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Five Scenarios for the Future of Recruiting

Podcast with HR marketing consultant and industry analyst, John Sumser

 
John Sumser, HRExaminer
John Sumser

"If there's ever been a time that resists planning, it's this time. And one of the things we call all do to make the economy move, is help each other figure out what's going to happen next."

Welcome to a Talent Acquisition Channel podcast on TotalPicture Radio with Peter Clayton reporting. Joining us today is Special Contributor to TotalPicture Radio, John Sumser.

John is the Founder and Editor of the recently launched A well known industry analyst, Sumser is also the CEO of Two Color Hat, a media and HR Marketing Consultancy which provides product analysis, market segmentation, positioning, strategy and branding guidance for the Recruiting Industry and Human Resources Field. (In a past life, John sold doughnuts door-to-door. I sold vacuum cleaners. Maybe that's why we get along so well). In HRExaminer, John is writing an excellent series as a lead-up to his presentation and conversation at ERE Expo 2010 Spring in San Diego titled, The Five Scenarios for the Future of Recruiting.

At ERE Expo, John's presentation - Recruiting Disruption- will cover just enough of the basics to get a conversation started.

Consider the following

  • The recruiting profession is 30% to 50% smaller than it was 18 months ago.
  • Many more HR Generalists are filling the recruiting role.
  • Technology is changing rapidly.
  • A new generation is coming to work.
  • Sourcing is simultaneously separating from the selection process and transforming itself.
  • Meanwhile, good enough sourcing is on everyone’s desktop. It just keeps getting better.
  • Social Recruiting is grabbing a foothold.
  • Salary transparency makes candidates smarter about the deal.
  • Workplace reviews create brand management problems.
  • The effective unemployment rate of 18% creates a candidate deluge.
  • Budgets are trimmed to the bone.
  • The publishing industry, which once provided the infrastructure for employment advertising is dead.
  • Other industries are in peril creating a sea of displaced, disrupted workers.
  • Old ideas of privacy are under assault.
  • Economic forecasts are impossible to believe (your company’s or the government’s)
  • Employment branding is gaining traction in health-care markets.

HRExaminer's Major Trend Areas and Their Key Sub Components

Demographics

Overall: The Northern hemisphere is getting older; the southern is getting younger

  • Guild cities: Increasingly, people move to cities where other people in the same profession work.
  • Aging Boomers: Career changes in light of a realistic retirement age of 75
  • New work styles: Telecommuting, independent contractor status, portfolio jobs
  • Educational Choice: Fewer and fewer technologists, more and more liberal arts
  • Supervision: Increasingly younger workers are supervising their parents’ peers

Organizational Design

Overall: The post-industrial organization is emerging; it looks more like a coral reef than a supply chain

  • Flattening: Networks obliterate hierarchies
  • Synergies: More and more work is hard to describe and multifunctional
  • Contract Management: The key to intra-organizational communications and vendor management
  • Matrix Management: More bosses for everyone is becoming the norm
  • Culture: Recruiting and mobility programs that favor culture over expertise

Globalization

Overall: Regardless of size, all companies are global.

  • Work hours and work week: redefined to customer – colleague convenience
  • Talent: Finding the right person is no longer a ’single origin’ question
  • Value: Created in the place with lowest cost/highest effectiveness
  • Culture: Sensitivity is a technical issue. Naming data properly is critical in cross-cultural workforces
  • Economic Environment - Some reason to believe that the New Normal means slower growth

Technology

Overall: The flow of technology not only remains overwhelming but increases

  • SaaS: Zero external investment and the promise of technology agility make SaaS the tool of the time
  • Search: Emergence of Recruiting databases that precede the Applicant Tracking System
  • Mobile: Sourcing is a mobile business
  • HTML5: Websites fight back; the future is not all Social Media
  • Implementation: Contract administration is a core HR discipline
  • Acquisition: Requirements documentation and internal change management are core HR capabilities
  • Enterprise: Unwieldy ‘big iron’ systems take heat from more agile SaaS tools
  • CRM: Recruiting workflow is about maintaining relationships; plucking the fruit out of the orchard

Social Media

Overall: Twitter nation or twitterbation. The jury is still out

  • Blogging: Preceded the rise of the kind of journalism that isn’t so ‘ism’
  • Death of Publishing: The niche editor is the new power broker
  • Social Graph: The new background check and referral system
  • Collaboration: The promise of a voice for everyone is overextended
  • Job Boards: Finding their ground. Job boards aggregate opportunity and opportunists in a way that has no peer.

