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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.
  3. 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.
  5. 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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New Research on Talent Acquisition Technology Trends

Talent acquisition technology trends seem to change every few months and it’s hard to keep up. In fact, over 60% of companies are increasing their investment in recruitment technology this year according to Aptitude Research. Companies are looking at both traditional providers as well as startups to help solve challenges with attracting, recruiting and hiring talent. But, determining what solutions provide value and what solutions create additional frustration is not easy. Currently, only one in five companies are measuring the ROI on their talent acquisition technology investments.

Fortunately, many companies are thinking more strategically about their technology with a focus on efficiency and innovation. Technology needs to do more than keep organizations compliant and provide a workflow for moving candidates through the process. Technology needs to empower talent acquisition leaders with the tools they need to solve business challenges. But, sometimes companies need help figuring out what technology to use.

I am so excited about our latest research report in partnership with CareerXroads designed to help companies navigate the trends in talent acquisition technology. The report includes new survey results, a series of interviews with enterprise organizations, case studies, RFPs and vendor reviews.

Below are some of the research findings:

–          Scheduling and Candidate Communication: Companies that use bots are twice as likely to fill positions in 2 weeks.

–          Recruitment Marketing:  Only 2% of companies are using all of the functionality in their recruitment marketing platform.

–          Assessments: Only 30% of companies are using mobile-optimized assessments.

–          Automation: Nearly 40% of companies are investing in automation but only 1 in 3 companies understand what automation can do for their talent acquisition efforts.

The report also features companies such as GE Appliances, Lowe’s and CVS. Below are some highlights from the case studies:

Lowe’s Corportation: Lowe’s needed to create greater efficiencies and improve candidate communication. It decided to leverage Robotic Process Automation (RPA) to manage over 3 million applications that it receives each year.

Enterprise Telecommunications Company: Since implementing Brazen, 15-20% of chats have turned into hires. Improvements have also been seen in managing the volume of applicants and identifying better quality applicants.

GE Appliances: The overall candidate experience has improved at GE Appliances and the apply rates have improved from 40% to 80% through the use of Talentegy.

We are fortunate to be in an industry where so many organizations are willing to share their experiences. I hope this research project can help companies along their journey to understand what options they have and what partners to consider.

 

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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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SmartRecruiters: Three Things I Learned at Hire Success

compass with the arrow pointing towards the word talent

I met Jerome Ternynck for the first time in 2008. At the time, he was the Founder of Mr. Ted (a popular recruitment solution in Europe) and he was about to launch a free ATS called SmartRecruiters. He made the announcement at ERE Fall and if you were at the conference, you probably remember that this was a very BIG deal. Jerome was offering an ATS with all of the basic functionality to anyone – even small companies with just a few employees. His vision was simple. He wanted to make recruitment simple for both employers and job seekers. Anyone could sign up and start using SmartRecruiters. To be honest, the solution was just ok. Remember, it was free. But, the beauty of SmartRecruiters was its integration and its vision to be something more than a traditional ATS. It was designed as a platform that could truly integrate with many third-party solutions such as background checking, assessments and onboarding. Today, integration is still one of its key differentiator but a LOT has changed.

I was fortunate enough to attend SmartRecruiters’ first user conference this week and below are a few things I learned.

  1. Integration is still a Differentiator: SmartRecruiters’ marketplace allows companies to discover and connect with pre-integrated solutions such as job distribution, assessments, and video interviewing. Solutions are added regularly. SmartRecruiters recently announced integration with LinkedIn, DocuSign, and Tableau. It is a solution that appeals to both recruitment and IT.
  2. Going Global: The company has made significant product enhancements and it is looking to compete at the global enterprise level. This is not the same solution from 2008. It can support multiple brands, handle high-volume and manage the complex needs of global companies. Oh, and it just landed Visa as a client.
  3. Customers Come First: SmartRecruiters is looking at its customers rather than its competitors when making product announcements. Customers helped develop this product and product enhancements and releases happen often. This year 573 ideas were submitted by 3,000 users. I had the opportunity to chat with the Head of Talent Acquisition for Atlassian who said that SmartRecruiters listened to what they wanted and helped to make changes to the product based on their feedback.

The ATS market has changed significantly over the past few years and companies are looking at next generation talent acquisition platforms such as SmartRecruiters that can support a more holistic approach to identifying, attracting and hiring talent.

Categories
Blog Talent Acquisition Strategies

The Aptitude Index: Your Guide to Selecting the Right Talent Acquisition Provider

compass with the arrow pointing towards the word talent

In August 2015, unemployment in the United States fell to 5.1% – the lowest rate in over seven years. Over 173,000 new jobs were added and many Americans who were left jobless a few years ago now have an opportunity to find work. While a strong job market is positive for the U.S. economy, it also creates a sense of fear for any talent acquisition department. With more jobs to fill, recruiters have to attract the best people in a very short amount of time- a challenge for even the best recruiters. According to research conducted by McKinsey & Company, 40% of companies that plan to hire next year said they have had unfilled openings for six months or longer because they cannot find qualified applicants.

Technology can play a major role in helping organizations improve efficiency and manage an increase in hiring needs. But determining what providers to select is not as simple as it used to be. In January 2016, we will publish our first Aptitude Index talent acquisition report that will profile the leading talent acquisition platforms and how they are helping companies improve efficiencies, the candidate experience and the quality of hires.

Looking through the lens of the customer journey, from organizational readiness to ongoing improvement, the aptitude index looks beyond product capabilities and gets after differentiators that you wouldn’t find on a demo or a solution provider’s website.

Below are some of the differentiators we are exploring:

  • Product Capabilities: features and functionality
  • Customer Support: resources dedicated to the customer
  • Services: training, implementation, change management, and post-implementation
  • Research and Development: investment in the product
  • Leadership: leadership of the company, including background and staying power
  • Employee Retention: continuity of client relationships
  • Delivery Models: on-premise or SaaS
  • Financial Viability: growth potential and exit strategy
  • Domain Expertise: heritage and expertise in talent acquisition
  • Partnership Philosophy: approach to integration and partnerships
  • Customer Satisfaction: sentiment and mood

We will be posting updates are we go through this process and collect data and information.

 

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