Talent CRM - How to Avoid a Costly Mistake

When companies roll out a new candidate relationship management solution (CRM), they are typically excited about how it will radically transform their recruiting function.  Large enterprises spend millions attempting to attract and hiring talent and boost the productivity of their recruiting / talent acquisition teams.  These CRM tools have been specifically developed to allow a company’s recruiters to have access to data for prospective applicants.  However, new systems often fail to live up to the hype for a myriad of reasons, software becomes shelf ware and the promises of lower costs and a shorter time to fill go unfulfilled.  

The promise of CRM is appealing, but in practice it can be uncertain.  When it works CRM allows companies to gather candidate data swiftly, identify the most valuable candidates over time, and increase employment brand equity and awareness.  It can reduce the cost of attracting and hiring talent and reduces time to fill open roles.  But when CRM doesn’t work, it can be the ruin of a CHRO, VP of TA, and your employment brand.   

Consider this, a bad hire can cost a company between $15,000 and $150,000 according to SHRM and other consultancies that have tried to put a price tag on a poor hiring decision.  CRM has not been mass adopted in recruiting, mostly because many firms are still too immature to use it.  It’s also telling that Candidate Relationship Management’s cousin Customer Relationship Management and the tools designed for it don’t perform much better.  Millions of dollars have been thrown at these platforms to try to improve sales and yet most of the time these initiatives fail. 

So, what is it with CRM?  Why do projects fail to deliver in terms of ROI?  Why so often do the promises from the sales and marketing teams of HCM and HRTech vendors fail to materialize for buyers and how can a company avoid making mistakes when purchasing one of these systems for their recruiting team?  

One reason is that leadership simply doesn’t understand what they are buying and why they are implementing it.  The ultimate responsibility for attracting and hiring talent falls on the CHRO and the CEO, yet in many of these instances, talent technology is in the CHRO’s domain, who often has delegated this to a VP of Talent Acquisition or Recruiting Operations.   

But this is a mistake. Ask members of any SLT to define what a candidate relationship management tool does (right answer is CRM helps align a company’s candidate flow with demand and helps streamline the recruiting process to enhance the candidate experience and reduce costs and time to fill over time) and you are likely to get a lot of different answers.  While these are smart, accomplished people, HR has not been traditionally thought of as a strategic function thus decisions are made in silos and are not connected to real business challenges.  Yet business challenges and obstacles are often downstream of recruiting decisions.   

For example, digital transformation has been a buzz word of sorts over the last few years.  Everyone is going digital, automating workflows, moving applications to the cloud, leveraging AI.  Yet the workforce needed to both execute and then maintain a digital strategy does not always exist.  And it’s these strategic initiatives that then are delayed because recruiting isn’t filling roles fast enough.  It can be because they lack the talent necessary, they lack the tools to identify talent (both external and internal to the organization)iv. 

The ultimate flawed assumption that most organizations stumble into is that CRM is a software solution that will manage recruiting and candidate relationships for them.   

In fact, this is not the case, Candidate Relationship Management is a practice that combines recruiting strategy and hiring processes, supported by relevant software and people for the purpose of lowering costs, reducing time to fill, enhancing the candidate experience, and building the employment brand.  It’s old and its cliché but that is because it’s true – finding success with CRM is about aligning people, process, and technology.   

Make no mistake, enterprise recruiting teams need a robust set of software applications to compete for talent in today’s marketplace.  While the failures and lack of adoption are real issues, CRM and other HR Technology is growing in popularity and the market for such tools is expected to grow at CAGR of 7% and reach 27B by 2027.

 Implementing CRM before having a Robust TA / Recruiting Strategy 

Any new recruiting technology that is shiny and sleek, with a fancy look and feel (sexy UI) can be seductive.  The emotional component of thinking about how this software is going to make my problems go away is powerful. But our emotions can be irrational and lead to poor decision making.  Many vendors of CRM today make promises that are based more on a hope and a prayer than on reality.  The claim they will automate the delicate and mysterious process of recruiting top talent.  CRM can indeed to this but it’s only after detailed workflows have been created, messaging has been refined and tested, employment brand has been developed, key talent audiences have been identified and defining attributes identified, along with employee value propositions crafted and refined for those audiences.  You need a clear talent attraction strategy.   

The reason for this is based on classic segmentation and personalization tactics that are designed to achieve recruitment goals.  A personalized message delivered to the right audience at the right time in the right context will convert a much higher percentage than a generalized approach where a single message is blasted to every candidate regardless of their circumstances.  

