1 Talent Acquisition Systems 2011 Executive Summary Sarah White, Principal Analyst April 2011 BERSIN & ASSOCIATES EXECUTIVE SUMMARY V.1.0
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3 Talent Acquisition Systems 2011: Executive Summary 3 TABLE OF CONTENTS Introduction 4 Key Questions Addressed in This Report 5 Research Methodology 6 What Is New in Talent Acquisition Systems 2011? 8 Summary of Key Findings 9 1. The Sales Cycle for Talent Acquisition Systems Is Taking Much Longer Mobile Solutions Have Transformed How Organizations Identify and Attract Talent Partnerships Are Driving Innovation Video Interviewing is Going Mainstream Market Consolidation Will Continue to Play Heavily in the Talent Acquisition System Landscape The LinkedIn Profile Will Be Interchangeable with a Résumé Integration with Social Networking Sites Needs to Engage Passive Candidates Source Analytics Are Becoming a Key Differentiator Solution Providers Have a Huge Opportunity to Address Contingent Labor. 13 Conclusion 14 About Us 15 About This Research 15
4 Talent Acquisition Systems 2011: Executive Summary 4 Introduction With a seemingly endless pool of job applicants, why is it so challenging for today s organizations to identify the right fit? In the past, recruiters have been tasked with filling open positions as quickly and as costeffectively as possible, often sacrificing quality of hire. Today, with an unemployment rate near 10 percent, and close to 20 million Americans out of work or underemployed, organizations can no longer settle for the wrong candidate. Yet, when facing a barrage of résumés and limited internal resources, the challenge of identifying and attracting top talent can feel overwhelming. Talent acquisition departments need help and, as a result, the value proposition for investing in a talent acquisition system (formerly known as applicant tracking systems) has never been greater. The talent acquisition systems market has changed dramatically over the past few years. Despite its maturity, this market continues to grow at a pace equivalent to that of any up-and-coming HR technology market. In fact, nearly 50 percent of organizations are likely to switch their talent acquisition systems provider over the next year. These systems have consistently gained momentum by offering enhanced capabilities that enable organizations to become more strategic and efficient in their talent acquisition processes. Yet, with recent consolidations and a new crop of providers entering today s talent acquisition systems market, making the right decision around recruitment technology can feel daunting at best. The purpose of this research is to give readers insights into the distinctions and overall market trends of the leading talent acquisition system providers available today. In our research, we explore: Various market trends during a recovering economy; Market consolidation; Market growth and potential for talent acquisition system providers; Recommendations for purchasing a talent acquisition system; The best practices for evaluating and selecting a talent acquisition solution provider; Key concerns during product implementation; Global support and configuration; Customer satisfaction; and, Key partnerships with talent acquisition add-on providers.
5 Talent Acquisition Systems 2011: Executive Summary 5 Key Questions Addressed in This Report This report will answer the most frequently asked questions on topics related to talent acquisition systems. What is the current state of organizations talent acquisition systems? What is a talent acquisition system? What features and functions are included? What are the underlying architectures required for success? What are the benefits of a talent acquisition system? How can this system help organizations integrate their talent acquisition processes? Which solution providers offer talent acquisition systems? How well do they support a truly integrated platform and core application functionality? How do the solution providers and their products differ? Given today s competitive HR and systems environment, how does an organization select the right solution? What are the business drivers for implementing a talent acquisition system? How does one cost-justify such a system? What are the most prevalent approaches to implementing a talent acquisition system? What are the best practices for implementation, governance, rollout and change management? What should organizations expect from the next generation of talent acquisition systems?
