What Is the State of the Labor Market Today?
How Successful Are Organizations at Talent Acquisition?
How Effective Are Today’s Talent Acquisition Technologies?
Which Technologies Are Most Common?
Where Do Organizations Post Jobs and How Effective Are These Channels?
Are Organizations Using Mobile and AI Technologies?
What Is the Future of Talent Acquisition Technology?
What Do Recruitment Technology Leaders Do Differently?
Takeaways…
Executive Summary
The on-again, off-again “war for talent” is back on in various nations, especially the United States. Consider the following facts:
- In late November 2021, U.S. initial unemployment claims tumbled to their lowest point since 1969.
- The U.S. unemployment rate fell to 4.2% in November 2021.
- In the U.S., a record-high 4.4 million people, or 3% of workers, quit their job in September 2021, part of a trend that some are calling the “great resignation.”
- There are also signs that this “great resignation” trend is extending to some other nations as well. For example, an August 2021 survey indicated that a third of all German companies were reporting a dearth in skilled workers, and authorities in Beijing, China, are warning of a growing shortage of skilled employees in its crucial technology industry.
As a result of these and other developments, talent acquisition professionals are under intense pressure to hire quality employees who can be retained over time. To accomplish this, many are leaning more heavily on talent acquisition technologies to help them quickly and efficiently fill vacancies with qualified candidates. Even so, this study shows that HR departments in many organizations are failing to take full advantage of what talent acquisition (TA) technologies can offer.
This study not only examines these trends but also looks at how organizations that use TA technologies more effectively differ from those that are less effective users. In addition, it outlines predictions of how TA technologies are most likely to be used in the near-term future.
About the Survey
The survey, called “The Future of Recruitment Technologies,” ran in the fourth quarter of 2021. There were responses from 214 HR professionals with 146 responding to every question.
Questions for the survey were guided by an independent panel of recruitment technology experts whom we thank for their invaluable insights.
- Tharoor, I. (2021, October 18). The ‘Great Resignation’ goes global. The Washington Post. Retrieved from htt ps://ww w.washingtonpost.com/ world/2021/10/18/labor-great-resignation-global/
- Liu, J. (2021, November 12). ¬A record 4.4 million people quit in September as Great Resignation shows no signs of stopping. CNBC. Retrieved from http s://ww w.cnbc.com/2021/11/12/a-record-4point4-million-people-quit-jobs-in-september-great-resignation.html
- Tharoor, I. (2021, October 18). The ‘Great Resignation’ goes global. The Washington Post. Retrieved from htt ps://ww w.washingtonpost.com/ world/2021/10/18/labor-great-resignation-global/
| Major 1 Finding Major 2 Finding | Most organizations are struggling with talent acquisition to some extent. Only about half of organizations report that the quality of their hires is above average or excellent. Only a third say their ability to control cost of hires is above average or excellent.Just 26% give their organizations high marks in the area of time to fill a position.Most (59%) say it takes nine weeks or more to fill a senior-level position. Talent acquisition technologies are useful but there’s much room for improvement. Just 42% say their talent acquisition technologies are good or excellent. Further, almost one-quarter (24%) of participants say their talent acquisition technologies are below average or poor. |
- Only three talent-acquisition-related technologies are used by more than half of respondents:
applicant tracking systems (ATS)
background checking
video conferencing
- Although ATSs are most widely cited as an effective TA technology, more than a third of organizations that use them say their ATS sometimes filters out potentially good candidates by mistake.