To put a CRM in place without having recruitment marketing goals is like trying to embark on a wellness plan with no baseline of current health, no clear destination or definition of what wellness is, no measure of success or time frame to complete.  Still many leaders seem to think that just the act of implementing technology is the marketing plan and they allow vendors to drive their approach to recruiting.  Another surefire way to fail is simply adapt your recruiting strategy and plans to fit the features and functions of the software you want to buy.  They leave other stakeholders (such as hiring managers) out of the loop, and they wonder why adoption is so low. 

Recruiting technology affects not only recruiters but hiring managers, leaders, and candidates and must be aligned around a strategy and process for it to work. Companies that find success implementing CRM don’t just go looking for software, they first start with a business problem such as reducing time to fill.  Then they look at root causes of the problem.   

Time to fill is a key performance indicator of recruiting efficiency and effectiveness.  It's also one of the biggest components of cost of hire. The art of recruiting is balancing the need to fill a job quickly with the understanding that a bad hire is still worse than no hire at all.  But it doesn’t come without a penalty.  Delays in filling a vacancy have both hard and soft costs.  Hard costs vary by function, for example, in sales, delays in filling an opening mean that a territory is not covered, leads are not followed up on quickly, new customers are not acquired, revenue targets are missed.  Stress is put on other performers to make up for the lost revenue.  This can increase attrition, further stressing the system.  In engineering, this can cause delays in product launches, it can cause overtime expenses to balloon.  In healthcare a lack of staff, especially in the nursing function impacts quality of care, and in some cases can literally be life and death.   

Understanding the root cause of the time to fill metric is the first step. If the business says it needs to fill roles faster, the first question to ask is why it's not able to fill them on time and on budget today?  If you move to implement CRM because a sales rep says that CRM will help you fill roles faster, you might be doomed to failure if the main cause of time to fill is managers that don’t trust or work well with TA teams or who are too busy to review resumes that are sent over. No software (AI included or not) in the world is going to solve that problem.  If you time to fill is because you can’t get your candidates to accept offers because your pay is 25% less than your top competitors and you don’t have defined messaging to counter (yes you might make less here but we provide better benefits, culture, training, etc.) then a CRM is not going to fix your pay gap or your reputation problem.   

However, if you time to fill is cause by a lack of access to data, a quick and easy way to search through databases external and internal, past applicants, and talent networks, and easily find the top matches, this is a problem CRM can solve.  If you have no way of segmenting talent and delivering personalized communications and are relying on tools from Microsoft and Google, then CRM can help.  And if you don’t know if you have enough people in each talent pool when a requisition is opened and you’re starting from scratch, posting jobs to every job board, and praying that applicants arrive, then CRM can help solve for that.  If your recruiters are too busy to follow up on emails or automate messages based on candidate behavior or status, then CRM can solve.  Again, root of the problem will dictate the solution.   

If you go to a doctor and they didn’t ask you any questions about your symptoms before prescribing your medication, you could end up worse off.  Say you have a headache, and the doctor says, sounds like a brain tumor, when all you were was dehydrated, you’re going down the wrong path.  Sure extreme example but how many people follow blindly advice from others and end up in bad situations.

 Installing CRM before building an inhouse function dedicated to recruiting.   

One of the most certain paths to failure is going to CRM without a recruiting organization to use it.  If a company wants to develop better a better recruiting function, it needs to make sure that its team is in place and the business processes and workflows that support recruiting and hiring are set up for success.  (I'd caveat this by saying that you could get away with this if your investing time and attention on hiring manager training and development here as well as providing compensation incentive for hiring but we all know that's like .001% of companies that would do that) It’s not enough to have a business problem to fix and a strategy to fix it, you will need people, you will need roles and responsibilities, you will need to understand the jobs that need to be done. A CRM rollout will succeed only after the organization and its process, job descriptions, performance measures, KPI’s, SLA’s, training have been structured to recruiting better and provide optimal outcomes.   

You can’t simply take what you are doing today and try to apply software, certainly not SaaS software.  Why do most big software projects fail? It has to do with change management.  While it’s the software that often takes the blame, reality is that it’s the organizations adherence to status quo that kills projects.   

Some of these initiatives can happen in parallel, but you need to have these mapped out before you can simply pull the trigger on a new shiny expensive piece of software.  It’s often only after internal systems have been reviewed, business processes updated, that software can be brought in.  If aspects of your current process are frustrating candidates, hiring managers, and recruiters, it’s probably not going to be fixed with software, and in fact, a poor choice could make things worse.    

Assuming You Need Every Bell and Whistle 

Being a sales and business development professional for 20 years, I've seen my share of RFP's that have been put together by committee. Asking everyone on the team to share their wish list of features and functions leads to a monstrous list that makes it almost impossible to find a vendor that does it all. It takes you as a company down a path that most often leads to indecision and confusion.

