Embracing disruption in the recruitment sector
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1 Embracing disruption in the recruitment sector
2 Embracing disruption in the recruitment sector Rapidly evolving technology, particularly the increasing adoption of artificial intelligence (AI), is seriously disrupting the UK recruitment sector. We take look at the changes, challenges and opportunities it raises for the industry. Disruptive technology and new forms of automation are seemingly bombarding the recruitment sector from all directions. The proliferation of online jobs boards and filtering services such as Direct Match, ubiquitous use of LinkedIn and new hybrid recruitment models have already posed a challenge to established contingent agencies and executive search firms. Further disruption has arisen from both big players like Google for Jobs and hired.com, as well as from lean and hungry tech start-ups like talent.io utilising increased automation. With the industry managing so much personal data, the advent of the General Data Protection Regulations (GDPR) is also causing ripples through the sector. And then there s AI. Although still evolving, the biggest impact of AI currently is around automation of repetitive processes through machine learning. The next level, boasting memory to learn and make decisions, has recently delivered autonomous vehicles and sophisticated chatbots, while upcoming generations of AI will understand human thoughts and emotions, although this is not quite a reality yet. Feeling the impact Why is all this technological disruption happening now and what does it mean for recruiters? Essentially, it s down to massively increased processing power and the sheer volume of data available. This impacts on recruiters in two key ways. Firstly, AI and other disruptive technologies are changing the nature of existing jobs and creating new jobs in all sectors. So recruitment companies should be striving to get in at ground level and be the go-to organisation for the new jobs being created. Secondly, these disruptive technologies can enable a recruitment business to spend less time on low-value work and focus on high-value activities because simple tasks can be automated. 2 of 8
3 Recruiters that can identify the low-value activities in their businesses that can be automated and leverage new technology to increase focus on high-value activities should be able to extend their reach, drive efficiency and deliver value to clients. An example from outside the recruitment sector is LawGeex, a tech legal firm specialising in automated contract reviews. In a test, a non-disclosure document containing five technical errors was run past a team of 12 lawyers and the firm s AI platform. The lawyers took 90 minutes to resolve the issues, the AI just two. Within the sector, customer relationship management (CRM) software such as Pulse helps firms to automatically capture all customer communications, phone calls and s in a single system. Other systems enables staffing firms to integrate and automate their in-house workflows from endto-end and there are also bots to help recruiters with GDPR compliance. Effective response Forward-thinking recruiters like SThree are blazing a trail to capitalise on these technologies. Andy Hallett of SThree likens the impact of disruption on the recruitment sector to TV series Game of Thrones, where a rapidly changing world is filled with threats from all directions. We know more disruption is coming but what are we going to do about it? To respond effectively recruiters need to disrupt themselves by asking what their customers want, and pre-empting where and how they are going to be disrupted, he says. This requires a long-term commitment to innovation, argues Andy, which is why SThree has a specialist innovation team running a research and development programme which is ring-fenced within its corporate structure. Build, buy or rent SThree has identified three broad strategies to respond to and embrace disruptive technology: build it, buy it or rent it. In terms of build, it has developed its own technology solutions such as the TalentDeck talent acquisition platform, its Showcaser video interview technology and HireFirst, a hybrid recruitment platform. Other disrupters have the technology but have much to learn about recruitment, says Andy. We ve got the knowledge, so we re building tech to deliver it more effectively, to push back against them. SThree has also acquired minority interests in a number of up and coming tech companies. Among these is RoboRecruiter, a recruitment-specific chat and messaging bot; The Sandpit, a startup incubator funding enterprise software for the recruitment sector; and the RightStaff platform, which is changing the way medical staff are supplied to the NHS cost-effectively. 3 of 8
4 And Andy says that sometimes there is no point in reinventing the wheel if someone is doing it really well already and it s simply easier to buy or hire proven third-party platforms such as Salesforce. You have to constantly spot who is trying to kill your business and commit to a culture of innovation to help you push back against the disrupters, get support from the top and look for people with the right digital backgrounds, including from outside the sector. Our motto isn t fail fast, it s learn quick, says Andy. Human qualities Disruptive technologies are of course also bringing about rapid changes to the way people work. In fact some roles are evolving so fast that the job spec has changed before an appointment is even made. Edward Short, Vice President for EMEA at leadership development and behavioural change specialists Potentialife, argues that rather than eliminating people from the workplace, AI and automation actually help reinforce the importance of human qualities to recruitment sector businesses and their client companies. Organisational structures are more fluid and messy today and jobs are moving away from being role-based, he explains. If you re recruiting people around