Month: July 2016

5 reasons why it’s hard to solve the recruiting tools conundrum

There are hundreds (if not thousands) of recruiting tools to help improve the end-to-end recruiting process.  The solutions are out there, but why does it have to be so hard to be able to use them? Why do enterprises only leverage a fraction of the excellent offerings on the market to optimize the full hiring and candidate experience?

Here’s why:

  1. Recruiters and Recruiting Coordinators hate friction in their tools
  2. For better or worse, the ATS is the data engine that drives the recruiting process.
  3. ATS companies have traditionally been slow to innovate and resistant to 3rd party integrations
  4. Point solutions can innovate faster and solve more recruiting workflows than the large ATS companies
  5. Point solutions/3rd Parties need to prioritize who they partner/integrate with

recruiter-computer

  1. Recruiters and Recruiting Coordinators hate friction in their tools

Recruiters and coordinators have more than enough to keep them busy, the last thing they are looking for is one more thing to do or tool to use. Adding another step to their process without a significant improvement to their productivity or business results will be met with significant resistance.  Unless it is drop-dead easy to see the benefits, adoption will not happen.  Here are the pet peeves that drive recruiters and coordinators nuts and cause unnecessary friction in their daily work process:

  • Needing to sign into multiple systems to manage the hiring process. Tools need to be one click away with single sign on (SSO).  Don’t make them sign in to each tool and ensure ease of access to an application via a simple click on a button, tab, link, or icon.
  • Double entry of data that already exists elsewhere. Information that already exists in your ATS should not need to re-entered or copy/pasted. As will be discussed in #2, integrating data between tools can be non-trivial.
  • Poor usability. Given the overhead burden put into the process due to compliance, traditionally, usability has been compromised to make sure that all the ‘cover your butt’ features have been crammed into each step in the process. The latest generation of ATS companies have included the consumerization of recruiting tech into their design, but still, there is a long way to go to make most tools easy to use and mobile-friendly.
  1. For better or worse, the ATS is the data engine that drives the recruiting process.

For nearly every company the ATS is the central database for all job and candidate information.  While some larger companies have created their own master HR database, they are more the exception than the rule.  Nearly every significant task for sourcing or selection uses information from the ATS database as the content source. As mentioned above, recruiters and coordinator know what information already exists for a Job or Candidate and they have no interest in re-entering data that they know already resides in another system.  Doing so is frustrating and naturally causes frustration and increases adoption issues for new tools. Thus not being able to easily synch data between tools can be a deal-killer for recruiting teams.  Given the importance of the data stores in the ATS database, ATS companies exert tremendous power over what is possible for your team to adopt.  The constraints your ATS puts on your capabilities and the implications of access to job and candidate data are something to seriously understand for your hiring and candidate experience process.

slow

  1. ATS companies can’t build everything themselves and they traditionally have not been open to 3rd party integrations

Taleo and other first-generation ATS companies started as products to apply supply-chain management operational efficiencies to recruiting. Furthermore, government-required compliance reporting acted as a catalyst to accelerate large enterprise adoption.  While these systems had appeal to HR executives by focusing on organizational productivity and keeping themselves out of jail, they did not focus on the real ATS customers and users:  candidates and recruiting teams.

Given these design priorities, the end-user experience primarily focused on work-flow management and exhaustive data capture – none of which resulted in a great user-driven experience. In recent years, much of the focus has been on getting some of the table-stakes such as a decent search function to treat the database like a CRM tool.  Also, basic performance issues and creating mobile-friendly tools.

If job or candidate related information needs to be used or updated by a 3rd party tool, then it requires some integration to allow for data exchange.  The challenge with first-generation ATS systems (e.g. Taleo, Kenexa/Brassring) is that they are pretty much closed system with poor (non-RESTful) APIs to allow for easy integration. Even worse, these incumbents charge multiple tens of thousands of dollars for the privilege of being an integration partner, deterring any small or medium sized company from working with them.  Newer ATS companies (e.g. Workday, iCIMS and Greenhouse) are much more open, simpler to integrate with and trying to become ecosystems, but the challenge for developers is the effort needed to create custom integration points for each platform integration (similar to creating an app for both iOS and Android). Aptitude Research Partners just published a phenomenal review of the current prominent ATS systems and details the strengths and weaknesses of each platform.

