NRG ENGINEERING PTE LTD. Research Efficient Talent Acquisition through E-Recruitment 6/18/2008 By Gilles Depardieu, PhD Pamela Islam, MBA
How Best Practices in Recruiting are better enforced using E-Recruitment Software TABLE OF CONTENTS TALENT ACQUISITION... 2 GROWTH OF E-RECRUITMENT... 2 E-RECRUITMENT ALIGNED WITH RECRUITMENT & SELECTION POLICIES... 4 E-RECRUITMENT ADVANTAGES... 5 Cost-Effective... 5 Efficient... 5 BEST PRACTICES... 7 JOB REQUISITIONS... 7 CAREER WEBSITES... 8 CANDIDATE SOURCING... 8 ONLINE RESUMES & APPLICATIONS... 9 ONLINE SCREENING... 10 ASSESSMENT AND SELECTION... 10 INTERVIEW MANAGEMENT... 11 OFFER MANAGEMENT... 11 ON-BOARDING & ORIENTATION... 12 MEASURING SUCCESS... 13 SUMMARY... 14 HR MANAGERS CHECK LIST... 15 1
Talent Acquisition Talent Acquisition is a long-term strategic approach to recruitment. It involves identifying, attracting, engaging and retaining highly qualified and talented individuals. More and more organizations today are identifying the importance of developing a Talent Acquisition strategy aligned with the overall organization goals. For this reason, the need for a qualitative recruitment and a streamlined process is critical. Today two of the top priorities for most organizations are the Acquisition of Talents and Talents Management, especially for high profile positions. Acquiring and Retaining high quality talents provide the most important key competitive advantage, but it is increasingly difficult to attract and retain such individuals. So, to win this War for Talents among organizations, it is important to have in place a system which does not only assist in attracting and building a database of high quality candidates, but also provides the flexibility to manage the entire Recruitment process smoothly and efficiently. The emphasis is on the quality, skills and experience of the individuals considered for a position. An effective E-Recruitment system must enable line managers and hiring managers to address these aspects of numerous applicants collaboratively and make better informed decisions, faster. This improves the competency of the Recruitment function, and gives organizations the required competitive edge to succeed. Growth of E-recruitment The reason for the shift towards online recruitment activities, and use of Web 2.0 technology for more Human Resource Management functions is mostly due to the inadequacy of the paper-based process. Most hiring managers and line managers mention the lack of systematic log of information and improper storage of paper applications leading to inevitable delays in application processing time. This increases the time to hire and thus cost to hire, while compromising the quality of hire due to incompetent practices. The latest trend in Talent Management and Talent Acquisition software is Software as a Service (SaaS). SaaS offers flexibility in which the application can be hosted and accessed by candidates and users across the Internet. It is popular because it eliminates the necessity of installing and running the software on the organizations own computers. This decreases the amount of software and hardware maintenance usually required. In addition, the database can be maintained by the vendor providing the software. Some competent providers of such E-Recruitment software, also known as Applicant Tracking Systems (ATS), are Taleo-Vurv, Kenexa, Stepstone and aqayo. aqayo, author of the present White Paper, is an independent new player in this field. The number of Internet jobseekers is estimated to have increased between 2001 and 2006 by 266.7%, and the numbers are still growing. According to a survey conducted on the E-Recruitment 2
market, which is predicted to grow in scale and importance by 2011, major trends are forecasted to include: 1 More advanced tools for candidate management on corporate career sites Increasing use of social networking technologies (Facebook, LinkedIn) to reach candidates More opportunities for specialists in the market In most organizations, the recruitment of candidates is an ongoing process to build a talent pool of qualified applicants for later reference even if candidates are not suitable for the current vacancies. Leading hiring managers and line managers who use Talent Management software today are requiring integrated, user-friendly applications which provide a "single view of talent." This means that they prefer to have an overall view of the entire recruitment process in one place. Most leading vendors of E-Recruitment software cater to such clients by providing better, easy to use dashboards which provide a full overview of the entire Recruitment functions at a glance. Recently, a survey was conducted among several Hiring managers at NRG Engineering Pte Ltd.; a consulting company specialized in the Oil and Gas industry, to identify how the E-Recruitment software they used enhanced efficiency of their Recruitment activities. All unanimously agreed that using ATS significantly reduced the time spent on each recruitment activity, and additionally smooth the recruitment process thanks to the candidate s information which is all shared by the managers. E-Recruitment software enables efficient talent acquisition through faster and more reliable processes. The Best Practices identified in this paper are based on this survey and on processes that were found to be effective through research on leading providers of such systems. 1 E-Recruitment Market Assessment 2006 by marketresearch.com 3
