Business Situation:  In a slow growth economy, it is difficult to get approval to hire new employees.  However, there is a strong desire by CEOs to grow the business and innovate.  How can HR help the organization with conflicting goals of controlling costs, yet innovate and return to growth?

Practice: Crowdsourcing – This is not a new idea.  It is explored in great detail in books like “Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business” “Wikinomics: How Mass Collaboration Changes Everything”, and “The Wisdom of Crowds”.  However, it is not a practice that is in the typical talent management toolkit of most HR/Recruiting organizations.  Crowdsourcing allows you to leverage talent that is not part of your organization to achieve your objectives.

Examples

TopCoder – Here is a description from their site:

Our business brings clients into the TopCoder community to get their work done in a new way. These projects range across the full spectrum of software and digital work. They engage our community in a range of disciplines: creative design, software engineering, and analytics. These projects are focused on innovating and implementing new products, releases, and features. At the core of this work is competition – each task is completed by members competing with each other to be the best at that task.

We believe that customers should be able to focus on what they want to build and create, not on measuring how many hours someone spent on a task. We believe engineers and designers should be free to chose when and if they work on a project or task, and be rewarded based on the quality of the results they produce. Empowering individuals to make their own decisions generates the most value for all parties.

When customers and members are brought together in a community and a market based approach is used to getting work done, there is no limit to what they can accomplish.

TopCoder has more than 300,000 people in the community.  That talent pool is significantly broader than one employer could build on its own. LendingTree uses it as a virtual software factory on an ongoing bases to supplement its own website development efforts, for example.

InnoCentive – InnoCentive also provides a platform for what it calls “challenge driven innovation”.  In that sense, it is similar to TopCoder, but is used for a broader problem set.  Here is an example from its website:

Roche’s challenge was to find a means of better measuring the quality and amount of a clinical specimen as it is passed through one of its automated chemistry analyzers. Both Roche and its partners had been wrestling with the challenge for fifteen years. So the company devised a test. It posted the challenge on InnoCentive.com, and through the power of crowdsourcing, exposed the challenge to a diverse, global, and open network of problem solvers. Within two months of posting the challenge, nearly 1,000 unique solvers from around the globe had signed on to the project, and a total of 113 proposals were submitted to Roche.

The result? Roche solved a challenge that had been plaguing it for fifteen years in sixty days. And interestingly, the submitted proposals replicated the entire history of Roche’s research and development program into this particular challenge. In other words, all of the solutions Roche had tried over a fifteen-year period had come in.

Think about that for a minute from a talent perspective.  Roche was able to find nearly 1,000 people for two months to work on its business challenge.  The prize for the winning solution was $20,000.  That was a pretty cost-effective source of talent.

Of course, crowdsourcing is not appropriate for every talent need.  However, HR needs to get outside of the box that says that talent is limited to just employees or contractors.

How many sourcing professionals in your HR/recruiting organization are leading the charge in working with these kinds of solutions (especially if you are not hiring anyone right now)?

I also had the opportunity to attend a Social Recruiting workshop in the afternoon put on by Thomas Boyle from SilkRoad and Rob Humphrey from LinkedIn.  It was a good introduction for attendees to Facebook, Twitter, and LinkedIn.  Most of the attendees had some level of experience with social networks and were very interested in best practices in leverage those tools to improve recruiting effectiveness.  Unfortunately, I was not able to attend the entire workshop so I was not able to see how things turned out, but clearly, based on the attendance, there was a lot of interest in this topic.

As with most user conferences, a lot of the value was in the networking and you could see customers starting to connect with each other at meals and breaks and sharing experiences.  That is really what these events are all about.

I was not able to attend the whole conference so if you did attend and have more to add on your experience, please feel free to comment on this post and add to this report.

