What a Recruitment Marketplace Does That Robots Can’t

Online marketplaces are using AI to quickly transform nearly every conceivable service:

  • Airbnb disrupted the hospitality industry by giving travelers (and hosts) a new approach to short-term lodging and in just a few years had more rooms available than the five largest hotel chains in the world.
  • Uber upended the age-old taxi industry by allowing riders to connect with drivers on-demand and now provides 15 million rides a day.
  • Amazon made it possible for shoppers to bypass brick and mortar retailers altogether.
  • Even the arts and crafts industry has adopted marketplaces like Etsy to connect niche artisans with buyers around the world.

In each case, disruption has been enabled by technical innovation — from the internet to cloud-based services to smartphones, geo-location services, and of course AI algorithms.

With so many successful examples, it’s easy to think we could apply a marketplace approach to every problem and end up with a solution that is better, faster and lower cost than the way things were done before. That kind of thinking has caused people to predict the demise of the recruiting profession altogether. For years, amateur futurists – alongside a few professional ones – have forecast the rise of the robot recruiter. It’s been said that technology will become so good at finding the proverbial needle in a haystack, employers simply won’t need people to do it anymore.

If you’re planning a workforce in this technological wonderland, there’s only one problem: It’s not true and robot recruiters can’t do the important and highly skilled work that human recruiters do.

Easy to disrupt

Conventional wisdom holds that market disruption makes some job obsolete – or at the very least, less relevant or a low margin commodity. It’s easy to assume that the recruiter would be the odd person out in the talent equation. Let’s use Airbnb as an example.

Before marketplace disruption came along, brokers and management companies signed up homeowners and matched them to renters. The matching required knowledge of the options, availability, quality of property and location, etc. Today, platforms like Airbnb use technology to provide this information and essentially play the role of the broker or management company. They make it easy for everyone involved.

For Airbnb, the “product” is residential housing. It’s not very complicated. Finding a three-bedroom, two-bath home with a pool in a particular neighborhood is a finite transaction. The permutations of amenities guests are looking for this year aren’t likely to be that different next year. And, once a platform like Airbnb has enough users to generate a critical mass of reviews, and therefore engender trust on both sides, the whole experience becomes turnkey.

The situations for travel agents and rideshare drivers (e.g., taxi, Uber, Lift) are similar. The travel agent’s “product” is airline flights and/or hotels rooms, which are easily quantified and objectively rated. Similarly, for ride share services, most humans can drive a car and follow a GPS to a destination, so the product is simple to objectively quantify and rate. The result is travel agents are largely gone and rideshare drivers have been commoditized!

Talent is not a product

So why can’t that work with recruiting? Why can’t employers and jobseekers connect directly on an “AirWorkplace” without the middleman? Simply put, the nature of the product is entirely different and so is the demand for it.

Said another way, the answer is surprisingly simple: Human beings are extremely complex and very hard to quantify objectively and rate, as are job requirements and needed work skills.

In recruiting, the “product” is human talent, not houses with pools. And not just any talent, but the talent that’s needed now in a knowledge economy. Unlike the most popular Airbnb houses, today’s most sought-after talent doesn’t have the same attributes year after year. Skills needs change at lightning speed. So does the availability of talent and the regulatory environment that impacts who you hire. Talent is complicated, dynamic and constantly changing. A three-bedroom, two-bath rental home is not. The rental home also does not have emotions or a family or career aspirations.

Passive talent doesn’t advertise

Another difference: Airbnb connects homeowners who are looking to make their space available. The platform doesn’t need to identify passive candidates. Imagine that if you wanted a rental, you had to convince a family, who had no real interest in renting their house that they should make their home available, and do it when you wanted to go on vacation. Who’d be able to do that? But that’s exactly what a recruiter must do to attract passive candidates, which are often the ones employers most desire.

What this means is recruiting technology that tries to match jobs to candidates will not be relevant until it can identify passive candidates with dynamically changing skills AND convince those candidates to take a new job. This is especially critical now, as we face one of the tightest skilled labor markets in history. Unfortunately, it is unlikely any such technology will be available for quite some time.

Recruiting has been disrupted

Monster.com may have been the original “disrupter” before we even knew that was a word. Monster gave job seekers access to jobs that were previously off the radar. It did a type of matching that connected candidates to employers based on keywords. And it gave employers access to candidates they never would have found otherwise. The unintended byproduct? Resume spamming. In my opinion, job boards did more to create demand for finding the needle in the haystack than any other recruiting innovation in history (because they built the haystack!).

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Technology has only made it easier to find more resumes of people who might be a fit and who might be interested, and therefore, actually makes it more difficult and time consuming to find the right talent. To complicate the matter further, as job requirements become increasingly more sophisticated, and the skills being sought evolve in real-time, mission-critical roles become harder and harder to fill.

Find the right recruiter

Instead of thinking about how to replace recruiters, we need better ways to connect with the right recruiters.

The ability to quickly connect with the right specialty recruiter who actually can match the talent to the job is becoming even more important. Combined with the increasingly tight labor market,this has created opportunity for disruption in the talent economy.

To find the best talent in any given moment, employers may need to find the candidates who aren’t actually candidates. They need to stay a step ahead of everyone. The only people who can help them do that, in real time, are very human specialty recruiters.

An efficient, AI-powered marketplace can connect employers to recruiters who know their industries, geographies and jobs. Rather than being limited to one staffing firm or a small group of contract recruiters, a recruitment marketplace connects employers to the right recruiter at the right time.

Recruitment marketplaces like Scout use the power of marketplace dynamics, combined with machine learning and predictive analytics, to offer a faster, more efficient way for employers to find the talent they need by matching of each job to the very best, very human, specialty recruiter.

A marketplace benefits employers and recruiters

This marketplace approach benefits both the employer and the specialty recruiter. Specialty search recruiters get quick access to more jobs in their specialties, so they can always be working on jobs they are best at filling and can make maximum use of their carefully cultivated candidate relationships, all without any cold calling required.

On the flipside, hiring organizations can quickly pinpoint recruiters with proven success by job type, while also taking advantage of the cost savings that come when recruiters are competing for their business. Additionally, machine-generated user ratings help ensure trust and transparency for employers and search providers alike.

The reality is that while a lot of the recruiting function has been automated, it tends to be the routine tasks associated with tracking and sourcing. This is very much needed and helpful, as this automation allows good recruiters, both internal and external, to focus on more high-value tasks, such as keeping pace with specialized networks, engaging the right candidates and finding the critical nuances in the job requirements and resumes. It also provides more time for the important task of convincing great talent to look at a new opportunity and ultimately to change jobs – things that only experienced and knowledgeable humans can do.

Ken Lazarus is CEO of Scout Exchange, a platform for marketplace recruiting.

Prior to joining Scout in 2013, Lazarus served as CEO of Lilliputian Systems, where he led the development of Lilliputian’s portable power product platform, secured international aircraft regulatory approval, raised significant capital from blue-chip investors, and signed important strategic manufacturing and distribution agreements. Previously, Lazarus served as CEO of ACX, a maker of vibration and motion control equipment that ranked #79 on the Inc. 500 before being acquired by Cymer, Inc. (NASD: CYMI).  Lazarus also cofounded DataXu and Ekotrope, and has worked with numerous other startups. He holds a Ph.D. from MIT and a B.S. from Duke University. Lazarus, who is a World Economic Forum Technology Pioneer, has served as an MIT Visiting Committee Member and holds over 20 patents.

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