E-recruitment aligned with Recruitment & Selection Policies Automated systems greatly increase efficiency of the traditional recruitment methods and selection tools. Due to the growth of the Internet, and the obvious benefits that Applicant Tracking Systems bring, more and more organizations are streamlining their recruitment process with e-recruitment software. The E-recruitment software is usually integrated at all the stages of Recruitment and Selection functions, as shown in the following diagram. Figure 1: Using E-Recruitment to enhance the Hiring Process In general, line managers send their Job Vacancies to the HR department. HR hiring managers create a Job Requisition for each vacancy and evaluate applications by matching qualifications against the criteria specified in Job Requisitions. Prospective candidates are added to the Talent Pool database for further assessment. E-Recruitment software provides HR hiring managers the flexibility to prefilter candidates through online screening. It generally provides Hiring managers and Line Managers a platform to manage and share all the information regarding candidates for the selection process. 4
E-recruitment Advantages Cost-Effective Applicant Tracking Systems reduce the cost of recruitment considerably by reducing the time it takes to hire individuals. Much of the paper-work is eliminated, if not all, and the time needed to perform administrative duties such as scheduling appointments and maintaining records is significantly shorter. In addition, Job vacancies are posted online (on Job Sites or on the company s career sites). Typically, cost savings are achieved through: - Online screening and pre-filtering of unsuitable candidates and thus allowing line managers to save time by concentrating on quality hiring - Sharing of information through the E-Recruitment system between Hiring managers, Line Managers and applicants, reducing the usual time taken for communication between parties Efficient E-recruitment allows candidates to access a richer source of information via the Internet on the Company career websites. They can view the status of their applications, edit and update their profiles as necessary. These sites may also be utilized to provide candidates Realistic Job Previews (RJP). A RJP is a recruiting approach used to communicate the different aspects of a job. The aim is to provide applicants with a better picture of what to expect when working with the Company. The corporate career site is an effective tool to provide RJPs because it can be customized to reflect the organization s culture and even provide success stories of top performers. On the Hiring manager s side, online applications can be acknowledged and processed more efficiently using E-Recruitment software. Pre-filtering/screening of candidates using job specific questions and advanced selection techniques allows the employer to focus quickly on the most appropriate applicants only. Moreover, building a talent pool of candidates by retaining outstanding candidates for the future allows managers and hiring managers to contact them later when an appropriate vacancy arises. Line Managers have better access to the status of their Job Requisitions thanks to E-Recruitment software. Although they have a more passive role in the recruiting activities, they have to be constantly updated. E-Recruitment software allows Line Managers to access candidate data as well as view progress of the recruiting activities at any time. At the same time, the software allows line managers to view in real-time the candidate profiles and their status in the Recruitment process. Managers can also share information with each other, and view notes or comments made by the other managers regarding candidates under consideration. 5
E-Recruitment software generally greatly enhances candidates-recruiters relationships by providing templates for all types of communication with applicants. Whether it is in response to applications received from candidates or to request more information, competent E- Recruitment software provides a list of relevant email templates to choose from. These templates enable organizations to maintain consistency in communication with candidates. They also save valuable time for managers who would otherwise have to compose all the messages themselves. Furthermore, the messages are personalized for each candidate and may be edited by managers if they wish to add a personal touch. All these features integrated into E-Recruitment software enhance efficiency of the recruiting processes. The survey conducted at NRG Engineering Pte Ltd. revealed that Keyword Searching; which looks through entire resumes and attachments, and Interview Scheduling were amongst the most sought after features of E-Recruitment software. The following diagram shows this in detail. Figure 2: Useful Features of E-Recruitment Software The Hiring managers also mentioned the following benefits offered by their E-recruitment software: Follow up reminders for any tasks, set by users Shared calendars (group calendars) which can be synchronized with Outlook Different levels of authorization for different users which increase the level of confidentiality of candidates data Single platform to view all information in addition to an historical activity log Flexibility to customize all the information and how it is displayed on each window Templates for emails, offer letters, welcome packages and other business documents Log of all communication with candidates, so that records are maintained about the subject of communication, when it occurred and with whom 6
