Talent Management Processes

The Next Wave of E-Recruiting Innovation

by Taleo Research

E-recruiting can be a tremendous source of differentiation and competitive advantage for corporations. When the Internet appeared, the first wave of e-recruiting innovation was the creation of an employment or careers section on the corporate Web site. The early innovators brought great acclaim and the status as an “employer of choice” upon themselves, and enjoyed the improved recruiting efficiencies that come with corporate Web site recruiting. By 2002, however, corporate Web site recruiting has reached close to complete adoption among the largest corporations.

The mere possession of a corporate Careers Web site is no longer sufficient to differentiate a company from its competitors. Leading corporations are turning to new and innovative practices to maintain a competitive advantage, particularly in the integration of the front-end Careers Web site with back-end data management systems.

The annual survey of the Global 500 companies conducted by Taleo Research, Global 500 Web Site Recruiting 2002 Survey, reveals that adoption of corporate Web site recruiting can be considered to have reached a mature state. In 2002, 91 percent of the Global 500 employs a corporate Careers Web site as part of the overall corporate recruiting strategy. Adoption of corporate Web site recruiting for 2002 represents only a three percentage point increase over last year. By contrast, corporate Web site recruiting increased nine percentage points in the previous two years, from 79 percent in 2000 to 88 percent in 2001.

Growth of corporate Web site recruiting is well off of its peak period of 1998-1999, when the practice grew from 28 percent of the Global 500 in 1998 to 60 percent in 1999. As the rate of growth decelerates, we expect it to take a relatively long time for the remaining nine percent of the Global 500 to join the corporations benefiting from corporate Web site recruiting.

The yearly increases in the rate of adoption of corporate Web site recruiting by the Global 500 since 1998 closely matches the predictions of the “diffusion of innovation” theory for the adoption of technological innovation. This theory divides adoption into segments starting with innovators, moving through early adopters, early majority, late majority, and finally laggards. The diffusion of innovations theory holds that the rate of adoption of a new technology will accelerate once the technology has moved out of the pioneering innovators and early adopters phases into the mainstream. After a majority has embraced the new technology, the increase in the rate of adoption diminishes, as the “late-adopters” or laggards, with more conservative attitudes to change, take longer to embrace the innovation.

With corporate Web site recruiting now at the point of saturation in the Global 500, the next wave of innovation and competitive advantage has already begun. Chief among the practices that will form the next wave of e-recruiting innovation are online candidate pre-screening and candidate relationship management. Already, these best practices are demonstrating robust growth among major corporations in the United States.

In the report Trends in Fortune 500 Careers Web Site Recruiting, Taleo Research tracked best practices of corporate Web site recruiting employed by the Fortune 500 companies. The two-year study found the strongest growth to occur in best practices that integrate the Careers Web site front-end with back-end recruitment management systems. Use of online pre-screening by the Fortune 500 grew 228 percent, while the use of a Job Agent tool for candidate relationship management also more than doubled, with 120 percent growth.

Early innovator companies understood the power of the Internet as a channel to attract new candidates. Presently, corporate Careers Web site utilization among Global 500 corporations has reached the level of close to full adoption. While the most innovative companies understood the power of the Internet as a medium to attract new candidates several years ago, they are now well on the way to streamline their processes completely. As a consequence, we are seeing a second curve of innovation that is only in its infancy.

New recruitment technology integrates the results of the first wave of innovation—the corporate Careers Web site—with a comprehensive back-end system, which builds on the first innovations to yield superior results. With this context, Taleo Research forecasts an acceleration of the use of integrated solutions, reaching the early majority phase in 2002-2003. But what will be the next wave after this one? I welcome your suggestions.