• Deploy’s solution will become Workforce Acquisition for Field Hiring v8.  It is immediately available.  Workforce Acquisition for Field Hiring v8 will be the platform upgrade path for existing Unicru customers (Workforce Acquisition v6 and v7 customers).  Kronos will incorporate content from the Unicru solutions (assessment and analytics) into the Deploy platform.
• Kronos will continue to offer the Workforce Acquisition for Corporate Hiring solution through its recently announced partnership with MrTed.  There is some overlap with the Deploy as it supports requisition-based hiring.  However, according to Kronos, most of the salaried hiring customers for Deploy are on legacy solutions, not the new integrated salaried/hourly platform (called aTAO).
• It will be approximately 90 days before Kronos will be ready to start migrating existing Unicru customers to the new platform.  Kronos will continue to support both solutions, but Unicru customers should expect ultimately to migrate to the new platform.
• Kronos has reorganized the Talent Management division.  There will be a Talent Management – West (Unicru) which will continue to focus on content (assessment and analytics) and a Talent Management – East (Deploy) which will focus on the development of the platform.
• Kronos also is keen to leverage the platform to expand into performance management (initially through the performance scorecarding functionality that Deploy had built). 

I do not think I will be publishing a First Take on this, but if you are a Gartner client and have questions on the acquisition, please feel free to set up an inquiry.

I found Dr. Sullivan’s post on ERE enlightening though.  I think he put it in the proper perspective.  It is innovative because of the breadth of factors assessed (though again that is something that has been possible) and how they were leveraging the core competencies of Google in creating this assessment approach.  Also, one should not look at it the context of just this one thing that Google is doing in recruitment and talent management in general.  It is part of a broader innovation strategy to ensure that it can bring in quality talent to support the business strategy.  Is that not what we all want to do?

Jobster CEO, Jason Goldberg told GigaOM that 2006 revenues would be north of $20 million.  The rumors say that Jobster has 145 employees.  Let’s do some simple math.  $20 million divided by 145 employees equals ~ $138,000 in revenue per employee.  There are many technology companies that break even at that level of revenue per employee.  Mature (and profitable) technology companies typically have more than $200,000 in revenue per employee.

However, Jobster is not a mature technology company.  It is a very new company (~ 3 years old) that has grown very quickly (expecting growth of more than 30% for Q406 over Q306).  It would seem unlikely that they would need dramatic cuts (the rumors indicate that potentially half of the staff would be cut) to reach profitability with even flat revenues in 2007.  

However, I would expect that they plan to continue to grow in 2007 and will, on net, add staff.  Jobster may still have job cuts or slow down the rate of hiring in certain areas.  It depends on where they think the growth will come from and the adequacy of staffing.  It may be overstaffed in some areas that are not contributing to growth and understaffed in others based on expected growth.  Jason says it himself in a blog posting about why Jobster cares about profitability; ”… you cannot do everything all at once.  at least not well.  that requires tough choices”. 

So, what is really going on here?  Did Jobster grow staff too quickly and now has to cut back to achieve profitability or did Jobster examine its market opportunities and decide to realign its staffing (including some job cuts) to go after the best ones?  I do not know.  I am sure we will find out soon enough.  

Often there is a desire in the media (and the blogosphere) to break a story, especially a negative story.  It attracts readers.  Negative stories do have a place.  There are certainly times when it is important to get a negative story out because it is in the public interest.  We publish research at Gartner that sometimes is viewed as negative by technology providers (I know it is hard to believe). 

However, gossip and rumors almost invariably lead to negative stories.  Bertrand Russell is quoted as saying “No one gossips about people’s secret virtues”.  It is easy to speculate based on gossip, rumor, and innuendo.  However, that speculation is based on information that is often wrong, incomplete, and/or misleading.  Maybe the Jobster rumors will turn out to be true.  Maybe they won’t.  Whatever the case, we should all be careful of conclusions drawn from rumors.

The Pace of Consolidation Accelerates in the E-Recruitment Software Market — Large vendors that have not had a presence in talent management are buying their way in through increasing mergers and acquisitions. Talent management vendors are trying to get to a critical mass to compete with the larger, more-established organizations.

Magic Quadrant for E-Recruitment Software, 2006 — Due to the maturing market for e-recruitment software, Gartner has produced a Magic Quadrant. The vendors included here provide Internet recruitment applications for the full requisition-to-hire process to companies with more than 2,500 employees.

SumTotal Aims to Lead Talent Management Market With MindSolve — By acquiring MindSolve, SumTotal Systems gains a strong talent management offering, including e-learning, employee performance management, succession management and compensation management applications.

Predicts 2007: Software as a Service Provides a Viable Delivery Model — Adopt SaaS first using a modular and incremental approach. SaaS predictions provide overall guidance for SaaS delivery adoption and specific market outlooks for human capital management, e-commerce and integration as a service.

