Bridging recruitment automation and applicant tracking.
 
By Sonal C Shah, President, Northwest Software, Inc.
 
Imagine an enterprise web based recruitment automation product that automatically finds the best candidates once a job (in any discipline) is posted and without any further manual intervention! Now imagine that such automation is uniquely intergated with today’s applicant tracking systems, therefore creating the whole new dimention in the enterprise human capital acquisition systems. Such a system is desirable in a soft market when critical considerations include reduction of total cost and doing more for less. Such a system is also desirable in growing markets as the opportunity cost of losing good candidates to the competition and speed of execution become even more critical factors.

Current recruitment process The traditional recruiting market is quite inefficient, costing up to 50% of an annual salary to fill a position and often taking 30 to 180 days. Conventional methods -- print advertising, job fairs, on-campus recruiting, internal referral programs, and headhunters -- are complex, time-consuming, and costly.

Online recruiting offers many opportunities to reduce cost-per-hire and time-to-hire by streamlining the recruiting process and providing real-time interaction between parties. Most companies turning to e-recruiting quickly get bogged down in the e-resume mess. A recent report by InterBizNet estimates 100 million resumes are listed. Job portals generate heavy traffic, causing bottlenecks for employers forced to deal with a flood of unqualified applicants. Organizations are finding it difficult to justify high job portal subscription prices (which is increasing exponentially year after year), as they still need to spend a lot of manual effort to weed out the interested, best qualified, and available candidates.

Active job seekers who have posted their resumes on job sites represent only a portion of the qualified pool of candidates. In addition, professional recruiters seek out passive candidates, who may not post their resumes because they tend to be higher quality talent who know they are in demand. A challenge for corporate recruiters is to constantly network and build a brand identity with as many passive candidates as possible. Companies spend millions of dollars for recruiting and advertising campaigns for their full-time positions to reinforce their branding. A large internal database, with millions of active and passive candidates, is created as a result. In addition to these internal sources of active and passive candidates, professional recruiters search in one or more external resume sources on the Internet including:

* Leading subscription-based job portals (e.g., monster.com, careerbuilder.com, hotjobs.com, dice.com, etc.)
* Directemployers.com -- a new site sponsored by major corporations in response to escalating costs for subscription-based portals
* Trade association sites for niche skills (e.g., such as oregonworks.org, napm.org, etc.)
* Unemployment sites listing individuals collecting unemployment benefits (see ajb.org)
* Popular resume newsgroups (e.g., misc.jobs.resumes)
* Search engines listing resumes for senior individuals on their own sites (e.g., yahoo, google, etc.)
* Diversity sites (e.g., diversityinc.com, etc.)


Solid Honor for Oregon’s Software Industry
Sonal Shah, President, Northwest Software, Inc. named Oregon Small Business Person


Sonal Shah, President of Northwest Software, Inc. has been selected by the U.S. Small Business Administration as the 2002 Oregon State Small Business Person of the Year, the highest state-level honor given annually. The Oregonian (5/16/02) reported this as a solid honor for Oregon software companies.

Sonal Shah said: "Trust, innovation, ethics and integrity are realistic goals that are not beyond our grasp, but within our reach and are the keys to success. You have the choice of being a "me too" supplier or you may choose to differentiate yourself by innovating. We chose innovation. Towards that goal, we invested over 30 people-years on patent-pending innovations. This enables us to compete with larger companies on a National level, and enhance customer value in terms of quality, price, and responsiveness."

At the awards ceremonies last month, Governor John Kitzhaber said: “…We are proud that you are Oregon’s small business winner. I know it takes incredible work to build a successful small business. Under your leadership, Northwest Software innovated, changed with change, and is making a difference in its markets. History has proven that businesses die without innovation and creativity in addressing the needs of the consumer. When a business dies out, employees lose jobs and the economy of the state and the country suffers...Congratulations to Sonal and her team.”

For more information, please visit email nsi@nwsi.com Tel: (503)-629-0303


It is virtually impossible for a recruiter to manually search all these sources for each new job on a continuous 24X7 basis. Highly paid recruiters spend about 60% of their time on the sourcing and screening functions of the recruitment process instead of on other, higher value-added functions. They source manually from some of the above resume sources. Their process of asking routine screening questions to qualify these candidates is extremely laborious and involves many rounds of phone tag. As some recruiters are unable (either because of the lack of time or technical expertise) to do in-depth screening, hiring managers spend unproductive time to screen unqualified prospects.