Search For Better Returns

Overall: Leaner, meaner businesses pursue effectiveness relentlessly

  • Outsourcing: If it’s a process, it will be outsourced. Cost always wins when value is equal
  • Definition of Employment: 40% of the workforce is independent by 2020
  • HR Metrics: Emergence of proactive HR metrics that drive organizational performance
  • Lean Disciplines: Ever increased focus on bottom line results

Energy and Sustainability

Overall: Energy and sustainability practices will shape the workplace

  • Energy choice: Determines where we work
  • Energy Source: Shapes technology
  • Telecommuting: Perfected through Globalization
  • Foundation: Many trends (above) depend on energy price and availability

Interview Transcript, John Sumser

©Total Picture, Inc.

Welcome to an Inside Recruiting Channel podcast here on Total Picture Radio. This is Peter Clayton reporting.

Joining us today is special contributor to Total Picture Radio, John Sumser. John is the founder and editor of the recently launched HR Examiner. He's a well known industry analyst and also the CEO of Two Color Hat, a media and HR marketing consultancy which provides product analysis, market segmentation, positioning, strategy, and brand guidance for the recruiting industry and HR resources fields.

In HR Examiner, John is writing an excellent series as a lead up to his presentation and conversation at ERE Expo 2010 Spring in San Diego. It's titled the Five Scenarios for the Future of Recruiting.

PETER: John, welcome back to Total Picture Radio.

JOHN: Hey Peter, how are you?

PETER: I'm great. It's good to be talking to you again.

JOHN: Yeah, the sun is finally out here in southern California and I'm happy to see it, so it's a great day here.

PETER: I'm looking forward to coming to San Diego and getting some of that sunshine, believe me.

JOHN: That's one of the great things about ERE in the spring is that it's in San Diego, it will be sunny, you can get rid of your winter coat for a couple of days. On top of that, there is going to be all that great content and this interesting thing that we're doing with the Five Scenarios for the Future of Recruiting.

PETER: Absolutely. You've structured this series on a technique developed by Shell in the 1980s called scenario planning. Can you give us some background on what this involves.

JOHN: The interesting thing about trying to predict the future is that every prediction that you could possibly make is going to be wrong, and that's a befuddling thing if you're trying to plan.

At Shell in the 70s and early 80s, they came up with an amazing approach called scenario planning. What scenario planning is, is the idea that you look at wildly different possible futures and imagine that those futures are true and then use that to figure out what you really need to pay attention to in your going forward planning.

For example, when they did the first scenario planning exercise, it was the 70s and they looked at a whole bunch of stuff and they realized that nobody had ever really thought hard about what would happen if there was a change in oil supply or a change in the price of oil. As the result of their scenario planning, they went ahead and did a series of things to insulate Shell from changes in price, and when the OPEC cartel crunch came, Shell was the only one of the major oil companies to survive intact. They began there and they started perfecting this process.

What you do is you imagine a great story about some aspect of the future and then tell it thoroughly and then double back to see how that affects the stuff that you hold dear to your heart.

PETER: That's really interesting. How have you evolved this scenario planning process in development of this series that you're doing for ERE, the Five Scenarios for the Future of Recruiting?

JOHN: One of the things that I've learned by doing this experiment is that there are really sort of two aspects to how the future of recruiting and HR is going to unfold.

One is that world events play a really powerful and important role. If oil goes to $200/barrel next year, it will change everything we know about how you do recruiting because commuting will become impossible. We'll have to figure out how to do telecommuting and telepresence and it will shift the mix from onsite employees to offsite contractors almost instantaneously.

So there are these big scenarios about the future of the world, and then there are also some logical scenarios about the future of recruiting. So we're looking at how technology is evolving, what it means to have a job board, what's the impact of social recruiting – so you get these two complementary but very different dynamics as you look at the process.

PETER: In the research you've done for the series, John, how has the recruiting function changed in the past 12-18 months, or has it?

JOHN: Well, there has been a crazy thing that's happened and nobody was really prepared for this. When the economic downturn hit, about 70% of all recruiters lost their jobs. That doesn't mean that recruiting isn't being done; it means that the game has changed substantially.

When you think about what recruiting is, recruiting is mostly the replacement of people who have jobs that are known qualities. So when the head of production finds another job, you have to replace him and there is a job requisition and you know sort of pretty well what you want.

Even in the downturn, that level of work is 11% of all of the people who are in the economy; 11% of people have changed jobs in 2009 in spite of the economy.

