce planning found that although 85% of companies are investing the same or increasing their investment, only 14% take a strategic, long-term approach to their workforce planning initiatives. A skills-based approach is a game changer. It goes beyond providing insights and gives companies an action plan. Some of the benefits and differentiators include:

  • Scenario planning for the time required for skills and proficiency to develop in existing and emerging areas;
  • Redesign roles for the future and plan for how organizations should evolve over time;
  • Capture progress and fully execute on a coordinated talent plan by integrating with Eightfold Talent Acquisition, Career Hub, and the entire Talent Intelligence Platform.

Companies Need to Consider Providers with a Strong Commitment to Responsible AI: Companies invest in AI in talent acquisition and management, but not all AI providers are the same. Companies must consider ethical AI as they evaluate providers and understand if products operate transparently, are backed by explanations, describe the methodology, and frequently publish data. In addition, responsible AI builds confidence with employers and candidates who want to understand how their data is used. Scott Sumner with the Defense Innovation Unit under the Department of Defense (DoD) shared how responsible AI was an important consideration when evaluating Eightfold as the provider for its GigEagle program. GigEagle using Eightfold’s AI matching will increase DoD’s ability to effectively leverage its abundance of talent currently locked into supporting singular units. In addition, GigEagle will focus on staffing short-term “gig” project needs, ranging from four hours to several months, many of which can be staffed remotely.

Partnerships are Helping to Drive Change: Eightfold and its clients are not operating in a vacuum. They are part of a larger ecosystem that drives change and transformation in how companies recruit and retain talent. Partners that include Deloitte, EY, and Magnit are partnering with Eightfold to provide a skills strategy for clients to ensure they are changing their mindset and optimizing their technology investments.

It is an exciting time to be in HR Tech!

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HireVue Acquires Modern Hire

Today, HireVue announced plans to acquire Modern Hire. This acquisition creates a clear leader in the interview and assessment space with 1150 combined customers (mostly at the Enterprise level- 60% of the Fortune 100) and a strong vision for the future. Both providers have taken similar paths over the past two decades:

– Starting with video interviewing and enhancing communication capabilities 

– Moving into assessments (HireVue’s acquisition of MindX and Modern Hire as the merger of Shaker assessments and Montage Talent)

– Strengthening analytics and insights

– Committing to responsible and ethical AI use cases

Hiring is a priority, and companies are increasing their investment in everything that happens, from the first interview to the offer. In February 2020, we found that less than 60% of companies were using or planning to use video interview providers. Three years later, over 80% of companies used or planned to use a broader set of intelligent interview platforms. Video was the tool of choice at the beginning of the pandemic for asynchronous hiring. The problem was that many of these solutions merely replaced face-to-face interactions with a less human way of interviewing. They also needed more insights, analytics, and assessments. Today, companies are looking for one provider to tackle everything from the first interview to onboarding. HireVue checks every box. Its solutions include video interviewing, AI-driven assessments, traditional assessments, virtual job tryouts, scheduling automation, conversational AI, and text-based engagement.

Here are a few thoughts on what this means for the market:

The Value of Hiring Experience Platforms: Hiring is one of the most critical and misunderstood talent acquisition areas. Companies invest significantly in recruitment marketing, sourcing, and ATS solutions but often need to pay more attention to the experience and decision-making that begins during the interview and assessment process. This acquisition strengthens HireVue’s dedication to creating a new hiring solution category. It combines years of behavioral science with innovative solutions across interviewing, assessments, communication, and impact/post-hire measurement. Its suite of solutions enables companies to make data-driven decisions and improve the candidate experience through simple and engaging solutions.

The Focus on Quality of Hire: Although efficiency remains critical to TA, the pendulum is swinging back to quality of hire as the number one driver in TA investments in 2023. One reason is the increased focus on retention. With more business leaders aware of TA tech decisions this year, recruitment is the first line of defense for turnover. Identifying quality hires early helps organizations prepare for future needs. Quality of hire and efficiency can sometimes conflict, but companies looking at technology should be able to maintain one over the other. 

