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New Research: Digital Transformation in Talent Acquisition

Eightfold AI: What’s Next?
Eightfold AI: What’s Next?

I have worked on some very exciting research projects over the past 15 years but our latest research on Digital Transformation in Talent Acquisition might be my favorite to date. Aptitude Research and Alexander Mann Solutions partnered together to create a report that would cover both the digital transformation roadmap as well as the digital transformation landscape. Below are some of the key highlights from the report (which is available now):

1. People are the Foundation of Success When it Comes to Transformation: Digital transformation is successful when companies are prepared and have the right support to ensure consistency and adoption. Too often, companies focus on the technology and ignore the role of change management and the impact of existing services to enable a successful digital strategy. The design of digital transformation has to have the user at its center. It takes strong leadership, planning and expertise to successfully implement real change, yet only 17% of companies in Aptitude Research’s study stated that senior leaders were confident in their current strategies to support digital journeys. Additionally, only 32% of companies have the internal resources they need and only 26% of organizations have the budget they need to support digital transformation (Aptitude Research, 2019 Talent Acquisition survey).

2. Companies Achieve Success When They Start Small: The greatest mistake organizations make with a digital transformation is starting out too big. Organizations should consider a focused approach with one or two areas of talent acquisition and even start within a single early adopter business unit. According to research conducted by McKinsey in 2018, only 16% of companies stated that digital transformation had successfully improved performance and 8 in 10 of organizations stated that digital transformation was too wide in scope. Organizations that are able to adopt agile project methodology, which has the user at its center, have a better chance of delivering a positive experience. Even more important than the initial project is ensuring that organizations have the budget and infrastructure to manage continual improvements, deliver incremental changes based on user feedback, and align business needs to a set of core design principles.

3. Brand is a Critical Component of a Digital Strategy: Digital transformation provides opportunities to show candidates and employees more about an organization and establish trust and partnerships. Yet, only 29% of companies believe that brand plays an important role in digital transformation (Aptitude Research, 2019 Talent Acquisition survey). When embracing digital technology, companies need to align their strategy with employer branding efforts and organizational culture, as well as consider the role of branding throughout the entire candidate’s journey from recruitment marketing to onboarding and new hire engagement. Consistency of messaging is critically important in a digital transformation.

4. Most Companies are at the Early Stages of Digital Transformation: Over 50% of companies in all regions said that they consider themselves to be in the early stages of digital transformation either just starting their journey or implementation process (Aptitude Research, 2019 Talent Acquisition survey). It is critical for these companies to develop a strategy to achieve success in adopting digital solutions. Industries that have the most mature digital transformation strategies in place include retail, technology and manufacturing according to Aptitude Research. Companies beginning the process should look at these industries for lessons learned and best practices. The true benefit and bi-product of digital is to enable relationships and human interactions.

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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.

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Employee Benefits: Your Greatest Recruiting Tool

This week, I attended the Health and Benefits Conference in Vegas where I participated in the Ideas and Innovators session. The event addresses topics such as wellness, benefits, and retirement, and I focused my discussion on how companies can turn their benefits programs into their greatest recruiting tool.

Talent acquisition has changed as the competition for talent increases. And while companies are increasing their investment in ways to attract and engage talent, they aren’t always asking the most basic question:

“What makes a candidate want to join our organization?”

The reality is candidates want what employees want. They don’t want free food, a game room, or weekly lunches with their managers. Beyond salary, most candidates want flexibility in their work options, opportunities for growth, and to be treated fairly. They want the basics.

In research we conducted last year, companies identified benefits as a top reason that candidates decide to join their organization. So, how can companies start to use their benefits programs as a way to attract talent? Below are a few suggestions:

–          Include benefits information on company career sites: Companies should include information about benefits programs on the career sites they use to attract candidates. This information needs to be visible to candidates when they are doing their research on a potential employer.

