HRMDirect COO Colin Kingsbury writes on the latest in recruiting and technology.

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I had a doctor's appointment this morning and when I went in, his desk was covered in stacks of manila folders. "I see you use the same organizational system I do," I said. As it turned out, a few months ago they decided to convert to all-electronic records, and because they elected to do the data entry themselves, it was taking a lot longer and costing a lot more than they initially expected. The other problem was that since it was a home-grown system built by the hospital's IT department, "everything needs to be done @#$-backwards," as my doctor put it.

This reminded me of how much paper is still involved in the recruiting process for many companies. Next to finance, HR is probably the leading killer of trees in an organization, from application forms, to background checks, and new hire paperwork. While converting to an electronic process can hurt a little at the start, the payoff isn't just greener for the environment, it also leads to easily-quantified cost reductions and efficiency gains.

• Online application forms : HRM can turn your paper form into an electronic one, and you'll be able to collect applications online and access all of your candidate records from any PC with a web browser.
• Instant background checks :
Eliminate faxes and follow-up calls by ordering background checks online as soon as candidates are identified. Many checks can be completed online in just a few minutes.
• Pre-employment screening :
Applicants can complete online skill and behavioral tests as they apply, helping you to improve performance and reduce turnover by up to 20% annually.
• Compliance: Automatically survey and track a full suite of EEO and OFCCP compliance statistics, and generate reports with a single click.
• Permanent candidate database: Next time you hire, start with your own database that costs nothing to search.

These are just a few of the ways that online recruiting can improve your bottom line, and clear off the top of your desk. But the most important feature that we offer is knowledgeable service, which is included in all subscriptions at no additional cost.

In contrast to older ATS vendors accustomed to working with large clients, HRMDirect's account managemers spend most of their time with organizations with anywhere from a few hundred to a few thousand employees, and is used to the unique challenges companies of this size face in transitioning to a paperless process. To find out more, check our online price sheet or click to talk to our sales team.

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permalink  |   ( 3 / 443 ) Every so often I hear a song on the radio that catches my ear and off I go to iTunes to look it up. This is dangerous because once there, odds are good I'll spend the next hour clicking related links until I find myself staring with glazed eyes at God only knows what twenty times removed from where I started. What Paulina Rubio has to do with delta blues I'm not quite sure, but that's how it goes.

There's a lot of ongoing talk about the power of social media, but in the case of iTunes, it also reveals some interesting limitations. While Amazon's book and product reviews have generally struck me as very well balanced, even when the subject is controversial, reviews of music on iTunes suffer from more grade inflation than a college quarterback majoring in Phys Ed.

To be fair, it's not exclusive to iTunes--CD reviews on Amazon seem to give the same scores as the albums get on iTunes. Compared to a DVD, hardcover book, or most consumer products sold on Amazon, a CD is less expensive, and books would seem to have many of the same creative and emotional attachment qualities as an album. Maybe I'm the guy in the asylum who just knows he's the only sane one, but the only thing I've found true about iTunes' ratings is that 4/5 stars *might* indicate the album is average. Or it might indicate that the group has a large base of fans who wished they turned out a 4-star effort.

All of this raises interesting questions for those who think social media will somehow improve the job-hunting/recruiting process. Are current employees of a comapny going to give jobseekers objective opinions about what working there is like, or are they going to overlook facts to present views which reinforce their own (positive or negative) biases? Some years ago, I asked my then-boss who we could use for a reference for a particular specialized prospect, and he suggested a client who was on the verge of firing the company. I asked him what he was smoking to make such a suggestion, and he chuckled and said, "never underestimate the unwillingness of a person to admit they made the wrong decision."

Needless to say, it is not clear to me that social media must do anything except amplify the volume of whatever process it is injected into. At the end, the process is still driven by people, and we haven't changed much.

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permalink  |   ( 3 / 521 ) About a month ago I posted why the typical software-vendor ROI story should be filed under "fiction" and signed off by threatening to go after the RFP process next.

Along the way to writing this I experienced one of those moments of clarity where all the complex and overlapping ideas I'd started out with just sort of fell away, leaving behind a single explanation, elegant in its simplicity:

RFPs are like job descriptions, and RFP responses are like resumes

Every day HR departments terminate employees whose resumes met every stated requirement on the job description. In many cases, the job description and the resumes it attracts all deserve to be filed under "Fiction."

