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Conversational AI: Transforming Talent Acquisition

On Global TA Day, we want to highlight one of our favorite areas of TA tech today…conversational AI.

In 2020, Aptitude Research published a comprehensive study on conversational AI to understand key drivers, highlight differentiators, and outline the business impact of these solutions. One year later, the talent acquisition landscape has significantly changed. Companies are feeling intense pressure to improve efficiencies, identify quality hires, reduce bias, and humanize the overall experience for both recruiters and candidates. As companies look closely at talent acquisition technology to help lift the administrative burden of recruiting teams and engage with candidates in a more meaningful way, conversational AI checks every box.

Here are the top findings from our report.

Conversational AI Is Not a Point Solution: Companies are still learning the value that conversational AI brings to talent acquisition. Companies that have leveraged these solutions to improve the application or screening processes are already recognizing the impact it can have on areas such as interviewing, onboarding, and internal mobility. Conversational AI is shifting from a quick-fix, point solution to a critical component in an end-to-end talent acquisition strategy. Conversational AI, unlike chatbots, is not a point solution. The more companies adopt these solutions, the more they recognize the potential throughout talent acquisition, and see advancements in use cases.

Conversational AI Is an Intelligent Assistant: Companies often think that candidates do not want to engage with conversational AI. The reality is that individuals are very familiar with conversational AI in their consumer and personal lives. Siri, Alexa, and other assistants help individuals get answers and guidance, and have become a part of daily life. Similar assistance plays a critical role in talent acquisition, offering candidates a “support team” as they go through various stages of their journey.

The ATS and CRM Markets Can’t Compete: Despite several acquisitions and ongoing discussions about conversational AI in the ATS or CRM solutions, only 30% of companies are looking at their existing providers for conversational AI capabilities. Many ATS and CRM providers partner with conversational AI providers even when they have their own capabilities. Conversational AI      requires deep domain expertise and a commitment to continuing to innovate and enhance the capabilities and intelligence offered.

Conversational AI Is Still More Than a Chatbot: The 2020 Aptitude Research report outlined the differences between conversational AI and chatbots. But, the confusion around the two still persists today. Companies quickly understand the difference when they implement these solutions, but do not always see it during the evaluation phase. According to Aptitude Research, 84% of companies want more than a basic chatbot to support their talent acquisition efforts.  Companies are requiring conversational AI solutions that understand the context around recruiting processes versus basic UI changes from chatbot. They are looking for an intelligent assistant to help both their teams and candidates.

Conversational AI Is Completely Transforming High-Volume Recruiting: Conversational AI is becoming the standard in high-volume recruitment. Currently, 65% of companies have some high-volume recruitment needs that include hourly, gig, volume of hires, and number of applicants. Conversational AI gives these companies a competitive advantage, helping them to compete for talent, fill positions quickly, and improve quality of hire.  Companies are automating 90-95% of process, screening and scheduling in under three minutes, and hiring in two days.

Recruiters in Professional Hiring Also See Massive Benefits: Recruiters are bogged down every day with repetitive tasks that keep them from doing the work they enjoy and the work that impacts the business the most – finding and meeting with more talented people. Companies in centralized, professional recruiting organizations state that 72% of recruiters are more likely to stay at their current job with the use of conversational AI, largely because time spent on administrative tasks is reduced by 50%.

The Audience for Conversational AI Is Expanding to Employees: Most companies are familiar with the use of conversational AI to support sourcing, apply, and interview scheduling. But, the interest in this solution for onboarding and internal mobility has increased this year. Conversational AI is not only candidate-centric, it is people-centric. Nineteen percent (19%) of companies using conversational AI are leveraging these solutions in the new hire process and 12% in internal mobility. Remote recruiting is the primary driver for the increased demand in these areas. Most companies rely on their HRMS or ATS for onboarding capabilities, and while these solutions include workflows and forms compliance, they do little to enhance the new hire experience.

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Blog Talent Acquisition Strategies

Global TA Day: A Love Letter to Recruiters

It is Global TA Day and we are posting a series of blogs on all things TA. This blog focuses on the recruiter experience.

