Talent Acquisition Technology: All in One, Do It All is Not Quite the End All, Be All

We are entering a new era of talent acquisition technology, and this time, it’s not because of AI. We at Talent Tech Labs are observing a change in both perception and design of TA tech. We have always thought of point solutions as a regular, important, and valued part of most organizations’ TA tech stacks. Organizations get a lot of value out of focused, standalone technologies. They are a critical source of innovation, and they are generally more user-friendly and responsive than large, complex TA suites that often innovate at a glacial pace. Point solutions must be innovative and responsive to survive in crowded marketplaces with stiff competition and tight recruitment tech budgets. However, these types of tools are becoming scarcer, as fewer point solutions come onto the market, and others get acquired by larger vendors.

Industry Consolidation Accelerates

This pattern is part of a larger trend of industry consolidation among TA tools. Large vendors like Workday and SAP are buying up smaller vendors and usually building their functionalities into their all-in-one TA suites. If you’re a Workday customer, you might have much or all of what you need to recruit within a single Workday ecosystem. You might not even need to leave the applicant tracking system to source, contact, screen, and schedule candidates. With so many large HRIS and ATS vendors compiling different tools into all-in-one systems, more organizations are now using slimmed-down, simplified TA tech stacks. Even organizations with more specialized TA needs are using slimmer stacks, as vendors like Paradox and Fountain in the high-volume space are building themselves out into all-in-one TA suites.

These all-in-one suites are becoming so common that according to TA tech entrepreneurs we’re hearing from, it’s becoming difficult for vendors to bring new point solutions to the market. Customers now expect new tools to do X, Y, and Z all on their own, with A, B, and C on next year’s product roadmap. It’s not enough for a vendor to do one thing very well if another vendor can do many things well enough.

The All-in-One Appeal

Is this a good thing for customers of TA technologies? We’d argue that there are more costs than benefits. There are some clear benefits, though. For one, ease of use: as noted above, recruiters get the convenience of working within a single ecosystem. They benefit from having familiarity with the workings of a platform and have a short learning curve for any new function it adds. Adding candidate assessments, for instance, can usually be done through a tab within the ATS. Recruiters have the added benefit of IT and customer support through familiar channels and faces. On top of all that, all-in-one TA suites generate seamless candidate and other data transfer, as information is all stored within a single comprehensive system of record. The system can automatically progress candidates from step to step (module to module) without any recruiter intervention.

Organizations no longer need to invest any resources in bespoke tech integrations, or deal with the fallout if those integrations ever fail. Finally, for growing or even established recruitment teams, all-in-one suites make it easy to build a TA tech stack. You might only need to decide on a single vendor for all your tech needs, versus patching together a stack that may or may not even work well together.

All this sounds great for customers: simplicity, ease of use, familiarity, consistency. But it hides many of the benefits we’ve seen from point solutions all along. If your organization opts for an all-in-one TA suite, you’re effectively locking your recruitment team into a TA ecosystem for a relatively long time. These tools, much like ATSs themselves, have long sales cycles, potentially for several years. Because of their scale, there’s also a significant amount of change management involved in opting into one of these tools or switching from one to another. These tools have months-long onboarding processes or sometimes even longer for large, complex TA needs.

Even though vendors provide resources to support onboarding, they generally still require a substantial investment of internal resources to implement the tools successfully. Relearning is just as daunting if the current vendor isn’t meeting your organization’s needs. The time and energy commitments can dissuade TA teams from making a switch from a tool that isn’t working for them, and it may only be certain functions that are causing problems—functions that could more easily be replaced if they were managed by point solutions.

Innovation at a Crossroads

We at TTL have also found point solutions to be much more innovative and often better designed than more comprehensive platforms. Their nimbleness allows their product designers to pivot, test, and evolve more quickly with fewer hoops to jump. Competitiveness in the market drives innovation and flexibility, while a slimmer product focus allows designers to delve more deeply into building better-quality products for specific needs. The simplistic design of point solutions also makes it easier for new vendors to bring unique products to the market. Compare to an all-in-one TA suite, in which a team of five or so developers with seed funding could not possibly design a unique product in a reasonable length of time. It’s no different from an industry like TV programming. If new ideas are being greenlit, viewers get a wide range of interesting options for everyone’s unique tastes. But if studios all want the same thing from a few major producers, viewers get the same types of stories and characters that quickly get stale.

The Cost of a Narrowing Market

Lastly, a market full of all-in-one TA suites can price a lot of organizations out from recruitment tools and automations that would help them to succeed. SMBs might only be able to pay for a lean, simple TA tech stack with a few easy-to-build, helpful tools, like interview scheduling and assessments. They can save money in a crowded marketplace with many different point solutions competing for market share. With fewer tools that do more at a higher price, some SMB recruiters might fall back on spreadsheets and manual processes, which doesn’t benefit much of anyone.

This era of industry consolidation is an important one for TA technology, and it has its benefits, as we’ve shown. But we still think there are advantages to having a market full of unique point solutions, and we hope that customers and vendors will continue to recognize those advantages, as well.

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