In this white paper sponsored by TalentWise, I take a look at some of the key moments in staffing technology history and some of the key trends for the future that are going to make history. I also share a few staffing tips and tricks for staffing to help make sure agency recruiters and search firms aren't consigned to history.
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INDEX
Introduction | Executive Summary
Staffing Technology: A Brief History
Part 1: Prehistory (Dawn of Time–1800)
Part 2: The Industrial Revolution (or Man vs. Machine)
Part 3: Scientific Management and Big Data 1.0
Part 4: Legacy Systems: Personnel and Paper
Part 5: Rise of the Machines
Part 6: Back to the Future: Talent Technology Today
Part 7: Staffing Technology Selection for Dummies
ABOUT THE AUTHOR: Matt Charney
ABOUT RECRUITING DAILY
ABOUT
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Executive Summary: A Brief History of Staffing
According to the Bureau of Labor Statistics
(BLS), last year an estimated 11.5 million
Americans, or about 2 percent of the total
eligible workforce, found good jobs (average
assignment: 3.6 months) at good salaries (an
average of $13.20 an hour), thanks to third
party recruiting providers.
That two percent might not sound like a whole
lot, but in terms of absolute employment, that
seemingly fractional amount amounts to the
difference between a booming economy
and a recession, at least according to labor
economists (We’ll trust the eggheads on this
one, since there are numbers involved.)
If you’re in staffing, you already know recessions suck—but it’s largely
because of you that we’re back to work, too. In fact, the BLS estimated
with an 11.1 percent year-over-year growth, the staffing industry is
outperforming every other sector not involving technology or healthcare.
That 2 percent, by the way, is only contingent labor; around 275,000
permanent, salaried positions were filled through search firms, an increase
of 3.2 percent since 2012. All told, the staffing industry generates total sales
of $117 billion a year—that’s billion, with a “B.”
Talk about big data.
Truth is, for a niche industry, staffing touches a lot of lives—both personally,
and professionally—across all demographics, markets, professional levels
and industries. It makes sense, considering that without it, millions of
Americans wouldn’t be able to pay their bills or build their bank accounts.
We’d say something corny like “staffing technology enables the American
Dream,” but since this is a B2B white paper, if you’re on the other side of
staffing, chances are that technology is more of a recurring nightmare.
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Because even though the number of roles staffing firms fill every year has
continued to increase steadily since the lean years after Lehman Bros. and
the economy collapsed, the fact is that the software powering most staffing
firms continues to be stuck somewhere between mainframes and MS-DOS.
In an age of constant connectivity and living in real time, all the time, the
truth of the matter is that staffing technology lags far behind its consumer
counterparts. In the age of the iWatch, staffing systems stay stuck squarely
in the days of the beeper and the brick phone.
But with changes such as social, mobile,
gamification and those other buzzwords that
you’re too busy playing Angry Birds on your
Android against Facebook friends to really pay
too much attention to, there’s seismic change
on the horizon for staffing technology. This is
good news for recruiters as well as their clients
and candidates.
This paper will take a look at the history of staffing technology, which
stretches back to antiquity, and trace its painfully slow evolution. We’ll
go from the bird-based time clocks favored by cave men all the way to
the distant future, where a boss at even a small sprockets company can
somehow teleport to spend a little face time with his offsite employees.
Most importantly, we’ll look at what you need to know to steer clear of the
Stone Age and stay at the cutting edge of automation and productivity (even
if there might not be a robot butler involved – yet). In staffing, time is money,
and systems are the key to working less and making more. Not to mention
minimizing damage and maximizing results. But don’t be fooled. This isn’t a
business case. It’s a wakeup call.
!!
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Staffing Technology: A Brief History
Part 1: Prehistory (Dawn of Time–1800)
If you think about it, staffing is likely the second oldest profession in the
world, and not all that dissimilar from the oldest, either, as both rely on
fulfilling the most basic human needs (millennia before Maslow developed his
hierarchy) and make most of their money on hourly margins.
Consider the Anubian Scroll, dated by archaeologists to Sumer, about the
same time Abraham used to herd goats with his kid Isaac just down the
road. This find, in which a Sumerian landowner records in hieroglyphs the
names and days worked by what one can infer as his chattel (which used
to be what “temps” were called), can be considered the first ever staffing
technology in history.
