The surest way to earn 3x revenue and 3x profit as your peers? Invest in recruiting.

The current global marketplace is highly dependent on technology, but when it comes to finding and hiring the best candidates, much of the tech deployed to do so is out of date. With power shifting from hiring teams to candidates themselves, coupled with forecasted talent shortages in the coming years, companies need to assure they have the best systems in place for candidates to apply quickly, easily, and on the go.

Recruitment systems, usually integrated into blanket enterprise resource planning (ERP) models are notoriously clunky. Tech reminiscent of the dot-com boom has no place in a world run from smartphones and social media. Management often misidentifies talent acquisition as weeding through resumes, and chooses an ERP with back-office HR functions in mind. That’s because most ERP models specialize in managing specific aspects of HR like payroll, benefits, and performance management. While settling for an ERP with a “good enough” Applicant Tracking System can seem like a simple solution, the Boston Consultant Group found that companies who make the investment to assure they’re recruiting the best talent earn three times the revenue and two times the profit of their peers.

With the world is moving at an ever-faster pace, candidates aren’t compelled to fill out long applications. With one-step-apply features on sites like LinkedIn, many expect to send their CV with the press of a button. A recent CareerBuilder study found “the more in-demand a skill set, the less likely a job seeker with that skill set will jump through hoops.”

Thus Recruiting has had to turn itself inside out, and put effort not only on intake, but acting more like a marketing department, attracting potential candidates to their organization before the usual process is underway. In a survey of SmartRecruiters’ Marketplace partners, 30 percent said recruiting marketing tools were what they were most likely to invest in this year.

While slow, some organizations are waking up to the problem more quickly than others. According to a recent IDC survey, 23 percent changed ATS solutions in the past 18 months —and another 22 percent plan to make a change in the next 18 months. But this doesn’t necessarily mean going for a complete overhaul.

Many still turn to a Recruiting Point Solution (RPS), specialized software that supplements the shortfalls of an organization’s blanket ATS. Many companies look to RPS to “plug holes” in their aging ERP package, and though this might seem like a quick fix, the problems associated with having an RPS and an ERP can be numerous. Instead of addressing fundamental problems in their HR software, companies end up doubling-up on recruiting programs, and overpaying. Additionally, many ERP’s operate as individual entities, making transferring data between a company’s ERP and its band-aid RPS an IT nightmare.

For companies willing to leave ERP behind, there’s best of breed (BoB) – systems organized like a digital lunch buffet. Companies pick and choose relevant software across all fields of HR – talent acquisition, talent management, and workforce management. This allows companies to ditch their expensive and overly configured ERPs for a conglomeration of sleek, targeted systems. Some BoBs, like SmartRecruiters, also offer a marketplace, an integrated collection of third-party technology that provides an easy platform for companies to continue to integrate into modern systems. Beginning with the SmartRecruiters Talent Acquisition Suite, an engine that gives hiring teams the newest tools for recruitment marketing, applicant tracking, and onboarding, companies can continue to acquire top-of-the-line HR software that encompasses functions like payroll and onboarding. The benefits of BoB don’t stop there.

The SmartRecruiters Marketplace is fully integrated within a single system, allowing data to be transferred seamlessly between programs as if it was a single ERP platform, with a range of third-party services organizations need to keep ahead of the curve in today’s war for talent. In the SmartRecruiters Marketplace survey of where this year’s big spends will occur, tools to address self-scheduling, onboarding, and analytics were only outranked by methods to address diversity hiring – essential to be seen as forward-thinking and inclusionary in 2018.

Additionally, the pick-and-choose aspect allows companies to slim down their HR systems to only what they need, saving resources that would have previously been wasted on an overpriced ERP.

BoB systems are a multi-faceted solution to a multi-faceted problem, providing a platform for companies to choose specialized HR software from industry leaders, all integrated into a single BoB system.

Recruiting Tech Options — ERP or BoB?

• ERP models are all-inclusive Human Resources packages, a blanket software aimed at integrating all of a company’s HR needs onto a single platform. Unfortunately, many of these behemoths base their programs on outdated technology; and, due to the production of all HR software being delegated to a single team, many features of ERP’s, especially those based around recruitment, lack the features present in a more specialized Talent Acquisition Suite.
• ERP models often specialize in managing specific aspects of HR like payroll, benefits, and performance management, while other features, mainly those centered around recruitment, feel tacked-on, in order to present a complete HR package to the market.
• Many companies look to Recruiting Point Solutions (RPS), in order to “plug holes” in their aging ERP package. The problems associated with this can be numerous. Instead of addressing fundamental problems in their HR software, companies end up doubling-up on recruiting programs, and subsequently overpaying. Additionally, many ERP’s operate as individual entities, making transferring data between a company’s ERP and its band-aid RPS difficult and time-consuming, creating a disconnect between the candidate and hiring team.
• Talent Acquisition Suites bring the integration of all-inclusive ERP’s and the modernity of RPS’ into a single package. Designed to target one specific aspect of the hiring process, TAS’ are at the forefront of technological innovation. TAS’ track job candidates from the moment they show interest in a position, through to the end of the hiring process.
• Due to its modernity, a TAS will be able to integrate with job-posting sites like Monster and LinkedIn, allowing a company to advertise positions, review applications, schedule interviews, and make hiring decisions seamlessly, all from a single platform.
• SmartRecruiters is constantly updating their software in order to stay cutting edge. “When you buy an off-the-shelf ATS, it’s out of date as soon as you buy it.” (Tracey Allison)
• Although ATS systems have become the industry standard for Talent Acquisition, Aptitude Research found that 51 percent of companies are employing multiple ATS systems, and only 20 percent of companies are satisfied with their current ATS.
• The SmartRecruiters Marketplace allows companies to pick-and-choose their HR software from industry leaders, all of which is fully integrated into the same same system.

