Workday Recruiting: Will It Disrupt The Talent Acquisition Software Market?

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This week Workday introduced Workday Recruiting, a long-awaited new module in the company's growing suite of cloud-based HR and Financial Management applications.

In many ways this product has the potential to disrupt the landscape for corporate recruiting software. Rather than being designed as a tool for recruiters which integrates with other HR systems, Workday started from scratch and developed a totally unified solution: one which manages all elements of the recruitment process, focused on the needs of applicants, managers, recruiters, as well as HR.

The Corporate Recruiting Software Market

The market for corporate recruiting software, now over $1.5 billion in size, is red hot.

These tools started more than 20 years ago with the advent of resume scanning systems that took paper based resumes and parsed them into a relational database. The systems were later named "applicant tracking systems" (ATS for short), and companies like Taleo (now owned by Oracle) and BrassRing (now owned by IBM) exploded with growth in the late 1990s and early 2000s. Since then dozens of companies have built applicant tracking systems and nearly every HR software company sells one.  (Read our Talent Acquisition Market research for details on the players.)

Why are these systems so important?  The entire job application process has gone digital. Thanks to the internet and companies like LinkedIn, Glassdoor, Facebook, Indeed.com, and others, companies can now post jobs all over the internet and receive hundreds of applicants in minutes ("resume overload" is now one of the biggest challenges recruiters face).

All these job applications have to be stored, ranked, and routed to managers for review. Candidates have to be interviewed and screened, then offers have to be written and people need to be onboarded. The process is complex, high volume, and filled with opportunities to create a positive or potentially negative experience for candidates.

(And that experience really matters. The 2013 Candidate Experience Awards research shows that 88% of candidates who had a “good experience” applying for a job left feeling positively about the employer, even if they did not get a job.  The quality of the job application process has a major impact on a company’s employment brand.)

Tools to recruit have become very sophisticated. In fact the whole discipline of talent acquisition looks much more like marketing and much less like staffing every day.

  • Today employers can source candidates through LinkedIn, Entelo, Gild, TalentBin, and dozens of other "smart search" tools which index people the way Google indexes pages.
  • They can purchase and post targeted advertisements all over the internet to find engineers, scientists, nurses, and other workers in highly targeted locations.
  • They can use "candidate relationship management" systems to build talent networks and interest groups, communicate with passive candidates (called "farming"), and manage the flow of candidates from "vaguely interested" to "ready to apply for a job";
  • And they can build custom websites, videos, and other digital assets to attract people.

In addition, talent acquisition is one of the biggest markets for Big Data and groundbreaking assessment science. Dozens of vendors now offer analytics tools which analyze hundreds of facts about candidates and help you predict who is likely to succeed. (Evolv, IBM, PeopleAnswers, and many others). Pre-hire assessments (which are used by fewer than 40% of all companies) can significantly improve the quality of hire – and today these assessments feel more like games than tests.

(Interestingly, research shows that data-driven assessment out-performs the managers’ interview on a consistent basis – we are often attracted to a candidate for the wrong reason when we meet them!)

Most of these science and assessment tools come from smaller vendors, making it even more important for companies to have a scalable recruitment platform to integrate everything into an easy to use, manageable environment.

For corporate HR leaders, this whole marketplace is dauntingly complex. Not only do companies have to post jobs, manage advertisements, create an extended employment brand, and manage candidate networks, but companies must open up this whole network to internal candidates and manage employee referral programs as well. Most recruiters tell us that internal candidates and referrals are the strongest tool they have.

  Workday Recruiting

Need for Integrated Recruitment Software

Companies need a software platform that manages this entire process. Not only must HR managers integrate third party tools, build a workflow to source and assess candidates easily, and manage internal referrals and talent mobility, they need analytics and data management to help monitor, improve, and optimize all this effort. Talent acquisition is the most important part of HR and makes up a $120+ billion worldwide market (Source:  Bersin by Deloitte Talent Acquisition Factbook) – anything companies can do to make the process more effective or efficient pays for itself many times over.

Until the last few years, software to support this market was developed by innovative and specialized talent acquisition software companies. Today most of these companies have been acquired and these tools are integrated into nearly every vendors' talent management system. (Oracle, SAP-SuccessFactors,  IBM, CornerstoneOnDemand, Saba, PeopleFluent, SilkRoad, Halogen, Infor, and nearly every other talent management software company now has a recruiting module.) The only major ERP vendor that did not have such a system was Workday.

Enter Workday

Workday's entire product strategy is based on developing a unified system which manages all areas of financial and human capital management. To date the company has been highly successful with its core HR application and partnered with other vendors in the area of recruiting and learning management (the two "book-ends" of talent management software). This has presented a challenge for Workday customers, most of which selected the product because they want a single integrated solution to replace their existing tapestry (read "mess") of various HR products.

Understanding this market and the requirements, nearly two years ago Workday's product team started interviewing customers and designing a totally unified solution. The design point focused on building a new type of system: one which addresses the needs of candidates, managers, recruiters, and HR – all unified into Workday’s platform.

Because Workday has a unique architecture made up of an object-oriented database and an extensible and configurable workflow engine, the company could  "rethink" what a corporate recruiting application would look like – free from the legacy of the "applicant tracking system" design. They also chose to take a mobile-first approach, designing a mobile interface for candidates and managers from the beginning.