The other piece is brand new jobs that are the result of growth and of course, there are none of those. And the brand new jobs that are the result of growth are where recruiters are really quite specialized, so the people who do that growth stuff have sort of disappeared or retrenched and there is 30% of the profession left. The work is larger than that 30% can do, so all sorts of different people are starting to participate in the recruiting process, including people you used to think of as HR generalists who now have much broader responsibility as the HR department contracted, these people got bigger and bigger jobs and so they're doing recruiting. And if you go to something like the ERE conference, you'll see way more people who are HR generalists than you would have 18 months ago.

PETER: Let's talk a little bit about some of the scenarios that you've come up with for this series of articles, some of the trends that will be impacting recruiting, such as organizational development and globalization, the technology that's being used now in recruiting and social media, what have you been able to uncover?

JOHN: There are a couple of things. One of the pieces that is really interesting and really sort of covered up by the downturn is the demographic crisis is accelerating and it's global. Over the course of the next 20 years, the number of people who are over 40 just shoots through the ceiling and it happens everywhere in the world. So demographics, meaning, how do you operate your business with more old people in it, how do you deal with the fact that there is a relative correlation between age and wage? So the aging of the workforce means that it gets more expensive to do stuff and that drives you right into the globalization question. So there are going to be amazing conversations about do we move this work from here to Brazil because the southern hemisphere is where all the young people are going to be 20 years from now? And if we move this work from here to Brazil, what do we do about the over 60 employees who are going to be displaced by this and how do you adjust that?

There are big overlapping pieces between the trends you laid out, demographics, globalization and what the OD (organizational development) function will be doing in the midst of all this is wrestling with the redefinition of work because older workers under the pressure that I just described are going to be willing to work for less, for fewer benefits under different arrangements than younger or middle aged workers might be, and so there is going to be a new kind of competition in the workplace and in the workforce in general.

Then you go over and you look at technology and what's really interesting about technology is we're right on the edges of the next revolution in technology and it's not social media. The revolutions in automation have been from mainframe to PC, from PC to client server, from client server to the web, from the web to if you've got to Web 2.0. Now we're heading into a world where the techniques that have been pioneered by Google, Yahoo, Facebook, Twitter, not social but social construct of those things but the underlying technology concept of those things is going to start really taking off and it is as different a way of thinking about computing as mainframe to PC or PC to web. So there are two or three players in the HR and recruiting space who are operating like Google or Yahoo and the rest of them are back in what is now the 20th century stone ages. So there is going to be a big splash because things will be different.

The other thing that's happening at the intersection of technology and OD, is that people are starting to realize that every single silo, HR included, but HR, manufacturing, engineering production, operations, everyone of these silos has their own information infrastructure and they're not talking to each other even when you've got Oracle or SAP or PeopleSoft in place, those big silos don't talk to each other and so there is going to be a combination of information technology in OD interventions designed to integrate the organization again.

The last one that you asked about social media. I'm wondering very hard about social media. It certainly is all the rage but it seems to me that it's currently like a diet of cotton candy; you can eat a lot of it, you know its light, it's airy and you can stuff a bunch of it in your face but it's not very nutritious and it's not very interesting. That's what we're fighting.

PETER: From a recruiters standpoint… in the marketplace article you wrote in this series one of the statistics you mention is 80% of all companies have fewer than 100 employees so do they use a different recruiting methodology than companies with 500 employees or 5000 employees and what does this mean for jobseekers?

JOHN: It's really interesting. Companies that have less than a 100 employees don't advertise at Monster. They don't use job boards. They don't have a recruiter working in the company. If you've got a company with less than 100 employees, I would imagine you're the company owner, Peter, and you're trying to figure out how to get a new person to do X. You're as liable to call me up and ask me what my kids are doing as anything else. So it's a much more network kind of recruiting that happens in that sub 100 space but really interesting, that's where all of the jobs that the economy are created. All of them. All of them!

I imagine that what's going to happen is a couple of things. There is going to be an explosion. I imagine the number of sub 100 person companies is going to go way up as the big corporations learn to outsource to little companies. And when that happens, there is going to be a real revolution in how recruiting happens from a job hunter's perspective and what that will look like is brand new interesting niches for job boards to penetrate. This is where the job boards are going to find their rebirth in these little markets that make up 85% of the overall workforce and probably some tags into social software that allow people who are interested in finding out about each other to find out about each other. So I think that's going to be exciting.

PETER: That really changes the whole dynamics of the employment market because as you said, these small companies aren't putting their jobs up on the Monsters and CareerBuilders, right?

