E-Recruiting Takes Next Step

Tools help hirers spot the best IT people.

Two years ago, at the height of the IT skills shortage, Keith Vencel thought he had come up with a great way for his company, Sutter Health, in Sacramento, Calif., to find more candidates and fill positions quickly: Hed have the company post openings online and accept candidate résumés via e-mail.

Vencel, a project manager at the nonprofit health care network, was half-right. Moving postings online generated a lot more résumés—300,000 a year for fewer than 10,000 job openings. But it didnt make the hiring process go any faster. In fact, so many résumés began flooding in by e-mail and the networks Web site that they were simply dumped in a pile to await attention from affiliates human resources departments. And there they sat, sometimes for weeks.

Not surprisingly, Vencel and other Sutter Health officials soon decided the network didnt simply need more résumés from IT and other job candidates; it needed better ones and a quicker, more efficient online process for sorting through them to find the best job candidates.

Sutter Health got exactly that last July when it signed on with Recruitsoft Inc., a San Francisco-based e-recruiting ASP (application service provider) that hosts Sutter Healths job site. Besides simply posting job openings and collecting résumés, Recruitsoft gives Sutter Health an automated way to evaluate, rank and match IT and other job candidates with specific openings. Thats helped Sutter cut the recruiting process from weeks to days in most cases, Vencel said.

Sutter Health certainly isnt the only enterprise that found its initial foray into e-recruiting less than satisfying. The first generation of company- specific recruiting sites, ASP services and online talent marketplaces may have generated lots of résumés, but, said Maria Schafer, an analyst for Meta Group Inc., of Stamford, Conn., they "so far are not living up to expectations" that they would allow employers to quickly target and hire the best candidates possible.

That, Schafer said, is because many havent provided the filters and other tools needed to help employers home in on the best candidate for the job—the C++ developer, for example, whos had exactly the right kind of experience on exactly the right kind of project.

That, however, is beginning to change. Organizations such as Sutter Health are hooking up with e-recruiting job sites and ASPs that are moving well beyond basic online job board functionality to offer a range of new services that are making e-recruiting more efficient, faster and more valuable.

E-recruiting sites and ASPs such as Recruitsoft; PureCarbon Inc., of Scotts Valley, Calif.; BrassRing Inc., of San Mateo, Calif.; TalentFusion, of Harrisburg, Pa.; and Development Dimensions International Inc., of Pittsburgh, are offering online tools that allow enterprises not only to quickly evaluate and rank candidates but also to automatically direct candidates to the most appropriate positions and track hot candidates, even those who may initially decide to work elsewhere.

While such features are making e-recruiting more valuable, experts caution that there are still gaps. Few if any sites, for example, allow enterprises to easily manage candidates for both full-time and contract work online, Meta Groups Schafer said. Therefore, experts say, enterprises should not drop more traditional methods of recruiting entirely in favor of e-recruiting.

Lower costs, too

Despite the slowing economy and initial problems with e-recruiting, experts say, finding the right IT talent fast is still a priority for most e-businesses, and doing it online is increasingly popular. Meta Group estimates that the number of enterprises using the Web for recruiting has doubled in the last year to 40 percent. And, according to International Data Corp., in Framingham, Mass., the top 10 worldwide e-recruiting service vendors collectively saw their revenues grow by 232 percent between 1999 and 2000.

Much of that growth, experts say, probably relates to one simple fact: E-recruiting IT talent, though imperfect so far, can be significantly less costly than other forms of recruiting.

"The cost savings will come from eliminating [recruitment] agency fees," Schafer said. "The agencies are the potential losers here," she said, because their fees start at 20 percent to 30 percent of the first-year salary of the new hire, a huge cost to any company, particularly for the hiring of highly paid IT professionals. By contrast, some job boards, ASP services and talent e-marketplaces charge far less—in some cases, only a few hundred dollars per hire plus monthly hosting fees.

Cutting recruiting costs isnt the only—or even the primary—attraction of e-recruiting for some organizations, however. Sutter Health, for example, wanted a way to affordably and quickly deliver qualified candidates for jobs at the networks affiliate hospitals and doctors offices. After spending six months evaluating 12 other similar services, Sutter Health in July signed a deal with Recruitsoft, which is hosting the careers section of the Sutter Health Web site (so far, hosting listings for jobs at 26 of the 42 offices of the networks 27 affiliate agencies). Recruitsoft provides a centralized database for candidate information and helps the network prioritize candidate leads by asking candidates detailed questions online, Vencel said. The latter feature has so far proved the biggest benefit.

"The skill-based questions are the key feature," he said. "Each candidate completes questions about their job experience, specific achievements and soft skills, and theyre ranked in sequence from the least to the most qualified for a given position."