Talent acquisition is an amazing profession. The fundamental work of a recruiter is personal, meaningful, and purposeful. It enables companies to grow and expand into new markets and gives candidates new opportunities. Yet, companies do not always recognize the role of the recruiter or give TA teams the resources they need. According to Aptitude Research, only one in four companies are prioritizing recruiter turnover this year.

Companies looking to provide an exceptional employer experience to their recruiters should consider the following steps:

  • Recognize Recruiters: Companies must recognize the reality of recruiting today and the challenges recruiters face when identifying and attracting talent. Recruiters must juggle multiple roles today and companies must recognize the work they do and the impact it has on organizational performance.
  • Set Realistic Expectations: Companies must set realistic expectations of recruiting teams that can including hiring goals, diversity initiatives, and cost savings. To improve the recruiter experience, goals and expectations must be achievable.
  • Invest in Technology: Recruiting and hiring teams need the right solutions to be successful. Companies that invest in the right technology will improve efficiencies and create opportunities to engage with candidates in a more meaningful way, and at scale.

Talent acquisition professionals are under pressure to balance a heavy workload without support, and they must remain flexible. Aptitude Research found the following challenges impacting recruiting teams:

Req Workload: Thirty percent (30%) increase in requisition workload since 2020.

Doing More With Less: Limited resources on TA function with layoffs and limited budgets.

Administrative Tasks: Spending 16 hours per week scheduling and 10 hours per week finding candidates in the ATS.

The role of the recruiter has become incredibly complex, and according to Aptitude Research, 30% of recruiters are feeling burned out this year. Over the past few years, talent acquisition has been a priority for business leaders. TA has been given new responsibilities that include areas such as retention initiatives, branding, internal mobility, and contingent workforce. By adding new roles, new strategies, and new technology in a short period of time, talent acquisition at many companies has become unwieldy and difficult to manage. Talent acquisition professionals need more support in balancing multiple priorities. The recruiter experience is the most critical component of the candidate experience and companies need to recognize when recruiters feel overworked and make changes.

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Blog Talent Acquisition Strategies

SmartRecruiters: The Next TA Tech Unicorn

In 2008, Jerome Ternynck announced the launch of a new ATS, SmartRecruiters. He shared his vision for the next era of talent acquisition technology and best-of-breed ATS providers. And, people were interested (including me). Jerome’s last company, Mr. Ted, was a leading ATS acquired by Stepstone, and Jerome was a well-loved expert with a strong reputation in TA tech.

Thirteen years later, Jerome has remained committed to this vision. SmartRecruiters pivoted from an SMB provider to a global enterprise provider (no small task- ask any of its competitors) with over 4,000 customers and 33 languages. And, yesterday, SmartRecruiters announced $110M in Series E with a $1.5B valuation.

What a journey.

We profiled SmartRecruiters in our latest Talent Acquisition Index report and included this analysis:

SmartRecruiters is a product company with strong services and deep domain expertise across all areas of talent acquisition. It has remained steadfast in its vision and commitment to improve talent acquisition and define hiring success for companies even during times of uncertainty and change. It has experienced significant growth over the past year with over 200 new customers, 100 new employees, and 150      new product features launched. SmartRecruiters is a provider that competes comfortably in the enterprise and global enterprise markets today. APAC is becoming a growing market for SmartRecruiters.

Several differentiators for SmartRecruiters includes candidate communication, AI matching, and advertising. Its SmartMessage solution includes WhatsApp integration and a unified inbox, while SmartPal (through the Jobpal acquisition) includes conversational AI and integration with WhatsApp and WeChat. SmartRecruiters offers programmatic advertising through SmartJobs to help streamline advertising and reduce costs. It has gone deeper in internal mobility this year to include a better employee experience and redeployment capabilities.

