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The Power of Purpose for a Successful Candidate Relationship Management Strategy

Forbes contributor Amy Phillip posed an important question in 2017 about candidate relationship management: Has neglect become the new normal? In this economy, where every company is being pushed[...]

January 28, 2019

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Contingent Workforce Management For Growing Businesses: How AI & Big Data Are  Changing The Game

The drive to adopt and invest in new HR technologies is more present than ever. Growing businesses are having to hire better candidates in less time, which is pressuring them to look for ways to automate their hiring process. Beneath the feature sets and fancy functionality lurks the specter of Big Data. In this post, we’re going to examine the latest trends in employment-centric software for contingent workforce management, and tackle a big question about handling Big Data. It’s a journey made possible by HR technology review firm Software Advice (a Gartner company), and Netflix, to name a few.

Growing businesses are investing in HR technology 

At the start of 2017, we published a series of articles discussing the top trends in the staffing industry that would likely influence the nature of recruiting and employment. What we didn’t really touch on was the role of HR technology in that process. Not too long ago, organizations prepared to invest in software platforms when their growth dictated the need for technology enabled efficiencies, such as automating once manual processes for tracking and managing employee data. Smaller firms remained content to rely on methods such as email and spreadsheets, which helped them avoid large capital expenditures on software. With fewer employees to oversee, these tools were sufficient to get the job done without perceptible losses in time or efficiency. However, that’s beginning to change.

Another research, Entelo's Recruiting Trends (2018), states that even smaller recruiting teams are likely to spend 1/3 of they working week with sourcing for only one position. This, combined with the fight for talent, accelerated the investments in automation process for a growing number of smaller organizations. Currently, 91% percent of the companies surveyed for the report are now supplementing manual processes with automation technologies, 60% of them investing specifically in AI-powered recruiting. The motivation seems to spring from a clear desire to meet and exceed performance management goals.

 

Big Data is becoming a bigger deal in staffing

In a similar Bersin by Deloitte study, 67 percent of companies looking to purchase new talent management software were driven by a keen interest in performance management capabilities, “either for the first time or as a replacement for existing solutions.” Likewise, Software Advice discovered that 44 percent of its respondents planned to increase their investments in the same area. In a comprehensive review of the entire human resources market in 2017, Entelo found that small businesses most commonly sought to automate sourcing (about 91 percent), e-mail communications (about 79 percent) and recruiting software (60 percent), in that order of importance. The impetus comes from the need to improve efficiency and accuracy specially in finding and sourcing top talent.

This is easily explained when you see that, for 62% of these companies, sourcing brings much more qualified candidates than inbound recruiting. Given the rise of employment risks and IRS penalties related to worker classification, specially for companies with a contingent workforce program in place, these tools were also viewed as instrumental in preventing misclassification of employees, miscalculating overtime and missing tax deadlines. Also, with 67% of the interviewees with a diversity policy in place, they all agree that automating and expanding their sourcing helps to find more diverse candidates. That's why having a Vendor Management Solution for small and medium business can be game-changing.

 

2019 is all about performance and metrics

Performance management has become an increasingly critical business concern for today’s organizations, and “the historical systems are not perceived as adequately supporting next-generation practices.” Existing systems are aging or already outdated. Close to 30 percent of the large organizations polled admitted that their performance management systems were more than seven years old. Even more challenging, many companies have continued to add disparate systems to accomplish specific tasks, yet have taken no steps toward consolidating that software into an integrated, enterprise-wide platform. As Bersin learned:

  • Of those replacing existing software, fully 75 percent sought to replace a standalone performance management application with an integrated suite solution.
  • The majority of organizations we surveyed (74 percent) use one software solution for their performance management system, but respondents reported that as many as ten or more systems are used inside their organizations today.
  • The source of this software varies:  41 percent of respondents reported that their performance management solutions are self-developed; 38 percent are provided by a vendor (often a suite vendor, although the module may be stand-alone) and 21 percent use modules that are within their core HR systems.

Software Advice also stressed the importance of integration, cautioning that while many software buyers select a stand-alone product that caters to an individual HR function, “this buying behavior may lead to issues down the road, as getting these separate best-of-breed systems to communicate with one another can prove challenging.”

 

The importance of HR technology in contingent workforce management

A new world of talent acquisition, engagement and management has dawned, one in which the concept of people data is inextricably tied to every decision we make. The trends we’ve just discussed in HR technologies are by no means restricted to organizations with full-time, direct-hire workforces. In industries where contingent workforce solutions are either outsourced to MSPs or managed internally with selected staffing agencies, talent tracking and performance management platforms are imperative. The complementary talent population is more prevalent and essential to the success of businesses today.

Strategic though they may be, contingent workers cut across an enterprise, its divisions and the multiple staffing suppliers engaged in an MSP program. A large benefit of an MSP program is its ability to promote visibility into key performance indicators, compliance, spend and productivity. Tracking personnel records and monitoring output are mission critical duties that are better enabled through advances in HR software, such as Vendor Management Softwares (VMS). 

 

Beyond HR Technology: a complete solution for growing businesses

Organizations that invest in analytics tools, business intelligence modules and analytical teams outperform their peers. And data enabled processes achieve much more than that. The world moves at a faster pace. Changes in business strategies, particularly around employment, require elasticity and sudden shifts. What today’s HR technology brings to the table is a heightened ability to predict and forecast: how many workers will be needed in the coming months, what skills will be required, what job categories will be needed, how much should those positions be paid, how quickly can they be onboarded and screened, which suppliers perform the best in specific programs, and so forth.

Clients want data. They want metrics, intelligence, transparency and solid benchmarks that allow them to predict future needs and counter potential fluctuations in market or organizational dynamics. Building a living scorecard, one that drives the client’s vision and strategic direction, is equal parts art and science. Tracking the proper metrics, those tailored to the buyer’s operational aspirations and culture, provides more than just visibility into supplier performance -- it fosters continuous improvement planning and allows all participants vested in the engagement to detect potential obstacles before they have a chance to impede progress.

To be meaningful, however, data must be interpreted and curated. And most growing businesses don't have the time to source candidates, manage suppliers, analyze data and so many other tasks, even with HR technology in place. That's why a new entity arises as a trend for contingent workforce management in 2019: an all-in-one solution that combines vendor management, AI-powered vetting technology, basic ATS functionalities and a powerful performance management dashboard. Welcome to the future of recruiting automation.

Sunil Bagai
Sunil Bagai
Sunil is a Silicon Valley entrepreneur, thought leader and influencer who is transforming the way companies think about and acquire talent. Blending vision, technology and business skills honed in the most innovative corporate environments, he has launched a new model for recruitment called Crowdstaffing which is being tapped successfully top global brands. Sunil is passionate about building a company that provides value to the complete staffing ecosystem including clients, candidates and recruiters.
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