6 Talent Acquisition Systems 2011: Executive Summary 6 Research Methodology This research study was initiated in April 2010 and completed in October We invited representatives from U.S. and global corporations, nonprofits, government and higher education to participate in qualitative interviews to discuss their current talent acquisition systems. In July 2010, we surveyed talent acquisition professionals, HR practitioners and recruiters from organizations of all sizes across all industries. The survey yielded a large cross-section of respondents (see section, Appendix I: Research and Survey Demographics, for more specific information). The purpose of this survey was to obtain opinions from talent acquisition customers about the performance of their primary talent acquisition systems, to obtain information on customer satisfaction, implementation challenges and to identify industry trends. The objective of this research is to address market shifts and best practices, as well as to profile the leading talent acquisition systems in use by enterprise and midmarket organizations. By leading, we refer to the following: The greatest market share of FORTUNE 500 and Global 1000 companies; Market visibility; Product leadership; Financial stability; Product innovation; and, Customer satisfaction.
7 Talent Acquisition Systems 2011: Executive Summary 7 Figure 1: Leading Talent Acquisition Systems ADP Virtual Edge First Advantage Hodes iq HRsmart icims Jobpartners Kenexa Kronos Oracle PageUpPeople Peopleclick Authoria SAP SilkRoad technology StepStone SuccessFactors SumTotal Systems Taleo Source: Bersin & Associates, Our analysis approach included the following activities. We collected comprehensive profile data, based on a standard set of company and product questions similar to a request for proposal (RFP). We conducted detailed briefings, and evaluated the providers using a functional criteria matrix and use-case scenarios. We conducted customer reference checks for each solution provider. We developed a profile for each solution provider, including functional evaluation ratings and our own analysis.
8 Talent Acquisition Systems 2011: Executive Summary 8 What Is New in Talent Acquisition Systems 2011? Due to the nature of the labor market, the evolution of talent acquisition systems and workforce demographics, we have made some significant changes to this year s report. New features in this report include: Key partnerships driving innovation in the talent acquisition systems market; Integration with third-party recruitment services, such as background checking and résumé processing, social networking sites and HR management systems (HRMS) providers; Global solution providers; The growing demand for mobile solutions; Recent market consolidation and its impact on talent acquisition system selection; Change management and communications strategies during implementation; Leveraging social media through a talent acquisition system; and, Vertical solutions targeting industries, such as retail and healthcare. In our product analysis, we introduce for comparison new areas of functionality. Some of these categories include: Ability to apply for jobs using mobile devices; Ability to post jobs using mobile devices; Ability to share job postings through social networking sites, such as Facebook, LinkedIn and Twitter; Ability to identify internal candidates versus external candidates; Passive sourcing through the corporate career portal; Ability for candidates to respond to notifications they receive; and, Ability to save assessments to candidate profiles.
9 Talent Acquisition Systems 2011: Executive Summary 9 Summary of Key Findings 1. The Sales Cycle for Talent Acquisition Systems Is Taking Much Longer. Despite a strong demand for talent acquisition systems, organizations are still hesitant to make a long-term commitment to one solution provider over another. In many instances, the sales cycle can take up to three years, a significant increase from only six months a few years ago. One reason is that the success of a talent acquisition department is often measured by these technology decisions. Many talent acquisition teams are fearful that selecting the wrong solution may cost them their jobs, especially during a time of economic uncertainty. Another reason is that requests for proposal have become more complex. Organizations can become blinded by the bells and whistles of solution providers and, as a result, overcomplicate their RFPs. Finally, talent acquisition is no longer the only group involved in purchasing decisions. Procurement and IT are becoming a critical part of the selection process. Each of these groups brings a very different set of priorities and expectations to the table. Organizations need to clearly define their must-haves and nice-tohaves early in the selection process, and create clear use cases 1 involving every group before engaging any solution provider in the process. 2. Mobile Solutions Have Transformed How Organizations Identify and Attract Talent. Mobile is the latest craze to hit the talent acquisition market. Job candidates, recruiters and hiring managers have become accustomed to managing everything through their mobile devices. To further demonstrate this point, in Q1 2010, Apple sold more than eight million mobile devices, as compared with 3.36 million computers. 2 Customers recognize that mobile solutions will increase user adoption and improve the user experience. As a result, they are including mobile as a key 1 A use case provides a description of a sequence of interactions between actors, and the system necessary to complete a specific goal or function. Use cases are often co-authored by systems analysts and end-users, and are presented as a sequence of simple steps. 2 Source:
