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New Research: Quality of Hire

Over 60% of companies in Aptitude Research’s latest survey identified improving quality of hire as their greatest recruitment challenge. Organizations have been talking about quality of hire for years. Yet, we have no standard in the market for defining or measuring it. In fact, most companies still don’t know what makes a great hire at their organization.

Why is quality of hire such a struggle? What can organizations do to improve it?

I am excited to announce that we are launching some new research on quality of hire that will help to answer these questions. Yves Lermusi, CEO of Checkster, and I will be discussing some of the findings on a webinar next Tuesday at 12pm EST. I hope you can join us!

Here are some of the topics we are going to discuss include:

–          Ownership: Is quality of hire a talent acquisition metric or a hiring manager metric? Over 70% of companies surveyed said it is the responsibility of talent acquisition. Yet, companies need to use post-hire indicators to measure it. We are going to discuss how to get the right data on your first- year employees and use that data to improve your talent acquisition processes.

–          Business Impact: Organizations can no longer ignore quality of hire. The impact extends into the business since companies that improve quality of hire are three times more likely to see gains in first-year retention , first-year performance, and first-year productivity.

–          Definition: Currently, only 26% of companies have a formal methodology for measuring quality of hire. Quality of applicant is a pre-hire metric that addresses the candidate’s performance at previous jobs or through previous experiences. Quality of hire measures post-hire metrics including first-year retention, performance and productivity. Understanding this distinction and then creating better collaboration and communication around the two is critical for defining quality.

–          Measurement: Measuring quality of hire is dependent on the availability of data . While many of these key performance indicators are common in discussions around quality of hire, more organizations do not have visibility into this data. Hiring manager satisfaction is not measured consistently throughout the organization while organizational fit is often not measured at all. This data is easy for hiring managers to access through payroll or HRIS systems but it is not communicated with talent acquisition teams and leaders.

–          Improvement: Companies that invest in technology solutions were two times more likely to improve quality of hire. The key to success for quality of hire is in what happens from interview to offer. Organizations cannot ignore solutions that play further down in the funnel that directly impact quality of hire including interview solutions, assessments, background screening, online reference checking and onboarding solutions.

Organizations need more clarity around how to define, measure and improve quality of hire. If you are just starting your quality of hire journey or you are looking to help validate or refine what you are currently doing, I hope you can join us next week!

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Amazon’s 2nd Headquarters: Building the Case for Boston

Last week, Amazon announced the finalists for its 2nd headquarters and Boston is a contender. This is exciting news for a city that has seen significant growth in tech from companies like Wayfair, Tripadvisor, Raytheon, EMC, and Hubspot. According to the SEC, at the end of 2016, Raytheon added over 2000 jobs and Wayfair not far behind with 1791 new tech jobs. Amazon would certainly accelerate this growth and completely change the job market and recruitment landscape in Boston. We believe for the better. And yes, as a Boston-based company, we are slightly biased. Here are a few reasons why we think that Boston is a strong candidate for Amazon and what impact this could have on talent acquisition efforts:

  • Brain Drain: A 2016 study by real estate services firm, CBRE, found that college students with tech degrees are leaving Boston for cities like San Francisco and New York that offer greater opportunities in their field. This is not a new phenomenon. Boston has always struggled to retain students from schools such as MIT, Harvard, Boston University, and Northeastern University – especially in tech. Amazon would offer a huge opportunity for students considering staying in the Northeast. It is planning to add 50,000 high paying jobs and invest $5 billion into the city.
  • Location: The location that Amazon is considering is just minutes from a major international airport. This location makes it incredibly convenient for customers, partners, candidates, and remote workers to meet with Amazon. Anyone owning real estate in Revere or East Boston should hold on tight to their investments.
  • Competition for Talent: Competition for talent is not always a bad thing. Amazon’s presence in Boston will certainly require companies like Wayfair, Raytheon, and even GE to offer better salaries and incentives to their existing employees. Amazon will also bring new talent to the city that will help boost the economy.
  • Diversified Industries: The Boston economy is thriving. According to BLS, Boston unemployment rose 2.3% in October 2017 from a year ago. Boston added nearly 15,000 jobs in that time in a variety of industries including professional services, education and health services, and finance. Amazon’s headquarters will increase Boston’s prowess in tech.

Amazon’s announcement on its 2nd headquarters will be exciting for any of the 20 contenders but Boston is well positioned to make the short list (despite its cold winters). We are watching very closely!

