aesc tat whitepaper

8/12/2019 AESC TAT Whitepaper

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ASSOCIATION OFEXECUTIVE SEARCHCONSULTANTS

(AESC)T A L E N T A C Q U I S I T I O N T E C H N O L O G Y

W H I T E P A P E R


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Technology presents our industry with a par adox: it holds both the

promise of enormous leverage and the threat of major disruption.

New developments in technology can streamline some of the traditional

challenges in the profession, allowing us to focus on areas where we

can provide maximum value. Conversely, there is the danger that

clients will overlook these value-adds and assume that the technology

is a complete, do-it-yourself solution. As a result, search professionals

need to be more aware than ever of what the latest developments in

HR technology are, understand how these developments will affect them,

be strategically ready to leverage developments to deliver maximum

value to clients, and be clear in communicating this value and the role

technology does and doesnt play.

With that in mind, AESC has created a Talent Acquis it ion Technology

Sub-Committee of the Global Board of AESC . The main objective

of the sub-committee is twofold. Firstly, it will monitor and analyze

key developments in talent acquisition and HR technology that could

potentially influence the executive recruitment industr y. Secondly,

it will disseminate this knowledge among AESC members so they can

use it in their strategy deliberations and provide additional insights to

their cl ients.

This inaugural whitepaper is the first in a planned series of whitepapers

and studies discussing various technologies and solutions that are potential

sources of opportunity and/or threat for executive search professionals.

We hope you find the information here useful to your bus iness, and look

forward to your feedback.

Anton Derlyatka

Managing Partner, Talent Equity Ventures (TEqV)

Senior Partner, Ward Howell

Ethan Birchard

Managing Director, AESC

The Association of Executive

Search Consultants (AESC) is

the wor ldwide proffessional

association for the retained

executive search and

leadership consulting industry.

Talent Equity Ventures (TEqV)

is a global venture capital fund

focused on HR and Education

technology star tups. TEqV is an

affiliate of Ward Howell, a

leading Human Capital and

Executive Search consulting

firm in Eurasia.

INTRODUCTIONT A L E N T A C Q U I S I T I O N T E C H N O L O G Y

( T A T ) S U B - C O M M I T T E E


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QUICK FACTST A L E N T A C Q U I S I T I O N

T E C H N O L O G Y T R E N D S

M O B I L E : 7 out 10 candidates in the USA use their phone to search for a job (Source: SimplyHired sur vey)

C L O U D : Cloud adoption grows by 36% each year (Source: Forbes.com)

S O C I A L : 48% of executive candidates original ly identified via LinkedIn

(Source: William Blair Report on LinkedIn Use)

P S Y C H O M E T R I C S : Use of Psychometr ic improves selection outcomes by 24% (Source: Onetest.com.au)

D A T A : 60% of companies are investing in Big Data (Source: Forbes.com)


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INTRODUCTIONT A L E N T A C Q U I S I T I O N T E C H N O L O G Y

Human resources technology is evolving with unprecedented speed.

And no part of HR has felt this influence more than recruitment.

Recruiter s and hiring managers can now find candidates faster, and source

talent in the most remote locations. They are able to gauge skil ls and

personal qualities with more precision, and gain insights into a prospective

employees fit, and create a smoother, more candidate-friendly hiring

experience. The latest technology allows them to create a deeper

connection with jobseekers and build a stronger employment brand.

Executive search occupies a unique niche . At its core , executive search relies

on an ability to pick from a small pool of executives. This exper tise results

from personal relationships with senior managers and companies and an

understanding of market trends, industries and regions. It stems from an

ability to build connections with clients so that they consider the search

consultant more as a trusted advisor than a hired hand. And technology plays

a lesser, but still significant role in developing this combination of in-depth

knowledge and interpersonal skills.

Yet executive search has also felt the broader impact of technology and

is benefiting from the same efficiencies as other levels of recruiting. Forexample, it is now possible to build a wider ne twork of contacts vi a social

media, or more efficiently manage data with new software solutions.