  1. Point solution tool companies can innovate faster and solve more recruiting workflows than the large ATS companies

You would think with all the resources of Oracle and IBM, Taleo and Kenexa/BrassRing would be leaders in talent acquisition innovation.  Instead they are not only laggards, but they also seem handcuffed to their old-school enterprise software mentality and business models.  Social, mobile and cloud are not in their DNA which has caused them to be slow in reinventing themselves and their platforms. An easy example of this is the emergence of the recruitment marketing category with companies such as Jibe, Smashfly and Phenom. In recent years as both the economy and hiring have rebounded, a solution for nearly every recruiting task has been created.  Whether it is for job description optimization, big data applied to resume analysis or a new twist on social, mobile sourcing there’s an app for that.  By not having a one-stop-shop platform provided creates the need for a ‘best-of-breed’ recruiting technology strategy and then a plan to figure out how to make all these solutions to work together. For leading edge companies with sophisticated talent acquisition organizations like Google and Amazon, they have responded by building their own integrated platforms to match their unique recruiting methods. However, most companies do not have the resources or skills to build their own recruiting ecosystem themselves.

Priorities

  1. Tool companies need to prioritize with whom to integrate

 In an ideal world there would common standards that any recruiting tool company could use to integrate into any ATS ecosystem.  While the HR Open Standards consortium is making progress, there is still a long way to go to meet the needs of most recruiting technology companies.

With over 200 applicant tracking systems, none of which have a dominant market share, having a fragmented ATS market is forcing recruiting tool companies to individually choose which ATS company to choose as an integration partner. Without common standards and well supported APIs / partner programs, only a few ATS companies will likely have the scale needed to support a deep ecosystem. Companies like iCIMS, SmartRecruiters and Greenhouse are trying to get there, but there is still a long way to go to make a full suite of recruiting tools as easy as plug-and-play. Until adding any recruiting tool to your ATS is as simple adding an app like your iPhone or Salesforce, there is no effortless solution.

The good news is that recruiters have some powerful tools available to them to solve their acquisition challenges .  However, unless these new technology solutions can overcome the hurdles that the dynamics of the incumbent enterprise platforms create, it will take many years for talent acquisition professionals to be able to fully take advantage of them.

About the Author: Ray Tenenbaum is the founder of Great Hires, a recruiting technology startup offering a mobile-first Candidate Selection platform for both candidates and hiring team success. Ray has previously spent half of his career building Silicon Valley startups such as Red Answers and Adify (later sold to Cox Media); the other half of his career was spent in marketing and leadership roles at enterprise organizations including Procter & Gamble, Kraft, Booz & Co. and Intuit. Ray holds an MBA from the University of Michigan as well as a bachelor’s in chemical engineering from McGill University.

Follow Ray on Twitter @rayten or connect with him on LinkedIn.

The only two recruiting metrics that matter

It’s been over two years now since we started Great Hires and since the beginning I have been bombarded with all the different ways to measure recruiting success. While many of them are interesting and good indicators of how efficient an organization is at sourcing and hiring top talent, in the end I have concluded that organizational leaders only need to focus on two strategic metrics: Quality of Hire and Candidate Experience.  Everything else is details.

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Let me explain, as I learned very early on in my career, the two primary outcomes a business leader is solving for are a) building organizational capacity and b) building the business.  All other metrics are either efficiency metrics on measure input values. This is similar to baseball where there are several dozens of statistics collected on every player.  As the book Moneyball pointed out, it is on-base percentage that is a significant predictor of wins and yet most experts focused on other statistics (e.g. slugging percentage) which did not correlate with the ultimate outcome objective of a baseball team.

Hiring and retaining great talent is clearly what a talent acquisition function is all about and directly responsible for building organizational capacity.  If you were to pick a single measurement for how a TA organization contributes to building organizational capacity it would be Quality of Hire (QoH).  While Cost-Per-Hire (CPH) and Time-to-Fill (TTF) provide good operational indicators for the effectiveness of the hiring team (similar to hits and batting average in baseball), the ultimate objective of recruiting is to bring on qualified personnel into the organization.  Rarely will you hear organizations willing to compromise on QoH in order to drive down their CPH or TTF. It is only when they are looking to optimize the process while at a minimum keeping the outcome measurement fixed that hiring teams should then focus on CPH, TTF or any other recruiting efficiency metric.

focus-on-quality

Now, there is no industry standard for how to measure QoH since each organization is unique and there are multiple leading indicator metrics which can provide a reasonable proxy, but none is exact.  Whether you believe the hiring manager satisfaction, one year retentions or staged (e.g. 2 weeks, 2 months, 1-year sometimes called First Year Quality) employee performance evaluation is right for your company, it is not an exact science. However, what matters is having consistent, multi-dimensional metrics which provide a holistic representation of hiring success.

