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eRecruiting Benefits

(November 05, 2003)
How does eRecruiting benefit the overall enterprise?

Long term readers are probably tired of our relentless reminders of the impending demographic changes. The top 50 industrialized countries are at or below Zero Population growth resulting in rapidly aging societies and shrinking workforces. Until this moment in time, no one has ever had to grapple with the question of maintaining growth while population stabilizes and then dwindles. It is a reality of significant impact in spite of the fact that it is counter intuitive.

Those old enough to remember the last economic downturn realize that today's inconveniences are nothing like the times that inspired the loss of a generation's dreams and double digit unemployment. Almost without note, our modest economic downturn has not meaningfully changed the historically low unemployment rate of 4.5%. At 4.5%, skilled workers have new jobs before they receive termination notices. The labor market appears to be running independently of the overall economic environment.

The last real recession, nearly 14 years ago, was caused by twin backups in the human and physical inventories of industrial economies. In those days (and the centuries preceding them), an economic downturn was always caused by the accumulation of errors in the distribution and inventory system. The economy cooled while capital was recovered from the hard goods clogging the system. Just-in-time inventory techniques have made a repetition nearly unthinkable.

The future holds an entirely different story. Economic downturns will be caused by imbalances in the human inventory. Rather than surpluses, the accumulation of bad hiring decisions and over optimistic planning, the causes will be shortages in key sectors.

Shortages are extremely predictable across the range of "white collar" occupations with major dislocations in regions where advanced education has lower penetration. As predictable is an acceleration of the tendency of jobs to be more fully projectized and therefore shorter in duration. Retention programs (or hoarding), will only have modest success in the downturn which will feature rapid wage escalation within some specialties (nursing and health care, for example).

In other words, the medium term benefit is preparation for a sooner than generally anticipated economic revision.

Occasionally, we've mentioned the staggering notion that external entities know more about a given company's workforce than the company itself. Given the fact that human inventory is the prized asset of any enterprise, this significant turn of events (impossible prior to the advent of the internet) will create defensive plays in abundance in the sub-medium term (during the next couple of years). Without a clear idea of the skills and aptitudes of the existing workforce, and in the face of a serious threat from these new external entities, we expect a great deal of attention to be focused on "getting better control of the human inventory". Almost no vendors are poised to make serious offerings in this arena and the cost will be very significant. eRecruiting programs provide the foundations for large scale measurement and management of human inventory in a way that no other existing systems can.

In the very short term, eRecruiting benefits include shortened cycle times and the ability to track the effectiveness of various inventory sources. Like PCs, in their early days, the results are suggestive rather than formal. In fact, it is reasonable to argue that the immediate results of using eRecruiting techniques are in decline as the result of broad adoption (In other words, when everyone does something, there is no comparative advantage.)

The typical benefits cited by industry salespeople include faster turnaround, broader access, "24 by 7" advertising, apples to apples comparisons and access to untapped pools of talent. In reality, it takes a sophisticated and well developed employment branding campaign with broadly targeted and distributed advertising (using one of the "JAD" services) to achieve these results. Increased awareness of the importance of recruiting as a line manager's responsibility, the reassertion of referral processes and a rethinking of the human inventory pipeline are some of the less tangible benefits. It is increasingly possible that small companies can begin to take advantage of the collaborative hiring processes that make companies like Microsoft so potent as recruiting firms.

In short, we are in a primitive and early phase of the next generation of recruiting. Early participation keeps a company competitive and prepared for the environment in which real human inventory control will be essential.

- John Sumser © TwoColorHat. All Rights Reserved.

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Materials written by John Sumser © TwoColorHat. All Rights Reserved.
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