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Five Talent Acquisition Predictions for 2018

The past year in talent acquisition has been characterized by new trends, new providers, and new investments. While this is an exciting time to be in talent acquisition, all of this change can feel overwhelming.

At Aptitude Research Partners, we are thinking a lot about the future and what 2018 will bring. As companies make more strategic decisions around their technology providers, we have a few predictions.

The Gap in the SMB: With every solution moving up market, we will see a gap in solutions targeting the SMB. Many best-of-breed providers are itching to move upmarket as the growth that many of these providers experienced in the SMB and mid-markets no longer seems to be enough. These providers are flexing their muscles by creating new partnerships, establishing a European presence, and demonstrating security and scalability that enterprise clients require. This mad rush upmarket is leaving a gap that needs to be filled in the SMB.

The Inevitable Acquisition: Market consolidation in talent acquisition technology is inevitable with too many providers doing too many different things. Aptitude’s 2017 research found that over 50% of companies are investing in 3 or more ATS systems and 3 or more primary sourcing tools. As 70% of companies invest in recruitment marketing solutions, ATS providers have an opportunity to make the technology landscape simpler for their customers, and we can expect some acquisitions in this area.

The Rise of Assessments:  While the assessment market is certainly not an emerging category of HR technology, it has evolved quite rapidly in the past year. Yet, at the same time, it is also a market that has sparked some controversy. Many traditional assessment providers are criticized for their high costs and negative experience for both employers and candidates. Too often, they remain a luxury of enterprise organizations recruiting for senior positions. Many new providers, on the other hand, face backlash as companies question the validity and fairness of these solutions and their effectiveness at attracting quality talent. Successful assessments today must balance sophisticated grounding in data science with a simplicity of user experience for both the candidate and the hiring manager.

The Need for Simplicity: We’ve said this before and we’ll say it again. Companies need simpler solutions in talent acquisition. Recruiters have one major problem. They need an easier way to attract, recruit, and hire talent. If a technology provider is not solving that problem, they do not have a viable solution.  According to Aptitude’s 2016 Hire, Engage, Retain survey, only 3% of companies are using the full functionality of their ATS systems. Companies either don’t know the functionality is there or they don’t understand how to use it. Again, many of these solutions are too complicated. If you want to give recruiters and candidates what they need, technology providers need to make it simple.

The Role of the Big Guys: Several big providers made bold moves in talent acquisition this year. Google Hire turned many heads with its launch earlier this year. Workday acquired new customers, making many of the ATS providers nervous. And Microsoft seems committed to its LinkedIn acquisition. All eyes are on the big providers in 2018 and it will be interesting to see what they do.

The next year is likely to present some major changes in the talent acquisition technology market and we are excited to cover it and help provide clarity around the uncertainty.

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New Research: Talent Acquisition Systems 2017

talent acquisition systems 2017 mockup

It has been over a year since we published our first ATS Index report and what a year it has been. Over the past year, providers have enhanced interview management capabilities, dabbled with Artificial Intelligence (AI), provided more options for employee referrals, and improved analytics and dashboards. It has been a busy time.

The biggest shift in the past year is the realization that the Applicant Tracking System (ATS) as a stand-alone product is not enough. In order to be efficient and provide a positive candidate experience, organizations need capabilities that engage talent both before they apply for a job and after they accept an offer. The providers we included in this year report offer much more than an ATS and several offer end-to-end talent acquisition solutions. The list of this year’s providers includes: ADP, Cornerstone OnDemand, gr8 People, Greenhouse, IBM, iCIMS, Jobvite, Lever, Newton Software,  Oracle, PeopleFluent, SAP, SmartRecruiters, Symphony Talent, and Workday.

We have made some significant improvements to this year’s report including

  • Integration: As more providers are offering ecosystems and marketplaces, we included more information on how providers are integrating with third-party providers and what their platforms offer for integration and support.
  • Security: Few providers in this report can truly support a global enterprise client. As companies look to expand globally, we believe that security is an important differentiator.
  • Advanced Capabilities: We evaluated providers based on some of the advanced capabilities we are seeing in the market, including events management, internal mobility, employee referrals, and CRM capabilities.
  • SWOT Analysis: We replaced the customer journey section of the report with a SWOT analysis to show where providers have strengths, weaknesses, opportunities, and threats.
  • Investment: Many of the providers in this report have received a considerable amount of investment. We called this out in the beginning of each profile, as financial viability is a key differentiator.
  • More Analyst Insight: We included more insight into what impressed us about each provider and what companies should consider when evaluating these solutions.
  • New Providers: This year gr8 People and Symphony Talent were both included in this report.