The Need to Reduce the Number of Hiring Solutions: Over 60% of companies are using more solutions today than before COVID, yet only 11% are satisfied with this technology. The buying behavior over the past three years has shifted, and companies must be careful when evaluating providers and considering true partnerships. Many of these companies want to reduce the number of providers, especially in hiring.

The Impact of AI: AI fundamentally changes every aspect of HR, and there is growing curiosity and appetite to understand it. According to Aptitude Research, 63% of companies are investing or planning to invest in AI solutions this year, compared to 42% in 2020. In addition, both HireVue and MOdernHire have demonstrated a commitment to ethical and responsible AI.

This announcement is exciting and presents new opportunities for clients, partners, and the ecosystem.

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Generative AI in TA Tech: Providers and Use Cases

Generative AI is changing the face of HR Technology. ChatGPT has the fastest-growing user base with over 100 million users, so no surprise many providers are trying to keep up with the latest in generative AI.

The potential impact on the future of work is tremendous. Generative AI improves efficiency (automating many administrative tasks), quality (enhancing the quality of content generated), and experience (providing faster results and more immediate answers). But it also has risks, including questions about how the data is captured, security and data privacy, and overall decision-making. Over the past two months, several vendors have made announcements about how generative AI and GPT-4 are enhancing their products. Some are making announcements that will provide immediate benefits to recruiting teams, candidates, and employees. Others are launching press releases for the sake of… launching a press release. My friends Tim Sackett and Kyle Lagunas and I did a roundup of these announcements a few weeks ago, and the list is growing. So, here are a few of the vendors to watch, use cases we have seen so far, and questions to ask providers.

Who are the Vendors Making Announcements?

Beamery: Beamery launched TalentGPT to offer a single assistant that leverages both Beamery’s proprietary AI and OpenAI’s GPT-4 and other leading Large Language Models (LLMs). It will be used across all products to help redefine and personalize the user experiences for recruiters, candidates, and employees. In addition, it will be used to summarize data and generate content that can be contextualized to the right audience.

Eightfold: Eightfold announced that it integrates recent advances in generative AI large language models (LLMs) to create two role-specific Talent Intelligence Copilots (employee and recruiter). Also, its Talent Insights will reflect the changing skills and roles brought about by generative AI in the labor market. These enhancements will improve the experience of recruiters and employees by providing assistance and improving productivity.

SeekOut: SeekOut launched its SeekOut Assist product which allows companies to copy and paste your job description and automatically generates a targeted search, then lists the most qualified candidates for a role. It then personalizes communication with candidates. This announcement will improve the recruiter experience and productivity.

SkyHive: SkyHive announced a job description generator powered by generative AI and received a patent for this product.

Phenom: At its user conference, IAMPHENOM, Phenom announced Experience+ (X+), a new platform-wide generative AI capability that improves efficiencies by automating content creation, surfacing actionable intelligence, and eliminating time-consuming tasks for candidates, employees, recruiters, managers, HR and HRIS teams. 

Microsoft Viva: Microsoft Viva announced Copilot, which takes advantage of next-generation AI and is built on the Microsoft 365 Copilot System, which combines the power of large language models (LLMs) with your data in the Microsoft Graph and the Viva apps to give leaders an entirely new way to understand and engage their workforce.

Other vendors making announcements include EY, Cliquify, LinkedIn, HireEZ, and iShield. The list will go on over the next few months.

What are the Use Cases?

Job Descriptions: Generating job descriptions and using copilots to assist in creating job descriptions and templates.

Summarizing Data: Summarizing data and extracting data in existing ATS and HRIS systems to provide insights and answers to companies.

Sourcing: Searching for candidates using job descriptions and job titles and providing a list of candidates.

Communication: Generating email templates and personalizing them for targeted audiences, providing immediate answers to employees’ questions.

Onboarding: Providing personalized new hire experiences and generating content for new hires.