As you can see from the picture on the
left, this stone system was most likely
less painful than an Excel spreadsheet,
but still left much to be desired for the
staffing professional forced to chisel his
invoices to King Nebuchadnezzar. Who,
records show, was a notorious dodger
of bills, proving that some things just
don’t change when it comes to staffing
clients. And the employer built a pyramid
made out of gold, for crying out loud.
Speaking of pyramids, over 5,000
meters of papyrus (in various locations
and conditions) have been recovered
from the Great Pyramid at Giza listing the names, occupations and
assets with which the servants buried alive with the Great Pharaoh could,
presumably, use as a reference for employers in the afterlife.
Onecanonlyassumethatasimilarrecordwaskeptsafelyoutsidefor
bookkeeping,a prettygoodrecruitingracketconsideringthesecandidates
alwaysstayedaroundpasttheirguaranteeddate.Infact,indynasticEgyptit’s
estimatedthatemployeeretentionreacheditshighestlevelinhistory(ithelps
that50percentoftheworkforcestayedwithoneemployerforlife—anddeath).
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We do know that by the birth of Christ, retention had become somewhat
more problematic; consider John 10:13: “He flees because he is a hired hand
and cares not.”
Still, getting paid on time for work done has held central importance
throughout history. Which, even in Biblical times, was a pain in the tucchus for
employers, and has always been a huge time suck. Withholding has been an
issue since Roman times, as James 5:4 tells us:
“Behold, the wages of the laborers who mowed your fields, which you have
kept back by fraud, are crying out against you, and the cries of the harvesters
have reached the ears of the Lord of hosts.”
Be glad you only have to deal with the IRS and maybe pay a fine. The
penalties, apparently, used to be much worse, but the point is, even though
staffing technology has evolved, minimizing risk and accurate record keeping
have been critical for employers since the dawn of mankind.
We don’t have much information from the Dark Ages, but we do know the
first ever personal tax record, the Domesday Book, appeared in the South
of England in the 12th century, and every nobleman was responsible for
accurately reporting and paying the Crown for the serfs residing and working
on his lands.
A few centuries later, the printing press developed, rapidly altering the nature
of HR technology. The first book printed in English, The Reycaulle [sic] of the
Histories of Troye included a lengthy section on the protocol of the ethics
of male-female interactions among members of the royal retinue – written
on the same topic (and same completely obtuse, unintelligible English
derivative) as the same employee guidelines we continue to develop some
540 years later. Only now, they’re in .pdf form and way less graphic when
discussing sexuality at work.
Printing continued to dominate HR technology for centuries after
Guttenberg’s first edition, from the scrip used to pay mercenaries to the
workhouse workbooks to this newspaper classified ad from May 1776,
printed in the Woodbury, MA. Recorder: “Wanted: A 4 1/2’ tall colored boy for
office work.”
Think your searches are specific? Still, job descriptions obviously haven’t
improved very much since these times, nor has the apparent desire for
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diversity even in the menial, colonial workforce. And sure, no matter what
was acceptable at the time, while anyone today bristles at this as racist, the
real question is: why 4 and a half feet tall? Hiring managers sucked, even back
before they formally existed.
Not much, though, changed at all, until the Industrial Revolution in the
mid-19th Century, when the influx of unskilled, transient labor to the cities
and factories made manual methods untenable, and competition fierce
for the most experienced, most skilled talent, which was, in areas such as
Manchester and Detroit, posted on job boards in tenements and mostly
immigrant communities.
Part 2: The Industrial Revolution
(or Man vs. Machine)
Change accelerated with the historical shift in workforce composition
and planning (reinforced by the almost worldwide abolition of slavery and
serfdom formally in place within 50 years of the first railway), not to mention
increasingly complex compliance and record keeping requirements.
The first American income tax was introduced in 1861 to pay for a war fought
mostly over labor costs; the Chinese Exclusion Act of 1882 put the onus on
U.S. employers to verify their new hires were not, in fact, Chinese citizens,
and placing employers at risk of seizure of property and loss of business.
