“Information is the oil of the 21st century, and analytics is the combustion engine.” — Peter Sondergaard, senior vice president, Gartner Research
This observation says a lot about how business in general is thinking about big data and its impact on areas such as retail, healthcare and finance. Vicktor Mayer-Schonberger and Kenneth Cukier go even further in their recent book (Big Data: A Revolution That Will Transform How We Live, Work, and Think), describing big data as a revolution that will transform everything about how we live, work and think. So it is interesting to consider how big data will change the recruitment industry in the coming years.
The first and most obvious impact is that this opens up a whole new market for niche recruiters. A report by E-Skills UK from November 2013 predicts that demand for big data specialists will rise by 243 percent in the next five years. A.T. Kearney predicts global spending on big data hardware, software and services will grow at a CAGR of 30 percent through 2018.
Access to a new fast growing market is only part of the opportunity big data presents for the recruitment industry. Current estimates suggest that 600,000 people per year are placed into permanent employment by the U.K. recruitment industry alone, and that there are 1.5 million temporary workers at any one time. This represents a huge amount of data which is being collected but not really being used in any meaningful way. The typical staffing company will just sit on this data and never think how it could be leveraged for the benefit of clients. It’s not only the data that recruitment companies directly collect that is available. The U.K. government currently has more than 10,000 data sets available for public use on its website data.gov.uk.
Perhaps one reason this data is not being used is because it’s not immediately obvious how it can be leveraged in recruitment industry. For example, if a supermarket collects information on your shopping habits via a loyalty card, it is easy to see how they are going to use that data. What can a recruitment business do with all its data?
PREMIUM CONTENT: UK Hiring Trends
Pay rate analysis is perhaps the first and most obvious use. Traditionally recruitment companies, if they provided pay rate information at all, would use polling or sampling to generate a general pay rate table. In practice what this meant was taking a broad job title, let’s say accountant for example, and then do a sampling of the last few placements they made with that title. Alternatively they might poll their branch office managers to find out a range of possible pay rates. This range together with a simple average was then presented to the client as the defacto market pay rate for an accountant. Very little effort was made to take account of factors such as location, industry specialism, seniority, current supply and demand or additional skills required.
Now using big data techniques we can be much more precise. At CDI AndersElite we use various tools which allow us to scan the internet and find thousands of individual job postings on a daily basis; once parsed and sorted into job families this data is studied and analyzed by our recruitment consultants. The net result is that for any given role, we can tell what the market is paying in real-time. We can look at a specific region or a city, show how the pay rate has moved over the last six months and predict how it might move in the coming six months. We can zoom out and look at the whole market or drill down into a particular advert.
Extrapolating from this data set we can help our clients make strategic decisions on where to place a factory or a new team, we can advise on supply and demand for a particular skill set and provide insight on market trends.
Big data techniques can also be used to help clients create better adverts. For instance, most job boards now contain very sophisticated analytical tools, which enable you to generate some very interesting information. As an example, we know the majority of jobs posted on our job board are posted at the start of the week, as you might expect; however jobs posted on Friday get 15 percent more views than jobs posted on any other day of the week.
It turns out the title or headline used to advertise a job is also very important. Those jobs with a headline of at least 40 characters on average received 40 percent more applicants than those jobs with less than 20 characters in their headline.
The use of big data means that the recruitment industry now has the potential to provide clients with new insights and expertise into how and when they should advertise; what to pay, where to find key skills and where various types of work might be performed more cost effectively.
Staffing companies occupy a key role in the employment market and in a market where margins are constantly being threatened we need to continually show where we add value. The innovative use and deployment of big data may be the key here.
MORE: Harnessing the power of big data