Donna Draper, Senior Corporate Recruiter, Computer Sciences Corporation, said: “Regardless of whether the market is soft or growing, it is no surprise that the process of sourcing and screening is expensive and inefficient, resulting in costly delays, lost productivities, and high cost-per-hire. During peak demands, senior recruiters rely on recruiting assistants who cost annually between $40K and $50K base salary (in our case), plus benefits and other overhead. These assistants are dedicated exclusively to Internet sourcing and initial screening, all of which is done manually, therefore limiting responsiveness and bandwidth. The opportunity cost of not hiring soon enough could also result in losing highly qualified candidates to the competition.”

The need for a new solution
Several years ago, Northwest Software faced many of the same problems and was seeking a solution that could solve all of these problems. Founded in 1988, Northwest Software, an information technology staffing and project solutions company, needed a way to differentiate itself in its intensely competitive contract labor market. Our vision was once you post a job description, the system should automatically find interested, available, and qualified candidates on a 24x7 basis without any manual intervention from the recruiter or hiring manager. Such automated sourcing and screening would become a key competitive advantage that would allow us to scale and compete on a national level. In addition, we needed seamless integration with all of the tracking and reporting features offered by an applicant tracking system.

At the outset, NSI ratified the needs and objectives of such a system with several Fortune 1000 and mid-sized companies. The consensus was that we were all looking for a solution that achieved the following objectives:

* Eliminate manual sourcing by finding the best matching candidate resumes from all available (internal and external) sources rapidly and on a 24x7 basis.
* Eliminate initial manual screening by requiring potentially qualified candidates (who are automatically identified and invited to apply by the system) to respond to job-specific general and technical questions.
* Reduce loss of quality candidates to the competition by in-depth sourcing and screening.
* Allow greater collaboration among the parties involved in human capital acquisition and build a knowledge base.
* Increase organization of job and candidate information so that information is readily and easily available while mapping with an organizational workflow and processes.
* Provide operational, statistical, and compliance reports. Specifically, track EEO data and streamline any related audit process.
* Co-exist with any ERP (PeopleSoft, SAP, Lawson) by considering resumes stored by these systems and exporting information on new candidate hires to these systems.
* Power the company’s website and reinforce company branding.
* Build relationships with candidates via digital marketing and TLCs to candidates who respond.

Current technologies
Hiring management systems range from comprehensive enterprise applications (also known as applicant tracking systems) to niche products focused on parts of the recruitment process. Many companies do their own recruiting by manual searching and screening, usually supported by an applicant tracking system. An applicant tracking system (ATS) tracks all events by candidate or specific job. ATSs routinely provide resume storage and retrieval, correspondence management, applicant tracking, and reporting. However, no ATS provides automated and job-specific active searching and screening that is integrated seamlessly. Some ATSs advertise that they source from millions of resumes on the Internet. The key question to ask providers of these ATSs is whether their system will automatically search, filter, and invite matching candidates on a job specific basis -- without any manual intervention after the job is posted. In the absence of such automation, highly paid recruiters need to spend a great deal of time to manually source and screen candidates -- extremely laborious, repetitive, and monotonous tasks. These systems do not fully harness the power of the Internet to integrate all aspects of recruiting from active candidate sourcing, through job-specific screening, to long-term relationship building and reporting.

Some resume management system providers offer resume-gathering spiders that collect information from different sites, but these tools are not usually fully integrated and do not reduce information overload. There still is a lot of manual and repetitive work to sort the needles from the hay, contact, qualify, and build a relationship with interested, available, and qualified candidates.

Bridging recruitment automation and applicant tracking
Northwest Software could not find an integrated system that met all of the above objectives. Therefore, we decided to invest in building a new application that would uniquely integrate recruitment automation with applicant tracking.

Recruiters can accurately define requirements before posting job vacancies both internally and externally. A wide range of sources including free sites, paid sites, and newsgroups are automatically searched using proprietary algorithms (based on AI and fuzzy logic) that evaluate the fit between a candidate’s resume and the job description.