–          Empower employees to be champions of benefits programs: If your benefit programs are good, employees are going to want to talk about them with friends and former colleagues. They will help to drive employee referrals. If your benefits programs are not good, it might be time to start empowering employees with better solutions. These efforts will boost recruiting and retention strategies.

–          Create more options: Benefits programs should not be a one size fits all approach. Employees have different needs and different expectations from employers. When creating messaging around benefits programs, it will be helpful to show different options available to support employees including wellbeing programs, maternity leave, financial wellness, and retirement plans.

Sometimes the best way to attract talent, is to focus on the basics and solve for what candidates want. By improving benefits programs, companies are addressing both the needs of employees and the needs of candidates.

 

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The Modern Talent Acquisition Function: Roles and Responsibilities

As talent acquisition becomes more complex, the role of the recruiter and the recruiting function must evolve. Recruiters must juggle multiple hats to be successful. No longer just focused on relationship-building or administrative tasks, the modern recruiting function requires a new set of skills and competencies that often seem contradictory. Just take data analysis and relationship-building as one example. Talent acquisition professionals need to build long-term relationships with candidates, interpret data, sell and market their employer brand, and consider a more flexible workforce- all responsibilities that did not exist a decade. While these responsibilities present new opportunities for talent acquisition departments to align with business goals, it can also create confusion around what roles are critical for a modern talent acquisition department.

Aptitude’s latest research looks at the evolution of the global talent acquisition function and identifies several roles that are helping to influence strategies, technology decisions, and the candidate experience. Below are some of these roles and how they are shaping talent acquisition decision-making.

Candidate Experience Manager: The Candidate Experience Manager role is influencing decisions around recruitment marketing solutions and candidate communication tools. This role helps companies such as Thermo Fischer Scientific, Wayfair and Qualtrics create a candidate-centric talent acquisition strategy. Aptitude research found that 30% of companies in APAC have a Candidate Experience Manager role compared to 21% of companies in EMEA and 18% of companies in North America.

Digital Specialists: Some companies are adding digital specialists to support their digital transformation such as Delta Airlines and Verizon. This role can help with evaluating and adopting digital solutions that can improve efficiencies and the overall experience using mobile solutions, AI, automation and video. Aptitude research found that 6% of companies in APAC have a Digital Specialist role compared to 12% in EMEA and 8% in North America.

Data Scientists: Industries such as financial services are hiring data scientists to join their talent acquisition teams and help them leverage analytics. Data scientists can help to evaluate AI solutions and predictive analytics solutions. These roles at companies like Warner Brothers and Morgan Stanley can help talent acquisition use data to drive decisions and create more consistency between disparate solutions. Aptitude research found that 10% of companies in APAC have Data Scientists on their TA team compared to 13% in EMEA and 12% in North America.

There is no one size fits all for the modern talent acquisition department. Companies will have to decide what roles will help to drive efficiency on meet new expectations of the business and the candidates. We are covering this evolution in our upcoming digital transformation report.

 

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Startups in Silicon Valley: It is Time to Slow Down

I recently watched The Inventor: Out for Blood in Silicon Valley. The HBO Documentary which profiles Elizabeth Holmes and her blood-testing company, Theranos, is both horrifying and familiar. In 2014, Theranos was valued at $10 billion. Four years later, it was worth less than zero.

It is the story of a tech startup that pushes a product that hasn’t been properly (or scientifically) tested and manipulates every buyer and investor into believing something that does not exist. It is also the story of a tech startup that puts marketing and false advertising over the development of a viable product.

Sound familiar?

If you have spent any time in Silicon Valley or the tech world, Holmes’ story of fraud and deceit is not unique.  It just plays out on a much larger stage given Theranos’ growth, backing, and status. Many of the elements of this story are relevant to the HCM tech industry. We have all witnessed providers that have lost their integrity in the race to the top. Buyers today need to look beyond product capabilities and examine leadership, commitment to product and development, and transparency.

