Recruiting Laggard or Leader

HR Tech Predictions 2019

As we reflect on 2018, there’s one recruiting development that’s indisputable: the artificial intelligence (AI) powered recruiter segment advanced from a concept to a solid trend. Modern AI capabilities – such as natural language processing (NLP) and pattern recognition have unlocked new HR applications including automated conversations, bias recognition, and gamified assessments. These new applications have diffused the line between talent acquisition and management; thus made it relevant for all HCM vendors. Venture-backed startups like AllyO that automate the full talent lifecycle have repeatedly validated the product-market fit; as a result, these early bird companies are enjoying the first-mover advantage.

Looking ahead to 2019, we forecast the AI recruiting addressable market to be $80-120M that will grow at 50-100% CAGR for the next three years. It won’t be long before the pragmatics and conservationists jump on the AI recruiting bandwagon. According to a survey conducted by PwC, 40 percent of respondents indicated their HR organization is using or planning to use AI. Even compliance-laden and traditionally slower to embrace technology industries – like banking and government agencies – have begun to use AI to solve hard talent challenges including workforce diversity and hard-to-find skills.

Benefitting from this growth will be the early stage AI recruiting market leaders, representing approximately 50 percent of the market share, followed by a long tail of fragmentation. The laggards, particularly established HCM vendors – who are in a “wait and watch” mode will risk losing relevance as the AI recruiter segment becomes mainstream. At AllyO, we believe 2019 will be dominated by three major themes: entry by established HCM vendors such as SAP, Workday and Oracle; current AI recruiting vendors will settle into their respective niches; and new use cases will emerge and with them, new vendors creating even more fragmentation.

The Human Capital Management (HCM) Ensembles

As AI recruiting disrupts their prospect and customer base, category leaders are responding by preemptive strike through acquisition (think iCIMS acquisition of TextRecruit), building on their own (Greenhouse with IBM is one such example) or partnering (e.g. Jobvite and Canvas). At AllyO, we’re fielding an ongoing stream of such inbound interest – not just from ATS vendors but from enterprise software vendors keen to gain competitive advantages.

Check Your HR Tech Vendor: Not All Are End-to-End

Market reception, technology sophistication, and competition are naturally forcing the current spate of AI recruiting vendors to find their swim lane. Some AI recruiting applications primarily focus on solving candidate experience via superior engagement technologies; using texting as a channel, NLP and a mix of automated and manual employer responsiveness. AllyO focuses on end-to-end recruiting by serving the full-talent value chain from initial job seeker engagement to post-hire check-ins. Combining superior engagement, automation and intelligence while focusing on all personas – candidates, hiring teams, recruiters, HR leadership and business operations – AllyO is the most unique and comprehensive among AI recruiting solutions.

New Ways to Solve New (and existing) HR and Recruiting Problems

As AI technology advances, new use cases will create opportunities for candidates, companies, established HCM vendors and new start-ups. Examples include autonomous intelligence, voice assistants and deep reasoning that – in turn – will powerfully human-less recruiting, predictive talent retention and proactive job matching. The possibilities are endless.

Enterprise HCM software vendors are already concerned about how to address these requirements with the nimbleness and innovation of a start-up. How quickly they respond to these three major themes will weed out the winners from the losers in 2019.

#1 First And Best: The early bird gets the worm. A skunkworks approach that offers the required agility and experimental mindset will be critical to stay in the forefront of innovation. This approach also solves for time-to-market when deciding if building, buying or partnering is the right decision.

#2 Make It Easy For The Customer: Those that build an ecosystem will be better positioned to deliver the next-generation of frictionless talent solutions. HR technology is becoming increasingly fragmented, which results in adoption challenges and short-changed benefits due to interconnectivity drawbacks. ATS and HRIS vendors such as SAP, Workday, IBM and Microsoft can leverage the AI recruiter’s middleware that connects all the HR systems and offers conversational engagement capabilities across the talent value chain. Job boards including LinkedIn, Monster and Indeed can increase their client retention, adding value by delivering qualified and scheduled candidates instead of piles of ill-fit applications.

HR technology is ripe for end-to-end consolidation that serves the full talent value chain through superior experiences, smart automation, and proactive intelligence. The HR tech buyers and the job candidates are also ready for a change. All of this will require the incumbent enterprise HCM vendors to tap into the emerging power of AI recruiting. The result will be an exciting 2019 where the buyer, the job seeker, and the hiring team will experience first-hand the confluence of technology advancements and market readiness.

 

AI Recruiting Demo

AllyO Staff

AllyO is an end-to-end AI recruiter that makes your recruiting delightful and efficient with intelligent, automated and conversational engagement via texting over mobile and web.

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