By now you might agree that QoH is the most important measurement for recruiting, but you are probably asking yourself ‘Why would Candidate Experience be the other metric that matters?’. Very simply, in most cases it impacts business results. Keep in mind that 95% or more of the people that apply to your job won’t get hired and 75%-80% of the finalists that you brought in to interview won’t be joining your organization. If these candidates either buy or influence purchases for your company’s offerings, you might want them to still like you at the end of the process. There has been a lot of research that shows that both a negative and positive candidate experience directly impacts a company’s bottom line. Consumer-brands like Starbucks,  Delta Airlines, Hilton Hotels and others have specific use cases detailing how their focus on improving their candidate experience had a positive business ROI.

tape_measure

And what about all those other commonly used metrics, do we just ignore them?  Absolutely not.  If you work in the talent acquisition function or are a hiring manager you definitely care, measure and prioritize factors like TTF and CPH.  They make up the trinity of Cost, Quality & Time.  And you optimize for all three. Always.  As a TA leader you are solving for each of them by leveraging people, processes and tools.  In addition, you need to be able to measure individual recruiter performance, and these input & process metrics provide good indicators to understand differentiated individual and department performance.

Similar to baseball, your primary objectives are to having a winning team that also makes money.  In addition, while there are plenty of measurements which will help you “peel-the-onion” on where to focus and prioritize, you need to know where to start.  When it comes to talent acquisition metrics it starts at the top and they are Quality of Hire and Candidate Experience.  Focus on these first and use the other metrics to optimize the process or their inputs.

About the Author: Ray Tenenbaum is the founder of Great Hires, a recruiting technology startup offering a mobile-first Candidate Selection platform for both candidates and hiring team success. Ray has previously spent half of his career building Silicon Valley startups such as Red Answers and Adify (later sold to Cox Media); the other half of his career was spent in marketing and leadership roles at enterprise organizations including Procter & Gamble, Kraft, Booz & Co. and Intuit. Ray holds an MBA from the University of Michigan as well as a bachelor’s in chemical engineering from McGill University.

Follow Ray on Twitter @rayten or connect with him on LinkedIn.

Eight things I learned analyzing the Glassdoor interview ratings of the Fortune 500

Over the past couple of years I have noticed a dramatic increase in the attention recruiters are placing on Glassdoor feedback.  Some talent acquisition organizations are even including their Glassdoor interview ratings in their corporate metrics.  Others are looking to find ways to increase the number of interview reviews. Given the greater emphasis and priority being placed on the candidate experience, I thought I would research the interview performance of the Fortune 500. Here is what I learned:

  1. The average number of interview reviews is 481, but most have less than 154 reviews

There is a wide distribution in the number of interview ratings, with about 10% of companies having more than 1000 reviews, however, many organizations do not even have 30 reviews. The mode number of Fortune 500 Glassdoor interview reviews is only 154, thus half of the F500 have less than 154 interview reviews

  1. Not surprisingly, for most companies, only a small fraction of candidates leave feedback, but have a big impact on company perception

The average number of employees in the F500 is about 69,000.  Assuming 15% of the total workforce is close to the number of annual hires, and each filled-position interviewed 2.5 candidates, then, on average, 25,000 candidates are interviewed each year for an F500 company.  With a mean of 481 cumulative reviews collected since Glassdoor started, then it is easy to see how less than 1% of interviewed candidates actually post feedback on Glassdoor. Thus, similar to Yelp, the critical few have a big impact on the many candidate readers.

 

  1. The average positive experience across the Fortune 500 is 63%

I have heard many recruiters hypothesize that most candidates only go to leave feedback on Glassdoor if they had a bad experience.  The data clearly does not support this perspective.

In fact, the mode is also 63%, thus almost two-thirds of all reviewers had a good interview experience.  On the flip side, there are only a handful of companies who crossed the 80% positive threshold.  This tells me that there is still long way to go for almost every company to improve their candidate interview experience.

Note: Graphic excludes 19 companies where the number of reviews was less than 30.

 

  1. The average negative experience across the F500 is 16%

While a 16% mean negative rating may not seem like much, let’s look at the math if you are a consumer-oriented company.  If a company is interviewing 25,000 candidates, and the 16% is a statistically representative sample, then about 4000 candidates are unhappy with their experience. Not only might they tell friends and colleagues about their bad experience which impacts other potential hires, but losing even half of those customers (2000) for a lifetime could be worth millions of dollars in lost revenue.  It’s pretty easy to do the math on why investing a little more in the candidate experience has a positive ROI.

Note: Graphic excludes 19 companies where the number of reviews was less than 30.

 

  1. Glassdoor’s feedback methodology isn’t that helpful for employers.

While I realize Glassdoor wants to make it super-simple for candidates to submit feedback there are a couple of glaring issues with the form for how employers can use the data.  The 3-point scale ‘Rate the Overall Experience’ is oversimplified to provide differentiated statistics. Using the Net Promoter Score scale would provide more meaningful, standardized data to use for analysis. Similarly, Glassdoor’s current method of capturing open-ended feedback relates to their ‘Describe the Interview Process’ question with additional ‘Briefly describe the interviewing and hiring process’.  While this is helpful to set expectations for other candidates to know what to expect, it does not consistently guide candidates to detail what went well and didn’t go well for their interview experience.  Here are some good examples where candidates detailed answers were very helpful. Unfortunately, a majority of the time, candidates detail the process steps without adding an explanation for their rating.  Putting in an additional text field after the rating scale with the question ‘Why did you give this rating?’ would be helpful to both candidates and employers.