| Major 3 Finding | Many organizations have not yet adopted mobile or AI technologies for recruitment purposes. More than a quarter of respondents (28%) say their organization does not use any mobile technologies in talent acquisition.Fewer than half of respondents (49%) say their organization has mobile-accessible career sites.Just 36% say their organization’s HR department is generally knowledgeable about using AI for the purposes of enhancing talent acquisition. In fact, nearly half (48%) actively disagree. The top three features that HR professionals would most like to see in an AI-powered talent acquisition application are: ability to assess (e.g., determine skill levels of candidate) ability to predict (e.g., predict which job candidate will result in the highest quality of hire) ability to personalize (e.g., personalize recruitment process) |
| Major 4 Finding | Most expect moderate to great change in talent acquisition over the next two years. The large majority say talent acquisition tools and technologies (88%), online sources used for talent acquisition (86%) and talent acquisition methods and practices (82%) will change to a moderate or great extent over the next two years.Further, the majority of respondents agree or strongly agree that, over the next two years: TA technologies will become more useful (76%) there will be greater emphasis on hiring diverse candidates (71%) |
| Major 5 Finding | When compared with recruitment technology laggards, recruitment technology leaders are: ● seven times more likely than laggards to have excellent time-to-fill outcomes |
- nearly three times more likely to have excellent quality-of-hire outcomes
- more than twice as likely to have excellent cost-of-hire outcomes
- more than twice as likely to have highly effective internal postings or emails
- less likely to spend more than nine weeks to fill entry-level positions
What Is the State of the Labor Market Today?
Although every nation has its own patterns and challenges, some experts view the great resignation as being global in nature. For example, an August 2021 survey indicated that a third of all Germany companies were reporting a dearth in skilled workers, and authorities in Beijing, China, are warning of a growing shortage of skilled employees in its crucial technology industry.
As a result of these and similar trends, recruiting talent has become a struggle for many organizations. Employers are adapting to this renewed “war for talent” by upgrading perks, allowing for more flexible work arrangements, and increasing compensation. But with high resignation rates expected to continue well into 2022, recruiting new employees is just half of the story; employers need to be able to retain them as well.
Amid all these challenges, employers are striving to improve their talent acquisition capabilities but, as the next finding shows, many face difficulties.
How Successful Are Organizations at Talent Acquisition?
Only about half of organizations report that the quality of their hires is above average or excellent. The news is even grimmer in other areas. Only a third say their ability to control cost of hires is above average or excellent, and a mere 26% give their organizations high marks in the area of time to fill a position.
A variety of factors could contribute to this lag in hiring time. Currently, many organizations are in a battle for talent, some even offering signing bonuses and perks to differentiate them from the competition. Also, HR departments have had a lot on their plate due to pandemic-response tasks and may be slower in scheduling interviews or fulfilling other necessary steps in the recruitment and hiring process.
Impact of organization size
Respondents in larger organizations are less likely to say their organization is excellent in any of the three talent acquisition metrics provided. For example, 25% of respondents in small organizations and 22% of respondents in mid-sized organizations rate their quality of hire as excellent. By comparison, just 11% of respondents in large organizations say the same.
Entry-level roles can typically be filled in less than four weeks (52%), whereas senior-level roles typically take more than nine weeks to fill (59%).
It is logical that senior level positions take longer to fill. These positions may have more rounds of interviews to ensure qualification as well as culture fit. High-profile positions may also need approval from senior level employees, such as the CEO, which can add an extra layer to the hiring process.
While situations vary between organizational circumstances, this data provides a benchmark to help HR professionals estimate whether the time their organization takes to fill positions is below or above average. For example, 8% say that it takes more than 10 weeks to fill an entry level position, which is much longer than the average. Consider looking at the hiring process and identifying where the bottlenecks and roadblocks are to streamline the process in your organization.
Impact of organization size
The larger the organization, the longer it takes to fill roles. For example, very few large organizations are able to fill senior-level roles in one to four weeks (2%), whereas 16% of mid-sized and 17% of small organizations can do so in the same time frame. We see a similar trend in hiring entry-level workers. Most small and mid-sized organizations can hire for an entry-level position in one to four weeks (57% and 60% respectively) whereas only 41% of large organizations can do the same.
Finding: The proportion of regrettable hires is alarmingly high in some organizations
We wanted to dive deeper to assess quality of hire and so we asked respondents to write in how many of their new hires in the past year they would hire again if they had the chance to do it over again. In other words, how many new hires were “regrettable hires”? While no hiring process will get it right 100% of the time, it would be fair to expect 80% or more of the new hires to be good choices. However, only half of organizations have that level of success.
