There was always an intermediary between the employer and the applicant – his own recruiter or an employee of a recruitment agency. However, with the development of technology – primarily AI – the role of humans in the hiring process is decreasing. Digital tools can already almost completely replace human labor at the recruitment stages.
Traditionally, the role of a recruiter or agency comes down to three main tasks:
- Search and filtering, i.e. comparison of vacancy requirements with the job seekers market. Technology is already capable of taking over this stage – a neural network can analyze a request, process tens of thousands of resumes and choose relevant candidates in a couple of minutes instead of several days of manual screening.
- Data enrichment. It involves direct communication with the candidate and the collection of information that is absent in the resume, for example, about his motivation, readiness for moving and the correspondence of vacancy skills. In other words, drawing up a more complete profile of a person. AI is close to taking over this stage by conducting a full voice interview with the applicant. Already at the current level of technology development, it is far from always possible to recognize with whom communication is taking place – with a person or a robot. 40% of Russians are ready to undergo an initial interview with AI.
- Maintenance. It is necessary to support and accompany the final candidate from the moment of accepting the offer to going to work. At this stage, tasks are more complex, related to the psychology of communication, and sometimes require a creative approach. Therefore, it still remains mainly behind the person. However, this does not mean that in the future, intelligent algorithms will not be able to reproduce it.
The main thing is that technology has an absolute advantage over humans where you need to compare tasks and competencies clearly. More and more employers formulate their need not at the position level, but with the help of a description of the task. For example, instead of “you need a marketer” – “you need to bring a new product to the market in 4 months.” When you have to look not for an employee, but for a set of necessary skills to perform a specific job, a person cannot compete with a car in speed.
According to hh.ru, 31% of Russian companies already use AI in recruiting, and another 18% plan to start this year. The trend towards the use of technology in hiring will gain momentum, and this will significantly change the business of recruitment agencies and the work of full-time recruiters.
Platforms vs recruitment agencies
Classical recruitment agencies have two business models. The first is a classic recruitment: the agency finds an employee in the customer’s staff and receives a one-time fee of about two, sometimes three salaries.
The second business model is transactional. The agency finds a person, enters into labor or civil law relations with him and provides his work to the customer in the form of a service, while the agency earns a commission for each hour or day of his work after employment. This is similar to how taxi services work: they receive a commission for all trips taken.
It is from the second model that technologies are already striving to oust agencies. Previously, to get 10 pickers to the warehouse for tomorrow, the personnel officer called his manager at the personnel agency. Now he leaves an application on the platform in a couple of clicks – and after 15 minutes, he has got confirmed candidates.
For business, this is not only fast, but also more economical. In the past few years, the cost of hiring has increased by an average of 20-40%, according to hh.ru. Automation allows to reduce costs primarily where hiring is massive, requirements for candidates are standardized, and turnover is high. For example, when searching for “blue collar” for warehouses, and outlets. The same person today can work as a picker of orders in the warehouse, tomorrow issuing purchases in order issue point, and the day after tomorrow laying out the goods on the shelves in the store. At the same time, the company does not need to spend time and resources on its search and design every time.
Next comes the IT sector, where there are many project roles. Finally, it is profitable to hire almost all mid-level positions through platforms: engineers, marketers – for specific tasks, be it bringing a product to the market or working out a marketing strategy. The business model of recruitment agencies, built on manual labor, does not allow them to work cheaper than platforms.
What slows down the development of platforms
Yet the business is not ready to abandon recruitment completely in favor of platform hiring. There are several inhibitory factors.
First, this is legislation. The regulatory framework for temporary project hiring in Russia lags behind reality. Staffing agencies are able to overcome these limitations flexibly. It is much more difficult for technology platforms to unify this process. But it’s a matter of time – lawmakers will inevitably follow the market trends.
The second factor is the maturity of the platform market. If we recall the evolution of marketplaces, we are now at the point where different categories of goods were bought at different sites. Now, if a company needs to hire an employee for a warehouse and a design engineer, it will have to use different platforms. In the future, universal aggregators should appear.
Finally, the technological maturity of the customers themselves affects the market. For example, in order to bring 500 people quickly to work, you need to automatically upload 500 tasks from the accounting system to the platform at the same time. Then – to get information that the performer is appointed, and issue a payment for the completed task. Technologically, business should be ready for this – we need systems for integration and people who can work with these tasks.
That is why personnel agencies will not completely disappear in the near future. However, gradually, one or another of their tasks will be replaced by technological solutions – and ultimately we will come to a scheme where the agency will deal with top positions, the most complex and non-standard ones. A human recruiter will be like a support operator in a bank: you can get through to him, but in most cases, it is simply not needed.
By Alexey Mironov, Head of Digital Outsourcing Product, Verme Group