SmartRecruiters is one of the few best-of-breed providers to hire a Chief Diversity Officer this year. It has made diversity a commitment in its leadership team, product capabilities and roadmap, and services. Its Diversity Hiring Toolkit includes a diversity and inclusion maturity model, success pillars, and diversity hiring assessment. SmartRecruiters is focused on customer partnership. It has responded and met 1800 user requests this year. It follows what its customers want and focuses on developing solutions for a more modern talent acquisition function. It is a company that is not afraid to take risks, but it still maintains a strong commitment to customer success and product development.

SmartRecruiters is an impressive company by any measure. Here are a few thoughts on this recent announcement.

  • Product: SmartRecruiters has been expanding its product suite over the past two years, including programmatic capabilities, conversational AI (through Jobpal acquisition), and matching. One area that SmartRecruiters is lacking is onboarding. This recent round will likely focus on filling some gaps that may include onboarding and sourcing. I expect we will see an acquisition or two as well.
  • Internal Mobility: SmartRecruiters has invested in internal mobility through product capabilities, research/content, and industry recognition through its awards. My guess is that SmartRecruiters will continue to strengthen its internal mobility capabilities focusing on employee experience.
  • Partnerships: This announcement presents new opportunities for partnerships and SmartRecruiters’ marketplace. I think we can expect to see more partnerships, integration, and a new approach to its ecosystem of providers.

Congrats to SmartRecruiters and Jerome. More to come as the investment in all things TA tech continues.

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Blog Talent Acquisition Strategies

It is a Good Time to Be in TA Tech: Investments, Acquisitions, and Conversational AI

Since we last published the Aptitude Talent Acquisition Index Report last month, providers have taken more investment from venture capital and private equity firms, increased partnerships and alliances, and acquired smaller providers. If you are interested in TA tech, make sure to follow George LaRocque and WorkTech for all of the latest news on investment in this space. Investment increased significantly in 2020 and continues to be a focus in 2021. Unicorns no longer look like unicorns since these mega-rounds of investment have become the norm.

But, how important is investment to buyers? Should it be? According to Aptitude Research, only 13% of companies identified the amount of money a provider has raised as key criteria in decision-making. We think companies should consider a provider’s investment history for the following reasons:

  • It may impact leadership and retention for the provider.
  • Providers may be able to execute on their product roadmaps, or they may change their product roadmaps based on the investor.
  • Customers may experience some growing pains that will impact product, culture, and support.

Investment is not the only big topic in TA tech. Mergers and acquisitions have also increased in the past year. Providers are looking for partners to help expand their global footprint, customer base, or product portfolio. Conversational AI, analytics, video, and branding were driving many of these decisions. ATS providers are looking for opportunities to provide customers with better experiences and more capabilities. A few of the acquisitions included:

Some ecosystem providers and Core HR providers are laser-focused on conversational AI this year. Ceridian announced the acquisition of Ideal. Stepstone announced the acquisition of Mya. And Pandologic announced the acquisition of Wade and Wendy. Pre-pandemic, HireVue acquired AllyO and AMS acquired Karen. Conversational AI is clearly becoming the future of TA tech, and we found that companies that invest in these providers improve efficiency, experience, and quality. The beauty of conversational AI is that it starts working for companies on Day 1, and companies are expanding the use cases into onboarding and employee experience.

We have been busy working on new research on conversational AI, so these acquisitions are top of mind, and I have a few early thoughts…

  1. Chatbot vs. Conversational AI: Many of the misperceptions around conversational AI stem from the belief that it is simply a chatbot. Chatbots are transactional. They provide value in giving responses to candidates in real-time. These responses are typically canned answers to basic questions delivered through text. Conversational AI offers a more sophisticated and more personalized solution to engage candidates through multiple forms of communication. Conversational AI gets smarter through use and connects recruiters and candidates in a more meaningful way. 39% of companies using conversational AI state that the most significant benefit is improving the candidate experience (Aptitude Research). Companies must be careful to recognize the difference between providers offering canned communication and transactional TA and those that are truly conversational and engaging.
  2. Market Potential: Conversational AI is still a growing market. The demand has increased, but companies are still figuring out what they need and what problems these solutions can help solve. The potential is there. Acquisitions (done right) can help some providers reach that potential by empowering them with more resources and expertise to build solutions that companies need. Acquisitions (gone wrong) can have the opposite impact. They can negatively impact potential, create obstacles, and make it difficult for providers to grow. Companies should carefully consider what these acquisitions will mean for existing customers and prospects.
  3. ATS Providers: While many ATS providers have made acquisitions over the past year, few have invested in conversational AI. SmartRecruiters is one exception with the acquisition of Jobpal. It will be interesting to see how the ATS providers respond to these recent acquisitions and look at a build, buy, or borrow strategy for conversational AI moving forward.