While the company started its efforts more than two years ago, Workday waited to release this product until it was competitive in the market. Six design partners were part of the development and most of them plan on using Workday to replace their existing ATS. So Workday’s strategy is not just to deliver a more unified product with features only available through ERP integration, but also to take the existing incumbents (who have years of R&D behind their systems) head on.

The result is a unified system which addresses the needs of all participants in the recruiting process: hiring managers, interview team members, recruiters, and of course candidates. By looking at talent acquisition as a process which is both an external and internal one (internal talent mobility is a critical part of recruiting), Workday has built a platform that addresses the entire talent lifecycle, integrated with Workday’s core HR application to provide a rich set of functionality for all stakeholders in the process.

Workday Home Screen

The system is built around a set of features that include workforce planning (creating pools of needed people and looking at both internal and external candidates), sourcing (importing data from LinkedIn and other systems), interviewing and hiring candidates, and onboarding – with analytics embedded throughout.

In the area of sourcing, one of the most fast-changing part of recruiting, Workday’s recent acquisition of Identified gives the company some powerful technology to better search and source candidates from external networks (Facebook, Yahoo, Google, as well as LinkedIn), giving the company the opportunity to deliver a disruptive tool for sourcing.

Workday Recruiting is also totally enabled for mobile devices. The company developed the entire product on the mobile platform first, enabling them to make the mobile version feature-equivalent with the web version.

For example, managers who are in the middle of an interview can quickly see comments and feedback from other interviewees on their phone, available as comments or in an activity stream from other interviewers. Recruiters have full access to the various stages candidates are going through and can monitor interviews in real time through their mobile device.  Candidates can find jobs, browse job descriptions, apply, and monitor their application through mobile. And a special feature which Workday built with LinkedIn lets candidates immediately see who else they know at the company they’re applying for in real time while they browse job openings!

Workday Recruiting

In the area of analytics, Workday’s embedded technology makes this product “analytics-ready” out of the gate. The demo shows a variety of standard reports: sourcing effectiveness, open positions, candidates by stage, etc.

Some of the more unique analytics include “headcount plan to pipeline”which essentially shows in real time how well your staffing process is filling in your workforce plan. This one feature demonstrates the power of an integrated recruiting solution: now managers and executives have a real time view of their candidate pipeline mapped against open headcount and workforce plan by role or other dimensions. You can immediately and easily see “are we ahead, behind, or on plan” for recruiting at any level of detail.

Workday Recruiting Analytics

A number of complementary partnerships are in place, including providers of background checking, video interviewing (Workday integrates HireVue), and job boards, demonstrating the completeness of Workday’s approach. The company is not planning on working with every third party recruiting tool and vendor in the market, but we believe the ecosystem will grow rapidly.

Josh Bersin

Advisor

Josh founded Bersin & Associates in 2001 to provide research and advisory services focused on corporate learning. He is a frequent speaker at industry events and a popular blogger. Prior to founding Bersin & Associates, Josh spent 25 years in product development, product management, marketing, and sales of e-learning and other enterprise technologies. Josh’s education includes a bachelor of science degree in engineering from Cornell, a master’s of science degree in engineering from Stanford, and an MBA from the Haas School of Business at the University of California, Berkeley.

21 thoughts on “Workday Recruiting: Will It Disrupt The Talent Acquisition Software Market?

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  4. There are now many good and very good commercial Learning Management Systems in the E-Learning market. The good news is that they use the concept of Software as a Service (SaaS) and enable organizations of all sizes to plan, deliver and certify online and classroom training activities.

    They are designed for both SMBs (Small and Medium Businesses), Enterprises and Non-corporate customers, such as online universities, government agencies and non-profit organizations.

    The best professional LMSs work as open systems according to industry standards, enable integration with third party systems and compatibility with all the authoring tools SCORM, AICC and/or TinCan compliant.

    They have programmable user interfaces easy to use and a wealth of attractive user-oriented features, such as social learning and collaborative capabilities, user blogs, Facebook, Twitter and LinkedIn integration, GMail integration, Google Apps integration.

    They enable to create communities across systems, have HelpDesk included and provide tools and applications for multimedia and video content delivery on PCs and all mobile devices.

    For most of these LMS systems, talent/performance management requires integration with third party systems, industry-standards compliant.

  5. Josh,

    This is interesting. If really Workday is driving innovation in the recruiting field, they will find the way to develop, expand and improve their platform, in order to stay on the competitive edge.

    On the other hand, this product could be integrated with talent development programs from major vendors, such as SumTotal Talent Expansion suite, that works with non-SumTotal technologies, as well.

  6. We also welcome Workday to the recruiting party. I think we can all agree that the market continues to evolve in exciting ways. For SuccessFactors Recruiting, our core value proposition continues to be to woo, capture, and onboard key talent with source to hire metrics that drive dramatic payback. Having another core player in the market ups everyones game.

  7. Josh,

    Nice post and we (at Oracle) welcome Workday to the recruiting market. One quick clarification – we have not bundled Taleo with our ERP solution. We still sell it stand alone. We very often sell it at the same time we sell Oracle HCM Cloud, but it is not bundled or included automatically. Oracle Financials Cloud is a different product set as well. They all share a common platform and are unified, but are sold separately.

    Jeff Kristick

  8. Josh,
    Thanks for your excellent summation of what Workday delivers.
    Can you let us know how Workday helps Hiring Managers and Final Decision Makers define exactly what they need us recruiters to find in exemplary candidates each time?

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