What is the Impact of Technology on Recruitment?

The role of HR has never been more crucial. With organizational excellence being the need of the hour, only the companies that focus on innovation, engineering, teamwork and people, will be able to achieve this as the most likely outcome. However, until HR stuck to its traditional role of workforce administration, it did not elicit as much importance as it does now. It was only once leaders and senior executives realized its strategic importance in contribution towards business results, the focus turned to making HR capable of driving a high-performance culture that lead to attainment of growth objectives.  This is where technology came to rescue; tools were developed and introduced that could help HR sustain its strategic efforts.

HR Technology became a fundamental prerequisite instead of being merely a buzzword. Today’s business environment is intensely competitive and promotes only the survival of the fittest and that’s why organizations are using information technology for increasing efficiency in human resource management. Implementation of technology in HR in the form of a HRIS (Human Resource Information Systems) has made it easier and faster to collect, collate and communicate information with employees and also speed up the hiring process.

The first MIS or Management Information System emerged during the 1960s when there was a mounting demand for HR departments to adopt computer technology to process employee information more effectively and efficiently.  Over the decades, the reducing costs of computer technology compared to increasing costs of employee salary and benefits has made it a necessary business decision to implement computer-based HR systems.

Importance of information technology in recruitment

HBR reported in 2016 that 57% of business and HR executives are using and 32% are willing to use new recruiting technologies and tools to speed up the hiring process.

Cloud and data analytics are going to play a huge role from now on.  But what is driving HR managers to use new technologies for screening and selection?

There are several ways in which technology can improve the efficiency and effectiveness of the recruitment and selection process:

• Role of technology in recruitment results in cost reduction
• Using technology in the hiring process reduces human error
• Technology impact on recruitment in terms of improved efficiency and quality

Role of technology in recruitment results in cost reduction

In a research, Innovex reported a reduction in screening costs by 50% using IVR in their hiring process (Thornburg, 1998). These reduced screening costs led large companies like Proctor & Gamble to adopt video conference technologies for campus hiring. (Chapman,1999). The globalization of economy and labor market has provided employers with a playfield which is not limited to any geographical settings.

In order to succeed in such a competitive global market one needs to have the brightest talent on board. Further the scarcity of highly skilled workers in engineering and computer science propelled recruiters to seek candidates beyond geographical borders. Most organizations that were earlier discouraged by the costs involved in international hiring are now employing technological aids like career websites and ATS to reduce costs while simultaneously expanding the applicant pool.  With the right tools, HR will not only have access to a larger talent pool, but will also be able to hire the right candidates. Greater retention has direct impact on cost savings.

(Also Read: How to Create a Positive Candidate Experience with HR Technology)

Using technology in the hiring process reduces human error

Another benefit of increased use of technology tools in screening and selection has been the reduction in human dependence. Humans often bias their decisions on bases of issues like sex race and age rather than merit or experience. HR professionals are also known for making compelling decision making errors like placing too much important on unverified and negative feedbacks.

Such rating biases can lead individuals responsible for hiring candidates to consciously or subconsciously make unfair judgments and discriminate against a particular group or candidate. The ATS or a similar tool removed the human element from the selection procedure and ensures a standardized one-for-all selection process that helps in valid and accurate decision making.

(Also Read: Top 10 Benefits of Using an Applicant Tracking System)

Technology impact on recruitment in terms of improved efficiency and quality

The final factor that propels use of various technologies like online talent platforms in recruiting is the improved efficiency of hiring systems by automating processes such as resume screening. Improved efficiency leads to shorter hiring cycles, thereby improving the competitiveness of organizations when hiring the best talents who may otherwise accept another offer if selection procedure takes a longer time. Automation is more about driving the quality of hire rather than focus on lowering the cost of hiring. (Also Read: How to reduce hiring cycle time)

While it’s hard to predict what exactly future holds for the human resource industry, we know for sure that innovations required to keep the HR functions competitive and relevant will rely heavily on technology. Cloud, for one, is an excellent platform for organizations to quickly jump aboard this rapid pace of innovation. Migrating to cloud provides the much needed push to break the shackles of traditional recruitment methods and adopt new ones.

The evolution of HR tech has helped reduce administrative burden on the HR department so as to be able to focus more on other responsibilities. In fact, in its current form HR technology isn’t a separate industry or entity. Its ubiquitous nature has made it as common as any other technology and companies that do not implement it in their businesses will have a tough time in the market.  CB Insights in its 2015 research estimates that investors put $2.4 billion into HR Tech vendors/ software providers/startups which are building new age Human resource management system platforms. This is a 60% growth over the previous year. The data is just an indicator of the speed with which the HR industry is changing.

(Also Read: The Importance of HR Analytics in an Organization)