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At the same time, technology and

the ever-changing economy havecreated new challenges for

consultants, and recent changes in

business and HR have made this

clearer than ever. Consider the

following trends:

Insourcing is increasing dramatically

Insourcing is a long-standing aftershock of the 2008 Recession that

sent thousands of firms into a more cost-conscious mode . That is

happening across the board, from the executive to the mass-recruitment

level, driven also by greater availability of technology-based solutions

(e.g. LinkedIn, an invaluable tool for any in-house recruiter these days).

While the slow but steady uptick in the global economy has loosened

purse str ings, many organizations remain cautious about spending.

Theyve grown comfortable relying on internal resources.

Competition has grown more intenseAt the same time the number and variety of companies providing

recruiting services continues to grow. Most of these firms have made

technology the cornerstone of their ability to find and place great talent.

They are active on professional networks and increasingly target their

efforts to mobile devices. Their use of the cloud has made collaboration

among colleagues in different offices and regions easier and they are

using analytics to develop deeper insights into candidates.

Candidate behavior has changedmarkedly

Todays candidates are more li kely to have information about

themselves in public , including social networks, as opposed to 5 years

ago. Also, they are more likely to field inquiries or show interest in

a job via mobile devices. A 2012 survey by the job board Simply Hired

found that 7 in 10 job seekers search for jobs using mobile phones .

At the same time , candidates will be more likely to discuss career issues

via social and professional media. In fact, social media has become

the most significant engine for recruitment and corporate branding,offering unprecedented access to personal information, referrals, and

professional communities.

IMPACT OFTECHNOLOGYT A L E N T A C Q U I S I T I O N T E C H N O L O G Y


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5I M P A C T O F T E C H N O L O G Y

T A L E N T A C Q U I S I T I O N T E C H N O L O G Y

The importance of cross-border fluencyis skyrocketingWith the ongoing maturation of economies in Asia, Eastern Europe,

the Middle East, Brazil and Mexico, executive recruiters will find some

of their best candidates in areas far-removed from their home bases .

And technology has enabl ed them to execute most complex interna-

tional assignments with greater speed and efficiency.

Standing out is more difficult

The amount of information that people generate and receive is r ising

exponentially. This is particularly true for executives and influencers

who may receive hundreds or even thousands of emails on a daily basis .

Executive recruiters who want to reach these busy individuals must

outsmart the competition for their att ention. A solid use of technology

can help these recruiters stand out amidst the noise and spam.


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A N A L Y S I S O F P O S I T I O N

A N D R E Q U I R E M E N T S

I D E N T I F I C A T I O N O F

C A N D I D A T E S

S C R E E N I N G A N DS H O R T L I S T I N G

J U D G E M E N T A N D

S E L E C T I O N

O F F E R M A N A G E M E N T

R E F E R E N C E C H E C K I N G

I M P A C T O F T E C H N O L O G Y



M E D I U M


D I S R U P T I V E

I M P A C T O F T E C H N O L O G YD I S R U P T I V E


L O W


M E D I U M


L O W


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To be sure , technology will have its most profound effect on searches

a level or two below the most senior level. The star recr uiter of CEOs

for the worlds lar gest companies may have little need for sourcing and

screening software or psychometric tests. The pool of potential candidates

for these jobs is small and well-known, so small that some recruiter s

may have a ready list of possibilities already in their head even as the ink

is drying on a search contract.

Executive recruiters are more likely to see technology as an enabler than

as an obstacle. Just take the inputting of information on candidates into a

database. Search consultants used to do this themselves, or had researchers

complete the task. Voice recognition tools allow them to parse data into

a database, which takes less time. Needless to say, the extra time can be

spent on activities more closely related to the selection of a candidate .

Middle tier search frms need

to embrace the new tech to

remain competitive

Technology helps to save costs,

improve effeciency and providebetter service

Push from recruitment to

senior executive market

The most talented search

consultants are using:

Mobile devices, professional

networks and social media

sites to track and engage

candidates and develop a

stronger understanding of

employers.