Just over one-fifth (22%) say 60% to 79% of new employees are worthy of being rehired (in other words, 21% to 40% of new hires were regrettable hires). Worryingly, 24% say they would rehire fewer than 60% of the employees hired in the past year.
How Effective Are Today’s Talent Acquisition Technologies?
How can employers deal with the many challenges related to talent acquisition? One possible answer is to take fuller advantage of the evolving and expanding range of available technologies. To accomplish this, however, organizations must first assess the current state of those technologies.
Finding: Fewer than half rate the overall quality of their organization’s talent acquisition-related technologies positively
Given the amount of attention talent acquisition technologies have received in the past decade, one might hope that by now most companies would feel positively about their systems. Unfortunately, that’s not the case. Only 42% of respondents describe their talent acquisition technologies as good or excellent.
There are three main factors that might be causing firms to have a disappointing experience with talent acquisition technologies. First, as we’ve reported, talent acquisition itself remains a challenging process in an era when TA is a high priority.
Second, talent acquisition processes are complex and best practices will vary from firm to firm. It can be difficult and costly to customize talent acquisition technology that is up to the task and well-integrated with other systems in the organization’s tech stack.
Third, HR might not have the budget to regularly upgrade its technology. The technology may have been state-of-the-art at the time of implementation but then became outdated over time. In a sense, all the advances made in talent acquisition technology can work against HR because they may not have the budget to implement new and helpful tools as they get released.
Impact of organization size
As organizations get larger, talent acquisition technology begins to struggle more. Whereas 47% of small and 44% of mid-sized organizations say their talent acquisition technology is good or excellent, only 38% of large organizations say so. This is presumably a result of the increasing complexity that comes with larger organizational size, which increases the demands on technology.
Which Technologies Are Most Common?
Finding: Most companies use few of the talent-acquisition-related technologies that are now available
Although virtually all respondents (97%) say their organizations use some type of TA technology, only three talent-acquisition-related technologies are currently used by more than half of the respondents:
- applicant tracking systems (68%)
- background checking (61%)
- video conferencing (60%)
Just under half (45%) use an employee referral system and 38% social media tools.
While a few of the technologies covered in this question might be considered “exotic” (e.g., AI-driven interviewing, virtual reality), most of them deal with standard elements of the recruiting process. In other words, relatively few companies are taking advantage of all the technologies on offer, or their current technologies don’t have these features added yet. Organizations may be sticking with a handful of core technologies rather than spreading their budget across numerous applications. After all, these technologies would also need to be integrated with one another to be effective recruitment tools.
Impact of organization size
Larger organizations are more than twice as likely as small organizations to use an ATS (88% vs. 41%). Mid-sized organizations fall in the middle, with 65% using an ATS.
Finding: ATS are the most commonly used technology, and also the most helpful
We asked respondents to indicate the five technologies that have most helped their organization improve talent acquisition success. Only one technology was selected by more than half of respondents: applicant track systems, or ATS (58%).
The second most helpful technology is meeting/video conferencing software (34%). Naturally, with more remote hiring, more recruiting professionals turned to remote interviewing in place of in-person interviews.
However, when we compare use against helpfulness, the data tells a slightly different story. For example, when confined only to those who say they use an ATS, fully 80% say it is one of the five technologies that helps their organization see TA success.
Finding: More than a third say their ATSs sometimes filter out potentially good candidates by mistake
One fear about ATSs is that they will mistakenly filter out good candidates. This is a legitimate concern in many organizations that use an ATS. In fact, more than a third (36%) say that, to at least a moderate extent, their ATSs filter out candidates who might otherwise turn out to be good job candidates. On the other hand, only 9% say their ATS’s algorithm filters out potentially good candidates to a high or very high extent, and about two-thirds (65%) say it happens to a low extent or not at all.
We should note that we removed the 11% of respondents who say they don’t know the extent to the extent to which their ATS do this. We would recommend that such organizations attempt to find out the degree to which such unintentional filtering occurs. Moreover, even though this appears to be a rare occurrence for a majority organizations, HR should consider doing spot checks of filtered out candidates and adjust the screening algorithm if errors are found.