Best Practices Automating the Recruitment and Selection process by integrating E-Recruitment software with the existing recruiting activities provides more competent, cost-effective procedures for HR hiring managers and line managers. Implementing the following Best Practices with the support of E- Recruitment software ensure that organizations are efficient in identifying and retaining talented individuals. The most important aspect of E-Recruitment software is the fact that almost all stages of the Recruitment process can be customized to cater to the unique needs of the organization. Thus, each step of the process becomes more efficient, accomplishing desired results within a shorter time. Some good practices in Recruitment are: Conducting Human Resource Planning well ahead and performing thorough Job Analysis before creating Job Descriptions, Job Specifications and Job Requisitions Providing Realistic Job Previews to prospective candidates during the interviews Rapid responses and follow-up with candidates Providing extensive information about the company on the corporate websites, including success stories and profiles of top performers On-going recruiting: Recruiting does not start when a vacancy arises, nor does it stop when vacancies are filled. It is an ongoing process, and line managers are always on the lookout for suitable candidates, nurturing strong relationships with them even when there are no jobs available. This acts as a form of advertisement and employment branding, as well as helps create a talent pool that organizations can rely on to find suitable candidates as soon as a vacancy does arise. Selection criteria based on competence (can they do the job), motivation (willingness to do the job) and organizational fit (can the organization offer them what they need) Job Requisitions Applicant Tracking Systems generally include the capability to create and post Job Requisitions for any vacancy. This allows line managers to list candidates for each type of Job and shortlist candidates using Keyword Search techniques. In-built templates make the job of creating new requisitions easier as similar job requisitions can be used several times for the vacancies that commonly arise. A database of in-built templates for Job Descriptions is yet another important feature such a system may provide. The flexibility to adapt these templates to the needs of the organization makes it easier to manage and use accordingly. Advanced E-Recruitment software ensures that it is easy to create Job Requisitions, list candidates according to the requisitions and at the same time view the status of applicants in the recruitment process. 7
Career Websites Corporate career websites serve to advertise the company as an employer of choice to prospective employees as well as offer a platform to applicants to send online applications and resumes. So it is vital for organizations to design a website that provides easy access to all relevant information with clear instructions on how to apply online. E-Recruitment software makes possible the posting of multiple Job Vacancies on the career websites, so that prospective applicants can also self-select the positions they are suitable for and apply accordingly. Yet another important aspect of the career website is that the applicants themselves should be provided the flexibility to create and edit their profile as well as view their status in the recruitment process through this website. The more sophisticated E-Recruitment software allow candidates to upload their resumes in any format (in PDF format, MS Word document etc.) and still allow line managers to search through every word in the resume using Keyword Search techniques. On the other hand, candidates can also search through the different vacancies posted using job search agents and apply to multiple jobs in a single session. Again, the line managers can review all this information in detail, and track the status of the applicants for each job requisition. Candidate Sourcing The most common sourcing tools today are online Job Boards and Corporate Career websites. Other sources for candidates include organizations Internal Databases, employee referrals, unsolicited applications and sometimes print media. Generally, E-recruitment software automatically identifies which source of candidates provides the best quality of hire for which job category (by comparison, a paper based process will not allow this easily). Managers at NRG Engineering Pte Ltd. use this function of the software to benchmark the recruitment processes of each business unit. Thanks to this feature, it is now well acknowledged that using E-Recruitment software helps increase the quality of hire, while the time to hire and cost of hire usually decrease. At NRG Engineering Pte Ltd., an internal database of qualified candidates was built over the years, based on all applicants that have ever applied to the company and the resumes acquired by the company through other sources such as online job sites. The fact that the internal database provides a rich source of candidates also indicates the efficiency of the searching tool currently used. The large volume of applications need to be systematically logged, and detailed information is available at all times for proper follow-up so that when the need for a new candidate arises, the existing database can be searched through quickly before advertising externally. 8
