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21 May 2013

Behind the Buzzword: The Commoditization of HR & Recruiting Innovation

Posted by Talemetry Today


It seems counterintuitive to take a step back and challenge the basics of innovation, but after a whirlwind of conferences these past couple of weeks, it seems apropos to pause and ask: when did HR and recruiting innovation become so, well, stale? The word ‘innovation’ gets bandied about so much in the HR and recruiting space it has become, ironically, a tired cliché. But just like the word ‘influence,’ this is one subjective term that, objectively, really can’t be defined (at least by consensus), much less measured.

The term was applied by a plethora of start-ups and established players for a wide plethora of products and solutions that, inherently, seemed anything but innovative. Well, make that to anyone who doesn’t have a ton of venture capital to spend. For example, at the HRO Today Forum a few weeks ago, I had the opportunity to be a part of the judging panel for the iTalent competition, which was similar to the start-up competition at the Recruiting Innovations Summit in San Francisco Talemetry attended last week.Businesswoman hand touch cube as symbol of problem solving.jpeg

Entrants were judged on 5 separate categories, with each category weighed equally. The five categories were ‘technology, ‘pitch,’ ‘business value, ‘viability,’ and, of course, ‘innovation.” The judging criteria defines this as:

Innovation - how innovative is the approach, vs. a late market catch-up play?

As any third grader knows, you can’t define a word by using it in its definition. But asking for clarification is similarly amorphous, particularly in an industry like HR and recruiting where almost everything is a late market catch up play. At least compared to consumer tech. But as this ballot illustrates, only in this industry are technology, business value and viability independent outcomes rather than prerequisites for the existence of HR & recruiting innovation.

Many of the start-ups pitched in both competitions are incredibly well funded and have gone through several rounds of financing and unsustainable growth of both headcount and hype that one has to ask when, exactly a company needs to stop starting up and start, you know, actually doing.

Video interviewing was around five years ago. It was just called Skype. And enterprises were using it then, an established part of the international hiring workflow for one Fortune 50 company in 2007, according to official HR policy and personal experience. Job applicants were looking for jobs on their smart phones then, too, using job board aggregators (I have vivid memories of scouring Indeed every day on my state-of-the-art Razr) – it’s just that at some point, they had to actually go on and apply. Or, I suppose, have very nimble thumbs and keen eyesight to go through page after page of ATS populated pop-ups and pull-downs.

The problem remains fundamental: candidate experience. But we find it somehow profound when someone says (as they did at least twice last week) “candidates are consumers and customers.” Which means, from a software perspective at least, they’re users, too.

What seems to be lost in a lot of the demos and pitches I’ve seen this year is that while the candidate focus is nice, it does indeed lag the market in the sense that consumer expectations far outpace those in the HR and recruiting market. And when it comes to fixing the candidate experience, individual recruiters trump any enterprise technology – because no technology can change an entrenched mindset.

Of course, that mindset in most end users of talent acquisition and management has already changed – but again, that change ends at work (or a corporate firewall). But by applying the same level of scrutiny that they do for a big ticket personal electronics purchase to these expensive enterprise point solutions, these talent leaders (and even industry analysts) would likely realize how ridiculous and commoditized this space has become.

Imagine walking into, say, an Apple Store or Best Buy and buying software that’s really a little pricey for what you were looking for (how to upload videos from my new digital camera into my computer), and won’t actually solve the problem (new USB cable), but once fixed, will solve the problems you don’t have yet (professional editing capabilities for the videos trapped on the camera). Most consumers wouldn’t make that purchase in the first place, or at least, until they had solved the initial problem.

But what if that same software you just laid down the plastic for not only came with not only no 30-day return period, but a three year contract? And that most of those cool features and functions that you were promised were just “on the product roadmap,” and “should be ready by next quarter?” You’d never make that purchase – no consumer likely ever would. That's why returns and exchanges exist in the first place.

But that’s exactly the premise so many HR and recruiting 'innovations', technologies flooding the marketplace seem to espouse as a viable go-to-market strategy. The trade off, of course, is innovation – no one wants to be a late adopter. But if the fundamental problem is that your operating system – your ATS – is obsolete or cumbersome – then no amount of after market add-ons will make the core user experience any better or more up to date.

No wonder that even after two solid days of hearing some of the most cutting edge and innovative products and technologies in the space pitch, Recruiting Innovation Summit attendees returned with the feedback that their biggest collective challenge (cited by over 40% of the attendees) was systems integration, decidedly unsexy compared to, say, talent communities or deep web sourcing.

But the existence of so many disparate systems in the first place suggests that this kind of “innovation” has, like most that passes as innovation, been done before. And had any delivered as truly promised, the integrations challenge wouldn’t be a pervasive problem. Or any problem at all. But, of course, viability and business value aren’t really independent of innovation. Nor is innovation subject to the terms and conditions of a three-year contract.

And they shouldn't in a $140 billion a year market where the few independent public companies trade at 20-30 times revenue or have been acquired for similarly staggering multiples by established players, similar to Microsoft’s purchase of Skype, the original video interviewing technology, or Yammer, the original enterprise collaboration tool.

These purchases still didn’t fix the train wreck that is Windows 8 or make Microsoft seem any more innovative for consumers – proving you can’t have great software without the underlying systems capable of supporting that software. Of course, if both products had an HR and recruiting bent, they’d already be category killers instead of (software) portfolio pieces in the already matured and increasingly sophisticated consumer software segment.

But instead, venture capital continues to pour into start-ups which address these and other solutions that, like Duke Nukem Forever, based on the original gammification engine, turn out to be nothing more than vaporware?

The answer, like so much in high tech, is decidedly low tech. To quote Gilbert and Sullivan (innovators before the term got cheapened), within the HR and recruiting space, “as a company, you’ve come to utter sorrow, but the liquidators say, ‘never mind you needen’t pay,’ so you start another company to-morrow.”

Topics: Talent Trends, recruiting trends, news, ATS, hr technology, candidate experience, events, talent acquisition

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