In a span of about 10 years, in America at least,
staffing as we know it was born—as was its
business necessity.
As always, technology developed to meet the
evolving needs of staffing practitioners and
employers. The year 1888 brought the first
mechanical time clock for tracking worker hours,
the same year as the first electrical coffee pot,
an invention that would go on to impact staffing
productivity perhaps more than any other.
Of course, these systems were imperfect, but
when labor relations involved sending in armed
soldiers to break up strikes, the margin of error was a little greater for
employers and staffing professionals (who, coincidentally, escorted fresh
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arrivals from Ellis Island directly to their textile clients in the Garment District,
in one of the first temp labor booms in history).
Then, much to the chagrin of contemporary staffing practitioners,
technology took a sharp turn from manual to mechanized, from dispensable
commodity to highly prized asset. Metrics were invented, and while we still
haven’t perfected them, they’ve been the de facto currency of staffing
professionals ever since.
Part 3: Scientific Management and Big Data 1.0
In the 1880s and 1890s, the same time as the Pullman Strike was being
busted up, monopolies like U.S. Steel were all the rage, and a rugged young
rapscallion named Mark Twain was writing books, a young man moved from
factory to factory all over the Rust Belt with a theory that was perceived as
radical, ridiculous and even insane.
His name was Frederick Winslow Taylor, and he believed in a completely
revolutionary idea that was more heretical to employers of the day than
paying salaried employees overtime.
Itwasthat,turnsout,workersemployedforsomeoneelseotherthan
themselveswerebasicallygiantslackerswithnoincentivetoworkanyharder
thantheyhadtoonsomeoneelse’stime,andthatwascostingcompaniesa
greatdeal—particularlyenterpriseemployerslikehisprimarypatron,U.S.Steel.
That said, there were also workers who, while lazy peasants like everyone
else on the payroll, had more natural talent and inherent skills (not to
mention work ethic) than their counterparts. This created a distinction that
created recruiting as we know it— that the laws of supply and demand also
cover human capital. These “A” Players were the kind that companies should
want to recruit and retain.
A quote from Taylor’s influential “Principals of Scientific Management” was
written in 1912, but it represents the same prevailing rationale driving the
staffing industry today:
“Thesearchforbetter,formorecompetentmen,fromthepresidentsofour
greatcompaniesdowntoourhouseholdservantswasnevermorevigorous
thanitisnow. Andmorethaneverbeforeisthedemandforcompetentmen
inexcessofthesupply.Whatwearealllookingfor,however,istheready
madecompetentman;themanwhomsomeoneelsehastrained.”
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And in this paragraph, staffing as we know it was born. As was human
capital consulting, because, like all consultants, Taylor not only invented an
“emerging national crisis of efficiency” but also solution sales, continuing,
“It is only when we fully realize that our duty as well as our opportunity lies in
systematically cooperating to train and make this competent man instead
of hunting for a man whom someone else has trained, thus making the man
more loyal and less expensive to his employer, than we shall be on the road to
national efficiency.
Yeah, so Taylor pretty much nailed the value proposition that staffing firms
still use today: a shared pool of prescreened, qualified and cost effective
labor to fill needs with little risk to the employer and minimal ramp-up time.
Measuring the relative productivity of these workers, meanwhile, was
a challenge at which Taylor wasn’t nearly so sage; called “scientific
management” (an obvious oxymoron to the contemporary eye), he devised
an elaborate system to measure exactly how productive workers were so
that their movements could be minimized, their work streamlined, and
ultimately, increase productivity and profit.
For many years, this “scientific management” of creating highly
interchangeable, highly specialized and highly productive workers through
process improvement and predictive analytics was considered a scientific
flop akin to eugenics or Olean. And yet, today, these very same disproven
theories have resurfaced, rebranded as “big data.”
And while Taylor’s earlier staffing predictions have obviously been borne out,
it’s only now that we’re realizing he was right about scientific management.
Only now, instead of measuring through observing individual workers
manually, we have the technology to make sure we’re getting the most out
of every worker.
What’s changed? Without recounting the entire lyrics of Billy Joel’s “We
Didn’t Start the Fire”, the answer is that while workers and jobs have
superficially changed over the 20th century, their motivations are still the
same: to make as much money as possible while doing as little work as
possible.
