Digital Disruption in HR—Time for Big Change (and Bigger Benefits)

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By Ben Hutt

Digital technologies are having a profound impact on the global economy.  You don’t need to look further than organizations such as Uber and Airbnb to see how truly transformative technology has been to a wide range of industries. Yet, there’s one industry that hasn’t seen much impact from technology, that is on the cusp of something great—recruitment.

When it comes to recruitment, a lot of the practices in place a decade ago are still in play today.  That would be fine if recruitment was an effective, cost-efficient, accurate and quick process, but unfortunately it is not.

According to The Search Party research, the average cost of recruiting a new hire can run up to 30 per cent of an annual salary and take three to six months. Moreover, many permanent hires fail to live up to expectations.

As expensive as it is to replace a bad hire, the money isn’t even what concerns employers most. In a recent Robert Half survey, chief financial officers (CFOs) said the single greatest impact of a poor hiring decision is lower staff morale (41 per cent), followed closely by lost productivity. Not a happy picture, but thankfully a digital evolution (or revolution) is at hand.

Disruption of Age Old Business Models
Uber is a great example of an organization that clearly understands that holistic change of the economic model has the potential to achieve a massive and game-changing outcome with huge benefits for all participants. By inverting the taxi business model from large companies controlling the booking model to the drivers being liberated by technology themselves, Uber has caused huge disruption within the transportation industry.

This is in stark contrast to the bulk of disruption in recruitment, which has focused on taking parts of the traditional process and marginally improving them. In recruitment, the problem as a whole remains. For any digital revolution to succeed, a service must be enabled that’s quicker, cheaper, and easier than all competing alternatives. It must give great value and high quality.

HR professionals, talent managers and agencies alike have embraced major change in the way information about people is made available. Adoption of LinkedIn Recruiter has been strong, and occurred early in its gestation—perhaps a sign that there is significant opportunity to improve the status quo.  Nonetheless, it’s becoming more apparent now that while tools like LinkedIn are fantastic for networking, they are less useful for recruitment due to the unqualified and superficial nature of the skills and experience on profiles. This is still the same approach as the old model, but instead of reading resumés on paper, you just read them online.

With the existing model, you’re also left with the age old problem of how to contact and engage passive candidates, and encourage them to consider leaving to work for you. It’s a specialized sell, and one that good recruiters spend careers refining. Given the recruiting challenges and concerns hiring managers have, it’s not surprising that their wish list for improvements includes greater access to qualified candidates, better information and less time searching, according to The Search Party research.

HR Can “Uber-ize” Recruitment
Just like Uber revolutionized the transport industry, an Uber-like approach to hiring is what will give recruitment a much needed boost. Wholesale evolution leading to a faster, cheaper, more reliable mechanism for hiring will come by embracing marketplace economics and leveraging the power of data science and machine learning (systems that can make sense of vast volumes of data that were impossible until only recently) to quickly and easily identify the best candidates for specific jobs.

Then the screening and the “selling” of the job to a candidate will be handled by experienced recruiters to save employers time and maximize the chance of a successful hire. This model will mark the true paradigm shift in recruitment as it empowers the three stakeholders in all recruitment processes: the employer, the recruiter and the candidate.

It will take time for digital innovations to be common place; it’s still early days. Substantial investment has been made in existing models, RPOs and internal teams. It will take time to realize that however these are organized, they are ineffective and inefficient. There is a better way now.

Hire on Culture: Interview Only Those Capable, Interested and Excited
The true power and value of digital recruitment to HR and talent managers comes from the automation of the time-intensive, complex parts of recruitment. Vetting candidates and making sure they have sufficient experience and the right skills is important; however, it’s not the best use of a busy HR manager’s time.

The role and value of technology is to make it easier to define and identify the perfect candidate for a role. To do this, you need a gigantic pool of highly-detailed and rich candidate information and cutting-edge search technologies. Short-listing is quick and easy.

The quickest way to then get a candidate to interview is to use a skilled professional who has a pre-existing relationship. Let them make the call while you do more important things. Importantly, everyone selected for interview should be pre-screened for interest, capability and excitement so that you decide based on cultural fit—a job best left for humans.

Stop Choosing the Best of a Bad Bunch (Slowly)
Instead, choose the best of a GREAT bunch (quickly).

We all know that the productivity of a great candidate far outweighs that of an average one. A good hire is worth its weight in gold. Imagine this: instead of taking two to three months to hire, it takes four weeks—half the time. Think of what you could do with that time: be more productive, profitable, and charitable.

Every innovation will be judged on its ability to improve upon the previous models. The time is now right for the HR industry to step past the allure of small innovations, and embrace true change and a new approach to hiring that is better, faster, easier and cheaper.

Ben Hutt is CEO of the digital recruitment marketplace The Search Party.

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