We will share our latest recent on conversational AI in the next few weeks, but these recent announcements have given me a lot to consider, and I am looking forward to following this market this year.

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Blog Talent Acquisition Strategies

New Research: Exceptional Experiences in Talent Acquisition

Experiences define and shape our economy. Consumers are more likely to make additional purchases, refer friends, and remain loyal to a brand when they have an exceptional experience – and a negative experience can wreak havoc on a brand. According to the White House Office of Consumer Affairs study, a dissatisfied customer will tell nine to fifteen people about their poor experience, and approximately 13% of your dissatisfied customers will tell more than 20 people. Companies realize the impact that a positive or negative experience can have on their brand and business success, and have invested in dedicated roles, resources, and technology to help improve customer experiences.

But, this level of attention is not given to the candidate experience. According to recent studies by Aptitude Research and Talent Board:

  • Fifty-eight percent (58%) of applicants who are screened out never receive a response (Aptitude Research)
  • One in three recruiters are feeling more burned out this year than ever before (Aptitude Research)
  • From job applicants who had applied over two months ago, 61% had not heard back from the employers (2020 Talent Board Candidate Experience Benchmark Research)

Although the talent acquisition experience has improved over the past few years, it still creates frustration and inefficiencies for both candidates and employers. And while 68% of companies are committed to improving these experiences in 2021, they often fall short.

So what exactly is an exceptional experience in talent acquisition? How can companies create experiences that feel meaningful and personal for candidates through every stage of their journey? Aptitude Research and The Talent Board partnered with Symphony Talent on new research to help define exceptional experience, understand gaps in expectations, and the impact of technology. Below are some of the key findings:

Sustaining an Exceptional Experience Takes Work: Over 1,000 companies have participated in the Talent Board Candidate Experience Benchmark Research Program to date, but only five companies have won CandE Awards eight-to-nine times out of the 10 years since the program was founded — four North American companies (AT&T, Colorado Springs Utilities, Deluxe, and Lockheed Martin), and one in EMEA (Intel). In 2020 alone, employers had to navigate a series of external challenges including COVID-19, while also dealing with a cascade of resulting internal hurdles (budget cuts, reduced recruiting plans and talent investments, and shifts in business).

Companies Should Start With the Employer Experience: Candidates will not have a positive experience if recruiters are unhappy and disengaged. If hiring teams are overworked and overwhelmed, the candidate experience will be negatively impacted. Today’s recruiting and hiring teams are facing an experience crisis and remote work has created additional stress. According to Aptitude Research, recruiters spend up to 16 hours per week scheduling calls and 10 hours looking for candidates in their ATS. Additionally, 32% of recruiters surveyed are looking for other career opportunities. Companies that want to improve their external experiences need to look internally first.

Communication Is the Biggest Missed Opportunity: Candidates want to understand their progress and know where they stand. Companies need to better communicate with candidates earlier in the process when they are first researching the organization, provide a process indicator during the application process, and communicate next steps post-application. Currently, 58% of candidates do not receive any response (Aptitude Research).

 Exceptional Experiences Directly Impact the Bottom Line: A poor candidate experience impacts business performance, including brand and customer retention. Organizations that have improved talent acquisition experiences over the past year have seen improvements to NPS scores, customer retention, and employer brand. Companies that provide a more engaging and human experience see a direct impact on business performance, including a two times improvement on NPS scores.