As a buyer, the purpose of an RFP process is to allow you to differentiate between a selection of products to solve a particular need. By giving everyone a list of standardized questions, you're able to make decisions on a more objective basis. (If you work for one of our competitors, you can stop laughing now and just email me a copy of your resume--it's ckingsbury@hrmdirect.com.) Problem is, that's just not how it works.

The typical RFP either asks the vendor to respond to a series of "can your product do X" questions, or, in some cases, asks them to rate themselves on a scale of 1-5 or some such. About a year ago in When Bad Features Feel Good I wrote, "Successful vendors are successful because they build products that people buy. That's obvious but what's more often ignored is that people often don't buy the 'best' product objectively speaking." So let's add another item to the list:

Successful vendors are successful because they're better than everyone else at convincing people to buy their product.

Just as a person putting "Java" on their resume serves as no guarantee that they are any good at programming in it, a vendor giving a positive answer on an RFP serves as no assurance that you'll actually like the product. You might think your RFP is so cleverly-written that we'll actually be forced into giving candid, clear responses--but remember, two can play at this game, and vendors get a lot more practice. After all, 80% of people think they're in the top 30% in terms of driving ability.

My advice is to look at the RFP for what it is: a prenuptial agreement that should be taken seriously by no one except the purchasing department. It will not help you to differentiate in terms of vendors' abilities to deliver a satisfactory solution. It will help to differentiate between those vendors who have large sales departments and/or teams of proposal writers to respond to every RFP that hits their inbox and pass that cost along to you. Salesforce.com is illustrative in this regard: their most recent annual report shows that in 2006, they spent 5 times as much on marketing and sales as they did on research and development. This represents an improvement actually, considering that the gap in 2005 was a factor of ten.

Just as requiring a Master's degree for a job which doesn't require one can have an adverse impact on your applicant pool, sending an unqualified, 30-page RFP out to two dozen vendors pretty much ensures that the responses you get will be composed mostly of the costly and the desperate.

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permalink  |   ( 3 / 428 ) There's currently a thread on ERE asking how one goes about calculating the ROI on an ATS. You can replace "ATS" with any other business software acronym here and it's the same story pretty much: we can help you shave a nickel off every $5 bill that passes by, and at the end of the year you'll have this jar full of nickels.

Perhaps the best put-down of this I ever received was some years back when I was an SE presenting a knowledge management product to a leading manufacturer of power-generation equipment that would have helped their techs find answers and relavant documentation much faster than they could currently. They had about 8,000 techs, so these were big numbers we could work with. We ran tests that showed techs spent an hour or so looking things up each day, and with our system, they could find the same info in 30 minutes or less. Multiple .5 hours times 8000 people times $50 per hour cost and we could show a positive ROI in one day.

The decision-maker never argued with our basic assumptions. He just said, "So they save 20 or 30 minutes? They'll just take an extra cigarette break." Far from being flippant, the VP was making a really important point. You can definitely get the pennies and nickels out of the process, but they have a habit of disappearing on their way to the jar.

ROI analyses work well when the dynamics of the system are very well known. For instance, the ROI on replacing a dirt-cheap inkjet printer with even a moderately-expensive laser printer is a no-brainer if you do much printing, because the laser doesn't guzzle ink that costs more than first-growth Burgundy by volume. You can easily plot a graph that shows that after X pages, the laser will be putting money back in your pocket. The variables are easily identified and quantified.

Looking at the ATS business, there is a major gap between cost and value. We charge $1200 per year per recruiter using our product, and we know from our clients that the vast majority of users spend nearly their entire working day staring at our system. Many of those users will cost $100k or more in salary and benefits, and they use our system because it makes them vastly more productive. How do we know? Because not a single client whose subscription was up for renewal has ever cancelled because "we realized we really don't need an ATS after all." A huge chunk of our business comes when a new head of recruiting or HR joins a company that doesn't have an ATS and says, "you gotta be kidding me!"

How do you quantify that value? Time-to-hire may not be good because the time saved by the ATS may accrue to recruiters spending more time sourcing or screening, to give just one example. There are a lot of moving parts, but I think it's safe to say that if ATS's were as anti-productive as they are often made out to be, there wouldn't be such a strong market for them that a company like HRMDirect could add 70 clients in the past 12 months without spending Jobsterbucks on marketing. But because we can't pin the numbers down the way we can an inkjet-vs-laser, we end up charging what the buyers are able to pay. CRM systems, which in many cases provide a similar set of functionality to our ATS, often sell for much more. Why? Because they're often bought by sales departments, which have far better access to budget.