The reason the world of work is shifting, however, is a little simpler.
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Technology has, for the first time, not only changed how we work, but
why and how we work as well. And the pace of development from Taylor’s
stopwatch to enterprise talent management suite proved that in order for
work to keep up with its workers, so too must technology.
“In the past, man was first,” Taylor writes, “but in the future, the system
will be first.”
As it turns out, Taylor was right.
Part 4: Legacy Systems: Personnel and Paper
Ask the average worker to describe what HR does and chances are that his
perception resembles that opening shot in Billy Wilder’s The Office, with row
upon row of drones mechanically entering data into antiquated machines
and identical desks overflowing with office paper. The reality is not far off.
While the human relations management movement of Elton Mayo
manifested itself primarily as a leadership strategy, those same leaders
simultaneously saw the need to deal with scaling increasing numbers of
employees, particularly payroll transactions. Mayo’s research, surprisingly,
showed little correlation between compensation and worker productivity.
It also showed that not paying them what they were owed, and when they
were owed it, was in fact the ultimate driver of employee dissatisfaction.
In those days before direct deposit but after the passing of such legislation
as social security and Medicare withholdings, the first true HR technology
started with mainframe payroll systems to make this formerly manual
process paperless and more or less painful.
Eventually, someone realized that all the information about new employees
they were punching into the mainframe happened to actually contain a lot
more useful and actionable information about employees than simply what
and when they got paid.
Forthefirsttime,companiescouldseedatarelatedtojobs,salary,absenceratesand
personaldatasuchasemployeetenureandworkhistory. Sincecompaniesrelied
exclusivelyonmainframesystems,thismeanttheirsystemswereexclusivelyon-
premiseandinterchangeablememoryandmicrochipswerestillafewyearsaway.
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Realizing there was money to be made from this sort of information (not
to mention potentially better personnel management techniques), the
first dedicated staffing technology vendors started popping up to serve a
growing market.
Manycompaniesemployedsmallarmiesoftechiestobuildandruntheirown
systems;teamsatbluechipcompaniessuchasAT&T,GeneralElectricand
DuPontdevelopedsomeoftheearliesttruestaffingsystemsinternally.But
increasingly,anupstartgroupofvendorsdedicatedexclusivelytostaffingarose.
Among the earliest players were companies including Dun and Bradstreet,
ADP and IBM, companies that shockingly, for a space now dominated by
startups, still exist. As companies’ needs changed and evolved along with
external work trends and internal needs, these dedicated point solutions
soon gained an advantage over the many constraints of mainframe systems.
While these mainframe (or “on premise,” as vendors behind the times have
sincerebrandedtheirproductmarketingandmessaging)systemsaregreatat
keepingdatasecureandbeingconfigurableenoughtofillaspecificneedwhile
handlingspecificdata,theyalsotendtohaveafewlimitations.Especiallyasthey
evolvedforrecruiting,asanyon-premiseATSusercantellyou.
The first is that, largely, they require a TON of maintenance— from the team
of dedicated ATS/HRIS specialists a company has to have constantly on call
(which amounts to a lot of headcount)—and even the pocket square set
that spend more of their time fixing existing issues than developing new
applications or improved efficacy.
Second, they tend to suck at being flexible or sharing data outside the
specific scope for which the system was built. That means that even within a
single organization, there might be dozens of HCM systems, each dedicated
to a disparate data set and unable to share information with each other,
much less disseminate that data from the back office to the front line.
Last, but not least, legacy staffing systems were about as intuitive for the
average end user as particle physics. There was no way anyone without a
computer science degree, complex coding expertise and the ability to quote
Douglas Adams could understand what the heck they needed to do to
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complete even the simplest of tasks.
The end user really didn’t matter— nor could most of these systems convey
requirements or real recruiting needs effectively to the techie responsible
for their system of record and their sanity. It was like trying to explain
SnapChat to a septuagenarian.
In those days, self-service generally meant opening the three-ring binder
with a users’ manual approximately the same length as your average Tolstoy
book. Mobile meant walking to the fax machine to send out an offer, and
most talent practitioners had to spend more time on the phone with the help
desk than with candidates.