Cloud techno logy to access

data from anywhere in the

world.

Improved screening systems,

gaming, psychometric testing

and video conferencingto increase the likelihood

of a good job fit.

E X E C U T I V E

S E A R C H

C O N T I N G E N C Y

M A S S

R E C R U I T M E N T

Low end searches have already

shown using technology to automate

processes to reduce costs and

increase market reach

The short term

battle ground




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Todays talent is global, mobile, versatile, accessible via a myriad of

communications tools, and trained in competing education systems.

And technology helps to remove barriers to a global and efficient talent

marketplace. Remote labor and project management tools make restrictive

immigration laws less relevant, while new identification, selection, and

assessment tools help to remove the subjectivity of human filtering.

In this new era, when technology can help to identify and deploy talent

where it is most productive, recruiter s face new challenges. The most

paramount include:

Finding talent O U T S I D E T R A D I T I O N A L R E C R U I T I N G sweet spots;

Connecting with this talent in a M E A N I N G F U L way;

E VA L U AT I N G TA L E N T F A S T E R and more precise ly than competitors;

Identi fying the passive job seekers who would be the most will ing to

CO NS ID ER A NE W OP PO RTU NI TY. Pass ive job seekers oftenrepresent the richest source of candidates. Finding them can be the

real challenge.

Creati ng a more E F F I C I E N T H I R I N G E X P E R I E N C E that increases

the likelihood of finding clients the right match the c lients. This reflects

particularly well on the employment brand that so often determines where

an executive will choose to work.

HR TECHNOLOGYOVERVIEW


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Technology has enabled recruiter s

to execute these tasks faster and

more efficiently. This paper will

focus on five areas of technology

that have had the greatest impact

on search and other areas of HR:

mobile devices, social and

professional media, data analytics,

psychometrics and cloud/software

asaservice (SaaS).

S O C I A L M E D I AM O B I L E

C L O U D

B I G DATA P S Y C HO M E T R I C S

H R T E C H N O L O G Y O V E R V I E W


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P R O F E S S I O N A L A N D

S O C I A L N E T W O R K S

Professional and social networks are

rapidly becoming a recruiters

most impor tant tool.

They have not only opened doors

to new talent hotbeds in Asia

Pacific, Eastern Europe, the Middle

East and par ts of Latin America,

but have also allowed companies to

mine talent more efficiently in their

own backyards. No longer must

recruiters sift through emails to

find a contact. Social networks

allow recruiters to engage

candidates more effectively long-

term. New software designed with

the networks in mind then helps

determine when someone is the

right fit for a job.

These networks have givenrecruiters unprecedented access

to personal and professional

information, referrals and

business communities. They have

also allowed recruiters to track

promising candidates, understand

their career preferences and bui ld

strong relationships with them,

even across continents. Social

and professional networks have also

been instrumental in establishing

a positive employment brand.

None of the networks have been

more important for recruiters

than LinkedIn . The network is fast

approaching 300 million user s.

Thats a roughly sixfold increase

over the 50 million users the

company boasted six years ago.

More than half of LinkedIns

revenues come from recruiting

services. The HR technology exper t

Bill Boorman calls LinkedIn an easy

hunting ground for recruiters.

A 2013 report by the investment

bank William Blair found that

more than three in four executive

recruiters said that their relianceon LinkedIn was increasing.

The respondents said that they

had identified nearly half their

candidates via LinkedIn, double

the percentage of two years ago,

and that they had pinpoin ted more

than a third of their placements

via LinkedIn, almost double the

percentage of two years ear lier.

But it was also clear that LinkedIn

was not a replacement for more

tradit ional resources. More than

three in four recruiters said that

LinkedIn was a good starting point

but that internal databases and

technology were st il l cr it ical to

how they managed their candidate

pool. The repor t called LinkedIn

an integral part of the executivesearch process but also said that

the information on the site was

only a fraction of what they need

to assess a candidate.