JOHN: That's right. That's right. You know the way that it works if I work in the bakery and you work in the bookstore across the street and I'm coming into the bookstore everyday on my lunch hour, after a couple of years, we're going to start talking about whether or not you want to come to work in the bakery or I want to go work in the bookstore. And so, these jobs that emerge don't emerge like they do in big companies. They emerge as conversations that turn into jobs rather than pieces of paper that turn into jobs.

PETER: Right. So it's almost serendipity rather than here's a job req, go out and fill it.

JOHN: Exactly, there's no job req. The way that a job gets created is I've got a company and I'm working seven days a week because I started the company, finally some money comes in, and after I finally gotten the kids shoes and clothes, I go look to find somebody to hire so I don't have to work all the time. Right?

PETER: Exactly.

JOHN: It's not a req. What I want to do is buy a couple of days off a week, not hire a junior underwater basket weaver; I want to hire somebody so that I can get some time off.

PETER: Back to the scenario that you mentioned, you want to hire somebody that you probably already know and trust.

JOHN: Or at least I have a way of knowing and trusting them. So I will try very hard to reach through people I know or neighborhoods that I know. I've started a company in the early 90s that needed to do a lot of website reviewing. There was no such thing as a website reviewer in those days. So we thought and thought and eventually, we ended up hiring all of the kids out of the local video store. We hired the kids out of the local video store because they knew how to review visual stuff quickly and authoritatively and we knew the neighborhood they were from, so we had some idea of what their values would be like. We hired 20 kids. We totally robbed that video store of people. J The kids were happier because they could sit down and look at the computer and had to write 500 words a day or something.

PETER: The most entertaining headline in the series of the Five Scenarios has be Invasion of the Shallybots. Can you give us some explanation of this?

JOHN: Sure. One of the things that's really interesting about where we already are and that, by the way, is something that you learn about when you try to think about the future. Where we already are is that there are small bits of software that are doing all sorts of things for us. When I drive through the tollbooth on the Golden Gate Bridge, a small bit of software looks at my car and deducts $5 from my checking account and when I pick up my phone, a small bit of software figures out where I am and what that means. I have a bunch of small bits of software that watch the news for me. Those things are all called bots – these little tiny bits of stuff. We're living in a world that is increasingly about bots servicing human beings.

Now when I think about recruiting and I think about the stuff that is most easily automated, I think about Shally Steckerl Sourcing Initiatives and the way that everybody in that profession spends time figuring out how to get just the right search query to find just the right person. So I imagine that there will be a library of hundreds of thousands of small little bots that are constantly looking for a person who has got the following 17 different characteristics and I decided to call them Shallybots as a tribute to the great work that Shally has done over the years.

PETER: I think this really brings up what you were talking about previously, if 80% of the jobs out there are truly with very, very small local organizations, it's going to be someone who comes up with developing these kind of bots that's going to have the opportunity to go out and find exactly the person they're looking for in exactly the location they need them.

JOHN: I think that's right, and so this is where you start to see some of the products and services and paths that are available for the evolution of recruiting in ways that are not just more of the same because if there is anything that's clear, it's that we're not going to have just more of the same.

PETER: Has there been any data or information you've uncovered in doing your research for the Five Scenario series that has surprised you?

JOHN: In some ways, it all surprises me. Part of what I believe you have to do to be effective as a planner is an idea that seems to me to be the way that I navigate the world and you should have really strong ideas, but you should not hold them very dear. So strong ideas loosely held is how I operate and what you need to do to make scenario planning work and that means that I spend a fair amount of time trying to have my mind blown.

What I have stumbled upon – I've stumbled upon a number of things. The process and research has gotten me to read maybe 150 books and those books range from evolution and bioengineering to… I just finished a great one called Streetlights and Shadows by Gary Klein and it is about the fallacies in the ways that people are taught to make decisions. People are taught to make decisions by considering the pros and cons or researching this and researching that and it turns out the way that most people make decisions is by gut instinct and that gut instinct actually is a preferable way to make decisions than a structured way.

I got to reading about that because I was trying to figure out how much automation might actually take over decision making for us and it turns out from what I can tell that the biggest thing that we have to look forward to is a lot of decisions to make and that automation probably isn't going to take over decision making, but it's going to take over the basic grungy part of finding all of the little bits of information so that you've got decisions to make so we'll spend more and more of our time making decisions and less and less and less of our time trying to figure out what decisions to make.

PETER: You're calling your presentation at ERE a conversation – it's called Recruiting Disruption. What are your expectations and what are you hoping to get out of your session at ERE?