Online Resumes & Applications Most organizations use their career website to advertise their brand image and portray themselves as employers of choice. So candidates are always encouraged to submit online applications on the company s career sites by creating a profile and using online forms. Usually resumes received in this way are tracked by the E-Recruitment software and automatically added to the company s Internal Database. Sometimes, though, resumes are received through direct email sent to the HR department or the managers themselves. This is not particularly encouraged as resumes and applications received in this way are difficult to sort through. Sophisticated E-Recruitment software provides a simple way to handle these piles of disorganized resumes. Managers can forward the emails they receive to a specified email address, from which the E-Recruitment software can automatically add resumes to the general list of candidates in the Internal Database. Usability of the career websites through which resumes and applications are submitted is another important feature that needs to be taken into account to ensure the effectiveness of the recruitment process. This implies that users of corporate career sites should be able to navigate around the site and find relevant information quickly and easily. Directions on how to create or edit profiles, submit applications and search through Job listings should be presented logically in clear language. In addition, application forms available online should be presented in a consistent format, thus making it easier to collect information from applicants in a systematic way. It is important to design the application form so that it is logical and comprehensible. The more competent E-Recruitment software systems provide flexibility to users to upload their resumes in any format, but also preview the resume exactly as it was written in the first place. Advanced E-Recruitment software enables customization of the company s career website (or websites), which is often the first contact point between potential candidates and the company. So while designing the career page, it is important to acknowledge the importance of its usability for applicants. Applicants should be able to apply online easily and track their progress through the application process while line managers should also be able to keep track of all candidates easily through a user-friendly interface. The features and functionalities of career websites and online applications have the potential to reduce administrative costs by a substantial amount by streamlining applications and by short listing candidates through pre-screening tools and online questionnaires. 9
Online Screening With the growth of E-recruitment software and online jobseekers, hundreds of applications may be received for each job position advertised. Hiring managers and line managers have to sort through all these applications to filter out those who may be suitable for the position. Much time and money is saved through online pre-screening, which provide online questionnaires and tests to filter out the qualified candidates from those who are unsuitable for the positions currently available. As such, online recruitment applications invariably include Killer questions for pre-screening and filtering out unsuitable applicants. These are important to save time by ensuring that candidates who do not possess relevant skills required for a particular job requisition are not short listed for assessment or interviews. Job specific pre-screening tools and self-selection questionnaires can be designed for each job position. This prompts applicants to answer questions specific to the position, and not just complete a generic outline of the application form which will pose further sorting problems later on. Integrating psychometric tests and online screening tools is a simple and easy process using E- Recruitment software. Although psychometric testing online is still relatively a new method it is an emerging future trend to predict Job Performance and determine whether the candidate can fit in with the organizational culture. It is possible that the most advanced E-Recruitment software such as Taleo-Vurv, aqayo and Kenexa may propose this functionality as part of their Standard Edition packages in future. Some Psychometric tests used quite regularly with proven consistent results are the "Five Factor Model" (FFM) also known as the Big Five personality traits, Myers-Briggs Type Indicator (MBTI), Harrison Innerview, etc. Since these pre-screening questions, psychometric tests or other forms of assessment vary from company to company, E-Recruitment software allows users to customize their websites to allow such filtering of candidates. Nevertheless, Psychometric tests are not the sole indicator of successful performance, and should be used in combination with other Selection tools. Assessment and Selection E-Recruitment software generally provides users with the flexibility of viewing all candidates listed together, while the more competent systems provide hiring managers and line managers the ability to view detailed lists of candidates along with their pictures, jobs they have applied for and other pertinent information in one screen. These provide more detailed information at the click of a button, and users are able to view the status of the applications, comments and feedbacks given by other managers concerning interviews and tests. Since there is so much information to look into, it is important that it is all presented in a format that is easy to navigate around with all the information available at a single glance, but details readily accessible too. There is a wide range of methods that can be used to evaluate an applicant, which vary in terms of reliability and the ability to predict Job Performance. So it is important to use selection tools that 10
