I would have called this trend, "a return to simplicity", but as far as I can tell, HRMS software has never really known simplicity. 90% of the people that I speak with are looking for a "simple and easy" system that offers them the capabilities to improve process, without headaches.
I believe that this quest for easy and simple is a reaction to stress created by people being asked to do more with less. No one that I speak with has time for complexity right now. They don't have time to learn, tweak and teach others another new system. They've got a lot of other things on their plate, and they can't relearn a software application when hiring is turning on and off every few months (or weeks).
Obviously the movement away from complexity and toward simplicity has been going on for some time, well before the recession. But the recession has really made us all focus on what makes us, and our businesses, more efficient. It's kind of like stubbing your toe. The first time you stub your toe, it hurts. The second time it hurts 10 times more. The economic meltdown was the first stub, and anything that makes us inefficient or slows us down from here is likely to bring us to our knees. As we emerge from the recession, software vendors should be listening to their customers and innovating. In the end, this will be good for the HRMS software industry as a whole.
In 2007, when we started offering beta versions of our own product, "deep customization" was high on our customers' lists of requirements. In the past year, this request has become nearly non-existent.
Now this is entirely contrary to a recent poll on ATS (applicant tracking systems) I read, so I should explain. I would like to call it a little bit of the "tail wagging the dog." If you sell software without a good process built in, then you MUST make it deeply customizable. If you're a software company without HR people and recruiters guiding your product design, then it MUST be customizable, because you don't know the challenges faced by your audience (your customers).
Most buyers that I speak with are being asked to spend less on consulting, staff, recruiting, etc, while still providing service to multiple teams that demand fast service. Clearly, the "here's a tool, now build your own" approach won't work for them. I believe that this trend is characterized by buyers seeking software that helps them do their job better, instead of software tools that they must "teach" how to solve their problems. "We need to fill these before we lose budget," is a common refrain. These buyers I talk to don't have time to wait for long customization process: they have a problem, and they need it fixed fast. Instead of a hammer, they need a house.
It can hardly be debated that enterprise software is way too complicated and for the most part, pretty thoughtless when it comes to user experience. The expensive applications that businesses use to run their human resources are some of the least friendly, most difficult systems ever committed to code. If you work at a company that uses business software or you've ever had to do something that should be simple, like apply to a job — or, heck, even look at a job on a corporate careers site — then you've probably encountered some really annoying user experiences.
Up to this point, companies have designed business software almost entirely for what we might call a "Power User", i.e. people that are going to use it day in and day out. For a business process like recruiting where 90% of the users don't hire all of the time and therefore don't use recruiting software day in and day out, this design focus leads to 10% user adoption. Casual users don't have the time or usage frequencies that foster retention of complex features.
But, there is good news and yes, another trend. Users are starting to demand better design and vendors are responding and finally acknowledging that there are other critical users of recruiting software like hiring managers and even applicants. As vendors tart making software easy-to-use for every user, we may even start to see adoption rates improve not to mention efficiency and overall program performance.
Captain Obvious at your service: The recent financial meltdown has put an emphasis on thriftiness. All enterprises, even oil companies, are looking for ways to shave costs. Buyers that I speak with have no choice; they are short-staffed, under-budgeted and forced to do more with less in the most uncertain conditions of their lives.
So what's the trend? Economizing? That's part of it and very well could be the biggest driving force. But, what I find really interesting is that some software companies are structuring their businesses to entice cost-conscious buyers. And, potentially even more interesting is how this trend may turn the business of enterprise software on its ear.
Many progressive software companies, across all industries, are offering "Friction-Free" buying programs to attract and retain customers. These programs are highlighted by simple tiered-pricing models, free trial periods, pay-as-you-go-contracts and non-punitive cancelation policies. The reduced risks help buyers get purchases approved easily.
(As a side note, this new model for software pricing forces vendors to build better software because they don't force people into long term contracts: if the software isn't good, you cancel.)
Convoluted pricing hides the elephant in the closet behind long-term contracts. "With our current software every time I want to do something, like add a user, or increase our job limit I'm forced to call someone and pay a fee." Or, "We tried to lower our user limit because we aren't hiring as much, but they wouldn't let us. When our term expires we're going to cancel." I hear these complaints almost every day, and the recession will be the end of this: the elephant has charged and is bowling over these anti-customer business models. Fair pricing is coming, for some buyers it has arrived, and it will benefit all consumers long after the recession is over.
In most companies, applicant acquisition, assessment, interviewing, feedback mechanisms and pre-employment screening are a series of disjointed manual processes. This is changing. Modern recruiting software vendors are finding ways to systematize talent acquisition. Along with key partners, ATS vendors will finally act as a platform to integrate each phase in the hiring process (acquisition, assessment, interviewing, screening ,etc) so they are coordinated, connected, organized and online (finally).
The timing couldn't be better. Job advertisements in industries like manufacturing, hospitality, retail and transportation are up 46% over last year alone and the "digital divide" in the US is shrinking at a remarkable rate. Thanks to the accessibility of broadband internet, $400 dollar personal computers, affordable hand-held computing devices and the widespread presence of computers in public spaces like libraries and state employment offices, more and more Americans are able to and prefer to conduct their job searches online. With more applicants online, companies that require manual, hourly, seasonal and unskilled labor must take steps to move recruitment processes online.
Watch for some progressive ATS vendors to offer a systematic approach to recruiting that increases overall productivity by eliminating wasted steps and periods of inactivity, maximizing resources and promoting consistency. Oh yeah, and they'll get everything online for you too. It's about time.