In my experience, the sort of ROI analysis attached to most software buying decisions is made after the vendor has been selected, which is to say after it really matters. More often than not, the analytical model used to calculate the ROI was provided by said vendor, and is about as objective as asking a Red Sox fan what she thinks of this year's Yankees. But then, most buyers are by this point in cahoots with the vendor, and care about the ROI case only to the degree that it provides posterior insurance should the decision prove unwise*.

And to be entirely fair to all involved, often this is just a case of the buyer complying with internal bureaucracy. I wonder sometimes whether the finance departments that ask for this stuff really look over it carefully each year, or whether everyone except the shareholders is in on the joke.

All of this isn't by any means to say that thinking about things in terms of ROI is fundamentally misguided. But the systems by which we approach this today are for the most part barely nicking the surface of what's really going on. What I do know is that once a recruiter starts using a tool like Resume Direct, it becomes an indispensable if unglamorous part of their job, for less than most of them spend at Starbucks on their way into the office. Maybe our applicant tracking system is really that much better, or maybe people just like to complain, but I don't think I'm hallucinating.

If there's any good news in all this, it's that I'm being asked to provide these sorts of ROI studies far less often than 2 or 5 years ago. The once-ubiquitous "ROI calculators" (which are about as serious a forecasting tool as a magic 8-ball) no longer occupy prime billing on vendor websites. I'll take progress where I can get it.

* And therein lies my next post, which will be about ROI's evil degenerate twin, the dreaded RFI.

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permalink  |   ( 2.9 / 823 ) Over the weekend we released Resume Direct 2.1 as a way of celebrating two years (to the day) since launching the beta. We've added over 70 clients since then (60 of them in 2006 alone) and the functionality we offer has grown far and wide with them.

Aside from some great new features like custom fields, the largest part of this release was dedicated to an "Extreme Makeover" of the requisition UI screens. The requisition pages have probably undergone more changes in the past two years than any other single part of the system. In 2005 it was little more than title, department, and location. Now there are roughly two dozen standard options, and with custom fields, clients can take that number as high as they want it.

Starting around six months ago we began noticing that in both demos and new client training sessions, an inordinate amount of time was being spent on screens that represented less than a quarter of the overall functionality we offered. No one (either prospects or clients) was complaining that it was too complicated, but the internal feedback loop between our support and training staff and the product development team kept coming back and saying "we need to do better."

Design-centric thinking may be newly in vogue in the software industry but for me personally it is old hat. Both of my parents were working artists, my father the head of creative services for nearly thirty years at the fragrance company Coty. Along the way he got to work with Sophia Lauren (who once baked him banana bread in her hotel suite) and threw away a bunch of original sketches by Andy Warhol, then just another mediocre freelancer looking to make a few extra bucks.

One of his greatest successes was the launch of Exclamation! in the late 80s. Perhaps his proudest achievement was to see the bottle exhibited at the MoMA, which had been his favorite museum since he was in art school. It's not an exaggeration to say that bottle helped put me through college. What is perhaps the most fascinating thing is that when I mention it to people, the first thing they remember isn't what the fragrance smelled like, but what it looked like.

For HRMDirect, the benefits of good design are no less acute:

- Reduced training cost
- Reduced support cost
- Increased adoption by end-users (especially hiring managers)

Most software vendors only care peripherally about these issues because:

a) they make money charging extra for training
b) they make money charging extra for enhanced support
c) the licenses were sold up front, so it's out of their hands

Why does HRMDirect care? As a software-as-a-service provider we are set up entirely differently.

1. We include training in our base prices, so the less training clients require to become effective, the better we do

2. We include full support in our base prices, so the more support clients require, the less money we make

3. Our licenses are sold annually, so we need clients to renew and hopefully increase the number of licenses each year to succeed.

In a SaaS world, we succeed the more closely we align with client needs, and good design, an afterthought in virtually every system out there, takes pride of place for us. While I don't know that I'll ever see screenshots of our new requisition UIs in a museum, and I'm quite sure that Scarlett Johanssen will never bake me banana bread, good design sensibility is in my genes and permeates everything we do here at HRM.

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