We are excited for all of the change in the market and we would love to hear any feedback on the report.

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HR Technology Providers: What Your Demo Says About You

worker holding a tablet with data and charts explaining to co-workers

I have had some bad demos this summer. I get it. Sometimes things just don’t go right. The connection might be slow. The product isn’t doing what it is supposed to be doing. The conference bridge has issues. It’s not a big deal…technology solutions are entitled to have bad days too. But why does it feel like the quality of demos is not what it used to be? Why does it feel like providers are less prepared  when presenting their solutions and articulating their value proposition?

They are not all bad. I have had some really impressive demos recently – including Moovila, Jellyvision, Crowded, and most of the ATS providers that are included in this year’s Index report (they are all demo pros). But, the bad ones stand out. I think as the market is rapidly changing, it might be time to slow down and revisit what matters in a demo (especially before fall conference season).

So, here are my Do’s and Don’ts of presenting an HR Technology Demo:

  1. Do Know Your Audience: Are you showing this solution to a buyer, an analyst, a partner? Not everyone is interested in the same capabilities. Tailor your demo to the right audience and try to understand what capabilities are most important to show.
  2. Don’t Talk About Trends: If the first 30 minutes of your demo is spent talking about “the war for talent”, you are doing something wrong. We all get it. Your customers get it. You don’t need to talk about these very high level trends. Instead, talk about the problem that your solution is solving and what capabilities and differentiators set you apart.
  3. Do Keep It Simple: You don’t want to overwhelm a customer or prospect with every capability or use case on a demo. Understand what is important to that individual before the call and show them the capabilities that best align with their unique needs.
  4. Don’t Forget Your Team: Most demos include some mix of sales, product and possibly leadership. Work as a team on the demo by engaging with your audience and involving everyone on the call.
  5. Do Ask for Feedback: The best demos create a dialogue where you are engaging your audience. It is important to stop and ask for feedback and to check to see if anyone on the call has questions that need to be addressed.

Some of this may sound basic but the way that companies buy HR Technology is changing. In some cases, the demo needs to change as well.

Next week, we will publish the second part of this blog series on demo recommendations for organizations…

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Ultimate Software: Fulfilling a Promise of Putting People First

Ultimate Software logo

Last week, I attended Ultimate Software’s Connections Conference for the first time and to be honest, I wasn’t exactly sure what to expect. Mollie and I travel to about 25 conferences a year. These events keep us up-to-date on the HCM technology space and they tend to cover the same stuff…product announcements, customer success stories, and company updates. And, no surprise, some do a better job than others. But Ultimate was impressive on all three fronts. This provider lives by a mantra of putting people first and it does so throughout both its customer engagements and product enhancements. It is a company that takes customer success seriously – listening to what customers want and innovating across its suite of products.

Here’s what I learned:

Product Updates

Product announcements took three forms: standard updates to address general customer needs, more innovative and forward thinking announcements (Ultimate invests 20% of its revenue in innovation), and new products.

  • Standard announcements include branded notifications and customer referral management to its recruitment solution, crossboarding functionality, mobile enhancements, and web-based adjustments to payroll.
  • Innovation that was announced centers around “Xander”- a people-first AI solution that is embedded in the products to empower managers and teams to improve the decisions they make around their workforce. Xander was inspired by Kanjoya, the disruptive workforce analytics solution that Ultimate acquired last year. It combines statistical data with insight into the emotions and attitudes that managers need to better engage and understand their workforce.
  • New products include the announcement of a Learning Management System (LMS) focused on leadership and a more flexible workforce.

Customer Success

I was surprised to learn that 51% of Ultimate’s employees are focused on services. They want their customers to be successful and offer robust programs for building talent pipelines, certifications, and leadership development programs. In addition to customer service, Ultimate offers activation, consulting, and free access to learning. On average, customers achieve a $3.88 return on every dollar they have spent.

Company Updates

Ultimate is a leading HCM provider. They have demonstrated product leadership, a commitment to customer satisfaction, and breadth in their suite of solutions. Company success includes financial growth and recognition:

  • 27% recurring revenue growth
  • #1 Great Places to Work for technology companies
  • #7 Fortune 100 Best Companies
  • #2 CEO on Glassdoor

Ultimate is fulfilling its people-first mantra through its services, technology, and engagement of its own employees. Mollie’s upcoming Payroll Index Report will provide a more in-depth analysis of Ultimate next month.