These use cases do not include how candidates and employees may use ChatGPT and generative AI to respond to screening questions, take an interview or an assessment, or participate in a performance review.

What are the Concerns?

We are at the very early stages of generative AI, and companies evaluating providers should stay informed and ask the right questions of their providers. Companies should be concerned about employees entering confidential data in open LLMs and the risk to security and data privacy. And at this stage, generative AI still needs to pass decision-making off to existing systems or humans.

–    What are the use cases for generative AI, and how is the data being used once captured?

–    Are vendors using private LLMs or open LLMs?

–    What do vendors need to change internally to support generative AI (design thinking approach, new sales process, AI skills, and talent)?

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Paradox Disrupts High-Volume Hiring: The Benefits of a Conversational ATS

Conversational AI: Transforming Talent Acquisition
Conversational AI: Transforming Talent Acquisition

Today Paradox announced plans to offer a conversational ATS for high-volume companies. This news should be no surprise if you have followed the Paradox story over the past few years. Companies like McDonald’s, Lowe’s, and Great Wolf Lodge have replaced their ATS with Paradox and a conversational experience. And the results include reduced time to fill (weeks to days), improved conversion rates, and better candidate engagement.

We found that 65% of companies with high-volume recruitment needs are not satisfied with their current ATS. Most traditional ATS systems are designed for corporate hiring and lack capabilities to support high-volume recruitment, such as programmatic advertising, scheduling, or communication. Conversational AI is a perfect product-market fit for managers and candidates.

What Does a Conversational ATS Include?

  • Hiring managers can quickly open and post jobs with a few taps in a mobile app.
  • Candidates can apply to jobs in minutes, all via text or Chat
  • Screening for minimum job requirements can be completely automated
  • Interviews can be scheduled (or rescheduled) instantly with qualified candidates
  • Automated reminders can be sent to drive significantly higher show rates
  • Reminders can automatically be sent when a candidate needs to complete other steps in the process

What are the Benefits of a Conversational ATS?

  • Mobile First: Mobile must be the foundation of a candidate communication strategy, especially for hourly workers. By adopting a mobile-first strategy, companies will be better positioned to engage with candidates and meet candidates expectations.
  • Personalization: Ultimately, communication should cater to the needs of the individual – not a collective group- and recognize that all individuals are not the same. According to an Aptitude Research study, ninety-four percent (94%) of companies believe that personalizing communications will help employees do their job better.
  • Consumer-like: Hourly candidates are customers; their experience should mirror a consumer-like experience. Solutions should provide engagement, communication, and simplicity.

What Does This Mean for the ATS Market?

  • Companies Have Better Options: The ATS market is an apples-to-apples market. These systems need more differentiation (except for Greenhouse and Lever). Paradox is the first real disruptor to the ATS market, offering an everyday experience.
  • Text and Chat will Be a Focus: A few years ago, many conversational AI providers were acquired (Stepstone with Mya, Pandologic with Wade and Wendy, and Hirevue with AllyO). As a result, some of the ATS providers will look at the text and Chat landscape and start to make some acquisitions.
  • Professional Hiring is Next: Conversational AI has completely transformed high-volume hiring, and professional hiring is next. Again, candidates, recruiters, and managers should benefit from a simple, personalized experience.

Aaron Matos, CEO and founder of Paradox, has built an incredible team and delivered a vision to reimagine the recruitment experience. I am excited to see what the next year has in store for Paradox.

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Pay Equity Starts with Talent Acquisition

Pay equity is a topic impacting every talent acquisition leader today. Candidates are demanding salary disclosures around equity early in the process. And recently enacted laws in several states require companies to provide more transparency to job seekers. But as the conversations around pay equity pick up, most companies need more strategies or technology to support change. And the labor market has put some companies at risk when they need to run pay analysis, provide transparency, or invest in the right solutions.

What are the challenges with pay equity?