Marketing loves to talk about features and functions and in today’s world of enterprise software there are plenty of cool gadgets, neat looking tricks that can seem almost magical.  So when a company sets off on a quest to buy the latest and greatest tools, they can get swept up in all the tech and marketing hype.  Not that it’s marketing’s fault, their job is to get you hyped up about a product.  But this again can lead you into a place you don’t want to be, driven by emotions, a rider on an out-of-control elephant, taking you along for the ride.   

 You don’t always have to rely on the most high-tech solution, and you don’t always have to implement the full solution and you don’t always need the full solution for the full team.  Sourcing is a great example here.  Many CRM’s today come with amazing access to candidate database, ‘source over 850M profiles’ but how many of your recruiters have time to source?  Many companies have dedicated sources and that is what they do, recruiters focus only on candidates that have applied or are engaged and they then spend their time guiding them through the process.  When you go to buy the solution, you don’t need sourcing access or seats for every recruiter. Again, this comes down to having defined roles and responsibilities.  So that you buy the right set of tools for the right people vs having a bunch of functionalities that sits unused.   

Another example where companies buy more tech than they need are chatbots.  Chatbots can make a demo fun and exciting but in practice they don’t get as much engagement and often just get in the way of candidate experience.  Understanding behavior is key here sometimes all you need is a simple FAQ to help get people what they need.  

The questions you must ask are, “where your CRM needs fit on the technology spectrum, how complex is your environment, and will technology solve a business problem worth solving?”  

Spamming not Engaging your Candidates 

If your candidates and fans of your employment brand knew you were about to invest in technology to help you hire better and faster, what would they advise you to do? The answer probably depends on the kind of company you are and probably depends on the parts of your process that are the weakest or most frustrating.   

Invest in something that makes it easier to get my application status. 

Invest in something that makes it easier to set up an interview. 

Get me feedback at the end if I didn’t get the job. 

If you tell me, you will keep my information on file if a role opens up, then follow up with me if that happens 

Relationships between candidates and companies can vary based on the type of roles a company has, it’s go-to-market strategy, the products or services it sells.  McDonalds will have an entirely different relationship with job seekers than Intel.  Sadly, companies tend to ignore these differences and apply some of the same strategies for hiring cooks and computer scientists.  They build the relationship with the wrong candidates because automation has gone off the rails and they invite the wrong people over and over to apply over and over and the 20X engineer doesn’t even get an email because of an issue with keywords.  

More than anything remarketing campaigns only annoy candidates.  They are spammed with irrelevant content, invited to apply for jobs that are clearly not matched to their experience, skills, and sometimes geography.  The only response these messages get are unsubscribe me.  

CRM (as long as it's fully integrated with the rest of your tech stack) gives you the power to understand who your candidates are, where they came from, what content they looked at, what jobs they applied to, what hiring managers said about them in an interview. Yet without setting up audiences, everyone will look the same and get the same canned message.   There is no reason for this to be the case  By adding segments, creating content and messaging that aligns with the persona, you create a degree of personalization that works.  Segments, audiences, and functions matter.  Do you have to get as personal in your messaging to an hourly worker as you do a CFO? No. Should you get super personal for a CFO vs a warehouse worker, Yes. All workers are equal but some are more equal than others and need to be handled accordingly.

Relationships work both ways. You might want to forge more relationships with candidates and high-level candidates at that, but do they want them with you?  This is where employment brand is a key factor.  At the end of the day a great segmentation and content strategy will have a hard time overcoming a poor brand.  Companies with a poor employment brand pay 10% more for the same candidate than a company with a quality reputation and candidates are more likely to turn down an offer from a company with a poor reputation all other factors being equal.   

Learning from your mistakes 

Companies can overcome mistakes, but it can be costly and getting talent to take a second look can be hard, certainly this is true in the age of remote work, where geographical barriers have been removed creating new talent competitors.  

If you tried implementing CRM already and it didn’t work, the temptation can be to simply move to a new platform, blame the software.  If software were the issue companies would not leave one platform for another and vice versa.  Each one blaming the vendor for the failure vs doing the work and looking at what was or was not done internally.  Did you skimp on the implementation? Under allocate resources to the project manager. Did you forget to really do a needs analysis first before investing?   

Any CRM project involves multiple stakeholders and multiple functions. Were all the right stakeholders given time at the table?  (There is a caveat here that can also bite where too many stakeholders are given too much say creating what scope creep, where suddenly everyone has a say the needs become some Frankenstein ask that will never work.)  

Many tools will come and go, but CRM is not a fad.  It is a powerful concept, supported with powerful software.  But with great power, comes great responsibility. Wielded without purpose or goal without planning, will end most times in failure.  It’s not impossible to use, but it’s not a panacea.  Define the problems and investigating the root cause can will help give you the ability to determine what CRM will solve for Vs. what it will not.