roles you re behind the curve. Previously, the most important thing was a good CV and skills, now it s attitude. Increasingly, companies want people with different behaviours and the right attitude sets. Organisations are clamouring for peak performers who can demonstrate nuanced, value-adding human qualities like innovative thinking, authenticity, collaboration, delegation and smart risk-taking. Within recruitment organisations that translates to having staff with the ability to understand how people will perform most effectively within a team culture, who are able to gauge interpersonal skills and culture-fit, and provide a differentiated candidate experience. Ed questions whether robots and algorithms can really do these intuitive human things. Not yet, anyway, he suggests. However, there are a huge number of steps in the recruitment process and introducing AI and automation technology removes the most tedious, low-value tasks, freeing up time for the high-value, human-touch activities. So, it seems there is still a vital role for the personal touch. Recruiters need to decide which part of the recruitment process they can automate with 4 of 8
5 technology to free up their people to focus on these essential human elements. They ll be better at identifying candidates with the right attitude sets, understanding what hiring managers are looking for and matching them up, says Ed. Data management risks The enormous amount of personal data handled in recruitment makes GDPR a further and increasingly pressing disrupter for recruiters. The new regulations mean new requirements for firms, such as how to respond to data access requests, the need to have a data protection officer in place and the need to report any data breaches within 72 hours. To manage the impact of GDPR businesses need to understand their data landscape and take a risk-based approach, explains John MacKnight of risk analysis consultancy CRA. While the regulator is neutral about the technologies supporting data processing, individuals have specific rights relating to automated decisionmaking and profiling, activities possibly handled by AI. You have to be conscious of how you use that technology and must make people aware of it. John stresses that reputational risk is the main GDPR issue for recruiters and recommends starting a risk register to create a baseline of understanding in order to develop layers of appropriate defence. He adds: Defences can include the technology solutions available to help manage GDPR but there s no silver bullet and human error will often be the weakest link. Grasping the opportunities Technology is undoubtedly bringing massive changes, challenges and opportunities to the traditional recruitment business. But the demand for high quality recruitment services is likely to continue to grow unabated as the UK seeks to address the talent gap post-brexit. Those businesses prepared to engage people with the necessary skillsets to embrace and adapt to AI will be able to focus on higher-value, high-end activities, potentially opening up major business opportunities and financial returns. The key is understanding how technology can be of most value in solving clients problems. While the sector will certainly look very different in the future, the rewards will be considerable for those that get it right. 5 of 8
6 Biographies Andreas Iacovou Relationship Director Barclays T: +44 (0) E: Andreas Iacovou is a Relationship Director working in the Business Services Industry Team in London. Andreas has a Bachelor s degree with honours in Economics and Law and has benefited from working in the information technology and banking sectors over the last 20 years. Andreas joined Barclays in 2008 as an Industry Specialist in the Business Services Team and now heads up the recruitment sector industry team. Prior to embarking on a career in finance, Andreas worked for a number of technology companies and was involved in the early development of the Tesco.com ecommerce offering. As an industry specialist at Barclays, Andreas has developed considerable understanding of the business services sector and is considered to be a trusted adviser to his clients. 6 of 8
7 Biographies Martin Atkins Partner and Business Services Specialist Menzies T: +44 (0) E: Martin primarily acts for SMEs and large companies, providing financial solutions to enable them to drive their business on and achieve their financial goals. He believes strongly in offering a practical approach to clients financial situations, not only listening to their needs and desires, but also providing tailored accountancy and tax advice based on his knowledge, experience and what is best for the client. Martin combines accountancy, audit and tax knowledge gained over the years to offer honest advice, support and guidance regarding the issues faced by small and medium-sized. His services range from facilitating monthly board meetings and acting as a quasi-financial director, to intensive hand-holding exercises with clients, guiding businesses through financial matters on an almost daily basis. 7 of 8
8 Biographies Tim Dunn Partner and Recruitment Specialist Menzies T: +44 (0) E: Tim Dunn runs a portfolio of SME clients and is a member of the business services sector team at Menzies, with a specific focus and expertise working with clients in the recruitment industry. With over 20 years experience in this sector Tim works hard to ensure compliance matters are attended to with the minimum of fuss, and he uses his experience to provide proactive advice and commercial solutions to the challenges clients face. With his good understanding of technology and software (in particular cloud based applications), Tim can help design innovative efficient solutions for clients. barclayscorporate.com Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No ). Registered in England. Registered number is with registered office at 1 Churchill Place, London E14 5HP. Item Ref: BM June of 8
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