Impact of organization size
Respondents at large organizations are more likely to feel their ATS filters are working well. More than half (51%) of respondents in large organizations say their ATS doesn’t filter out potentially good candidates at all, compared with 38% of respondents in mid-sized organizations and 29% of those in small organizations.
Editor’s Note: This chart does not contain the 11% of participants who responded “Don’t know” to this question.
Where Do Organizations Post Jobs and How Effective Are These Channels?
Finding: Most organizations use their company’s website to post open positions
Once a company identifies a need to fill a position, the next step is to post the job. The most highly used place to post jobs is the company’s website (70%). Company websites are readily available and there’s no extra cost to post a job. However, as we will see in the next finding, this method is not always the most effective. Fifty percent also say internal posting or emails are highly used.
Two-thirds (66%) say job boards are highly used to advertise their open positions. However, we did not specify whether the job boards in question were free or pay-to-post.
Finding: Job boards are most commonly viewed as highly effective job-posting tools
While the company’s website is the most popular place for job postings, it is not the most effective tool. Just 28% say the company’s website is highly effective, though another 47% say it is moderately effective. Although it may not be the most effective approach, it is likely cost effective.
Respondents say job boards are the most effective means of posting jobs. Nonetheless, only about half (49%) say this method is highly effective. By comparison, just 22% say internal postings or emails are highly effective and just 28% say social media sites are.
Perhaps the takeaway here is that a variety of tools and methods should be used when it comes to job postings. Organizations need to consider both effectiveness and costs in their recruitment considerations.
Impact of organization size
Smaller organizations are slightly more likely to see more success with posting jobs on social networking sites. More than one-third (35%) of respondents at small organizations say social networking sites are highly effective tools for job postings, whereas 30% of respondents at mid-sized and 25% of respondents at large organizations say the same.
Finding: While job boards and company websites are the obvious places to put jobs postings, there are many other options
We asked respondents to write in a response to the question: “What other tools, if any, are effectively used for job postings in your organization?”
Their answers included a variety of methods not covered in the previous question. Some methods such as podcasting are relatively unconventional. More traditional methods include billboards, transportation advertising, ads in trade publications, or even word of mouth. Although it may sometimes coincide with job board ads, programmatic advertising was also mentioned.
Are Organizations Using Mobile and AI Technologies?
Finding: Many organizations still have not adopted mobile capabilities in their talent acquisition practices
Given the prominence of smartphones and tablet computers today, it is disappointing to see that 28% of respondents say their organization does not use any mobile-related technologies for talent acquisition. Just 49% leverage something as basic as a mobile-accessible career site.
Moreover, few make use of texting in the recruiting process. Just 37% say their organization uses texting to engage with applicants, and 33% say they use texting to schedule and confirm assessments or interviews.
We believe that organizations may be missing out on a large portion of qualified candidates without adopting mobile-friendly technologies. In fact, some sources suggest mobile job applications are becoming more popular than desktop job applications.
Finding: Just 36% say their HR department is generally knowledgeable about using AI for enhancing talent acquisition
Nearly half of respondents (48%) actively disagree that HR is generally knowledgeable about using artificial intelligence, or AI, for the purposes of enhancing talent acquisition. While this is a large number, it may be understandable as AI is a relatively new technology, and HR may not always have the budget to try out and master such new technology.
However, more than one-third (36%) agree or strongly agree that their
HR departments are generally knowledgeable about using AI in the TA process. It’s a good sign that so many HR departments are staying up to date with the latest technical innovations in talent acquisition technology. Not all AI tools are mature enough for widespread use, but we can be confident that AI will become increasingly prominent in the HR and talent acquisition function, and it’s reasonable to expect HR to be proactively learning about it.
Finding: About two-fifths (41%) would like to see AI-powered talent acquisition applications be able to personalize the recruitment process
When we asked respondents what they want from AI-powered talent acquisition applications, the top two answers relate to finding a quality hire:
- ability to assess (e.g., determine skill levels of the candidate)
- ability to predict (e.g., predict which job candidate will result in the highest quality of hire)
The third most commonly cited feature on HR’s wish list is the ability to personalize the recruitment process (41%). Indeed, this may be one key way to enhance the experiences of job candidates.
