Case #1 – MrTed’s SmartRecruitersThe recent HR Technology show in Chicago reinforced within me the idea that many automated HR solutions have problems. Most HR products are first-generation attempts to automate the record-keeping, transaction processing and most tedious aspects of human resources.
The recent HR Technology show in Chicago reinforced within me the idea that many automated HR solutions have problems. Most HR products are first-generation attempts to automate the record-keeping, transaction processing and most tedious aspects of human resources. In fact, many of today's HR solutions (e.g., benefits enrollment or performance evaluations) are simply automated versions of a previously manual task.
HR solutions are desperately in need of reengineering. Sacred cows need to be sent to the slaughterhouse and a genuine rethink of HR technology is in order. The proof of this reengineering need is out there in spades. Just look at how many novel new technologies have originated in the HR space in recent years. Two weeks ago, I saw firms challenge concepts like:
- Are resumes really needed to initiate world-class recruiting?
- Are job boards relevant today when there are over 20,000 - 40,000 job boards in existence?
- Do all interviews have to take place in person?
- Can someone come up with a better way of developing questions for interviewees?
- Can't we do a better job of predicting who will or won't work out well if promoted to a higher position?
New products are coming to market because technology constraints are fewer, the cost of technology has come down and creative technologists are starting to chip away at the out of date belief system older HR systems were designed to serve. But more than anything else, new HR solutions are appearing because prior solutions are inadequate, irrelevant or wrong.
For the next few posts, I will highlight some of the more interesting new technologies coming out in the HR space. The purpose of these posts is to promote discourse and to challenge the status quo in HR solutions.
The concept behind SmartRecruiters is pretty straightforward: Mid-market firms, like their larger enterprise brethren, want an applicant tracking system (ATS). But, an ATS can be an expensive proposition for the SMB marketplace buyer. An applicant tracking system acts as a book of records for applicants and other jobseekers interested in a given firm. In theory, resumes and/or job applications are placed in the ATS and can be sorted, stored and retrieved at a later date by a company’s HR recruiting group. A good ATS is often linked to a company's corporate website.
SMB firms generally lack an ATS because of the significant upfront cost to acquire the software and to integrate it with their corporate website. SMB companies may lack the technical staff or IT budget to bring an ATS in-house.
What SMB firms have instead is a manual application tracking system. You and I may know it as a file cabinet. Resumes go in and are hard to find again in the future. Some firms have developed sophisticated Microsoft Excel spreadsheets to supplement these paper-based files.
SmartRecruiters realizes that SMB firms will have a limited budget for HR technology solutions. An ATS, while valuable, will often fail to make the cut for capital funding in an SMB firm. However, these same companies will buy job postings on major job boards and utilize other related technologies services when needed or as monies become available.
SmartRecruiters is a free ATS for the SMB marketplace. Moreover, the software is hosted via a software as a service (SaaS) solution so that SMB firms incur no added IT costs to began utilizing the service. Companies can personalize their online applicant tracking system to make it feel/appeal consistent with their company’s branding. Everything about the ATS service is free to an SMB firm.
So how does MrTed make its money? The company makes no money off of the hosted ATS. It can make money though when SMB users utilize some of the add-on technologies that MrTed has integrated with the free ATS. These complementary technologies include compensation surveys, employment background checks, personality tests, listings on job boards, etc. What's interesting about these add-on services is that they are offered by the drink (i.e., SaaS-based) as well.
The revolutionary (and reengineered) aspects of this solution to me are:
- a recognition that SMB buyers have different economic and business hurdles than larger enterprise buyers
- an ATS by itself adds little value. Value comes when firms can acquire related services (e.g., employment verification) at a point of need in the recruiting process.
- Software as a service means more than just a difference in software delivery models. Much of the dialogue in ERP circles is whether a product is sold on premise or on demand. Here, MrTed has taken the view that an ATS can be hosted in a software as a service fashion and can be free, too. This means that in certain enterprise situations, free is an acceptable form of SasS solution.