If you were to survey CEOs, over 90% would say that pay equity is important. So, what goes wrong, and why isn’t this being discussed during the recruitment process? Pay equity is complicated, and talent acquisition professionals face a number of challenges when trying to address it. Several challenges include:

  • Getting Leadership Support: Although most leaders support fairness and equality in the workforce, not every leader supports an equal pay philosophy. Lack of leadership support can negatively impact talent acquisition’s commitment to improving pay equity in the hiring process.
  • Lack of Pay Information in the Job Description: Companies invest in improving the language of job descriptions to ensure fairness but often need to include information on pay. Candidates must be made aware and guided during the screening, interview, and assessment process. Even in states that now require transparency, employers include wide ranges that provide little information. The need for more transparency in the job description impacts the ability of companies to recruit top talent.
  • Lack of Equal Pay Analysis: Companies can only address pay equity in talent acquisition once they understand their shortcomings. An equal pay analysis can help companies better understand what they need to improve.
  • Labor Market: Today’s labor market has made it challenging for companies to attract and recruit talent. The current market conditions influence the speed and the need to improve efficiency. Companies looking to move quickly to attract talent often ignore critical aspects of pay equity, including running pay gap analysis.

What are key strategies to consider?

  • Eliminate Salary Negotiations: Salary negotiations and the strategies to successfully negotiate are often only available to certain job roles. Not only do salary negotiations place undue stress on recent hires to navigate these contentious conversations (and potentially lose income), but they also often result in internal pay inequities among their employees.
  • Invest in the Right Technology Partner: In the new era of pay transparency, talent acquisition is on the front line of this important initiative. Solutions should provide TA leaders with the tools to define pay transparency, convert quality applicants to hires, and improve the new hire experience. As talent acquisition evolves, recruiters need flexible solutions to support candidates and employers. Solutions should integrate with an ATS, understand offers history, analyze compensation data, and create compelling offers built on transparency and trust. It combines data with authenticity.
  • Conduct Pay Equity Assessments: Companies must regularly conduct pay equity assessments to help to close the pay gap. Pay gap analysis can provide visibility into what needs to be improved in a company’s efforts to address pay equity.
  • Include Pay in Job Descriptions: Companies that provide pay transparency in job descriptions attract more talent and improve the trust between candidates and employers. In addition, by including pay information, candidates clearly know what to expect during the job process and if they will be compensated fairly.
  • Remember High-Volume Hiring: As companies rethink their talent acquisition strategies for the next year, high-volume recruitment must be a priority. Pay equity is not a new topic in high-volume recruitment, but it plays a major role in decision-making today. According to Aptitude Research, 70% of companies believe they are losing high-volume talent because of pay transparency and inequities. Companies with low hourly rates or not offering competitive rates will lose candidates in the process. Aptitude Research found that 44% of candidates who drop off in the process do so when they find out the pay for a position, and 30% of candidates learn about pay during the apply stage. Not disclosing pay until later in the recruitment process is not the solution. Companies must consider their approach to compensation and the direct impact on talent acquisition and recruiting efforts. 
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2023 HR Technology Trends and Predictions

Predictions are tricky. It is hard to look at the next 12 months and make assumptions about trends when the future seems uncertain. But, through our research and interviews, we see some obvious priorities and shifts in the market just three weeks into the new year. Earlier this week, someone asked me if the investment in HR Tech will continue at the same pace as in 2021 and 2022. My answer is yes. The pandemic and the past three years have changed how companies view automation and technology. And, as companies prepare for any talent transformation, technology is a critical part of that journey. We found that 70%  of companies will continue to invest the same or increase their investment even with an economic slowdown.

But, even if investment remains high, it will look different. The band-aid approach to technology which characterized the past few years, will be replaced by more strategic investments in providers (partners) that can deliver value and provide the capabilities and services to support transformation.