The more sophisticated aspects of AI do not appear to be high up on HR’s wish list. For example, few would like to see AI have the ability read facial expressions (9%) or be able to simulate a conversation (8%).
What Is the Future of Talent Acquisition Technology?
Finding: The large majority of respondents expect at least moderate change in talent acquisition methods, technologies and online sources of talent over the next two years
Talent acquisition is a fast-evolving HR function. Most respondents are expecting changes in talent acquisition methods, technologies, and online sources over the next two years.
The area most likely to see change is in talent acquisition technologies and tools, cited by 88% of respondents. That is, nearly half of the respondents (49%) say they expect great change and a further 39% expect a moderate change. Eighty-two percent also say they expect a moderate or great change in talent acquisition methods and practices.
Finding: Respondents are most likely to want technologies that do a better job of finding and filtering in qualified candidates
Nearly all respondents (97%) want more from their future TA technologies and services. The most cited feature respondents would like to see from future technologies is being better at finding top candidates (65%). This is closely followed by the related goal of improving the filtering in those qualified candidates (62%). In other words, the top priority is creating a strong candidate pool. However, simply finding candidates isn’t enough; respondents also want to their technologies to be better at matching job titles with searches.
Respondents would also like to see the recruiting process become more efficient. Half wish for better integration with other systems, and 45% want their technologies and services to be better at analyzing process bottlenecks.
Since technologies are constantly evolving, talent acquisition leaders should keep an eye on whether new or upgraded products will address their wish list of needs.
Finding: Nearly three-quarters (71%) agree or strongly agree that there will be greater emphasis on hiring diverse candidates over the next two years
What can we expect in talent acquisition over the next two years? The majority agree or strongly agree that:
- technologies will become more useful (76%)
- there will be greater emphasis on hiring diverse candidates (71%)
These two points can feed off each other. Having robust technologies could enable organizations to focus more successfully on diversity, equity and inclusion (DEI) issues. For example, technologies such as resume anonymization can be used to weed out unconscious bias and provide a more equitable hiring process.
Few say that hiring will slow down. In fact, 44% agree that hiring will focus more on remote workers. Nearly half (47%) say hiring will be more automated, which could potentially free up talent acquisition professionals to focus on more strategic or high-touch work.
What Do Recruitment Technology Leaders Do Differently?
To better understand the outcomes of effective recruitment technologies, we divided the survey into two cohorts:
- Recruitment technology leaders: Respondents who answered the question, “How would you rate the overall quality of talent acquisition technologies used in your organization?” as “good” or “excellent.”
- Recruitment technology laggards: Respondents who answered “average,” “below average,” or “poor” to the same question.
In the findings below, we shorten these to “recruitment tech leaders” and “recruitment tech laggards.”
Finding: Recruitment tech leaders are more likely to say their ATS helps improve talent acquisition success
Recruitment tech leaders are not only more likely to use an ATS but are also more likely to say their ATS is one of the top five technologies that has helped improve talent acquisition in their organization. In short, they know how to make the best use of their ATS.
Finding: Recruitment tech leaders are nearly three times more likely than laggards to have excellent TA outcomes
Better, faster, cheaper—those three words summarize the differences between recruitment tech leaders and laggards. Recruitment tech leaders are three times more likely to say their quality of hires is excellent, more than twice as likely to say their cost of hire is excellent, and seven time more likely to say their time to fill is excellent.
The data suggests that proper usage of recruitment technology can have a positive impact on the recruitment outcomes organizations care most about.
Finding: Recruitment tech leaders are able to fill all employee-level positions faster
When it comes to time to fill positions, recruitment tech laggards are more likely to spend nine weeks or more filling entry-level, mid-level and senior-level positions. Nearly two-thirds (64%) of recruitment tech laggards say it takes nine weeks or more to fill senior-level positions, but just 50% of recruitment tech leaders say the same.