Yet LinkedIns strengths have also

created a challenge. Boorman writes

that many potentia l candidates have

removed key parts of their career

backgrounds from their profiles

because they are not looking forjobs.

HR TECHNOLOGY


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That has sparked a raft of startups

social med ia aggregator s that can

parse information from different

networks. The end effect is a fuller

candidate profile and the abil ity

to predict with greater accuracy

whether a job opportunity will be

of interest to passive job seekers

who are not actively looking for a

new oppor tunity, but may be the

best fit for a job. Among the leading

aggregators are Entelo, TalentBin,

Gild, and Joberate.

Other HR Tech companies are

focusing on referr als, once an

informal process that now allows

individuals to provide more detai led

input about candidates. Their

technology al lows employees to

tout the benefit s of a company andserve as brand ambassadors.


P R O F E S S I O N A L A N D S O C I A L N E T W O R K S

Ave rage of 48% of candidates

are identified through LinkedIn

Around 35% of placements were

originally sourced through

LinkedIn

Opportunity;Will iamBlair

conducted a research on

LinkedIn Usage among

executive search consultants:


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M O B I L E

HR TECHNOLOGY

The rise in mobile devices has created a more fluid environment for

recruiters. Candidates are now more likely than before to be online and

reachable via one of these devices.

An estimated 55% of the worlds cell phone users say that their main source

of internet access is their mobile devi ce. A 2012 Forbes Insights paper found

that people ra rely disconnect from wor k a byproduct of the mob ile

revolution. Todays candidates are accessing career-related information,

communicating with potential employees and applying for positions through

their devices. Mobile devices have altered the types and quant ity o f messages

that recruiters send. The quick, inci sive communication more appropriate for

small screens is quickly replacing longer forms. Recruiters must also look

more analytically at the times and places when candidates are receptive to

their messages .

According to the latest stats, 25% of all Google searches that contain

the word job are conducted on mob ile devices. However less than

40% of Fortune 500 companies have a mobile-enabled career web page

that candidates can access. Thi s i s changing now and recruiters are

star ting to focus on making the recrui ting process mobile-friendly.

Going forward, expect wearable technologies and video to play even bigger

par ts in recruiting. The market for wearables, which are supposed to facilitate

the performance of such tasks as checking ema il and sending messages, is

doubling ever y month, says the K leiner Perkins study. These devices, coupled

with computers in industrial and automotive equipment, will provide us with

a variety of new ways to communicate with and monitor our workforce , the

Deloitte consultant Josh Bersin writes in a report that looks at workforce-

related technology trends in 2014.


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A N A L Y T I C S

Analytics: Large quantities of data so-called big data have significantly

improved marketing. A 2013 Forbes Insights paper, The Big Potential of Big

Data, found that companies that make use of big data exceed their goa ls

more than 50% of the time. The authors of the paper found that big data

gave companies better insights into consumer behavior and allowed them

to connect on a deeper level with existing and potentia l cl ients.

HR has been slower to adapt big data to its needs, although recently

theres been more improvement. Recruiters are now increasingly using

analytics to get a better understanding of candidates. In what environment

is a candidate most likely to succeed? How do their profiles match those

of executives who have already succeeded at an organization? What is

the wrong cultural fit ?

The same types of systems are helping recruiters and companies look

inward. They can analyze the backgrounds, skills and career paths of

successful and unsuccessful manager s. Does an MBA predict success?

How many years should someone hold a position before moving

up a level?

Analytics have become the basis of faster resume parsing, which allowscompanies to screen out candidates. Among other firms, Google is using

algorithms to identify candidates who are well-suited for certain jobs.

Faster screening can create a more cost effective hiring pipeline, reduce

the amount of time positions remain unfil led and broaden the pool of

potential candidates.

HR TECHNOLOGY


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P S Y C H O M E T R I C S

Psychometric testing has been around for a long time. But the quality and

penetration of the tests has increased significantly in recent years. While

these tests may consider job quali ficat ions and experience , their greatest

value is in under standing soft skills. This is an area of increasing impor tance

for companies.

