Pattern Recognition, by Ian Sigalow

The Future of Human Resources

Introduction

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Ian Sigalow

<p>Ian is a co-founder and partner at Greycroft Partners in New York City. He has been a venture capitalist since 2001.</p>


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The Future of Human Resources

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In the last few months we have seen a number of companies attempting to transform the Human Resources space.  The big opportunity exists with large companies that are straining under the weight of hiring and on-boarding so many new employees.  For instance, a company like Accenture hires seventy thousand people per year.  In the process they screen a million candidates across a global network of recruiters, agents, job boards, software, and services.  The budgets are large and the systems are antiquated. There is also a nagging problem with mobile – job seekers research positions on their phone today, and the current applicant tracking systems (Taleo, Kenexa, etc) were built before the advance of the mobile web.

Once a candidate arrives for work he or she represents the company, which opens a whole new series of questions.  Does the employee describe their company in a flattering way on LinkedIn?  Is the company’s name even spelled correctly?  Is the employee connected to the right people?  The Internet has already democratized “what you know”, and it is only a matter of time before it democratizes “who you know”.

The last question from an employer’s standpoint is “How do you build a culture that compensates people for good work?”  In a small firm this is easy – spot bonuses, gifts, trips, etc.  It becomes more challenging as companies get larger, and managers are restricted to end-of-year bonuses and reviews.  Of course this assumes that managers are even aware when good work is being done, which is so often not the case.  This is why turnover is higher at big companies than small companies.  And when you have high turnover you need to hire more employees, which takes us back to the beginning.

In the future software will help with all of these issues.  It is unclear to me whether this will be one tool, or a series of tools.  It might be a platform like Salesforce that innovates in this direction, or it could be a new company that starts fresh.  Either way there is a multi-billion dollar opportunity out there waiting for someone to capture it.

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Ian Sigalow

http://sigalow.com

<p>Ian is a co-founder and partner at Greycroft Partners in New York City. He has been a venture capitalist since 2001.</p>

Comments
  • user

    AUTHOR JohnFrankel

    Posted on 7:44 pm January 26, 2013.
    Reply

    Check out $CSOD.  They have been attacking the talent management space for over a decade and are growing revenues 60% a year for the past 6 years servicing large corporations and government to address these specific issues.  The crazy thing is no one seems to know about the company.  Stock up over 60% last year and over 10% year to date.   The ROI from using the $CSOD platform is obscene for large companies ~ thus the massive adoption rate.  Over 10,3mm seats at the end of Q3 2012 and could get to 20mm seats by the end of this year.

    • user

      AUTHOR idsigs

      Posted on 12:01 am January 27, 2013.
      Reply

      @JohnFrankel I am going to check this out.  I would prefer to fund a start-up or two in this space and have $CSOD buy them for $100MM++ though.

  • user

    AUTHOR petevanson

    Posted on 8:05 pm January 26, 2013.
    Reply

    There are several companies trying to bridge the technology gap between ATSs and mobile. At Ovation Technologies, we were in the middle of our product development when mobile broke out as a relevant venue in social recruiting. We chose an easy SaaS interface in front of a powerful .net platform on the Azure cloud. Not surprisingly, companies are slow to adopt technology that shakes up the traditional business processes.
      @ovationtech is built to provide an easy platform for recruiting and hiring activities and the human resource community is finding it a useful addition to their other process platforms.

  • user

    AUTHOR brentdaily

    Posted on 11:14 am January 29, 2013.
    Reply

    The key is to know what motivates rather than assuming it’s always monetary.  RoundPegg has built software to measure, manage, and monitor culture (self-promo alert: I’m a founder) so companies can align themselves around the values that are driving success.  
     
    Anyhow, we agree with you that we’re on to something huge and always willing to talk about investment.

  • user

    AUTHOR BenSesser

    Posted on 4:50 pm April 21, 2013.
    Reply

    I totally agree. There are very interesting businesses to be built in the “talent analytics” space. It is still early days.
    Bringing together internal data (HRIS system data, employee feedback, screening and assessment data from a company like SHL Group, business needs, etc.) and external data (social comments by staff, employment branding data, economic data, etc.) to help HR departments take a more “Money Ball” approach to employee engagement, reducing turnover, increasing the batting average of successful hires, identifying HIPO employees, and projecting future talent gaps and needs. Companies already measure in these areas but mostly through periodic surveys. The future winner(s) will bring a lot of disparate data together and connect the dots. 
    I spent 4 years with CEB (www.exbd.com) in corp dev and we thought a lot about this space (and they continue to).

  • user

    AUTHOR JohnFrankel

    Posted on 6:18 pm April 21, 2013.
    Reply

    idsigs I would like to find one too. 😉

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