What started with a hiring spree in talent acquisition, has turned into a function on fire. With pressure to cost cut, companies are restructuring talent acquisition functions and laying off recruiters. Leaders are divided on the future of the function and recruiters are wondering if they should rethink their careers. Is the relationship between companies and recruiting broken?
With HR Tech spending on the rise on average of 6% a year, the battle between perceived savings from automation and a candidate demand for personalization is not new to recruiting, but the frenzy with which companies are taking action is fanning the flames.
Here’s the recap: after COVID stalled hiring in 2020, it picked back up in 2021 leading to a hiring spree for recruiters before crashing down in late 2022 when excessive hiring caught up with overzealous executives eager to scale.
As the economy showed signs of stalling in 2023, these companies began to look for ways to cut costs, and HR and recruiting professionals found themselves at the crosshairs of layoffs with both in-house and contract recruiters getting the axe and entire recruiting and sourcing teams being disbanded.
Is It Recruiting’s Groundhog Day?
The economy isn’t the only thing prompting this breakdown of recruiting. HR technologists are selling efficiency at a time when AI is dominating headlines with its impact and speed to market. The speed and ease with which tasks can be automated is unlike previous decades of innovation. Even recruiters at Google have fallen victim to what may be seen as the dismantling of recruiting in place of this more cost-effective technology and AI.
This isn’t the first time technology has changed the recruiting game. From the advent of the ATS to online interviewing, technology has had many cyclical impacts on recruiting. But this time feels different. Long-time talent leader, Gerry Crispin, the Co-Founder of industry leadership group CareerXRoads, agrees.
“Over the many recessions from the 1970’s to today, I’ve never seen this many [recruiting] professionals at a leadership level in transition. [Executives] are targeting HR and talent acquisition [with] the expectation that human productivity will leap when AI is integrated.”
Crispin’s perspective mirrors actions already being taken by companies like IBM. Earlier this year the company announced they would pause hiring for roles including HR, expected to be filled by AI.
Using Technology to Augment Personal Connection
Dan Black, the Global Leader for Talent Attraction and Acquisition at EY is seeing the cost cutting across companies too, but rather than outsourcing to save money for the future or relying primarily on technology, they’re balancing both.
For example, his team has built an internal global sourcing function that Black says is designed for flexibility in an unpredictable economy.
“It has enabled us to leverage an established network of great EY talent acquisition professionals across the globe, including tapping into available resources when there is uneven growth in different markets and service lines.”
According to Black, EY’s recruiting team then relies on technology for the rote tasks that make sense, “leaving more time for our broader TA team do what it does best: engage with talent in a human, personal way.”
Recruiter Pete Radloff acknowledges the fear that many recruiters have.
“The influx of AI has many running scared that the profession will be obliterated. But it is unlikely that AI is going to ‘take all the jobs.’ What’s more likely to happen is that we’ll see those at the top of the profession begin to leverage AI in ways that can enhance the abilities of their talent acquisition team.”
However, drawing the line between what can and should be automated isn’t simple or clear. Almost every element of the candidate experience can be automated, but across the entire candidate lifecycle, elevating that experience almost always requires personal connection or human interaction.
For example, technology can drive custom content to a candidate, in the attraction phase of the candidate experience, but candidates crave the follow-up, one-on-one conversation to engage in the content they’ve consumed.
That personalization isn’t only important to the candidate-employer relationship, it can be the difference-maker in the recruiter-hiring manager relationship.
“If a hiring manager can get basically the same service – basic sourcing, screening, short-listing, scheduling, assessing, and market intel – from a co-pilot AI bot and they’re getting the speed, quality, and diversity outcomes they need from that technology, they’ll see less value in the recruiter role,” says John Vlastelica, CEO of consultancy Recruiting Toolbox.
The exception, he says, is when a recruiter is operating as a true talent advisor: “if the hiring manager community sees real value from the advice they get and quality candidates they receive they will fight hard to keep their recruiters as partners.”
Career Recruiting Professionals May Need to Get Creative
Sometimes though, cost cutting wins out no matter how strong the partnerships are internally. Courtney Reun was the Director of Talent Attraction, Intelligence, and Experience at biotech firm Sage Therapuetics, until recently when she was part of the company’s layoffs of 40% of its workforce (which included her entire team). As she navigates her own job search, she’s worried about the future of the entire function.
Veterans like Reun believe it’s not just technology that’s the threat, it’s the bigger perception that recruiting has been boiled down to a function of process and driving efficiency at all costs will be the new normal.
Reun, who has almost 20 years of talent acquisition experience at brands like Dunkin’ and Heaven Hill, has seen this before in her career. When companies cut costs, and layoffs abound, recruiters aren’t needed. But as the economy rebounds, the need for recruiting always seems to bounce back. This time around, Reun is seeing companies outsource the entire recruiting function at a pace she’s never seen before.
“The decisions being made regarding the human element of hiring are happening way too fast, “ she says. “I remember outsourcing everything to an RPO 15 years ago. It didn’t work then, and it’s not going to work now.”
Still, some industry leaders prefer to position the change as a positive nod toward the future even while agreeing the industry is breaking down.
Jess Von Bank is the Global Leader of Work Technology Services for Mercer: “when we look back at the dismantling of Talent Acquisition, says Von Bank, “it will look like more like the shedding of old skin for new. This is an example of something breaking for the wrong reason but good riddance — because, in fact, the rebuild will be the talent transformation we needed all along.”
Will it though? With all the buzz about the value of AI, will the majority of recruiting functions see a need for strategy or rely wholly on technology to power a process.
All of this is happening at the outset of the industry’s biggest conference, HRTech, set to kickoff in Las Vegas next week. Over 3,000 recruiting and technology leaders will converge to see the latest boosts to recruiting efficiency or threats to their jobs, depending on how you look at it.
Von Bank has advice for companies thinking of recruitment layoffs : “instead of shedding headcount when the market forces a hiring freeze or restructure, we should be repurposing our best talent stewards to retrofit the entire talent function for business.”
All the while, Reun, who is actively searching for her next role, is rethinking how she can add value by repurposing her two decades of talent acquisition experience and emerge from the flames in a new way. A lesson for all leaders on how to navigate an ever- changing industry that still hasn’t figured itself out.
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