 

 

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Why We Do Not Rank Vendors in Our Reports

recruitment marketing index from 2017 displayed on a smartphone

When Mollie and I founded Aptitude Research Partners, we did so because of a massive need in the Human Capital Management market for a more productive conversation between HCM technology users and providers. Our goal from day one has been to move the dialogue beyond feature and function, to what really matters.

The mission of our business is to enable a new conversation where organizations have the insight to better understand their own HCM needs, and providers can clearly highlight their differentiators in order to create stronger relationships and improve the overall employee experience.

The Experience Economy, as we call it, is a delicate balance. Each member plays a distinct role. As far as we are concerned, as analysts, we take on the role of a kind of Sherpa leading both vendors and practitioners up the mountain to new heights.

 (See mountainous logo, etc… now it makes sense!)

It’s a role we take quite seriously.

And unlike the traditional analyst ranking models made popular by Gartner’s Magic Quadrant or Forrester’s Wave,TM  we do things a bit differently. We feel it’s critical to maintain objectivity to truly add value to both parties.

That is why we do not rank vendors in our reports

To-date we have published two Index Reports, one last year on Talent Acquisition Systems and one this month on Recruitment Marketing. The Indexes are an expression of that new conversation.

[Update: Now three Index Reports. Read our latest Index Report on Payroll Solution providers.]

They bring the concepts of the HCM technology landscape (our perspective of the vendor landscape) and an understanding of the buyer’s journey (detailing what matters to practitioners) together. The reports explore key trends, meaningful differentiators, and provide our opinion on how to think about the process of matching organizations with the right provider with a unique look at the top players in the space.

It is NOT a stack-ranked list of providers, or a shopper’s comparison guide. This is important. Instead, it provides an overview of the market and helps companies rethink how they determine their own needs, the evaluation criteria used to select partners, and what providers might meet their unique requirements.

As the market becomes more complex, organizations must take a step back and reexamine what is driving success, and ask new questions around technology decisions. The profiles of providers in these reports describe their attributes along these criteria. The insights are based on survey data from hundreds of technology users, in-depth demos and conversations with providers, and our own experience and expertise in the HCM space.

It is our hope that these reports help to simplify the confusion, and focus in on the real, practical questions users and buyers ask every day as they prepare to evaluate technology.

We’re always listening. Reach out on Twitter and Facebook, on our blog, or by emailing us at hello@aptituderp.com.

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The Power of Recruitment Marketing

A digital layout withs someone selected cartoon figures as ideal candidates

When we asked organizations to identify their priorities for talent acquisition investment, recruitment marketing was top of the list. Companies want solutions that can handle the top of the funnel or the pre-applicant workflow. It is not a new request. Companies didn’t just decide they needed a solution to attract, engage or nurture leads. They just didn’t have any good options in the past. Today, recruitment marketing is a critical component of any talent acquisition technology strategy.

The challenge most companies face is understanding what recruitment marketing is and how it can help drive overall recruitment success.  Often referred to as the “pre-applicant platform”, recruitment marketing includes capabilities that maintain the employer brand, foster candidate relationships and enhance messaging and communication efforts. While recruitment marketing can transform a talent acquisition function, the real value is found in a solution that integrates and supports the overall talent acquisition strategy.

Next Tuesday, June 21, I will be presenting a webinar with Charlie Nelson at SmartRecruiters to discuss the power of recruitment marketing. Below are a few topics we plan to cover.

  • The current state of Recruitment Marketing and the key drivers for investing in a technology partner;
  • The role recruitment marketing plays in the current talent acquisition landscape;
  • The key strategies to integrate recruitment marketing efforts with overall talent acquisition efforts;
  • An action plan to help companies get the most value out of their recruitment marketing strategies and investments.

This topic has gained a lot of momentum over the past year and I hope you can join us and share your thoughts on this space.

 

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Greenhouse and the Era of Next Generation ATS Providers

Many people holding up tablets in front of their faces with their pictures on the back

Greenhouse is on a fast growth curve. It has made a name in an industry that is crowded, confusing and incredibly competitive. This next generation talent acquisition system is growing at 200% annually with $60 Million in funding and over 2000 customers (mid-market). It is interesting to me because it is not necessarily disrupting the ATS market but it is thinking about recruitment differently. I learned a lot about Greenhouse at its user conference last week where I had the opportunity to meet with the Executive team and some of its customers. Below are a few reasons why I believe it has been successful and a few things it might need to consider for the future.

