I’ll admit, I used to think recruiters could be replaced by software. Like any good tech person, I was convinced AI, data and robots would eventually take over recruiting. I actually even wrote an article, “Why Recruiters Are Obsolete,” about why I thought recruiters (staffing agencies) were antiquated. Well, I was wrong. After running Ideal Candidate for almost two years, I’ve learned a lot. I no longer think recruiters can be replaced, but I do think they are due for a massive refresh. Here is what I learned.
Human Touch Is Required
Recruiting is sales and I’ve never really read articles about the impending replacement of salespeople by software and robots. Convincing someone to come work for you, perhaps quitting a current job, is all sales. When dealing with people’s careers, it’s not black and white. People’s emotions are at play and it’s something that goes beyond automation and software. Just like sales appeals to people beyond strictly data, recruiting does as well.
Guesswork Has to Go
We need recruiters, but recruiters need to use data to make decisions. Again, I’ll relate this to sales. It doesn’t matter how good of a salesperson you are, if you aren’t using tools like CRM and business intelligence tools, you’re not being efficient or making the best decisions. Like salespeople, recruiters need to use data to make decisions. Far too often I hear people say things like:
“I’ve been doing this for 20 years, I can pick out a great salesperson.
“I don’t believe in assessments”
Every single study out there shows using a data-based approach is the only way to go. If you don’t believe me, take a look at these statistics:
There is a 46% failure rate among new hires within their first 18 months on the job (using “gut feel” has majorly contributed to this percentage)
HBR found that even a simple hiring equation outperforms human decisions by at least 25%
Companies that use a sales hiring assessment enjoy on average, a 20.7% increase sales productivity per candidate
Would you hire a salesperson that refuses to use data to make decisions? Or who refuses to use a CRM? Sure, some people will, but they aren’t going to last long. If you’re a recruiter that doesn’t believe in using data you will not survive. Sure, there will be a couple people out there, just like we have a market for classic cars, but it’s not sustainable.
Where else is big data taking over? We can see this phenomenon really taking off in pro sports. It started out with Moneyball and now all kinds of teams have started making data-backed decisions.
Recruiters typically get a success fee for placing someone at a job. I used to think this was ridiculous until I realized how much work goes into placing someone. What is still ridiculous is that there is not much alignment between the success fee and the success of the candidate and company.
The success fee should exist. It provides motivation for the recruiter which is important. However, I think the success fee should relate to the long term success of the placement. For example, spreading the success fee over a year to ensure the placement was actually successful. Recruiters typically don’t like doing this because it’s riskier and less cash upfront. We’re actually guilty of taking an upfront success fee, but we provide a distributed monthly option as well.
I now truly think that recruiting won’t be replaced, but refreshed. I now think of the future of recruiting not as a recruiting robot, but robots helping humans make better decision.
Recruiters that embrace technology and data will survive and the rest will slowly fade away.
Somen Mondal is the Co-Founder of Ideal Candidate. With a B.A.Sc. in Computer Engineering from the University of Toronto and an M.B.A from Queen’s University, Somen served as the Chief Executive Officer of Field ID until it was acquired by Fortune Brand’s (NYSE:FBHS) Master Lock division in 2012. He has been profiled on the Profit Hot 50 and Deloitte Fast 50 Companies-to-Watch lists. Follow him on Twitter and LinkedIn.