Anditsuckedreally,reallybad.Butasystemwassacred;afterall,youwerelocked
intoitforever,withthesamefeaturesandcodebasesittingunchangedsincethe
Reaganadministration,prettymuch.Itjustwasn’tworking.
And the great battle between recruiting and technology turned into a full-
fledged war.
Part 5: Rise of the Machines
You might not believe it now, but one of the most revolutionary companies
in the history of staffing technology first launched in 1994, and the
MonsterBoard (as Monster.com was originally known), proved to be a game
changer for candidates and recruiters alike.
For the first time, recruitment practitioners no longer had to rely on their
Rolodex and help wanted ads to reach candidates. They could go directly
online and access a database of candidates with a previously unheard of
size and scope. By 1996, the year Monster went public, it boasted of over
250,000 resumes and 50,000 active jobs; no small potatoes, considering
menternet penetration in the United States that same year was estimated
to be between 35-40 million total active monthly users, with each logging in
an average of 30 minutes a month.
As online recruiting exploded, so too did a staffing technology industry
which constituted a rapidly growing ecosystem; the market for recruiting
technologies, including online recruitment spend, increased from a paltry 4.1
billion in 1991 to an estimated 68 billion only a decade later.
While job boards like Monster, as well as CareerBuilder, Hot Jobs! and niche
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players such as Dice and the Ladders counted for a significant share of
this early online recruiting marketplace, the increased consumerization of
HR technology was also coupled with the development of Web-enabled,
integrated applicant tracking and talent management systems.
By combining disparate databases, both internal and external, into a single
source across all parts of the full cycle hiring process, talent acquisition
shifted its focus from reactive, just-in-time hiring to strategic, proactive
sourcing. This meant recruiters were now building not just a slate of
candidates for one position, but a pipeline of candidates to meet the future
talent needs of an entire company.
The resulting ease of finding both jobs and candidates led to a dramatic
increase in applications, from approximately a dozen per
posted position in 1995 to almost 200 just a decade later.
This sudden influx of resumes suddenly put the impetus
on companies not just to attract candidates, but do a
more effective job screening out the right candidates to
find the elusive A-player who fits both the organization’s
needs and its culture.
It also commoditized candidates, democratizing search
from old boys’ club to open network by giving the same
set of tools to essentially everyone, meaning that finding
talent was no longer a competitive differentiator.
This level playing field meant largely reverting to the critical recruiting
competencies which preceded talent technology: personal interactions
and personalized engagement continue to define who’s winning the war
for top talent.
Part 6: Back to the Future: Talent Technology Today
While the rise of online recruiting represents one of the most significant
disruptorsintheevolutionofstaffingtechnology,theriseofsocialmedia,
mobile,video,predictiveanalyticsandothertrendsshapingstaffinghaveledto
aproliferationinpointsolutionsandstartupvendorsfightingforashareofthe
estimated$17billionannualspendontalentmanagementsystemsalone.
Bersin by Deloitte estimates that 40,000 companies worldwide compete
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in the talent acquisition or recruiting space, each promising to make talent
management more efficient and effective. Which means that, if you’re like
the 52 percent of employers planning on increasing your talent technology
spend over the next year, you’ve got your work cut out for you to choose the
right systems for the future.
If you’re in staffing, chances are you’re largely stuck in the past and bogged
down in manual submissions, paper-based onboarding and documentation
processes that require recruiters to spend more time on paperwork than on
building the meaningful relationships required for staffing success.
When assessing which talent management vendor is right for your staffing
firm, it’s easy to get caught up in specious functionalities and pointless
feature sets designed to create market demand (think: video interviewing),
rather than solve market challenges. The good news is that for staffing, as
Zeppelin and Camus famously stated, the more things change, the more
they remain the same, and the right system simplifies and streamlines
staffing processes instead of adding unnecessary complexity and improves
the recruiter and candidate experience alike.
That means when it comes to systems, you’ve got to keep them integrated.
In fact, 40 percent of HR technology buyers said they’d be willing to sacrifice
added functionality for a single sign-on. Further, a survey of talent leaders
revealed their biggest technology challenge was integrating and optimizing
disparate systems and solutions.
