The way we do business today is almost unrecognisable compared to how we worked only a few years ago. The emergences of digital technologies are changing the way we work. From invoicing customers on your mobile phone to Skype calls with clients based thousands of kilometres away, business life as we know it has changed forever. You don’t need to look further than organisations 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, but is on the cusp of something great: recruitment.
Despite some positive change, recruitment is one of those critical business functions that has seen minimal change. There is still the process of sifting through CVs, arranging meetings and making telephone calls just to find the perfect candidate – all taking lots of time (and patience). Change for change-sake is never worthwhile but when it comes to recruitment, the lack of change in how businesses hire is having a significant negative impact.
According to our own research, it currently takes Australian businesses on average 60 days to hire talent and according to People Driven Performance the cost of replacing a highly-skilled or experienced employee can cost a business up to 150% of an employee’s annual salary. Add this to the productivity loss of not having a team member and it creates a major challenge for businesses. While it might look bleak, the opportunity provided by digital tools is huge and helping to drive efficiencies and even more growth in the recruitment industry.
Keeping up with technology
Digital and innovative tools should not be seen as a threat to businesses but rather as a better way to do business and increase profitability. Instead, digital tools are supporting business to innovate and be efficient and this should be no different to the way business recruits.
At the moment, innovation in recruitment is largely taking one part of the hiring process and putting it online. This is only creating minor changes; it’s not game-changing or having significant impacts on a business’s bottom-line. For any digital revolution to succeed, it must take into account a specific problem, and then use technology to address this. For any business, it needs to be quicker, cheaper and easier and be inviting for people to use it.
While the rise of social media sites such as LinkedIn and job boards have helped, these are still primarily online versions of existing methods. The fundamentals behind recruitment, the time and cost to hire employees have not evolved. LinkedIn has been popular since its inception; however, it is becoming more apparent that its main benefit is for networking. It is 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 – instead of reading CVs on paper, you just read them online. You’re also left with the age old problem of how to contact and engage a passive candidate and encourage them to consider leaving to work for you. It’s a specialised sell, and one that good recruiters spend careers refining.
To really solve the problem and deliver better hiring outcomes faster and more cheaply, you need a marketplace that supports and empowers the interests of all participants: employers, recruiters, and candidates alike. You need to streamline the process, and this can only be done by using cutting edge data science and a forward thinking approach to social, big data, and machine learning to ultimately benefit business.
Make better decisions
Last year we surveyed the views of hiring managers across Australia and found over half of new recruits taken on by businesses didn’t work out within the first two years. This means even though businesses are putting a lot of energy and work into finding the right person, more than one in two does work out for the long-run. The goal of effective recruitment isn’t to fill roles for the short-term but to find talented and ambitious individuals that will support your business in the long-term.
We all know that the productivity of a great candidate far outweighs that of an average one. It’s worth its weight in gold.
Imagine this – instead of taking two to three months to hire them, it takes ten days – less than half the time.
About the author:
This article was written by By Ben Hutt, CEO of digital recruitment marketplace The Search Party.