Here are a few of my thoughts on trends that will dominate 2023:

Skills will continue to be the most significant trend: Skills have the greatest impact on the future of work and employee experience. Skills are THE trend to watch in HR Technology this year, and companies are looking closely at providers in this space. We just published a study with HCI and found that 82% of companies identified skills as a priority, and 54% of companies are increasing their investment in skills this year. The number one driver is to provide more career development opportunities for talent. A skills-based approach to talent enables companies to offer a fairer hiring process, support strategic workforce planning, and make smarter decisions to enrich reskilling and upskilling talent. Skills impact and transform every single aspect of talent acquisition and management and allow employees to be understood in a more meaningful way. The challenge most companies face is that they take a piecemeal approach to skills- separating the strategy, change management, and technology. This approach delays the impact of a skills-based approach and creates frustration. Over the next year, providers must work with companies to provide a more holistic approach to skills.

Talent Intelligence needs a reckoning: Talent intelligence is the new buzzword in HR Tech, but it is also one of the most misunderstood areas. Talent intelligence platforms are AI-driven platforms that help companies understand the potential and learnability of the workforce. They use large data sets and a skills-based approach to look at talent in a complete way. The challenge is that too many providers are using talent intelligence. Sourcing providers, online reference checking providers, and people analytics providers are all rebranding themselves as talent intelligence. The misuse of this category creates confusion with buyers and minimizes the impact of what these platforms can actually do for companies.

Strategic workforce planning will be a priority: It is not a new category, but it has gained momentum over the past year. As companies enter a period of transformation, understanding the supply and demand for talent is critical. But, only 1 in 2 companies use their workforce planning strategy company-wide. Workforce planning only works when companies have the resources and technology to support it. Even when investing in a core system, workforce planning is still manual, and companies rely on excel. The first generation of workforce planning providers (Aruspex, Vemo, Inforhm) provided advanced capabilities that, unfortunately, did not go mainstream. The good news is that we see existing skills-based platforms and new providers focusing on this area. Our following Aptitude Research report will focus on strategic workforce planning- coming soon…

Contingent workforce management needs to be a priority (but will take time): Some research firms estimate that by 2030, 50% of an average organization’s workforce will be comprised of contingent workers. Unfortunately, most HR leaders and TA leaders are hesitant to take ownership of contingent workforce management. A contingent workforce helps companies fill critical talent gaps, reduce costs and increase overall productivity. In a year when agility and resilience are becoming table stakes for businesses, alternative work arrangements are critical to the future of the workplace. Yet, despite the increased investment in contingent labor, companies still need to overcome many of the same challenges. Most companies need more visibility into this critical workforce segment’s use, spending, and performance. Additionally, cost control and fee models are a concern as companies question their staffing agencies and technology partners’ need more expertise in-house. Contingent workforce management is ripe for transformation. Any strategy around DEI, skills, or workforce planning needs to include contingent workers. Companies must examine what is broken to develop deeper insights and a more effective framework. They must reconsider the ownership, fee models, and partnerships that they have in place.

Alumni programs will be invigorated: We are already seeing a renewed focus on alum programs, which will likely continue this year. Alumni programs support recruitment and employee experience. For example, one organization we interviewed fills 10% of its roles with alums. We will likely see more focus on alums from existing ATS providers, CRM providers, and talent intelligence/skills-based platforms.

Pay transparency will be a focus: 1 in 5 workers will now work in a jurisdiction with pay transparency requirements. But, there is a growing tension between job seekers that want pay transparency and employers that do not. It is impacting remote recruiting and how job descriptions are being created and the ridiculous pay ranges included. Vendors are starting to think about balancing the needs of the candidate and employer. My friend and labor economist, Andrew Flowers, often publishes on the topic, and I recommend following his work at Appcast.

Conversational AI will replace ATS in the high-volume: High-volume industries do not need a traditional ATS. It doesn’t support hourly candidates or busy managers. Companies in these industries are looking at the opportunity of conversational AI to replace the ATS and seeing significant outcomes. McDonald’s is one example of a company that reduced time to fill to 2 days using conversational AI through Paradox. I expect more companies to look at this option over the next year.