Finding: Recruitment tech leaders get much better value out of all the tools they use for posting jobs
Recruitment tech leaders are nearly twice as likely as laggards to say posting jobs on the company’s website is highly effective (39% vs. 21%). While both recruiting tech leaders and laggards use social networking sites to roughly the same degree, tech leaders are able to use them more effectively. It’s not enough to have a tool; you need the time, effort, and skill to make it worthwhile.
Finding: Recruitment tech leaders are more than twice as likely as laggards to have an HR department that is generally knowledgeable about the use of AI for talent acquisition
AI is beginning to be applied to various aspects of talent acquisition. One of the most important uses of AI is in the initial screening of applications. AI can also be used to find candidates who match a job description, to schedule interviews, or to communicate with applicants via a chatbot.
More than half (54%) of recruitment tech leaders agree or strongly agree their HR departments are generally knowledgeable about AI for the purposes of enhancing talent acquisition. By comparison, just 22% of recruitment tech laggards say the same.
Takeaways
| Key Take away Key Take away | 1 2 | Start by evaluating TA success. Look at metrics such as quality of hire, regrettable hires, time to fill and cost per hire. Determine where your TA processes could be improved. Where are the weaknesses and bottlenecks? How can they be addressed, and could better TA technologies be part of the solution? Ensure your talent-acquisition-related technologies and those who use them are up to par. Organizations with good talent acquisition technologies tend to get better results on all the critical elements of recruitment. While good technology can make the recruitment process easier and faster, it might also enable your organization to compete for talent on an equal footing with rivals. Buying new technology can be the easy part of the process of enhancing talent acquisition capability. What organizations may find harder is successfully implementing the technology, enabling all the key features and getting user adoption. Further, consider training all employees who handle recruitment on how to get the most out of your talent acquisition technologies. |
| Key Take away | 3 | Expand the range of talent acquisition technologies you use. Organizations mainly use ATS, background checking, and video conferencing when it comes to talent acquisition technologies. However, there are many different categories of technology that can be used to optimize recruiting. Consider researching which other technologies would benefit your organization if added to your TA technology stack. |
| Key Take away | 4 | Gauge the effectiveness and cost effectiveness of different methods and technologies. Once those evaluations are made, determine if any of these technologies can be used more wisely and effectively. See if you |
Based on the results of our research, below are some recommendations for organizations seeking to improve their usage of TA technologies and the overall success of their TA efforts.
can calculate the return on investment of the various technology usages.
Based on these evaluations, modify processes as needed.
| Key Take away | Audit your ATS to ensure it isn’t filtering out good candidates. Start by defining what a “good candidate” is in your organization. This may evolve over time and be different for different positions. Decide on a reasonable position to audit. Look over the candidates your ATS “filtered in” for that position. Then have an experienced recruitment expert look through those who were “filtered out.” Does the expert see examples of candidates who look as or more promising than those who were filtered in? If so, then determine how this happened and tweak the filtering algorithms so they are in better alignment with your organization’s standards and objectives. | |
| Key Take away | 6 | Identify bottlenecks in time-to-fill. One of the benefits of having an integrated collection of talent acquisition technologies is that it becomes possible to see where the bottlenecks in the process are occurring. An ongoing analysis of these bottlenecks will reduce the time it takes to fill vacancies. |
| Key Take away | 7 | Go mobile. If you haven’t considered mobile-friendly applications for your talent acquisition function, then your organization is already behind. Mobile is increasingly commonplace, so ensuring mobile friendly recruitment means you won’t miss out on a significant portion of potential candidates. |
| Key Take away | Keep learning about AI. AI offers great promise for various aspects of recruiting. Keep an eye on what AI can do by asking vendors for demos, running pilots, and talking to peers in other organizations to see what they have looked at and benefited from. But also be aware of the potential drawbacks of using AI for talent acquisition. | |
| Key Take away | Do your homework. There is a wide range of available technologies. Determine which ones are of greatest value to your particular organization’s objectives. Keep in mind that as circumstances and objectives change over time, the proper mix of TA technologies may change as well. |
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[4] Tharoor, I. (2021, October 18). The ‘Great Resignation’ goes global. The Washington Post. Retrieved from ht tps://w ww.washingtonpost.com/ world/2021/10/18/labor-great-resignation-global/
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