Below are a few quotes/themes from the movie that are relevant for some of the startups in our industry:

“We have to uphold a legacy in Silicon Valley of saving the world.”- The elitism that comes from Silicon Valley often undermines product strategy, customer support, and leadership style. Many leaders at startups get caught up in their egos that they forget to focus on building products that will work.

“We are part of something that is a revolution, and that will change our world.” I have heard this line from too many startups throughout my career. These blind statements damage both customer and employee loyalty. They give the false sense that these early startups know better than anyone else and shield them from any accountability.

“Data doesn’t sit in our mind as much as stories do. And even more important, stories have emotion and data does not.” – Many start-ups focus on their stories and messaging instead of the credibility of their products and data. Customers in many cases are buying a vision instead of a solution that will provide value.

“Getting results doesn’t mean it’s ready for primetime.”– Years ago, tech companies would spend years building and testing their products before they launched them. Today, it seems to happen overnight. A Stanford graduate or former Google employee will get an idea, and the next month, they start a talent acquisition company. Startups need to spend some time with customers and competitors to understand this market and what solutions will drive value.

“Honesty might cost them their jobs.” One of the most frightening aspects of the Theranos’ story is that employees that questioned the integrity of the company were fired. Collaboration needs to be an important part of a startup environment, and too often, early-stage companies shut down anything negative from their employees or customers. As a result, employees have little faith and confidence in these products.

For anyone that is buying new technology, investing in new technology, or just curious about HCM startups I highly recommend this movie. I think you will find many similarities between Theranos and many of the companies in this space.

 

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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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Talent Acquisition Technology: Innovation from Ireland

Last summer, I was invited by Enterprise Ireland to attend an event in Dublin and learn about some of the leading technology companies in talent acquisition and talent management. Enterprise Ireland is the Government agency in Ireland responsible for supporting Irish businesses in the manufacturing and internationally traded service sectors. Eight hundred Irish owned companies operate across all 50 US states and Enterprise Ireland supports many of these providers. Not surprising, talent and HR is a growing area of investment. Enterprise Ireland helps these businesses to start-up, innovate and ultimately, to achieve global success. It gives them the support and guidance that many stat-ups in the United States lack.

The companies that I met in Ireland were professional and had a clear understanding of their differentiators, goals and target customers.

In the spirit of St. Patrick’s Day, I want to highlight a few of the leading talent acquisition technology companies headquartered in Ireland.

Sonru: With over 500 customers all over the world, Sonru (which means “stand out”) is a global video interviewing provider that supports companies such as Pepsico and Volvo.

Clinch: In the competitive recruitment marketing industry, Clinch differentiates itself with strong customer support and an innovative product. Over the past year, Clinch has added internal mobility capabilities, SMS and communication, and focused on helping companies stay GDPR compliant.

HireUp: HireUp is a referral app that was designed for employees. It allows employees to share jobs through any channel they want and provides communication and notifications about the status of a candidate to the individual that provided the referral.

Jobbio: with over 6,000 SMB customers, Jobbio is an employer branding company that focuses on helping companies with recruitment marketing, job distribution and the candidate experience.

These companies represent just a handful of innovative providers coming out of Ireland. Other areas of growth include learning, communication, and engagement. The support these providers get from Enterprise Ireland helps them make better decisions around their roadmaps, partnerships, and global expansion.

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Aptitude Weekly Update: Jobvite, TMP, Yello, Google and IBM

It is the end of another exciting week in HCM technology with some major acquisitions, product announcements, and new partnerships. The recruitment marketing landscape is changing while AI continues to define technology decisions in 2019.

Below are some of the highlights from this week:

–        K1 Investment Management (a private equity firm based out of Los Angeles) invested over $200 million in Jobvite. This funding will be used to acquire three distinct (and notably different) talent acquisition providers: Talemetry (Recruitment Marketing Platform), Rolepoint (Employee Referrals), and Canvas (Candidate Communication and Text). Each provider offers a unique set of products and capabilities that when (and if) integrated will provide one of the most robust talent acquisition suites available in the market. You can read my thoughts from Monday’s blog.