The rich troves of data generated by psychometric tests can help

eliminate per sonal biases that cloud hiring decisions. They may also enable

candidates to make more informed decisions about certain jobs. Leading

vendors include SHL and Talent Q, which uses an algorithm to predict how

well someone will work in a particular environment.

A number of companies are using gamification to determine job fit.

Gaming tests are inter active in nature . They engage candidates but also

glean valuable information from them based on how questions are

answered. Questions often focus on how someone might respond to a

situation in such a way as to receive point values (although it would be

incorrect to suggest that there are right and wrong answers). The results

tend to offer a more neutral assessment of skil ls and personality. The

answers may determine more precisely whether a candidates leadership

approach matches a companys philosophy.

HR TECHNOLOGY


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The extensive use of the cloud is leading to an increasingly virtualized job

market. In this new environment, employees are becoming more like free

agents who provide their highly mobile services and skills on a per-project

basis. In the workforce, virtualization skills are available via networks, and

companies use technologies to monitor, coach and suppor t employees. Work

hours and compensation may differ from traditiona l models. In some cases

high-speed internet, mobile devices and cloud computing have made

vir tualization a more efficient way to execute projects and conduct business.

Executive search firms can benefit from this trend as well, by developing

more scalable and efficient operational models.


S A A S A N D T H E C L O U D


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N E W O P P O R T U N I T I E S

HR TECHNOLOGY

A few additional technologies stand out for their ability to address particular

business concerns.

Recruiters have been trying to find more efficient ways of screening resumes

since the dawn of the profession. The challenge has become especially acute

given how easy it is to access career information online. The latest automated

resume filtering allows companies to automate and streamline resume

screening. Systems built by companies such as Google use algor ithms to

produce initial judgments about candidates. The algor ithms are based on the

analysis of key words and traits found in CVs and resumes.

Predicting performance has been a major challenge. Now a slew of new

software providers are using performance prediction algorithms to create a

clearer picture of whether someone is likely to succeed in a job. A few of the

systems identify key qualities and skills and weigh them against job

specifications with unprecedented precision, but companies such as Good.co

and Fitzii focus on cultural fit.

Social media offer s a wealth of career information about executives. But its

difficult to know if information is up-to-date, or at times to make sense of the

data. Companies such as Entelo, TalentBin and Dice mine social data and drawconclusions from it. One Entelo algorithm has been able to predict with a

high degree of accuracy whether a professional will change jobs over the

next six months.

Finding, hiring or otherwise engaging talent globally can be a complex and

difficult process. Yet it has also become essential for companies who are

expanding in new mar kets. Who are the r ight leader s for these growing

opportunities? How can companies ensure that they have enough skilled

managers and other employees to tackle key projects? The latest software

providers allow companies to identify and manage talent quickly and

efficiently across all geographies.


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OPPORTUNITYOR THREAT?

Technology can be a double-edged sword for executive search, an industr y

that pr ides itself on personal interaction and a deep understanding of people

and organizations.

Many successful executive search consultants are on a first-name basis with

candidates and board directors. They dont need psychometric tests or

statistical-based assessments to know who among their ongoing contacts

might be right for the next big opening. So are these new developments

at odds with searchs traditional strengths?

The bevy of start-ups and early stage software providers focused on the

recruiting space is testimony to a vibrant demand for products that can help

consultants navigate a faster-paced, more interna tional business environment.

Recruiting firms should be paying close attention to and investing in the latest

technologies to help them make sense of disper sed pockets of talent and

companies spread throughout the world.

Used in the right combination with traditional approaches, technology

becomes more oppor tunity than threat. The trick is finding the right balance

between the numerical and the personal.

The trick is findingthe right balancebetween the numericaland the personal.


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It is difficult to separa te fully

opportunities and threats, since

the vast majori ty of new tools or

platforms potentially represent

both, says a recent Spencer Stuar t

memo to the AESC Tech Initiative.