10 Talent Acquisition Systems 2011: Executive Summary 10 criteria in their requests for proposal and in their solution provider evaluations. The majority of the solution providers included in this report offer some type of mobile access, either through approvals or through an entire mobile solution. Those solution providers that are hesitant to expand into the mobile market will only miss out on future deals. 3. Partnerships Are Driving Innovation. Innovation is a major theme in today s talent acquisition market. Both organizations and solution providers are looking for sophisticated ways by which to engage candidates, build a talent pipeline and create a more positive user experience. Although several leading providers have developed forward-thinking enhancements in areas (such as analytics, interview management and candidate career sites), the talent acquisition systems market is highly commoditized. When one solution provider introduces new capabilities, the rest of the market follows suit. Most of the innovation is provided by supplemental products versus the traditional talent acquisition solution. These supplemental solution providers are partnering and often integrating with traditional talent acquisition systems to offer innovation in areas, such as video interviewing, social media, search engine optimization (SEO) and résumé sourcing. 4. Video Interviewing Is Going Mainstream. Video has become a popular vehicle for improving any talent acquisition strategy. Both employers and job seekers are experimenting with ways to enhance résumés, employer branding, job postings and onboarding. While the role of video is still up for debate in most of these talent acquisition areas, video interviewing has demonstrated its staying power for the obvious benefits in reducing travel costs and time to fill. More and more organizations are demanding integration from their talent acquisition systems with video-interviewing providers, such as HireVue and Greenjobsinterview.com. Google, Dish Network and Rio Tinto are all examples of companies that are investing in video-interviewing technology to effectively save costs and reduce time to fill.
11 Talent Acquisition Systems 2011: Executive Summary Market Consolidation Will Continue to Play Heavily in the Talent Acquisition System Landscape. Market consolidation is a reality in today s talent acquisition systems market as solution providers are looking to either expand their global footprint or build out the talent management suite. Consolidation began to shake up the market in 2006 with the acquisitions of BrassRing by Kenexa, VirtualEdge by ADP, and Unicru and Deploy by Kronos. Taleo s acquisition of Vurv followed in 2007 and, most recently, the company acquired Sonic Recruit in February The recent acquisitions of Peopleclick by the Bedford Funding Group to form Peopleclick Authoria and MrTed by StepStone indicate that the market is continuing to consolidate in a more strategic way. These providers have successfully communicated their strategies, executed rapidly on product enhancements and maintained a strong commitment to the customer. As organizations embrace the idea of one platform for their talent management needs, fewer standalone talent acquisition systems remain. We are likely to see more acquisitions as solution providers look to gain market share. 6. The LinkedIn Profile Will Be Interchangeable with a Résumé. LinkedIn has become one of the most effective tools for both job seekers and recruiters. It offers a way to strengthen employer branding, engage both active and passive candidates, and build a talent pipeline. Every solution provider included in this report offers some level of integration with LinkedIn. At the most basic level, these providers are broadcasting jobs. At a more sophisticated level, they are targeting messages to individual LinkedIn groups and passive candidates. Some of the leading providers have even responded to requests to upload and parse a LinkedIn profile instead of a résumé. Although still in its infancy, some organizations are starting to test out this concept since multiple traditional résumé formats have created a myriad of challenges for anyone involved in the applicant process. Similar to the concept of a standard application, a LinkedIn profile offers a common language and can offer some standardization around the process. Organizations