JOHN: So the whole idea behind this experiment is a good one. I've done about 40 presentations in the last couple of years at un-conferences. For people who are listening to this who don't know what an un-conference is, an un-conference is a really smart thing that's happening in the conference world.

You know, you go to a conference and the fundamental thing that happens at most conferences is there is the person on the stage and then everyone else, and there is this supposition that the person on the stage somehow knows more than everybody else in the room and that just isn't true any more. In an era where everybody has access to the same internet, the difference between an expert and a non-expert is hypothetical at best. And so the un-conference movement is designed to try to minimize that difference between expert and audience and have sessions that are more conversational and less about I know something that you don't know.

The problem is those things don't work very well and they don't work very well because of a couple of factors. One factor is that the organizational structure of un-conferences puts you in the business of having everybody in the room being equal, and when you have a conversation amongst equals and there are 40 or 50 people who in that group of being equal, the conversation always has to go to the lowest common denominator and that means that un-conference sessions are often uniquely stupid.

PETER: Why do they have to find the lowest common denominator?

JOHN: It's an evolution, and you find the lowest common denominator because anybody can go to any session. And so what I try to do here is over the course of the 10 weeks preceding this adventure is give away absolutely everything that I could find to give away on the subject so that if you read everything that is in the article series – the 10 article series and they're being published all over the place, they're on ERE and they're on the HR Examiner and they're on some LinkedIn groups. If you read that stuff, you get more than everything than you get in the presentation on the material.

You get something like 12-13,000 words on the subject of the future of recruiting. Now if you've got that and if you come, then what I expect to do is have a 5 or 6 minute presentation that says here's the stuff that was covered coming in here, let's talk about it, because what should be the case is that everybody who is in that room will be prepared. It's the difference between having a conversation where everybody starts on the same page and then departs, versus the kind of conversation where people just drift into it.

I liken a lot of what I see in social media – there is this great bar in D.C. called the Dubliner, and when you go to the Dubliner on St. Patrick's Day, they manage to cram about 1000 people into a space that the fire marshal says will hold 70, and it's noisy and it's crazy and it's a lot of fun, but the only conversation happens is people yelling epithets at the bartender trying to get a beer. J A lot of social media is like that, right?

A lot of social media is really like that and what you want to do is uplevel it so that it's like a reading room somewhere in a library or that it's a meeting of people who share a common understanding of a couple of things and are interested in trying to figure out how to solve a problem, either together or based on the information they get from collaborating.

I guess what I'm saying in a way is that social media, in spite of all the rhetoric is not very conducive to collaboration and if you want to have collaboration, you have to have preparation. I'm trying to offer a way where there can be a prepared group of people going into a conversation. And then the other thing that I want to do, I'm bringing in enough money to buy a lot of people dinner because I can't imagine why a good conversation on this subject shouldn't last five or six hours.

It's scheduled at the last corner of the last breakout session during the ERE conference with the idea that it can go on into the evening and that it can be something other than one more chance to sit in a stiffback chair, sneaking a look at Twitter on your laptop while you make doodles on the thing and eat the hotel's candies. We've all been there, right?

PETER: Oh yeah.

JOHN: I'm really not interested in putting people through that sort of torture anymore. I'm much more interested in trying to figure out how to make this something that is a really high value, high engagement transaction for everybody who touches it.

PETER: One last question for you John; what would you like the audience to know or be prepared for at ERE?

JOHN: I think it would be really interesting to have people come with their real close at hand planning problems, how do you figure out how to get through this year or next year and see if there isn't a way to talk about using scenario planning and the scenarios that have been put in front of everybody in this process as a way of getting your arms around what's going to happen in the next couple of years.

If there has ever been a time that resists planning, it's this time, and one of the things that we can all do to make the economy move and lubricate is help each other figure out what's going to happen next. Good, bad, indifferent, having some clearer picture of what the next thing is, what the new normal is, is where we need to be.

I think a conversation like this can be a movement in that direction.

PETER: John, thank you so much for taking time to speak with us today and I look forward to seeing you in a couple of weeks in San Diego.

JOHN: Thanks Peter, it's always wonderful to talk to you.

PETER: Thank you.

John Sumser is founder and editor of HR Examiner. You can connect with him at HRExaminer.com.

Peter Clayton

About Peter Clayton

Peter Clayton, Producer/Host, is an award-winning producer/director of radio, television, documentary, video, interactive and Web-based media who has created breakthrough media for a wide array of Fortune 100 clients.

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