2020 Talent Predictions That Probably Won’t Happen
There’s not a whole lot in talent acquisition that anyone can actually predict (its inherent unpredictability is what makes recruiting fun, after all), but that doesn’t stop every prognosticator and pundit in the TA and HR Technology business from trying.
Perhaps the most predictable thing in the entire business of talent are the specious, spurious and soporific “prediction” posts that proliferate on pretty much every editorial calendar in the industry.
Sometimes, of course, the “analysts” whose analysis mostly consists of analyzing anecdotal evidence get one right; give enough monkeys enough typewriters, as they say, and eventually, they’ll write a compelling job description. The chances aren’t good, but, as the immortal Steve Urkel pointed out after Laura told him there’s a one in a million chance that she’ll agree to go on a date with him, “at least there’s still a chance.”
So, before I disclaim this entire post by pointing out that no one, particularly me, is capable of actually knowing what’s new and what’s next in recruiting and hiring, I should point out that yeah, there’s a chance that I might get one or two of these (well informed) predictions right.
Now, if you need actual expertise to navigate the digital transformation, technology landscape and constantly evolving world of work, well, click here – because Allegis Global Solutions understands what evolving talent organizations need today to compete for – and win – the top talent of tomorrow.
In the meantime, here are some educated guesses from yours truly on which talent trends every HR and recruiting pro should know for 2020.
1. The Echo Chamber
Conversational intelligence is conventional wisdom in recruiting at this point, but for some reason, we’re more preoccupied with building bots and adjusting algorithms than we are with anticipating a trend that’s been self-evident in consumer technology for several years now.
Voice search has moved from margins to the mainstream, and with it, so too have candidates’ online search behaviors and expectations. What technologist Mary Meeker refers to as “The Voice Based Front End” should have a profound impact on talent technology in the coming years.
If we agree candidates are consumers, consider that Comscore predicts over half of all online searches in 2020 will originate from voice enabled devices like the Amazon Echo, Siri, Cortana or Google Assistant.
These technologies are increasingly becoming part of our personal lives; eMarketer reports that by 2021, 122.7 million Americans, or 42.2% of the US internet population, will use voice assistants daily (with similar penetration being evidenced in markets all around the world).
Another recent study found that nearly 58% of internet users globally reported to using voice search to research a local business in the last 12 months; fully 42% of those users who utilized a voice assistant like Google or Amazon searched for information on a business at least daily.
What consumers wanted most from these voice searches were information on a business’ products, company information and scheduling (such as medical appointments and reservations); 26% of voice based business searches resulted in the user clicking through to the company website.
In terms of market penetration, consumer adoption and search volume, it’s pretty obvious that the same sort of shift in search is coming to how job seekers look for jobs, and will be an increasingly critical part of every recruitment marketing strategy (and, likely, the roadmap at more or less every TA tech vendor out there, with applications ranging from job boards to CRM and ATS systems to programmatic ad platforms and more).
A year ago, I probably would have dismissed this as one of those specious and suspect fads, but in the arms race for online job search supremacy, the increasing importance of voice search isn’t a question of if, but when. And it’s probably a whole lot sooner than you think.
2. Survival of the Biggest
While institutional capital will continue to pour into the HR Technology vertical in 2020, the nature of that funding, and the key players, will change dramatically as capital is being increasingly concentrated in late round funding of a few players.
Investors are moving from the high volume of high risk, high reward deals involving early stage, emerging startups in talent tech, as we’ve seen for the past few years of financing, to less volatile and lower risk (albeit higher dollar value) investments in more mature, less volatile companies.
Part of this is being driven by the fear of a looming recession (something as yet unsupported by job numbers), and part as a sort of hedge against the soaring multiples and overt overvaluations (WeWork, anyone?) that public markets and private equity firms are quickly correcting.
TL;DR: all of those startups that have been popping up over the past few years in HR Technology will either be purchased by private equity firms and bigger software companies, will merge with other small startups as a survival tactic, or disappear entirely.
The HR Technology market received an estimated $5B in funding in 2019, capping off a four-year run of record quarters for deal size and deal volume in HR Tech; many investors want to start seeing some returns and solid revenue soon, particularly as the HR Tech market matures and consolidates.
From the whopping $11 billion buyout of Ultimate Software by PE shop Hellman and Friedman in February to the $200M majority stake K1 took in Jobvite that same month), private equity seems to see a lot of opportunities in the HR Technology market, which means that there is likely still a lot of TAM left to address in the next few years.