When used smartly by a search

firm, they offer the opportuni ty

to either deliver better solutions

or do so more productive ly. The

memo continues: For those search

firms that respond well to thi s

changing world, these challenges

have the potential to make them

stronger and more valuable

bringing renewed focus to their

value propositions and perhaps

improving their productivity

and efficiency.

In order to remain competitiveand stay ahead of the cur ve,

recruitment professionals should

consider the following

recommendations:

Embrace changes in HR technology

Fast-evolving software solutions can lead to greater efficiency in the

sourcing, recruiting and assessment of candidates. Short-term costs

will often be more than balanced out by the long-term strategic benets

of investing in the right technologies.

Invest in analytics

Big data offers an unprecedented amount of information on candidates .

But if companies cant make sense of it, the volume of information

is meaningless.

Cultivate the use of social media

Professional networks in particular are an effective way to learn about

candidates and create a strong brand.

Target the mobile deviceCandidates are more and more likely to learn about a company or

apply for a position via smart phone apps.

Use SaaS and cloud technology

These technologies can vastly improve the hiring process by allowing

companies to collect and share information about candidates more

easily around the world. They foster collaboration among employees, too,

which can make for a richer, more productive work environment. SaaS

and the cloud also have the advantage of scalability; that is, they can

keep pace with a companys increasing workforce needs.

O P P O R T U N I T Y O R T H R E A T


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Technological innovation is tr ansforming recruiting, along with other areas

of human resources. It has allowed companies to create a wider net for talent

and speed up the process of screening candidates and matching them to jobs.

The latest software has increased recruiting efficiency. In many cases, it has

led to an improved quality of hire. Recruiting technology will continue to

serve as a major force in HR. Recruiters will have to keep pace.

This applies to all levels of recruiting, including executive search. Some

consultants say that current innovation applies only marginally to their

industr y. They say technology will continue to have its greatest impact

on lower-level recruiting for skills-based positions that are needed in

quantity, such as engineers and software designers. The skeptics hold to

the belief that search is based largely on subjective judgment and that

technology will always play a minor par t.

The same thinking may also reflect a temporary resistance to change

or failure to fully appreciate the winds of change. It wasnt long ago that

many consultants believed that LinkedIn would never have a significant

influence on their business. Now it is arguably the most powerful tool

for sourcing candidates.

CONCLUSION


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But search will increasingly avail itself of the latest software. It is inevitable if

the industry is to keep pace with the needs of its customers. These search

consumers are more disper sed, more likely to need executives quickly.

Consultants who make the best use of technology, including voice recognition

and resume parsing software, mobile databases and systems for enhancing

remote collaboration, will be able to address these demands. And firms who

invest in the latest technologies will outpace those who dont.

How soon each of these technologies will become more entrenched is

difficult to say. In genera l, we see technologys role deepening in the next

three to five years, as consultants real ize that they can combine old and new

approaches seamlessly to provide better customer service in a dynamic

global environment. What precise mix of technologies provides the most

competitive advantages to the profession will be determined by market

forces and search firms who dare to innovate.

It wasnt long agothat many consultantsbelieved that LinkedInwould never have asignificant influenceon their business.

Now it is arguably themost powerful tool forsourcing candidates.

C O N C L U S I O N


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Sub-Committee Members of the Global Board of AESC:

Anton Der lyatka, Senior Partner at Ward Howell

Luis Truchado, Partner at EuroGalenus

Bennett Machtiger, Chief Marketing & Strategy Officer at Spencer Stuart

Breck Armstrong, Chief Information Officer at Boyden

Peter Kerridge, Managing Partner at Kerridge & Partners

Contributors from AESC:

Ethan Birchard, Managing Director at AESC

Peter Felix, President at AESC

Glenda Brown, Managing Director at AESC

Authors and HR Technology Exper ts:

Taras Polischuk, Talent Equity Ventures

James P. Rubin, Independent Wr iter and Contributor

CONTRIBUTORS


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