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Guest Article
Contributions by experts working the real world of online screening and assessment.
The Zen of HR: Technology
By Raghav Singh, SPHR
HR today is not a very nice place to work. Gone are the days when HR professionals could roam the halls of companies professing to be doing noble work in the cause of employee relations or diversity initiatives or something equally critical to the continued survival or success of their employers. The golden age ended in 2000 and HR now finds itself being forced to demonstrate value. A headline from AMR Research’s Human Capital Management Report in 2003 spelled it out, in case anyone was still under the illusion that there was any chance of a return to the glory days. The headline read – “HCM initiatives signify the need to cut costs while attracting, retaining, and motivating top performers.” The report went on to say that:
HCM professionals face a conundrum in 2003: They are under constant pressure to cut costs and do more with less. Less money, fewer staff.
There were portents to be sure that the end was near. An article in Fortune, published around 1997, was titled – “Eliminate the HR department.” The author wrote that there was nothing that HR did that added value and everything could be done better and cheaper if outsourced. He was roundly criticized and vilified for his version of the Emperor’s New Clothes, and eventually wrote an apology. That’s unfortunate because he had it right. He must be feeling pretty good about himself right about now. Outsourcing is the dominant trend in HR and the profession is under tremendous pressure to demonstrate value.
At the IHRIM (International Human Resource Information Management) conference in Orlando, in April of this year, the entire focus of the conference was outsourcing. At a panel discussion of industry experts one expert predicted that within five years 80% of the work done by HR would be replaced by technology. That timeline seems overly aggressive (and the person making the prediction was shot down by every other panelist) but the trend cannot be denied. The same AMR report cited above also mentioned that:
This riddle does have an answer, though: technology. Users are recognizing that investing in better technology helps to get and keep the best talent.
Trouble is that HR is doing little to influence technology development to support activities that add value. What has been developed seems ill-suited to save much of HR from extinction. HR technology is, for the most part, geared towards process automation. That is, efficiency instead of effectiveness. Obviously, effectiveness requires being efficient but HR technology shows few signs today of evolving to the point where it adds genuine value. At first this made sense since there was a lot of low-hanging fruit. Payroll and benefits systems automated mundane processes. Staffing was next and Applicant Tracking Systems (ATS) developed to support data collection. But further development has stalled. Much of what is being developed seems focused on just automating paper processes – whether it’s new functionality in an ATS or a learning management system. These systems reduce costs and promote standardization but in terms of value added they do little. Cost savings quickly hit a floor below which any further reductions are marginal at best and the benefits of standardization are intangible. In fact, the inflexibility that HR technology imposes on organizations makes it less attractive in today’s dynamic environments.
HR seems to be doing little to remedy this situation. I recently attended a retreat of senior HR professionals. One of the facilitators asked the participants how many considered themselves to be business partners. This was like asking the attendees at a Baptist convention about how many believed in God. Still, these were senior HR professionals from some of the largest companies in the Midwest including several in the Fortune 500. One would expect someone to at least admit that, just maybe, they weren’t “at the table”. That was not to be the case that day. This navel gazing is what allows HR technology to stay mired in a swamp of useless functionality.
The irony is that by adopting technology as it exists today – HR just reinforces the view to their employer’s executive team that they do nothing of substantive value and focus on process, instead of results. The conclusion being that HR can be readily outsourced.
Staffing is one aspect of HR’s work that can benefit from technology while demonstrating value. Staffing is a business critical process that impacts the future of an on organization. Demographic trends and economic projections all point to an imminent return to the days of a shortage of talent. Also, to use a very trite cliché – staffing is not rocket science. What’s required to have effective staffing capabilities can be well supported by technology. However, despite obvious needs and demand, staffing related technology falls critically short of delivering value.
The technology to support staffing exists mainly in the form of ATS. There are over 100 vendors providing ATS products. These products are almost exclusively focused on managing the process, instead of providing high value added services such as sourcing and screening. Much of the time spent in staffing is devoted to finding (sourcing) and evaluating (screening and assessing) candidates. For HR to add value, and do more with less, the technology in an ATS should focus on these aspects.
Take sourcing for example. Effective sourcing, for that matter, effective staffing, requires that sourcing be a data driven process. This is more than just source tracking – which is a quantity measure. There’s also a need for assessing source quality – that what sources generate the “best” candidates as measured by skills, abilities, tenure and ultimately performance. Instead of just measuring the cost of hiring HR needs to measure cost of sourcing. The former is just an average that includes many fixed or sunk costs such as the time managers spend in interviews. CFOs do not care if a fixed cost item is used more or less. What they do care about is hard dollars being spent on sources of little value. An inability to distinguish the two does not get one invited to be “at the table.”
Measuring source quality requires that candidates be screened and assessed. ATS products provide some screening capabilities but they do a very poor job of integrating assessments. The functionality usually supports the redirecting of candidates to an assessment instrument and, in some cases, attaching the results to a candidate’s record. This is a partial solution at best. For assessments to be more effective the results need to a) validate pre-screening, b) drive further action and c) be tracked along with source data. That is, assessments should demonstrate the effectiveness of pre-screening and sourcing.
Alternatively, assessments should be used in combination with matching technology to narrow a pool of candidates to those that best match the job requirements and demonstrate the necessary skills. This is critical in order to improve the productivity of recruiters, but few vendors are doing much to improve the situation. Some have actually made things worse by suggesting that their screening technology is an effective alternative to using assessments. The “best” automated screening simply allows for candidates to be presented a set of questions with the responses weighted based on job requirements. The most that any such functionality can accomplish is a limited amount of low-level screening. The effectiveness is entirely dependent on the content, i.e., the questions used and the weights assigned. Screening can augment assessments but not replace them. The content is not tested for validity and is frequently poorly created, given that the developers (recruiters) have little training or education to do so.
So once again, by failing to channel development efforts in a direction where they add value HR has allowed vendors to set the course. Technology developers don’t deserve all the blame for this state of affairs. They’re simply doing what seems easiest. To the extent HR is willing to keep buying products of mediocre functionality there’s little incentive to develop anything better. Nonetheless unless the profession wrests control of the direction HR technology will evolve, the prediction made at IHRIM just might just come true – sooner, if not later.
Raghav Singh ( ) is an ATS expert who has previously been in product management and marketing roles at Peopleclick and Recruitsoft. His career has included work as a consultant on enterprise HR systems and as a recruiting and HRIT leader at several large companies. He writes articles for the Electronic Recruiting Exchange.