Why Data-Driven Recruitment is Quite a Challenging Process?

We have been noticing the advancement in the use of technology in the HR field for two decades now. Every professional in this industry can validate the rough journey energized by the advancement of technology, change of attitudes and needs, and the continuous evolution of priorities and practices in HR professionals.

The preferences and the general landscape of vendors are subject to alteration every few years. With the introduction of the Application Tracking System (ATS) job portals like Monster, HotJobs and Headhunter.net were replaced by new vendors like Personic, Resumix, and Webhire. During the same period, the trend of Learning Management System (LMS) job boards reached its peak and thus companies like Docent and Click2Learn emerged and now both combined are known as SumTotal (i.e. Skillsoft).

Moving further, the Employee Performance Management (EPM) became an essential feature of vendors in the mid-2000s mainly because of the online performance reviews, hence great companies like SuccessFactors predominantly took over the HR setup. Then, finally, Workday, who for many years was known as a leading company for addressing all HR problems including Core HR, payroll, recruitment, and talent management.

Apart from Workday, all the above-mentioned vendors have become outdated or vanished because of their outmoded ways and their inability to modify the applications with the evolving technology. Even EPM solution is nowhere to be mentioned in the deployment, investment or acquisition sector. Although these ways are still used in practice, there is no advancement or venture investment added.

On the other hand, the recruitment technology continues to progress over the last twenty years and represents an evolving landscape of start-ups and emerging companies. Also, this group attracts most venture capital investments with about $500 million flowing into these businesses since 2011. So, what is the reason behind this?

Out of all HR categories, recruitment is particularly subjected to technological evolution, mainly because it addresses a highly inefficient and frustrating process. Despite of the large number of potential candidates on the market and the increasing demand to fill vacancies, applicants continue to complain about lack of job opportunities while recruiters argue about incompetent candidates. Surprisingly, technology is unable to bridge this gap!

WHY TECHNOLOGY-DRIVEN INNOVATION HAS AN IMPACT ON RECRUITMENT?

Recruitment has been a highly subjective process because most of the recruiters are making their decisions based on their own, merely on the subjective intuition about applicant’s capabilities for a certain job. Oftentimes, such wrong calls can be detrimental for the company on the long run. So, what can be the benefits of data-driven recruitment?

Nowadays, the use of psychometric and cognitive assessments, together with corporate performance data analysis, give us the opportunity to assess the potential employees on every aspect and enables us to make important decisions regarding employment and team building.

Three major disruptions of recruitment technology have been observed in the hiring technology in 1990’s regarding certain platform technologies and the fourth one is on its way.

Internet – the emergence of digital job portals took the place of classical job advertisements. This led to mass job posts and thus a surge of applications for the potential job. Later, companies started building customized career sites where applicants can learn details about the position and the company before they apply. Recently, email marketing and candidate relationship management (CRM) are included in today’s recruitment marketing process.

Search – the rise of web search tools highly organized the hiring procedures while ATS technology further facilitated the process of effective resume prioritization on available job positions. This made the recruitment process more efficient, resulting in better decisions regarding recruitment. This also facilitated the first phase of recruitment, which relied on SEO to increase traffic of candidates to career sites and show potential open employment positions.

Social – this facilitates the distribution of job vacancies towards targeted populations via recruitment marketing and employee referrals on social networks. This improves the hiring process as potential applicants learn about the company within social circles.

The fourth major disruption is Data Enabling which is true in all sectors of the economy. Data collection and data mining has greatly transformed every aspect of life. Now, marketing companies can predict the engagement with offers and adds due to the abundance of data they collect based on individual’s interests, priorities, online shopping history, location and much more. Moreover, restaurants and hotels can predict how weather impacts their business events thus can manage the labor and supply chain accordingly.

Also, doctors’ prescriptions can be based on real-time patient data and medical history, and further align them with other patients. These are just a few examples of data-driven disruption, some of which are positive while others are quite off.

DATA-DRIVEN TECHNOLOGY IS QUITE PROMISING, BUT FACES A HUGE DISCREPANCY WITH HR

When it comes to talent management, productive application of data in HR technology is in its initial stages. Early talent management platforms enabled recruiters to mine data on passive candidates by collecting public information available as a social footprint and targeting those candidates on social channels. Although these portals greatly helped the recruiters, they barely scratched the surface of talent management.

The HR sector has been aggregating candidates’ data regarding demographics, employment history, turnover, academic records, training experience, but also departmental and corporate performance. The advancement of machine learning reached a level where all this data, after tweaking by data experts, can help in the decision-making process for recruitment and workforce building. This will bring a new level of fairness and objectivity in the recruitment process.

Despite of the highly subjective hiring process, there are still some loopholes in the criteria where some standards are considered critical but hold no significance on the long run. What if the Artificial Intelligence could formulate a perfect method for each company based on a customized approach reflecting their culture, principles, management, sector, job role etc. thus revealing candidate data from University attended to SAT scores.

Therefore, if some predetermined company standards are not met the AI will help you avoid that hire and suggest a better candidate based on your previous HR technology and business performances. Although AI is a new approach, data analytics has been used by experts for over a decade with staggering results. There is no doubt that this approach will help businesses prosper by making data-driven team-building decisions.

Although this next disruption holds a great promise, it needs to be applied with great caution as the advanced technologies, such as machine learning, are not familiar to many. Currently most HR companies are not willing to consider or apply the new technologies available on the market and there’s a great chance that purchase decisions will be made for the wrong reasons, such as brand recognition.

It has been observed in the marketing technology that there are some vendors who try to acquire machine learning techniques, but don’t have enough value to offer. Most of the vendors speak of it, but very few have anything remotely close. The vendors are packed up with gigantic team of data scientists and highly manual intervention, but lack real technology automation.

CONCLUSION

This incoming data disruption should be regarded both with skepticism and good faith, hoping that the 2.0 version will deliver the promised benefits. Version 1.0 will automate the sourcing process and build a candidate pipeline. HR professionals will get accustomed to these technologies and fortunately will then be able to expand their companies by having in-house data scientists or third-party consultants who can assist in the selection process and application of these technologies.

Hopefully, 2.0 version will be adopted by 2025 and organization building will be driven mainly by computers. This will increase the efficiency of HR departments, giving the HR leaders a more strategic role thus reducing the need for a team of recruiters. This all impacts the influence of AI on other fields, as noted by Marc Andreesen in a recent interview for Vox about the health sector.

He considers that with doctors being equipped with computer knowledge, their jobs are becoming higher level and better paid. We are looking forward to welcoming the great partnership between technology and HR. This next wave of disruption is expected to be highly beneficial for the HR sector and eventually for the organizational and business performance.