In my more than two decades of navigating the dynamic world of recruitment, I’ve witnessed a tremendous evolution – from the days of fax machines buzzing with job offers to today’s sophisticated AI-driven talent sourcing tools.
But with organizations now facing significant challenges, including vast skills gaps, fierce competition, increasing diversity, equity and inclusion (DEI) considerations and ever-changing candidate expectations (and all set against a backdrop of economic uncertainty), it’s clear that the talent acquisition landscape isn’t just changing; it’s being revolutionized.
Back in February TLNT ran an article on the need to redefine the recruiter’s role, in which the author argued recruiters are a businesses’ strategic partner – tasked with building a more resilient workforce and one that is diverse, inclusive and reflects the values of the organization.
This resonated with me as I am hearing the same in my role at The Talent Labs where I am responsible for the strategic development and leadership of the TA Center of Excellence.
We conduct regular research with our thousands of members and our latest TA Organizational Structures Report echoes that, to truly elevate your talent acquisition (TA) function from a basic operational level to an exemplary strategic asset, it’s critical that your TA teams collaborate deeply with all business units.
However, it’s clear from the research that there are a number of barriers preventing organizations from operating a future-fit TA function.
A mere 34% of respondents deem their current structures as highly effective.
The good news is that nearly half of organizations (48%) are already taking the crucial steps to revamp their TA models, aiming to better align with the shifting needs of businesses and candidates while also optimizing costs and efficiency.
But another area that needs work is agility.
In TA this goes beyond organizational structures to the core of the team. It’s about ensuring your TA team is skilled and versatile, which means investing in continuous learning and development.
We believe that cross-training your team to handle different aspects of the recruitment process not only enhances their skills but also prepares your function to be more agile.
This adaptability is particularly crucial in times of rapid change or unexpected market shifts. From my experience, the most successful TA teams are those that are not siloed but which are integrated with business units, understand the nuances of the roles they are hiring for and are proficient in using advanced tools and analytics.
Yet our research finds just under one in five organizations (18%), provide clear career and development paths for TA professionals, and for nearly half (49%), these plans are still being developed.
Those that do are more likely to work in organizations with more than 10,000 people (31% versus 20% as the average for all respondents), and in line with that they also make more than 1,000 hires per year (31% versus an overall average of 25%).
They’re also more likely to have more than 21 people working in their TA function, at 37% versus an overall average for respondents of 26%. There’s no differentiation between the type of model the organisation operates.
This lack of career and development pathways is also reflected in the limited investment in training for responding organizations overall. Training receives only 7.1% of the TA budget, making it the smallest allocation among all categories.
Then there’s technology. If there’s one investment that’s non-negotiable for a future-ready TA function, it’s tech.
Advanced digital tools and AI are revolutionizing how we source, select and onboard talent. These technologies not only streamline operations but also enhance decision-making through rich, data-driven insights.
Although our research finds technology is the third largest investment area for TA, taking more than 16% of its budget, this is well behind people and sourcing.
Moreover, our Annual Survey 2024 found technology, a new ATS, AI and access to more data was cited by 8% of respondents as a challenge for the forthcoming year. It’s also the largest area where there are perceived capability issues (64% of respondents).
Recruiting technology and AI is primarily the responsibility of centralized TA teams, with 75% having this accountability, while 19% sits with the local TA team and 12% with HR overall.
When it comes to metrics the most popular are Time to Hire, recorded by 82% of respondents, followed by Diversity of Candidates (68%), Time to Offer (67%) and Cost of Hire (60%).
But, less likely to be recorded are Quality of Hire, Quality of Process and Hiring Velocity.
Time to Hire as a key metric reflects the findings from the last time this data was collected in May 2021 when 80% of respondents said they recorded it.
Cost of Hire is being measured by 60% of respondents compared to 54% last time, and Quality of Hire has dropped slightly, from 32% to 26%.
According to Gartner, technology is the leading HR investment priority as HR leaders expect technology-related initiatives to hold the biggest HR function efficiency potential – impacting all areas of the candidate pipeline, including candidate attraction, sourcing and experience as well as talent analytics.
Given the strategic importance underscored by Gartner’s findings, investing in these areas is critical for modernizing TA.
This approach not only addresses today’s talent needs but also aligns with the broader HR transformation trends, ensuring a robust, data-driven foundation for future talent management success.
Gone are the days when talent acquisition could be sidelined as a mere administrative function.
In today’s world, where talent is unequivocally linked to sustained organizational success, having a TA function that is merely adequate is no longer acceptable.
Now, more than ever, TA must be engineered for excellence – ready to propel the organization towards a thriving, future-ready state.
Key lessons:
- Shift in hiring ratios: Research from The Talent Labs shows a shift in external to internal hiring ratios from 70/30 to 60/40 over two years, underscoring a trend towards greater internal talent development.
- Effectiveness of current TA structures: Only 34% of respondents with a centralized model deem their structure highly effective, indicating that these models could be better adapted to address more localized requirements.
- Reasons for reviewing TA structures: The top reasons for organizations reviewing their TA structures include better meeting business and candidate needs and achieving cost savings, as identified by 48% of respondents.
- Adoption of technology: The integration of technology and automation in TA is linked to improved performance metrics such as Time to Hire, Quality of Hire and Cost Per Hire.
- Global challenges: The need for geographically aligned TA functions to manage global talent needs and navigate diverse regulatory environments effectively.