Companies Are Increasing Their Investment in Automation: Automation can help improve experiences for both employers and candidates. While not new to recruiting, automated processes continued to increase this year to support leaner recruiting teams and more applications, especially with machine learning and other smart technologies. The reality is that most candidates who are interested in a job will research and apply, but never move forward. Most will have little to no human interaction and will be dispositioned automatically. Automation can help provide a fair and equitable experience, and allow companies to provide consistent communications to every candidate.

 

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Blog Talent Acquisition Strategies

New Research: TA Buyer’s Guide Top 10 Findings (Part 1)

I am excited to announce that we published our annual talent acquisition buyer’s guide report this week sponsored by Verified First. It serves as a resource for anyone interested in learning more about the trends impacting technology and the requirements critical to making decisions. The talent acquisition technology market is constantly changing, and staying ahead of trends is becoming more challenging. Organizations need to evaluate providers based on a new set of criteria that encourages partnership and collaboration between the business and the solutions. Trust in the company, product, and roadmap is a critical part of the buyer’s journey and a key differentiator when evaluating solutions.

Evaluating technology is not as easy as it used to be. Ten years ago, the talent acquisition technology market was comprised of multiple providers offering clear products in defined categories such as background screening, job boards, applicant tracking systems (ATS), assessments, and onboarding. Today, the market has exploded with hundreds more providers and new ones entering each month. Additionally, the lines have blurred. Many of these providers offer several solutions in talent acquisition or have created new categories of technology, making a buyer’s decision much more complicated.

Below are 5 top findings from this research:

  • Efficiency is driving decisions. Companies have stated that improving efficiency is the key driver when evaluating technology providers. Companies are looking at providers to improve time to fill, increase recruiter productivity and improve overall decision-making in talent acquisition technology. Improved efficiency benefits the candidate and the employer by helping candidates receive communication, stay informed and move through the process.
  • Talent Acquisition Technology Investment Continues to Increase. Although some technology investment has slowed down over the past year, one in four companies are increasing their TA investment, and 44% of companies invested in new technology in 2020. Companies are looking at providers to support the challenges they face but often do not consider how they will work with the existing technology infrastructure.
  • Companies need to measure ROI early. Only 1 in 2 companies measure the ROI of their technology investment. As talent acquisition is being held more accountable to the business, showing the value and the timeframe is critical. Measuring and demonstrating ROI is a crucial part of any technology decision and does not need to happen after a company makes its investment – it should actually be considered before.
  • True partnership helps to improve adoption. Adoption is a challenge in talent acquisition technology. Only 3% of companies use all the ATS functionality and only 2% in their CRMs. Companies need to look at how their provider will partner with them during implementation and how they will make that relationship stick after year one, year two, and beyond. Companies should consider their change management resources, and customer advisory boards and councils, customer feedback sessions, and “Idea Labs,” where customers are free to voice concerns and connect with other customers.
  • Companies are looking to replace solutions this year. The top areas of TA tech replacement this year include ATS, CRM, background screening, and assessments. Before evaluating technology options, organizations should conduct an internal needs analysis and be prepared to answer some questions internally. Companies need to identify and communicate expectations before evaluating solutions. Before signing on with a provider, companies should ask how confident the provider is in meeting these expectations and what plans they have in place to meet and even exceed them.

TA buyers face more difficult decisions today with new providers, new categories, and new pressures. The TA tech market changes rapidly, and companies must balance their own unique requirements with the providers that will partner with them. This report can help companies at any stage of their TA tech buyer’s journey.

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Blog Talent Acquisition Strategies

The Future of AI Matching: A Conversation with Tim Sackett

It is hard to find a conversation in TA tech that doesn’t include AI matching. ATS providers are enhancing their capabilities to connect jobs to candidates and candidates to jobs. Providers like HiredScore and Eightfold have gained a lot of momentum in the past year. While SeekOut, a search and sourcing provider, announced that it raised $65 million in Series B funding expanding its matching capabilities. All eyes are on AI matching. In our latest study, 34% of companies stated that they are using some type of matching and they are two times more likely to improve diverse sources and three times more likely to improve quality of hire.