2023 will no doubt be full of surprises, but I look forward to the innovation, transformation, and partnerships from the providers in this space. One trend worth following is ChatGPT and its use in talent acquisition. I attended a panel on Recruiting Brainfood today, and some use cases include communication, job descriptions, introductions, and recruiter productivity. I don’t see this replacing assessment, as some have suggested, but it presents exciting options for recruiters and candidates looking for more immediate research.

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Tech Hiring Trends and Insights

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We posted this guest blog with our friends at Relode this week.

The next year will be critical for tech employers looking to attract and hire the skills and talent they need to navigate their changing business needs. With the pandemic, labor shortage, and recent layoffs and hiring freezes, it needs to be clarified to understand where tech hiring stands today and what companies should consider for the future. Many news stories around layoffs and hiring freezes impact some of the largest tech giants. For example, in October, Twitter announced 50% of their workforce was cut at the very end of the month, and Meta and Apply announced layoffs in November. But, the reality of tech hiring is more complicated than what news outlets are highlighting.

According to Appcast’s Recruitonomics, “Information (the BLS category) added a modest 4,000 new jobs in October, despite all the news of layoffs. On the other hand, professional and Business Services (which can also contain tech jobs) added 39,000 new jobs. So overall, the tech sector is a mixed bag.” 

While several large tech giants remain cautious for the next year, many companies continue expanding their workforce in both traditional and non-traditional ways. We found that high-growth tech companies are still increasing their headcount.

A Closer Look at High-Growth Tech Companies

Aptitude Research found that one in two tech companies identify as a high-growth company and most of these companies are tech companies. High-growth companies include any organization performing better or expected to perform better than its industry or the market as a whole. These high-growth companies face unique challenges and opportunities when attracting, engaging, and retaining talent. We found that companies have several business priorities influencing high growth today, including an increase in headcount, global expansion, new market opportunities, and mergers and acquisitions.

According to this study, these companies are two times more likely to increase the number of hires this year. Talent is the most important factor in success. It impacts all other priorities, including their ability to expand globally, enter new markets, and achieve a successful exit. Unfortunately, for many of these companies, the pressure to move quickly makes recruiting and retaining talent challenging, especially in a labor shortage.

As the tech market becomes increasingly more complex and confusing, we identified a few trends influencing tech hiring today:

Invest in More Automation: Companies that want to hire the best tech talent cannot afford to rely on legacy systems and technology. World-class technology is the differentiator and helps tech companies compete for talent. Yet, not all tech companies are making the right investments. 62% of tech companies state that their recruitment activities are too administrative, and only 1 in 2 of these companies are looking outside of their ATS for better options. Tech talent expects solutions that offer a simple and dynamic experience.

Focus on Internal Mobility:  Companies must carefully consider the culture around career development, ensure employees have fair and equitable opportunities and communicate feedback consistently. For tech companies, careful planning and preparation around internal mobility are critical to a talent acquisition strategy. It requires companies to shift how they think about talent and prioritize the individual. Currently, 73% of tech companies are developing a strategy to support internal mobility.

Focus on Speed: It is a common characteristic among all high-growth companies, regardless of their priorities. Companies want to see results, and business success is measured by its ability to adjust to change. As a result, HR and talent acquisition leaders face pressure to adopt new strategies and technology overnight. While this focus on speed has created opportunities, it has also presented challenges with attracting, engaging, and retaining talent. As a result, high-growth companies must carefully balance their focus on speed with their focus on talent.

Embrace the Contingent Workforce: According to Aptitude Research, 82% of tech companies are using contingent or freelance workers, and 1 in 2 companies plan to increase their use of a more flexible workforce next year. Companies must consider talent that will fill critical talent gaps and help companies stay ahead, and talent acquisition strategies must include a complete view of total talent.

Tech hiring remains one of the most misunderstood areas of talent acquisition today. As companies look to another year of unknowns, staying prepared and investing in the right support is critical to effectively attract and retain quality talent and meet changing business goals.

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