 

  1. It only takes one person to create a negative candidate experience

 

After reading hundreds of negative reviews, one pattern that I noticed, is that many times a candidate detailed interactions with several interviewers and had multiple positive experiences. But then it took just a single bad event, like an interviewer acting unprofessional (e.g. didn’t read their resume before showing up, didn’t apologize for being late etc.) or the recruiter didn’t follow-up in a reasonable amount of time for all that goodwill to be forgotten. This shows how a great candidate experience is only as strong as its weakest link.

 

  1. Three companies with great interview ratings :

As mentioned above, I would expect a consumer-oriented brand would strive to be above average in their interview ratings.  Three of the companies with a large number of reviews and stellar ratings are in that category:

  • Deere (81% Positive / 7% Negative)
  • Publix (81% Positive / 8% Negative)
  • Southwest Airlines (79% Positive / 8% Negative)

 

  1. Three companies with surprisingly below average ratings:

 

  • Aflac (46% Positive /25% Negative)
  • Dish Network (49% Positive /27% Negative)
  • Netflix (38% Positive / 34% Negative)

Interestingly, all three have a consumer-orientation which means that many of the candidates they interview are potential customers they might lose for a lifetime.

Netflix is especially curious because of how much press they have received about being a progressive company with their HR practices and forward thinking culture. While the bar may be high to join the company, given the subscription nature of their offerings, one would think they would invest a lot more in ensuring a great candidate experience.  (Note: I interviewed at Netflix back in 2002 and had a great experience. I still remember the process in detail, including some elements which I have since borrowed when I conduct my own candidate interviews).

 

So what’s the opportunity for your company?

My key take-away from this analysis is that it is still early in the game for companies to shape and change their Glassdoor interview ratings and reviews.  By both improving their candidate experience and leveraging new ways to encourage candidate to leave feedback, employers can drive up their positive feedback rates to improve their employer brand and candidate perception.

 

About the Author: Ray Tenenbaum is the founder of Great Hires, a recruiting technology startup offering a mobile-first Candidate Interviewing Experience platform for both candidates and hiring teams.  Great Hires was named as one of Entrepreneur Magazine’s Brilliant Companies of 2016 where it was ranked #2 in Business Tools.  Follow Ray on Twitter @rayten or connect with him on LinkedIn.

 

10 things I learned researching the ATS platforms used by the Fortune 100

Last week I decided to research the applicant tracking systems (ATS) used by the Fortune 100. The analysis was prompted by a fellow recruiting startup founder who suggested that Great Hires invest in becoming a partner for a newer ATS company’s marketplace.  This made me want to estimate the size of the opportunity based on the volume of candidates that pass through the ecosystem of these providers.  Despite how fragmented the ATS market is, I was surprised that there are only three ATS system providers who serve more than two F100 companies.

  1. Taleo/Oracle and Kenexa BrassRing dominate the Fortune 100

2. The number of jobs flowing through the top systems (Taleo/Oracle, Kenexa/BrassRing and homegrown) dominate everyone else.

3. The average number of job openings of the Fortune 100 is 2,172. These firms must have very large talent acquisition organizations to keep up with their hiring needs.

4. Many companies have started using a second platform such like a recruitment marketing system (e.g. Jibe or Smashfly) or even a second ATS-oriented company  (e.g. Smartrecruiters or Jobvite) to deal with CRM, Recruitment Marketing or Talent Community needs. However, these “second” platforms have less than 20% penetration in the F100.

5. Six firms built their own ATS: Amazon, Google, Apple, Microsoft, Verizon, Statefarm. What makes Statefarm unique is that they aren’t a technology company, but they seem to have unique needs with a franchise-like recruiting model.

6. Only one Fortune 100 company has adopted the Workday ATS in the two plus years since its release.

7. Amazon has 17,000 job openings and 230,000 employees. They are a much bigger organization than most people think and ranked #20 of the F500 by number of employees. For comparison, Wal-Mart is the largest employer with 2,300,000 employees.

8. Oracle has 8,000 open job reqs. I wonder how much input/feedback the Oracle recruiting function has provided the Taleo development team about their ATS?

9. Three of the top 6 companies with the most job openings are healthcare related and combine for nearly 43,000 openings

10. American Airlines gives candidates the option to apply using their Yahoo credentials. Not LinkedIn, Facebook, Google or Twitter.  Are they signaling applicants who they are really looking for?

American_Airlines_Apply_with_Yahoo

Note:  Berkshire Hathaway was not included in this analysis since it is really a holding company, and was replaced by #101 DuPont.