Similarly, bigger players are investing or subsuming emerging solutions (eg Workday’s ‘strategic investment’ in CRM provider Beamery or Indeed’s acquisition of programmatic platform ClickIQ or SAP’s headline grabbing $8B acquisition of Qualtrics), which has historically been a primary M&A strategy in the HR Technology market, as enterprise software providers can more quickly integrate point solutions’ functionality, features, proprietary IP and existing customer contracts faster than building them. The result may be a whole new generation of “Frankensuites” in HR Technology, but from a market share perspective, that strategy certainly hasn’t hurt the incumbents.
Finally, we’re seeing more companies coming together to ensure their continued survival and viability, the result of increased cost of business, competitive landscape and the drying up of VC in all but a few more mature players. Whether framed as an acquisition (Entelo/ConveyIQ; Smashfly/Symphony Talent) or as a merger of equals (Indeed/Glassdoor; Saba/Lumesse), the smaller players realize that in a world where it’s survival of the biggest, size absolutely matters.
The last scenario, of course, is that many companies simply run out of funding and simply cease to exist; this will be the most common “exit event” for startups in the HR Technology space in 2020 (as it has always been, given the assumed rate of failure inherent to VC investment). This year, expect to see some spectacular fails as once meteoric startups crash back to earth – and the market snaps back to reality.
Why does this matter to HR and recruiting practitioners? Well, simply put, there’s a whole lot of uncertainty about a whole lot of vendors, many of whom have long term contracts in place with their current customers; in an M&A event, this could include changes that significantly alter employers’ HR Tech stacks and total talent strategy.
If you want to know the direction HR technology is going, follow consumer technology. If you want to know the direction the HR Technology industry is going, follow the money.
3. Internal Mobility is Everything
Generally, retention is considered an HR initiative. This is an increasingly critical flaw in most hiring processes: once a hire happens, they functionally move from the purview of talent acquisition to the purview of HR.
HR’s playbook looks at retention from the perspective of employee satisfaction and traditional engagement metrics – not so much delivering long-term value. Recruiting should take a different approach: Upward mobility, career advancement, and the sort of aspirational, “it’s not just a job, it’s a career” things that get written into job descriptions will increasingly be the focus of corporate TA in 2020, as opposed to just in time sourcing, screening and selection of largely external candidates, as has historically been almost a default strategy for filling a requisition.
Despite the fact that internal hires consistently make up over half of all hires and are the top source of hire year after year (and have been so since the start of SOH surveys), companies spend relatively little time or resources on internal mobility as opposed to external search. The result of this approach is that fully 1 out of every 4 new exempt hires fail within the first year (a pretty high failure rate for recruiting), while the cost of backfilling those hires continues to increase (currently about $4500 a pop).
Additionally, employee tenure is at an all-time low, and industry churn is at an all-time high, which means not only are workers leaving, but they’re leaving to go work at your competitors. If talent really is a company’s greatest asset, this could have inordinate and unexpected costs.
Increasingly, companies will look to increase internal hires and promotions in 2020 as a way to increase retention, employee engagement, worker satisfaction and quality of hire. They will do this largely by using matching technologies to proactively source internal candidates against external talent for every open req (and machine learning should, inevitably, make internal hiring even more prevalent, given they’re 400x more likely to get hired than an external applicant, something that algorithms should quickly pick up on).
Enterprise employers will also realize that their process is broken, and begin to streamline or eliminate many of the barriers that make it difficult for internal hires to apply for roles (like requiring prior permission from their current supervisor before applying for an open role).
It’s really simple. We talk all the time about this concept of talent communities, right? Well, your org chart, or company directory, functionally serves as a talent community. So, if you need to find all the marketing people with consumer product experience in your organization, you can easily do that using the most rudimentary human capital management (HCM) system.
When a job opens up, instead of going straight to publicly posting it to job boards and searching external resume databases for potential candidates, go into your HCM and ATS, instead.
If you don’t start your searches by looking inside first, then half the time you’re really just reinventing the wheel with every search. If you want to make the hire, which is every recruiter’s job, then internal mobility is the most efficient and effective way to get that job done. And that small step might just be the biggest trend to watch in 2020 – and beyond.
After all, the future of work is a work in progress. And your workers of the future are statistically likely to be your workers of today, too. Once we figure that out, we’ll make the recruitment function of tomorrow better. Together.