Recruiting is now a race for talent. Software companies hope to help HR keep up.
More than ever, following the shift to remote work spurred by the pandemic and The Great Resignation, the experiences of the last few years have emphasized just how critical talent is to any organization.
“Our customers will say to us, ‘If we can't hire, we're dead in the water as a business,’” said Oracle Senior Vice President Nagaraj Nadendla. And as companies scramble to find and recruit scarce talent, demand for software that can speed up the recruiting process is on the rise.
In the past 10 months, recruiting startups Eightfold, SeekOut, Gem and SmartRecruiters have all hit unicorn status by promising to make the recruiting process more efficient. Established players like LinkedIn and Workday are also investing in product features that can help recruiters, from providing candidate recommendations to reducing time to hire.
“Today if you miss an opportunity to speak with a candidate and move them along, then that candidate will very likely have another opportunity and offer out the door,” said Jobvite Senior Vice President Dwaine Maltais. “[The] first-mover advantage is so critical these days with as competitive of a job market.”
In a talent landscape where speed is paramount, cloud vendors like Jobvite and Oracle are using AI, machine learning and automation to help companies snag top candidates first.
The war for talent
To Maltais, recruiting is an absolutely essential component of a company’s overall strategy. “It's where companies are meeting their business strategies and their workforce plan, but you can't execute on your business strategy if you don't have the right people in the right spots in the right places,” he said.
To some extent this has always been true. The need to find the right talent helped HR establish its status as a key driver of business value, and a critical aspect of that shift over the years has been technology.
Although it might not be apparent at first glance, HR departments have actually been keenly interested in software improvements for years. “They’ve also been one of the earliest adopters of new technologies, which you would not generally think about,” said Maltais, who mentioned complex searches on unstructured documents such as resumes as technology HR pioneered. Not to mention that “recruiters and HR and people were searching for jobs online in the very early ‘90s.”
HR isn’t new to the cloud either — in fact it was one of the first business functions to make the transition. “HR got in the cloud a lot earlier than finance and supply chain,” said PwC partner Dan Staley.
But given the pace and complexity of today’s recruiting environment, being in the cloud is now a strategic imperative. “Those that are still non-cloud-based, I think they're feeling the pressure,” said Nadendla, because it's more difficult to broadcast opportunities or for candidates to find them.
In this market, time to engage is critical, said Maltais. “A day getting in the way of that can mean the difference between making a hire and having to continue searching and sourcing,” he said.
HR departments recognize this challenge, and they’re looking at new technologies that can speed up time-to-hire. “What we’re noticing in HR is that there's a desire to use what's called these more disruptive technologies: RPA or Internet of Things, artificial intelligence, blockchain VR, etc.,” said Staley.
But the realities of hefty implementation costs and difficult integration processes are leading HR departments to outsource most of the heavy lifting to cloud vendors. “Instead of them going in and building something custom on their own, they're waiting until the software vendors incorporate it into their products,” he said.
In fact, cloud vendors like Jobvite and Oracle are already using digital assistants, chatbots and other technologies to do just that. At Oracle, the company is using AI in its Oracle Recruiting human-resources software to automatically winnow large funnels of candidates down to a shortlist, said Nadendla.
“We synthesize skills, job history, education, certifications, and we do natural-language processing and many other things that go into the algorithms to help identify what is the initial shortlist you should focus on,” he said. “It's almost like an advisory role: We suggest, recommend, provide predictions for certain types of roles, how much time would it take to fill, etc.”
At Jobvite, AI is being used to automatically send outreach messages to candidates in a company’s database. In some cases, AI-assisted outreach is actually more effective than the alternative.
“We're seeing open rates and click-through rates in excess of 50-60% from that type of a reach out,” said Maltais. The company is also using more text-based interfaces, like text messaging, to react more quickly to candidates. With a text, “you're getting responses back generally in 90 seconds or less versus email versus picking up the phone,” he said.
Other parts of the recruiting process, from scheduling interviews to searching candidate databases, are also being made more efficient via automation. While technologies to make recruiters’ lives easier have always been valuable, noted Maltais, today “it’s a game changer in how they're staying afloat and being able to get the talent that they need.”
The cloud is essential to moving at this faster pace, but there are still challenges. Although “70-80% of all HR organizations have at least something in the cloud,” said Staley, an organization’s current vendor may not be the right fit today given the significant changes in the market for employees.
Because HR departments were often first to the cloud inside their companies, since that time, “maybe your organization's requirements have significantly changed and maybe through an acquisition or new business ventures, what they had before no longer meets what they need going forward,” said Maltais.
This means many HR organizations are dealing with multiple vendors that can be tricky to integrate and manage. “We found that 50% of organizations or HR organizations routinely make a habit of purchasing from multiple vendors,” said Staley, citing PwCs latest survey data.
But when it comes to recruiting, using multiple vendors can lead to more problems than solutions. “It's disconnected candidate experiences, it’s disconnected processes, not to mention you have [to have] unified data sets to be able to drive optimal outcomes for the organization,” explained Nadendla.
That’s why at PwC, Staley sometimes encourages clients to use fewer vendors. “Organizations are looking to be more productive, more efficient. And if you can use fewer vendors, you're talking about reduced interfaces, lower cost to maintain,” he said.
Nadendla, for one, thinks the industry is shifting away from the explosion of vendors caused by the so-called “best-of-breed” enterprise software movement towards single vendors. “Increasingly, we see quite the opposite, which is more of standardization on a single-cloud solution, particularly given the benefits and the touch points across the suite,” he said.
Like most SaaS industries, in the human capital management world, there’s a complicated web of partnerships and competitors amongst vendors. At Jobvite, Maltais said of large HCM players Oracle, ADP and Workday, “in some cases we’re partners, in some cases we compete with them.”
Ultimately though, Maltais thinks Jobvite has a leg up on both Oracle and Workday when it comes to recruiting because of its singular focus: the traditional argument against large vendors. “At the end of the day the big difference between a Jobvite and an Oracle, who's also a partner and a valued partner from that standpoint, is that we are 100% focused on talent acquisition,” he said.
At Oracle, Nadendla disagrees, and sees Oracle’s ability to provide cloud-based human capital management (HCM) from “hire to retire” as a necessity, especially as recruiting and employee management move closer together.
That’s why Oracle is making a play to become a complete vendor for all of HR software, not just recruiting. “We have a tremendous set of investments across Oracle Labs, not just recruiting but HCM and across Oracle apps,” said Nadendla. The company is also focused on incorporating emerging technologies, although that would likely be via building in house as opposed to M&A. “AI and machine learning and others, no we don't see any acquisitions,” said. Nadendla.
At Jobvite, the company is putting its money into text-based interfaces and automation. “We've invested really heavily in text-based interfaces, whether that's through chat, whether that's through making it easy for someone to apply to a job, whether it's checking schedules,” said Maltais.
It’s clear the pandemic changed the relationships between employees and management but it also clarified that talent is critical to enterprise success. Buyers, vendors and startups are all seeking anything that can give them an edge.
At every quarterly call you hear that “the most important asset in an organization is its people,” said Maltais. “So it's critical that companies have the right talent, when they need it, for the goals that they're trying to achieve.”
This story was updated with the correct brand name of the Oracle Recruiting software.