–          TMP Acquires CKR Interactive. TMP Worldwide also announced the acquisition of CKR Interactive, an employer branding and recruitment marketing firm founded in 2001. This acquisition expands TMP’s market share in the recruitment marketing space and gives CKR Interactive access to more creative services and technology (through the TalentBrew platform).

–          Yello Launches a New Interview Scheduling Product. Scheduling interviews is one of the greatest challenges facing talent acquisition professionals today. Ineffective scheduling can negatively impact recruiter productivity and the candidate experience. According to our recently survey, over 60% of companies have dedicated schedulers on their talent acquisition teams. Yello is helping companies manage the way interviews are scheduled with a new product that is powered by AI and can match and manage complicated schedules in one system.

–          Hire by Google Expands in the US and Canada: In 2017, Google launched its Hire product in the US and began to expand its products in the talent acquisition market. This week it announced expansion in Canada and the UK. I am guessing we will continue to see global expansion and a possible move up market in the next year or two.

–       IBM Announces Partnerships with Skillsoft and ServiceNow: I was at the IBM Think conference this week to learn more about AI, blockchain, automation and talent. I will post more from this event on Monday but two major announcements were IBM’s partnerships with ServiceNow and SkillSoft. These partnerships represent IBM’s commitment to areas like internal mobility and succession planning.

Have a great weekend!

 

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Talent Acquisition: The Next Wave of Acquisitions

Today, K1 Investment Management (a private equity firm based out of Los Angeles) invested over $200 million in Jobvite. This funding will be used to acquire three distinct (and notably different) talent acquisition providers: Talemetry (Recruitment Marketing Platform), Rolepoint (Employee Referrals), and Canvas (Candidate Communication and Text). Each provider offers a unique set of products and capabilities that when (and if) integrated will provide one of the most robust talent acquisition suites available in the market.

Without diminishing the value of Rolepoint and Canvas, this acquisition is significant for two main reasons:

–          Jobvite: Jobvite is here to stay. This announcement puts to rest any rumors about the future of Jobvite as an ATS and its’ staying power in a competitive market. Jobvite’s customers can expect more products, services, and support over the next few years.

–          Talemetry: This acquisition is the first significant announcement in the recruitment marketing landscape and it will not be the last. With many of these providers looking for an exit, is the future of recruitment marketing in a stand-alone solution or an integrated suite (ATS and Recruitment Marketing)? My bet is on the latter.

The ATS market is no stranger to acquisitions. In fact, it has gone through two major waves of acquisitions in the past 15 years. The first in 2005-2006 with acquisitions that included Virtual Edge by ADP and BrassRing by Kenexa. These providers were looking to complete a broader vision of their talent management suites. Smaller companies such as Cytiva (by Taleo) and HodesiQ (by Technomedia) followed suit a few years later. The second wave was in 2012 with the acquisitions of Taleo by Oracle, SuccessFactors by SAP, and Kenexa by IBM. These larger ERP companies were looking to check a box for recruitment technology. What followed was a de-prioritization of talent acquisition and very little innovation or product development.

This most recent announcement could spark the third-wave and possibly, the most significant. In this case, talent acquisition is not a piece of the puzzle. It is not an extra module that is getting acquired to fill some larger HCM story. In the case of this acquisition, talent acquisition IS the story.

Below are my early thoughts on what we know at this point, what we don’t know, and what this means for the market.

What We Know

–          Integration: In the short-term, K1 plans to keep the four providers separate with their own product, sales, and marketing teams. Each of these entities will roll-up under Jobvite with Dan Finnigan as the CEO. The goal in the long-term is to have an integrated platform.

–          Enterprise: Talemetry has been very successful at serving the global enterprise market through strong leadership and a product that was originally built for integration with Oracle customers. It is the unsung hero of the recruitment marketing world with high utilization and 70% year over year growth. It is the provider that can help support enterprise growth.

–          Services: Jobvite has strengthened its’ services and customer support over the past few years. Ultimately, services will be under one shared entity but it will take time and a commitment to the customer.