That challenge, however, represents a significant opportunity for staffing
firms to implement integrated talent management technology that will
transform the most critical task for every organization’s bottom line:
recruiting and retaining top talent.
Part 7: Staffing Technology Selection
for Dummies
If you’re like the average recruiter, chances are you’ve got about a dozen
different system sign-ons for diffuse point solutions which only focus
on a single aspect of the hiring process. Each of these platforms means
mastering multiple user interfaces, managing multiple vendors, and adding
unnecessary complexity to an already complicated hiring process.
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Finding a single, simple, SaaS solution for staffing has the ability to
improve that experience by creating a more efficient, effective hiring
process that results in the best possible experience for candidates and
recruiters alike.
A best-in-breed system not only standardizes and streamlines staffing
processes, but also creates visibility of
process for clients and candidates, while
moving formerly paper-based, highly
manual processes completely to the Cloud.
While this white paper has looked at the
evolution of staffing software and traced its
history from stone slabs to SaaS, here are
some things to consider when selecting the
integrated talent management system to
properly position your recruiting function
for future success.
Designed For Your Needs: Tier One ERPs, are more or less
traditional enterprise systems with point solutions and integrations
simply slapped together, resulting in massive inefficiencies and
minimum flexibility.
This piecemeal approach puts the onus on end users and internal IT
departments to design their hiring process to fit their system, instead
of a platform, like TalentWise, that’s fully configurable for the unique
needs of end users and their hiring needs.
True multi-tenant SaaS solutions like TalentWise require minimal time
and resources for implementation, meaning minimal headaches and
maximum ROI on your recruiting technology investment.
SaaS systems like TalentWise also consistently evolve to meet
changing recruiting and business requirements through regular
product updates delivered seamlessly through the Cloud, so that your
systems always stay up to date and ensure your organization stays on
the cutting edge of staffing—and a step ahead of the competition.
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The Full Cycle: Unlike point solutions
that only support a single part of your
staffing process, an integrated talent
management solution like TalentWise will
serve all your hiring needs, from screening
to selection to offer management and
onboarding, within a unified platform and
interface that’s completely automated and
completely compliant.
By providing a single, simple solution for all
staffing needs, a platform like TalentWise
creates a unified user experience
while allowing companies to end their
integration nightmares and middleware
malaise with one user interface, one
vendor, one support team and ultimately,
one great experience.
Built to Last: With the explosion of
startup staffing solutions and an exponentially expanding vendor
marketplace, it’s essential to select a staffing technology partner
that, like your workforce, is built for the long haul and for the future
of recruiting. This means choosing a platform, like TalentWise, that
recruiters and candidates can access in real time, all the time, from any
device, anywhere in the world.
TalentWise not only offers an intuitive, consumer-grade Web-based
interface across all browsers, but also works with mobile devices to
reach talent anywhere in the world of work.
While acting as a system of
record, TalentWise also serves
as a system of engagement,
building fully branded candidate
portals with video and social
media capabilities to keep
candidates and new hires
engaged throughout the hiring
process, from screening to onboarding and everything in between.
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If you’re still stuck in the staffing stone age, pushing paper forms and relying
on manual processes for screening, onboarding and managing candidates
and new talent, choosing a system like TalentWise takes away much of
the paper and the pain that no longer need to be occupational hazards for
recruitment and talent practitioners. The history of staffing technology is still
being written, but with a system like TalentWise, the future is now.
And it looks pretty cool.
ABOUT THE AUTHOR: MATT CHARNEY
Ifyou’reseekingsnark,westronglysuggestyoucallourmainman
Matt.AsourEditor,Mattisoureyes,earsandvoiceonallthetrends
inHRandrecruiting.Hespecializesincreatingsmart,compelling
content.AndMatthaswalkedthewalked.Hehasworkedwithsome
oftheworld’sbiggestbrandsincludingDisneyandWarnerBrothersas
botharecruitingandmarketingleader.Nowwe’reluckyenoughtocall
himoneofourownasheworkswiththetopcontentcreatorsinthis
industrytocreatethecommunityrecruiterscancallhome.