Strategic Talent Management
Automated Matching of Supply and Demand
by Taleo Research
The high value of human capital to today’s corporations is clear, and crystallized in one new principle: a skilled workforce is a cash multiplier. That is the first new principle described in this series of articles. The ubiquity of skills demand, the subject of my previous article, is the second principle to understand. The third key new principle of human capital management, detailed in this article, is the Automated Matching of Supply and Demand. This is a corollary to the principle of the ubiquity of skills demand, and is only achievable by developments in technology.
The ubiquity of skills demand, brought about by the shift in availability of data, is a great step forward. Nevertheless it is also a limitation and often creates a fair amount of unqualified supply. If the network that created the Internet is the base of that principle, the computers that are linked by this network are the enablers of the principle discussed here.
To explain the automated matching of supply and demand principle, we have to dissect the content of the communication delivered in this transaction. For years, the content holder for such transactions has been the resume. The resume has been the best tool to summarize the competencies and skills a candidate can bring to a new position through highlighting abilities, certification and experience by describing past positions, past diplomas and employers. The resume has been the best tool at the time to try to make a match between a task and an individual.
The Mis-Match of Unstructured Information
The process of finding the best individual to fulfill a given task has been highly manual and paper intensive, with very little automation, because a fit for a position is not reducible to a computer algorithm. However, although the final fit of the position with the individual cannot be based on a computer-made decision, the first set of selections based on minimum criteria can be. A final decision should and will always be based on individuals working together and having to meet and to know each other.
Let’s review and understand what is done when a department of a large company needs additional resources. They fill a request form that is called a requisition, go through the approval process, and create a job description. The job description is what will be used to match the candidates with the tasks to achieve. In fact it is the job description that will be matched to the resumes of the candidates.
This matching of two unstructured documents is done by individuals who most of the time apply highly unsystematic and subjective criteria to make the first selection, called prescreening. This activity not only has been highly inefficient and very time consuming, but also very ineffective. The criteria used to select candidates do not insure systematic results.
Internet Connectivity and Processing Power
Economic Benefits
Yet, manual prescreening was the best and only option available at the time. It was better than recommending a candidate for hiring simply because he or she is the first on the pile.
Today, the Internet combines the connectivity of the phone and the processing power of the computer. The Internet is the common medium of communication between talent supply and demand. To enable automated talent matching, what is required is a common platform for both the job description and the resume. Job descriptions (talent demand) and resumes (talent supply) can be reformulated in terms of a common currency – skills. The corporation defines corporate-wide standard skills, which are then systematically attached to job descriptions. Talent supply then aligns itself to meet the new standards, reaching a new equilibrium.
Automation increases the speed and efficiency of the process, matching up talent supply with demand in real time. This new possibility has been created only by the widespread acceptance of the networked computer as a new communication device for job applications externally, and as a portal for redeployment internally. A systematic skills-definition platform is an especially powerful enabler to re-deploying human capital in a downturn quickly and efficiently.
The ubiquity of skills demand and the automated matching of supply with demand have an important impact at the macro-economic level. A more efficient process for matching talent supply with demand will reduce the base level of unemployment called friction unemployment. Friction unemployment is the residual level caused by the inefficiency of the communication between corporation and individual. Moreover, real time access to a pool of candidates not only impacts the economy globally. It also creates a positive productivity boost in corporations that can identify needs, translate them into a common language and fill positions in a timely and quality fashion.