What We Don’t Know

–          Oracle Integration: Questions may arise around the future of Talemetry’s close partnership with Oracle. Overall, it should not have a major impact since Talemetry integrates with many of the ATS providers including Workday, iCIMS, and PeopleFluent. And ultimately, customer requests tend to drive partnerships more than providers’ decisions.

–          Timeframe: Acquisitions take time. As a result, delays can impact product strategies, support, and resources. Customers will not know the long-term goals until some of the short-term objectives have been met.

–          Target Customer: These providers serve different markets. Although there is some overlap, only time will tell where this new entity will thrive. What we do know is that the emphasis will be expanding in the enterprise market.

What It Means

This acquisition has the potential to change the talent acquisition landscape for a few reasons:

–          It will put pressure on other stand-alone recruitment marketing providers that are looking to get acquired or fearful that they won’t be able to compete against a larger firm. We can expect to see more acquisitions over the next year in recruitment marketing.

–          Providers that play in the larger ecosystem (such as Rolepoint and Canvas) may also get acquired by ATS companies or talent acquisition suite companies. These types of acquisitions can leave customers feeling uncertain about future investments in third-party providers.

–          ATS companies will need to enhance their capabilities. Most of these providers have some type of lightweight CRM in place. They will need to enhance these products or make future acquisitions. Expect more and ask for more from your existing providers.

It is an exciting time to be in talent acquisition. It is no longer a piece of the HCM puzzle. Solution providers feel pressure to do more and talent acquisition leaders are in a unique position to ask for more. We look forward to what the next few months will bring.

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Recruitment Marketing: Four Trends to Consider When Evaluating Providers

compass with the arrow pointing towards the word talent

In a few weeks, we are publishing an updated Recruitment Marketing Index. It is a project I started a year ago and this market continues to surprise me. Although, it is one of the most exciting areas of talent acquisition technology, evaluating these providers is not always easy. Organizations are looking at these solutions from very different perspectives and based on very different needs. Some companies want support with career sites. Some companies want a true CRM. And, some companies are not even sure what they want. Unlike the ATS market, recruitment marketing can feel like apples and oranges.

Over the past year, many of the providers in our report have enhanced their capabilities, secured investment, created service offerings, and acquired large global customers. It has certainly been a year of change but some of the confusion around what these solutions do and what value they bring has remained the same. The goal of this research is to help provide clarity on a complex market and highlight the key differentiators in this space. With over 70% of enterprise companies investing or planning to invest in these solutions this year, we want to share some of the latest trends.

Below are a few of the key takeaways from the report:

Replacement: It is amazing to see how many second and third generation buyers exist in a market that is still immature. Recruitment marketing is the top area of replacement in the next year above ATS, assessments and background screening. Organizations looking to replace these solutions cited capabilities, price and customer support as the top reasons. The providers that succeed in this market are not those that have secured the most investment but those that are committed to building products that their customers want to use.

Adoption: Adoption continues to be one of the greatest challenges with recruitment marketing. Only 2% of companies are using all of the functionality in their recruitment marketing solutions. The problem is two-fold: many companies do not have the resources in place to support implementation and adoption and many of these providers are not making products that are simple enough to get adopted. These solutions provide great value but only if they are getting used.

Buyer: The recruitment marketing buyer is different for every company and it is not always the head of talent acquisition that is the key decision maker. At many companies, recruitment operations professionals are responsible for evaluating providers and talent acquisition teams with candidate experience roles, campus recruiting roles and employer brand specialists are having influence as well.

Events Management: One of the key drivers for investing in recruitment marketing is the ability to create, track and manage all events. It is surprising that many of the providers in this market are still lacking some robust capabilities in events management. This is one area that is becoming increasingly important especially with the demand for more campus recruiting solutions.

The Recruitment Marketing Index report profiles eight of the leading providers in the space and will look at differentiators, product roadmap, investment, and capabilities. We are looking forward to sharing this research with you!

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