12 Talent Acquisition Systems 2011: Executive Summary 12 looking to create a more positive candidate experience, specifically with experienced employees, will likely consider this option. 7. Integration with Social Networking Sites Needs to Engage Passive Candidates. Organizations at both the enterprise and midmarket levels are looking for some type of integration from their talent acquisition systems with social networking sites, such as LinkedIn, Twitter and Facebook. Many organizations do not necessarily understand how to use these sites yet, but do recognize the value they can provide to a company s branding and sourcing efforts. Every provider in this report offers some way to broadcast and share jobs on these social networking sites from a candidate career page. True differentiation in this area can be found with those providers that offer ways to engage passive candidates and even to refer candidates. Talent acquisition systems will need to include application programming interfaces 3 (APIs) and bidirectional integration with social networking sites as a standard in the future. 8. Source Analytics Are Becoming a Key Differentiator. Source analytics can show organizations where candidates are coming from and how they are spending their sourcing dollars. When reevaluating job-board spend and considering social networking, these capabilities can be incredibly valuable to an organization. These dashboards provide unbiased data-driven decisions to guide recruitment. Through customized dashboards, SEO keyword analysis and custom reports, organizations can improve employee referrals and communications. While there are still some technical limitations, the benefits of sourcing analytics extend beyond talent acquisition. and can help improve marketing and communications departments. 3 Application programming interfaces or APIs offer the ability for one application or tool to speak to or be embedded within other applications or tools a hallmark of Web 2.0 technology.
13 Talent Acquisition Systems 2011: Executive Summary Solution Providers Have a Huge Opportunity to Address Contingent Labor. With workforce demographic shifts, recent economic conditions and more baby boomers seeking work post-retirement, contingent labor is the future of our workforce. The relationship between employer and employee has been tainted over the past few years. Organizations often no longer seek a full-time hire and job seekers want to be on their own terms. As a result, contingent labor is on the rise. Organizations typically manage this workforce through a vendor management system but few talent acquisition system providers offer solutions to address this growing market and fail to take a holistic view of their talent (see Figure 2). Peopleclick Authoria is one provider that has a long history of accounting for every segment of the workforce, including contingent labor.
14 Talent Acquisition Systems 2011: Executive Summary 14 Conclusion The leading talent acquisition systems will continue to develop beyond core functionality (e.g., applicant tracking and candidat requisition) into areas such as contact management, onboarding, employer branding and internal mobility. Understanding your organization s needs and considering your talent management strategy along those lines will help locate software automation solutions that support those objectives. When considering product differentiators, consider from what position of strength did this application develop? Get to know the other Figure 2 System support your contingent workforce Yes 26% No 74% customers and you will be a resource for each other. We hope that Talent Acquisition Systems 2011 serves as an educational tool for project teams and their key stakeholders to understand the current state of the market and can also serve as a frameork for solution selection. Figure 2: Talent Acquisition Systems That Support a Contingent Workforce Does your system support your contingent workforce? Yes 26% No 74% Source: Bersin & Associates, 2010.
15 Talent Acquisition Systems 2011: Executive Summary 15 About Us Bersin & Associates is the only research and advisory consulting firm focused solely on WhatWorks research in enterprise learning and talent management. With more than 25 years of experience in enterprise learning, technology and HR business processes, Bersin & Associates provides actionable, research-based services to help learning and HR managers and executives improve operational effectiveness and business impact. Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks and in-depth market analyses designed to help executives and practitioners make fast, effective decisions. Member benefits include: in-depth advisory services, access to proprietary webcasts and industry user groups, strategic workshops, and strategic consulting to improve operational effectiveness and business alignment. More than 3,500 organizations in a wide range of industries benefit from Bersin & Associates research and services. Bersin & Associates can be reached at or at (510) About This Research Copyright 2011 Bersin & Associates. All rights reserved. WhatWorks and related names such as Rapid e-learning: WhatWorks and The High-Impact Learning Organization are registered trademarks of Bersin & Associates. No materials from this study can be duplicated, copied, republished, or reused without written permission from Bersin & Associates. The information and forecasts contained in this report reflect the research and studied opinions of Bersin & Associates analysts.
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