Workday’s Initial HCM Offering Is Intriguing but Unproven — The startup Workday’s Human Capital Management software-as-service solution includes innovative technology and has had some initial success. Prospective customers will face the usual risks of early adopters.

Case Study: Workforce Analytics at Sun — Sun used workforce analytics to understand the financial impact of and to target its spending around its mentoring program.

I agree with all of the "New Way".  I think if you asked most people in the HR profession today, they would agree too.  So, why does the "New Way" not happen and how can more organizations implement the "New Way"?  Let’s consider each in turn:

Talent Mindset — All managers — starting with the CEO — are accountable for strengthening their talent pool — Of course, managers should be accountable.  However, why are they often not accountable?  Performance and compensation systems are not aligned to encourage accountability.  The culture does not support accountability.  It could be a number of things.  The important thing for HR professionals is that they need to support managers so that they know what they can do to strengthen their talent pool and help make sure that the accountability for this is institutionalized.

Employee Value Proposition — We shape our company, even our strategy, to appeal to talented people — I do not know if I agree with this entirely.  I think the strategy, what uniquely defines the competitive advantage in the marketplace, should shape the people I have in the organization.  I think it was put quite well in the book "Good to Great".  Great companies make sure that they have the right people in the right roles and that everyone is committed (i.e., engaged) to successfully executing on the strategy.  I am paraphrasing here, but I think you get the drift.  Having said that, it is still important to have a strong employee value proposition to attract and retain the best talent.  Dr. John Sullivan has done a great job of discussing this on ERE in many different ways.  I am not going to link to all of the posts.  Just visit ERE and see what he has written.

Recruiting — Recruiting is like marketing — It is like sales, marketing and supply chain management.  All of the disciplines are important to apply.  As I have said in previous posts, when was the last time your recruiting organization talked to people in those other parts of the organization to understand best practices.

Growing Leaders — We fuel development through stretch jobs, coaching, and mentoring — I agree that these can be important to developing future leaders.  How do you know what is having the most impact and where you should invest and what results you should expect?  C-level executives want to know.  See the case study I recently published (subscription required) on using Workforce Analytics to show the effectiveness of a mentoring program.

Differentiation — We affirm all of our people, but invest differentially in our A, B, and C players — Again, I agree, but have you truly differentiated your A, B, and C players?  Many organizations I talk to have grade inflation.  They do not do a good job of calibrating their performance appraisals.  This has a negative downstream impact on compensation (especially if you are not truly paying for performance), succession management (you do not have the right talent pools identified), and morale (employees do not trust the system and true "A" players feel less appreciated).  Technology is not a cure to these problems, but it can help.  Employee Performance Management systems that include integrated performance management, compensation management, and succession management can provide an infrastructure to help managers and executives differentiate their talent investments.  This is one of the reasons that updated MarketScope for Employee Performance Management Software will include performance, compensation, and succession management.

The Magic Quadrant for E-Recruitment Software is in editing (still).  It is pretty long so it takes some time.  I have been getting some questions so I know it is in progress.  It should publish any day now.  I have also kicked off the update to the MarketScope for Employee Performance Management Software.  We have expanded the scope to include Compensation Management and Succession Management.  The initial contact list included 42 providers.  If you are a provider and did not get the initial e-mail, please let me know.

Once we complete the EPM MarketScope update, we will have a good set of vendor research across all of talent management.  We will continue to update this research in 2007, but we will also start to focus more on the user side. 

The two main themes I will be stressing in 2007 are Integrated Talent Management and Workforce Analytics.  I will be updating some of our 2005 research on these topics as well as publishing several case studies.  For Integrated Talent Management, I am interesting in companies that have a vision and strategy that cuts across all of the talent management domains.  These companies do not have to have had implemented technology across all of these areas, but should have started to implement technology in several talent management areas.  I am very interested in the business case/cost justification done for these initiatives as well as how these organizations have linked their integrated talent management initiatives into business priorities.

I published a case study on Workforce Analytics at Sun Microsystems a few weeks ago.  I want to do similar case studies next year that focus on workforce analytics help organizations make decisions about human capital management that lead to specific business outcomes.

If you know of companies that would be good candidates for these types of case studies, please contact me.