provide consistent results, and have proved their validity in the past. Some Selection tools that are commonly used include Technical Tests, Interviews or Assessment Centres where candidates are asked to complete certain tasks such as group discussions, role-play, problem-solving etc. The selection tools used should be able to distinguish between candidates and reflect their abilities to perform their job functions effectively. Interview Management Interviews may be conducted individually, one-on-one or by a panel, either on the phone or inperson. Using pre-selected open-ended questions are helpful to understand the candidate competencies and whether they fit into the position requirements. It is usually even more helpful to follow a checklist of topics to cover during an interview, and mark topics already covered. E-recruitment software systems are configured to enable managers to schedule interviews as well as record their comments and feedback about the applicants. Some additional features such software systems provide include reminders for upcoming interviews, collaboration tools with authorized managers so that all have access to the feedback and comments provided by others and an online checklist of the interview subjects to cover with applicants. Offer Management Once the hiring decision is made, an offer letter is sent to the candidate, and negotiations are conducted on this basis. In this respect, E-Recruitment software accelerate the offer process by providing managers a list of templates for several types of offer letters, contracts and other legal documents. Managers can choose the appropriate templates, depending on the position and geographical location and personalize the messages conveyed. Competent E-Recruitment software provides a checklist of Things to do when making a Job offer. This ensures that all procedures related to making an offer have been completed. Senior managers can review and approve offer letters and all related documents thanks to performing work flow engines integrated in the application. This process is faster and less prone to errors because of the availability of in-built templates. The managers need only to review relevant parts of the document. So only a few sections need to be edited or revised in case of negotiations. The software application enables managers to track the status of their offers as well: whether the offer letter has been sent, offer accepted or rejected. Top-notch E-Recruitment software provides an added feature called e-signing for signing contracts through the Internet. This eliminates the need to send documents by post just to obtain written signatures from candidates. E-signatures obtained in this way are legal, reduces the time involved in signing of the contract and allows for faster on-boarding of the new employees. 11
On-Boarding & Orientation When negotiations are completed and the Job offer is accepted, the next step is on-boarding of the new hire. Some companies use this process to strengthen their brand image by conveying an excellent first impression to their new talents. Automating the on-boarding process through E- Recruitment software provides a more systematic and efficient way to perform this task. As a first step, welcome packages in electronic format are sent to the new hires immediately, informing them about the company administrative details and other pertinent information. The new employees are also asked to log into their profile and complete required forms online. Meanwhile, the E-Recruitment software notifies relevant managers about the new addition to the company. Additionally, orientation programs are effective in introducing new employees to the organization environment and work culture and to ensure effective integration. The length and nature of the orientation depends on the nature of the job itself and the organization. If orientation programs are conducted, orientation schedules are included as part of the welcome package. Calendars of managers who will be conducting the orientation program are updated simultaneously. This ensures smooth orientation to the company for the new employee as well as allows managers to efficiently manage the on-boarding process. Costs of turnover are reduced, and the new hire is given the opportunity and support to reach productivity within a shorter time. Web-based on-boarding systems, integrated or not in E-Recruitment software, enable organizations to standardize, coordinate and keep track of every step in the process, as well as make the new hires feel valued and supported. Efficient and successful on-boarding programs offer a better chance to transform the new hires into committed employees. 12
Measuring Success To ensure that the recruitment process is effective and efficient, and that there are no bottlenecks holding back the process, it is important to choose and measure the Key Performance Indicators (KPI) at each stage. Analyzing KPIs will lead to an overall improvement in recruiting and retaining talent. The followings are some of the Key Performance Indicators in measuring success and efficiency of the Recruitment and Selection Process: Quality of Hire Cost per Hire Time to Hire New Hire Turnover The metric generally used to measure performance of the talent acquisition process is "Quality of Hire". Most line managers measure the quality of hire according to the new hire output and performance or by the length of time a new hire stays with the company. As shown in the diagram below, it is the length of time a new hire stays with the company that is perceived to be the best measure for the quality of the hire, according to the survey conducted at NRG Engineering Pte Ltd. Figure 3: Measuring Quality of Hire However, in more mathematical terms, the quality of hire is measured using the formula: While measuring the quality of hire is critical to analyze the Recruitment and Selection process, the costs associated with each step in the process are also important. The costs per hire include both direct costs associated with each hire, such as advertising costs for posting vacancies on Job sites, conducting phone interviews or salaries of the recruiting executives and indirect costs like the time spent by line managers for each hire in the Recruitment process. The recruitment process is never 13