Why So Much Growth in Such a Short Period of Time?

  • Productizing Best Practices: Greenhouse with its scorecard functionality and its focus on best-practices is a product that guides recruiters and hiring managers to make the right decisions. It doesn’t force them into the decisions but it shows them what the obvious answers are and then let’s them decide. The job of a talent acquisition professional has become so complex that this level of simplicity and guidance goes a long way. Box, one if its customers at the event, said it was able to provide a simple experience for recruiters, improve how recruiting teams work together and cut time to fill from 60 to 28 days.
  • The Demand for Best of Breed: According to research we’ve conducted this year, 50% of the companies that are unhappy with their ATS are using an ERP. Companies today are looking at best of breed providers and no longer have to sacrifice integration for deep functionality. Stitchfix stated that when considering an ERP and Greenhouse, the partnerships and integration  with third-party providers helped influence its decision to go with best of breed.
  • Happy Partners: In conversations with several companies in San Francisco, Greenhouse has a reputation for being a good partner. Why is this important? Well, the next generation talent acquisition platform is dependent on an ecosystem of providers to support everything from sourcing to screening to interviewing candidates. This ecosystem is the lifeline of an ATS and having strong partnerships in place can greatly improve the customer’s experience.

What It Needs to Consider Moving Forward?

  • Move Out of Tech: Right now, Greenhouse has nearly 60% of its customers in the technology industry (including eretail and fintech). When we ask companies what influences the recruitment tech decisions, “word of mouth” was number one. While it is great that tech companies are so impressed with Greenhouse, it will need to expand outside of tech to sustain its growth and rethink its messaging and even sales strategy.
  • Expand in Recruitment Marketing: Next Generation TA platforms are defined as having 3 critical systems: a Recruitment Marketing platform, ATS and onboarding system. Greenhouse has the ATS and onboarding but needs to build recruitment marketing especially as it comes head to head with providers such as iCIMS, Lever, and SmartRecruiters.
  • A Stronger Message: As competition continues to heat up in this market. Messaging around making recruitment better and easier gets overplayed. Greenhouse will need to be very clear on its differentiators as it moves up market and into other verticals.

Greenhouse is one of the providers we are including in our upcoming Index report. Stay tuned…

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The Top Four Investments in Talent Acquisition Technology

A dark picture with someones palms lit up with different data and graphics displayed above it.

The number one question I get asked by corporations and solution providers is “what is the hottest talent acquisition technology right now?” It’s not an easy question to answer.  It never has been. What may seem hot is not always what drives efficiency and success. And more often than not, hot fades away. Companies need to think about what brings value to their existing processes and what will improve how they operate and the overall experience of candidates, hiring managers and recruiters.

Talent acquisition buyers are making more strategic decisions around their technology. They are listening to their peers, questioning their existing providers and looking for partners. We asked companies in our 2016 Hire, Engage and Retain survey what investments they will be making this year and below is what they had to say (this data does not include the ATS market). Many of these solutions are not necessarily the “hottest” new technology but rather solutions that companies believe will help them recruit better and provide a positive experience.

  • Background Screening: Although it’s considered a tactical area of recruitment, background screening can have a dramatic impact on a company’s overall recruitment strategy. Organizations that make a strategic investment in these solutions are able to expand their global reach, improve the candidate experience, and strengthen the quality of hires.
  • Pre-Hire Assessments: Pre-hire assessments encompass the tools and technology that enable organizations to evaluate if a candidate has the right skills and behaviors to perform a job. Today, companies of every size are providing objectivity to the hiring process by leveraging a variety of pre-hire assessments consistently throughout their organizations, from executive-level positions to front-line workers.
  • Recruitment Marketing Platform: Often referred to as the “pre-applicant platform”, this solution includes capabilities that maintain the employer brand, foster candidate relationships and enhance messaging and communication efforts. Companies are investing in stand-alone solutions as well as some of the more innovative talent acquisition systems.
  • Employee Referral Tools: Companies are looking at solutions that can automate the employee referral process. Often these tools can make sure that referrals get in the hands of hiring managers and recruiters and provide employees with the confidence and information they need to make referrals.

The talent acquisition technology landscape is changing rapidly and there is no shortage of innovation. Companies in the process of evaluating what technology they need should consider solutions that will align with their processes and drive business outcomes.

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