Companies have no greater brand advocates than employees, whose role in sourcing top-quality talent should not be overlooked.

Compared to previous years, hires resulting from employee referrals is declining, thanks in part to the rise of custom, targeted campaigns and social media outreach to build talent pools. As a result, referrals are no longer the top method for sourcing high quality candidates. But that doesn’t mean organizations should abandon their referral strategies. Recent studies report that referral and recruiter-sourced applicants account for 27 percent of all company hires.

The appeal of employee referrals is multifaceted: they typically draw a higher volume of qualified candidates who—by the virtue of already being an employee—are more likely to be a better company fit and often cost less than a non-referral candidate. Crowdsourcing your candidates through referrals is not only an effective method for finding great talent, it can align with a larger TA strategy emphasizing company branding and employee engagement.

1. Referrals Improve Quality of Candidates and Hires

In a competitive market, hiring top candidates quickly is the difference between success or failure. By leveraging your entire employee network to source both active and passive candidates, your candidate pool is already much wider and more diverse without additional effort. Fast-tracking vetted candidates cuts down on the need for several steps in the recruitment process, including job description writing, ad posting, resume collection, and candidate screening.

In Tech, where specialized skills are in high demand, referrals and custom campaigns are better at attracting the right talent than job boards or other traditional recruitment methods. When sourcing for specific roles, many employees only refer candidates they think are qualified for the role, as their recommendation reflects on their judgment. Recruiters are more likely to see an increased number of quality applicants that not only cost less than non-referral candidates, but are faster to hire and onboard.

2. Company Branding is the Focus of Recruiter Marketing

Today, recruiters and hiring managers are doubling down on their efforts to maintain a marketing-focused strategy in their talent acquisition, with brand values being pushed to the frontlines of these efforts. When marketing company brand to candidates, companies have no greater advocates than their own employees. Social media posts and other positive promotion can be effective tools to this end.

Websites like Glassdoor offer current and past employees a platform to express their opinions about companies, and this transparency directly affects candidate decisions. A 2016 study found that 75 percent of job seekers consider the employer’s brand and reputation before even applying for a position, so it’s important for companies to engage with their employees and, in turn, prospective candidates.

3. Referrals Impact Employee Engagement

Organizations often create incentives for referrals through employee referral programs (ERPs) that encourage current employees to think about and emphasize the positives that make the organization one worth working for, and to spread the news throughout their network. Employees have stakes in the company’s success, so if they are engaged and active in building out the team with top performers, they will feel more valued and appreciated. Additionally, recognizing the actions of your employees, rewarding quality efforts, and creating friendly competition to achieve a team goal will also boost employee appreciation, which helps raise motivation.

To avoid spamming your employees with all open positions, nurture a pool of specific referrers who have connections for the type of role that needs to be filled. This personal and targeted approach will significantly boost your response rates, as well as the quality of referrals. Targeting the company’s top-performing employees is a good first step.

4. Highlighting the Power of Inter-Org Relationships

Depending on your organization and industry, relationships can be a major factor in the company’s daily operations, and can play a role in how your employee referral program works. Often, the quality of the personal connection to the candidate is the top motivator for an employee referral, and can directly influence factors such as job satisfaction. Incidentally, referral employees tend to experience higher job satisfaction than non-referred. Referring employees often reciprocate these positive motivators, leading to a greater personal investment in the company and longer tenure, thanks in part to the implicit commitment to the referring friend.

With the right sourcing tools, businesses can build more strategic relationships within personalized talent communities, allowing hiring teams to organize and manage high-quality talent before the demand hits. Modern recruiting software or ATSs are designed to communicate directly with targeted talent communities and send branded messaging that drives impact and conversion.

Employee Referrals are Just One Part of the Strategy

With unemployment in the US dipping below 4 percent in April 2018—a first since the dot-com boom of 2000—recruiting top talent in today’s job market is becoming more difficult than ever. Individuals can afford to be picky, which puts pressure on cost-conscious organizations fighting over talent in a competitive seller’s market, particularly in tech. Thanks to direct sourcing practices, companies are reaching the right talent more directly, but the value of employee referrals should not be discounted as part of a larger TA strategy.

Though recruiters are changing how they source top talent, employee referrals still rank among the top candidate sourcing methods. As we have seen, referrals have a significant impact on your current employees’ engagement, your company brand, and the important relationships that drive business. Understanding these factors when leveraging your employee network for referrals or implementing an employee referral program ensures that your employees will champion the success of the entire company—regardless of their job description—and reach out to share what makes their company worth applying for. In an era where company culture and brand values are one of the top selling points for applicants, nurturing positive relationships with employees and boosting their engagement should be at the top of your company priorities.