Candidates who arent a perfect match for one job are automatically encouraged to apply for other jobs if the system finds a better match, Vencel said.

Pricing for the service ranges from $250 to $500 for each candidate hired, depending on the quantity of hires made in a given month, along with a $1,000 monthly Web site hosting fee, a Recruitsoft representative said.

After several months of using the hosted service and with a rollout to the rest of the networks affiliates under way, Vencel said, the efficiency gains the network has realized have been significant even though the service hasnt yet resulted in recruiting cost savings. "Were spending the same amount of money on recruitment now as a couple of years ago, but this avenue is more targeted and is leading to some better candidates," he said.

Some 1,200 job candidates are listed in Sutter Healths Recruitsoft database now, along with listings for 1,600 open jobs. Most important, Vencel said, the network is receiving more than 30 résumés per week that meet every qualification for certain open jobs, far more than it received in a given week before. In addition to the increase in highly targeted job applications, the system allows the networks human resources managers to respond to those job seekers much more quickly, since theyre not wasting time evaluating inappropriate applications, Vencel added.

The next goal is to integrate Recruitsoft into the networks Lawson Software HR management system, a project Sutter Health plans to complete early next year, Vencel said.

Even while Sutter Health is increasingly satisfied with its e-recruiting efforts, the organization isnt giving up on traditional methods, including local television, newspaper and online advertising, along with employee referrals.

This multipronged approach is the best way to go, experts say, at least until e-recruiting ASPs improve and prove their return on investment.

Another company that is tapping into the advanced features of e-recruiting ASPs is Ditech Communications Corp., a maker of optical networking equipment based in Mountain View, Calif., and its optical communications equipment subsidiary, Altamar Networks. Both, despite the slowing economy, are desperate for hardware, software and network engineers. How desperate? In October, the company will raffle off a $40,000 BMW to employees who have referred successful IT hires, said Dave Forbes, marketing communications director for both Ditech and Altamar.

Like Sutter Health, Ditech originally launched its own recruiting site to collect résumés but became dissatisfied with the results. The site was too difficult to maintain and wasnt producing enough well-qualified candidates. So Ditech turned to e-recruiter PureCarbon. For $500 per month, PureCarbon hosts the career section for Ditechs jobs. Soon the ASP will begin hosting the Altamar job site as well, Forbes said.

But the PureCarbon service, dubbed JobPlanet, unlike Ditechs home-grown recruiting site, goes far beyond a simple job-posting board. It includes a job-agent feature that lets candidates search open positions against a detailed skills profile and notifies candidates when jobs come up that meet their qualifications. In addition, the site helps Ditech track and keep in touch with candidates who were interviewed but chose to join other companies. In some cases, Forbes said, those candidates have had changes of heart about the jobs they chose—giving Ditech another chance to woo them.

For some companies, using advanced e-recruiting ASPs is not only helping them quickly sift through mountains of candidates to find the right people, its also saving them money. Systems integrator Computer Sciences Corp., of El Segundo, Calif., for example, is using Eclaro LLC, of New York, to quickly qualify and hire contract workers. The Eclaro online marketplace helps the company avoid spending time on unqualified candidates and paying steep fees to traditional recruiters.

Three years ago, CSC, which has 6,000 IT jobs a year to fill, was taking résumés online through its corporate site as well as using traditional recruiters, newspaper ads and employee referrals. But, said Bill Gunn, director of employment services, in Falls Church, Va., "The vast majority of the résumés we received were from people who didnt have the right qualifications."

And, Gunn said, those who were hired were coming at a premium. The traditional recruiters were charging 40 percent of the first-year salary for each IT hire, he said.

A year ago, CSC signed up with Eclaro, which lets contract IT workers bid on jobs and charges just 15 percent on each hire—a significant savings. While CSC hasnt stopped using other recruitment tools and avenues, its reliance on expensive recruitment services has lessened because it hires more workers through Eclaro.

While cutting recruiting costs may be a nice bonus, the real return on investment for companies using advanced e-recruiting services will come from being able to quickly find and hire better-qualified IT workers, experts say. More résumés from laid-off dot-commers may be out there, experts say. But theyre not necessarily people you would want to hire.

And making the wrong choice can be expensive. Simply getting a new hire on board can cost a third or more of that workers first-year salary.

So, experts say, the slowing economy notwithstanding, employers need to use every method at their disposal—including new e-recruiting tools—to find the right IT job candidates quickly.

"With the slowing economy, there are more tech people out there, but theyre not necessarily better quality," said David Foote, managing partner and research director at Foote Partners LLC, in New Canaan, Conn.