Although companies understand the value of AI-matching, they don’t always know where to go to find a technology partner. My friend, Tim Sackett (a true expert on all things TA) and I had a discussion on AI matching last week.

Here are some of the questions we addressed:

  • Should AI matching come from an ATS provider or a stand-alone provider?
  • What are the benefits of AI matching? Why is everyone interested?
  • Are providers truly considering ethical AI? Are companies?
  • Should matching be employer-driven (matching candidates to jobs) or candidate-driven (matching jobs to candidates)?
  • What else is going on in TA tech today?

We would love to know if you agree or disagree and what your thoughts are on the SeekOut announcement or TA tech.

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Blog Talent Acquisition Strategies

The Talent Landscape in 2020: Total Talent, Metrics that Matter, and Finding a Partner

It has been an exciting year in talent acquisition.

The technology landscape has changed. Talent acquisition leaders face new responsibilities and are being held more accountable for business metrics.

Yet, at the same time, so much in talent acquisition remains the same.

When we asked what recruiters spend their time doing, scheduling interviews and finding candidates in the ATS were top of the list. With new responsibilities, talent acquisition leaders need to think about partners that can help them focus on more strategic initiatives. I am excited because next Tuesday, I will join Jim McCoy, General Manager of Scout, for a webinar to discuss some of the most critical topics in talent acquisition in the next year that is driving change including:

Total Talent Acquisition: Although a flexible workforce can help organizations reduce costs, close talent gaps, and navigate change, developing a strategy around the use of contingent labor has become increasingly complex. In order to maximize the value of contingent labor and plan for future workforce needs, organizations must adopt a more systematic approach to the way they manage this critical talent pool. During this webinar, we will discuss how organizations are looking beyond the long-standing boundaries that divide traditional employee talent acquisition from management of the contingent and free agent workforce talent supply. Companies are adopting a single-integrated framework for employee recruitment, and contingent workforce supply chain management, yielding what is known as a total talent strategy. Nearly 30% of companies have a strategy for total talent acquisition.

Metrics that Drive Success: Talent acquisition is being held more accountable to business metrics yet, some companies still fall behind in their efforts to measure the success of their talent acquisition efforts and recruiter performance. During this webinar, we will discuss the metrics that are most critical for talent acquisition leaders and solutions that can help to measure the performance of recruiters and recruiting teams.

Finding the Right Partners: According to Aptitude Research, nearly 50% of companies are still not measuring the ROI of their investments in talent acquisition technology and services. With so many new options and startups to consider, companies need to be careful when evaluating providers and look for partners that have demonstrated expertise and a commitment to talent acquisition. During this webinar, we will talk about the questions that companies need to ask when evaluating partners in today’s market.

And, it wouldn’t be a talent acquisition webinar without a discussion around AI, so we plan to discuss AI’s role as well. This webinar will help companies at any stage of talent acquisition prepare for the next year. I hope you can join us!

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Blog Talent Acquisition Strategies

iCIMS Announces a New Framework for Talent Acquisition

The talent acquisition technology market has experienced significant transformation over the past few years with new products, providers, categories and startups. It is an exciting time to be in the recruitment industry but at the same time, it can feel incredibly overwhelming as companies try to understand what a modern technology stack should include. Furthermore, a lot of organizations are stuck with the technology they have today and aren’t able to switch off systems that aren’t meeting their needs.

Models have been created to show the breadth of products companies need to include in end-to-end talent acquisition, but most don’t align with the priorities or strategies that talent acquisition leaders have in place. And, many of the providers tend to overcomplicate an already complex market.

iCIMS is one provider that is committed to helping meet clients’ needs within the talent acquisition market. It has announced a new framework that helps to simplify the market with a new product portfolio for customers to invest in solutions that they need at the stage that they need them. The portfolio includes three suites: recruitment marketing suite, advanced communications suite and a hiring suite (after a candidate applies for a job). These suites can be integrated with other applicant tracking and HR systems.