“It is humanly impossible to put your eyeballs on every resume and manually invite every matching candidate,” said Draper. “Senior recruiters are better off spending time on high-leverage tasks (such as building relationships with qualified candidates) than on the manually intensive sourcing and screening tasks.”

Selected prospects are automatically sent a rich email and invited to come in to apply for a specific job. During the application process, they are screened further with a set of job-specific general and technical questions. A performance profile further describes how a candidate is a fit for a particular job. Interested, qualified, and available candidates are sorted, ranked, and presented to the recruiter or the hiring manager.

The new solution eliminates many of the manual steps associated in the recruiting life cycle shown. Automating the best recruiting practices frees human resource personnel and managers to focus on critical decision-making and other value-added activities, and enables all participants to spend more time building collaborative networks.



“Traditional applicant tracking systems are glorified electronic filing cabinets,” said Draper. “They are passive systems that work only to the extent you input data into them. The time has come for systems that go beyond applicant tracking -- systems that tap into the full potential of the Internet in order to minimize repetitive and manual work in the entire recruiting process.”

Soft or growing market considerations
In a soft market a plethora of candidates are available. This makes the sourcing and screening functions extremely time intensive and expensive. Further, companies seeking to do more for less have downsized and eliminated many jobs. “I find it very interesting that NSI is able to successfully work over a hundred open job orders with only four recruiters, whereas we overworked our four recruiters with a maximum of just 25 open orders, often fewer,” said Draper.

On the other hand in growing markets, or as companies gradually begin to rehire, their bias is to fill positions with laid-off workers in order to recover valuable human capital lost when they downsized. Unfortunately, companies do not have a structured system to stay in touch with these laid-off workers. Further, their competition is also targeting the same workers in order to gain valuable competitive knowledge. Therefore, in growing markets recruitment speed and on-going contact with these workers are critical factors.

Imagine the savings in a commodity-based procurement system – For both full-time employees and contract workers
Companies have optimized their supply chain by taking a commodity approach to bring together buyers and suppliers for their hard goods. However, companies have not yet applied a commodity approach to procure full-time or contractor human capital, and therefore have not fully tapped into the cost reduction potential.

Even in a soft market environment, the staffing industry generated some $66 billion in revenue in 2001 -- $56 billion from temporary help services and $10 billion in permanent placement services (Source: American Staffing Association). These numbers do not include the direct and indirect corporate labor costs associated with sourcing and screening manually. With regard to staffing revenues, suppliers justify a burdened premium (as opposed to a modest premium over payroll) as they spend a lot of time to source and screen qualified temporary workers. By applying a commodity-based approach, companies may substantially reduce their human capital procurement cost by targeting supplier premiums associated with both contract and permanent placements. Given the size of the staffing industry, even in a soft market, companies with significant spending (for either full-time and/or contractor procurement) may want to consider doing a study of their current process in order to identify cost-reduction opportunities. For a small investment, the recurring benefit could be substantial.

Background
Founded in 1988, Northwest Software, an information technology staffing and project solutions company, needed a way to differentiate itself in its intensely competitive contract labor market. It invested over 30 person-years in patent pending technology in order to transform many aspects of human capital acquisition into a commodity-based process. These innovations have helped Northwest Software lower total cost for its customers, while enhancing overall quality and responsiveness. As a result, it is now competing successfully with larger companies on a national level in order to meet the staffing needs of its Fortune 1000 clients.

Sonal Shah has over 15 years experience in contract labor staffing and human capital acquisition. She is the President of Northwest Software, a company that provides Information Technology and Technical staffing services to Fortune 1000 customers around the country. Fourteen years after its founding in 1988, Ms. Shah was named SBA’s 2002 Business Person of the year, the highest state level award. Northwest Software has become one of the premier woman-owned and innovative IT and technical staffing companies in the nation. Northwest Software has invested in EZRecruit, an enterprise ASP based recruitment automation and applicant tracking system. Northwest Software is a user and reseller of the EZRecruit system. Under Sonal’s leadership, Northwest Software has developed unique strategies to bring a commodity-based approach to human capital procurement. For more information, please email sonal@nwsi.com or call 503-629-0303.

 
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