exactly the same for any vacancy, and the time it takes to fill a vacancy can vary from a few days to a few months, depending on the circumstances. Usually, the shorter time it takes to hire, the fewer costs are associated with it, and thus lower the cost per hire. However, it is important to keep in perspective that the cost per hire or the time to hire is not the sole measure for recruiting success. Organizations should concentrate more on the quality of hire as a measure of the recruitment process since this is the true measure of success. Trying to reduce costs, and time to hire may lead to bad quality hires, and the resulting cost of bad hires is much higher. Saving time and cost may imply that organizations are rushing through the hiring process, instead of concentrating on the quality of the talent pool being created. Measuring the quality of hire is the most accurate indication that high performers were identified throughout the recruitment and selection process. The Report Generation feature of advanced E-Recruitment software enables the measurement of the KPIs of Recruitment more effectively. In addition to the regular reports required to analyze the recruitment process, the feature enables managers to find answers to any ad-hoc queries that arise, saving time and providing more valuable information whenever necessary. Summary Talent acquisition, in itself, involves the planning, sourcing, assessing, hiring and on-boarding of top talent. Automating the Recruitment Processes helps implement Best Practices in most organizations today. This leads to a better employment branding through career websites and also provides more effective recruiting tools for selecting suitable candidates. The hiring manager s time can be spent more efficiently, aligning all stages of the Recruitment and Selection procedures to their overall strategy. The following practices are usually standard to attracting and retaining quality hires: Aligning HR strategy to the organization objectives through strategic workforce planning Improving candidates experience Using appropriate tools and processes (through the e-recruitment software for instance) Improving the company brand name to attract qualified candidates Providing accurate advertisements, job/role descriptions and Realistic Job Previews (RJP) E-recruitment software ensures efficient recruitment functions and helps busy line managers fill their vacancies in the best manner. HR departments who are experienced in ATS usage usually see the quality of hire improve consistently, as Recruitment Best Practices are diffused via the software throughout the whole organization. Thanks to the increasing use of E-recruitment systems, the loss of communication data between candidates and hiring managers is progressively becoming a thing of the past. The following checklist shows some of most important features to consider in selecting an ATS. 14
HR Managers Check list How to choose a suitable ATS for your organization Features Does Your ATS Do That? aqayo Other ATS Job Requisitions - Use Built-In Templates Yes Some - Customize Job Requisition Templates Yes Some - Post Jobs Real-time Yes Yes - Show Applicant Status for each Requisition Yes Some - List Candidates by Requisition Yes Some - Customize workflows Yes Some - E-mail based approval process Yes Some Career Websites - Host multiple career websites Yes Some Candidate Sourcing Online Resumes & Applications Online Screening - Online Application Yes Yes - Multiple Customizable forms Yes Some - Applicant can create/edit Profile Yes Some - Job Search Agents for Applicants Yes Some - Automatically add resumes received from online applications to Internal Database Yes Some - Show Candidates List including pictures Yes Some - Single view of ALL applicant information Yes Some - Customize Online applications Yes Some - Automatically add Resumes from unsolicited emails to Internal Database Future Version No - Customize Online Application to include "Killer Questions", or Future Version Some - Psychometric Tests Future Version Some Assessment/Selection - Keyword Searching Techniques (through Resumes & Attachments) Yes Some - Rank Candidates based on overall evaluation Yes Some Interview Management - Schedule Interviews with Outlook Yes Some - Collaborate & Share Notes, Feedbacks Yes Some - Checklist of Topics to cover Future Version Some On-Boarding /Orientation - Offer Management Yes Some - Templates for Offer Letters, Contracts, Emails Yes No - E-Signing of Contracts Future Version Some Advanced Features - Track ALL communication in detail Yes Some - Historical Activity Trail Yes Some - Reminders & Updates for any user-set task, as well as for: Yes Some o Interviews Yes Some o Follow-up with Candidates Yes Some - Identify best Source of Quality candidates using Reports Yes Some - Measure success of recruiting activities through built-in reports and custom reports Yes Some 15