The Recruitment Marketing Suite: By definition, recruitment marketing includes the activities and strategies to nurture and engage with talent before they apply for a job. According to Aptitude Research, 70% of companies are investing in recruitment marketing this year yet, only 2% of companies are using all of the functionality that their provider offers. Recruitment marketing needs to be simplified. iCIMS customers can leverage recruitment marketing capabilities through dynamic career sites with iCIMS Attract, and through a CRM (what iCIMS is calling its Nurture product). These capabilities were made possible through the Jibe acquisition iCIMS made earlier this year.

The Communication Suite: 1 in 2 companies still use email as their primary form of communication with candidates and 62% of candidates never receive any communication from employers. iCIMS is helping companies improve this through “live communication” with iCIMS TextRecruit which includes chat, text and social media messenger and iCIMS ARI (Automated Recruiter Interface) which uses artificial intelligence to automate repetitive, high-volume tasks like candidate screening and interview scheduling.  

The Hiring Suite: This suite of solutions includes recruiting, offer and pre-onboard. This suite includes the ATS capabilities as well as communication and compliance that needs to happen with employees before they join an organization. Aptitude Research found that the growth of the ATS market remains strong at 10% with companies looking to invest in true partners.

With several acquisitions over the past few years including TextRecruit and Jibe, iCIMS is providing clarity about its offerings and flexibility around how companies can adopt technology solutions to meet unique needs. It simplifies the talent acquisition technology market and makes it feel more manageable to companies that are confused with where to begin. These suites are supported by a unified platform with access to a marketplace of hundreds of providers that integrate with these core suites.

 

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Shaker International Merges with Montage: Reshaping Talent Acquisition Technology

Today marks a significant shift in the talent acquisition technology landscape. Shaker International, a leading assessment provider, has merged with Montage, a leading provider of candidate interview and hiring solutions. The new company will be co-headquartered in Delafield, WI, and Cleveland, OH under the leadership of Kurt Heikkinen as CEO and Brian Stern as President. The merger is designed to enable organizations to make better decisions through the combination of science, data, and technology.

According to Aptitude Research’s 2019 Talent Acquisition survey, 58% of hiring managers stated that they don’t have the data they need to make decisions around talent. This announcement is helping to solve a critical need in the market.

The HCM market has undergone numerous mergers and acquisitions over the past decade. While some provide value to customers and prospects, others fall short. According to research by Harvard Business Review, the failure of mergers and acquisitions is  somewhere between 70% and 90%. A successful merger will require alignment of goals, a commitment to the customer, and a willingness to change the course when needed. Below are my early thoughts on what will make this merger successful and what customers can expect in the future.

–          Deep Understanding of the Partnership: In this case, the merger is based on mutual respect and a desire to expand both products and customer base. These providers do different things. So, they don’t have to manage conflicting interests or compete with each other internally. They have taken the time to truly understand each other’s businesses and share similar values and goals for the future.

–          Common Culture: Both Shaker and Montage are Midwestern companies that have sustained growth while innovating to meet the needs of the market. Montage has innovated through its scheduling and interview capabilities and Shaker through its predictive assessments and Virtual Job Tryout. After spending time with both companies over the past decade, I can say that this is a natural fit.

–          Similar Customer Base: Both providers target enterprise companies. The combined company has hundreds of customers and 47 of the Fortune 100. This combination will give these companies more options from a single provider.

–          Short-Term and Long-Term Goals: Establishing both short-term and long-term goals is a critical part of any merger. In the short-term, the providers will maintain separate brands, and the companies will remain intact with separate sales, customer support, and product teams. In the long-term, we can expect to see a holistic view of the company.

–          More Insights: Unlike acquisitions, mergers are successful when both providers thrive. This merger gives both companies better data and insights to help grow their products and support customers. The combined company has over 15 million candidates and enable over 1 million hires in over 20 languages in 200 countries and territories this year.

This merger is helping to reshape and reimagine how organizations hire. But, it also has the potential to change how organizations invest in technology. Companies can start to think less about filling a category and more about solving a business challenge. Over the next year, this combined company will need to adjust to changes along the way and carefully consider future branding and customer requests. We will keep you posted over the next few months.