Mixing Human And Data Intelligence For Smarter Hiring Spend

U.S. employers missed analysts’ estimates last month when they added 117,000 jobs across the private sector, ADP data recently revealed, the latest evidence of what ADP Chief Economist Nela Richardson described as a “sluggish” labor market.

But the global hiring and talent acquisition industry has experienced some dramatic fluctuations in the last year that cannot be fully assessed through monthly jobs reports alone. Rather, industry-by-industry, company-by-company, and even business unit-by-business unit, there have been varying levels of spikes and declines in hiring activity. It’s created an environment in which many hiring leaders are placing greater emphasis on the efficiencies and costs of the talent procurement process.

But empowering hiring managers and procurement leaders to make smarter decisions about how they spend company funds on growing their teams isn’t a straightforward process. As Jason Ezratty, co-founder and chief data scientist at labor supply management platform Brightfield, and Doug Leeby, CEO at extended workforce sourcing and management firm Beeline, told PYMNTS, optimizing talent procurement and spend must involve a combination of sophisticated analytics technology and a human behavioral approach to driving change.

A Targeted Understanding

While there are always fluctuations in hiring activity, the pandemic created even more dramatic waves of both layoffs and hiring surges, depending on who you ask.

According to Leeby, certain industries, like the healthcare and data sciences spaces, faced a sudden surge in demand for contingent workers. Other businesses similarly turned to the contract labor field to more easily scale or downsize as closure and reopening government mandates evolved.

Leeby also pointed to the emergence of widespread remote labor policies that suddenly broadened the talent pool for hirers. “We’re seeing buying behavior change to say, ‘I don’t really care where they are, I just need the talent,'” he said.

What the pandemic drove home is that hiring needs for every industry, business and even department within a business can be different. As a result, a more effective hiring strategy needs to be highly targeted.

“We have organizations that build products for the medical community, with one division that is going wild and ramping up resources, and other divisions that are essentially shut down,” noted Ezratty. “It’s not a client-by-client, but a business unit-by-business unit, manager-by-manager reality.”

Data-Driven Insights

In order to understand how to optimize hiring practices, firms first need a holistic view into their current approach to determine what is working, and where improvements (and cost savings) can be made.

Both Ezratty and Leeby emphasized the value in a data-driven approach to assessing the talent procurement process. Their firms recently announced a collaboration to roll out a new solution, SmartBuyer, which is built upon artificial intelligence (AI) to analyze talent buying behavior. Their tie-up began with first analyzing transactions between labor contract buyers and suppliers, which discovered 2,000 particular buying behaviors.

Optimizing talent procurement involves a variety of factors and metrics, from job title to location to supplier pricing. Data is key to an informed buyer, said Ezratty. “The path to saving money starts with making sure you’re buying the right thing the right way,” he said. “The idea of being a smarter buyer, of going to the right vendor, knowing what a good price would be — that’s what it means to be a smart buyer. But a lot of buyers are not set in that position.”

The Human Approach

Digging deep into the data of how hiring leaders source and pay for talent is crucial to identifying the ways in which workflows can be improved and cost savings can be achieved. Yet all of the data in the world won’t mean anything unless that hiring leader actually changes their behavior.

It’s why Leeby and Ezratty highlighted the importance of a human-centric approach to driving change. That means both embracing behavioral analytics and finding the right strategy to encourage those hirers to make better choices.

“There’s a human interaction there, and sellers and buyers bring their biases to those interactions,” said Ezratty, noting that every individual shopper can be influenced by emotions and their own “headspace” when making purchasing decisions. Ultimately, that can lead to spending more money unnecessarily. Providing information about historical buying behavior upfront can help those buyers understand their personal biases and behaviors that lead to more expensive, slower or non-compliant procurement.

Leeby pointed to other opportunities to take an approach to talent acquisition that meshes both technology and human interactions, like mitigating unintended bias to support staff diversity. “It’s about much more than just workflow,” he said. “It’s, how do we find the most interesting, dynamic and talented people in the extended workforce and match them up appropriately? That, in my opinion, can be done to some extent with human intelligence, and to some extent with augmented intelligence.”