Here’s how it works

“You better start swimmin’ or you’ll sink like a stone. For the times they are a-changin’”
Bob Dylan

The Fishbowl

A couple of weeks ago I learned that my co-workers call the office that I share with our CEO, “The Fishbowl”. The Fishbowl is the nerve center of Newton Software.  Given our small footprint, the Fishbowl acts as the design studio, front office, communications center and test lab. Sometimes our co-workers might say it more resembles an ultimate fighting iron cage, or a badger den, but for now we’ll leave it at The Fishbowl.

A while back, I started keeping a tally on my whiteboard in The Fishbowl. Often, during phone calls, I will get up and place a mark or two under some jibber that I had previously written. Over the last 2 quarters, my scrawl has roughly tripled in size, now infecting a second large grease-board. It now is directly juxtaposed with a neatly-written product roadmap owned by my office mate. Admittedly, the walls in our office now have a pop culture “Odd Couple” look to it.

As the VP of Marketing and Sales and general front-man for Newton Software, I spend a great majority of my time speaking with HR and corporate staffing professionals about recruiting and hiring. I also have the pleasure of spitballing with notable recruiting bloggers, industry analysts and other technology vendors in the recruiting-sphere.

Undeniably, the recent economic train wreck has brought a new sobriety to town and with it some pervasive emerging themes. And while I don’t profess to be a recruiting software industry Nostradamus, I can share with you some recent observations from my varied conversations over the past 2 quarters. Clearly, there is shift occurring and believe it or not, this shift means good things are ahead for people that buy (recruiting) software.

Here are the trends that I believe are here to stay even when, once again, the economy improves and hiring becomes a front-burner issue.

My 3 Emerging Trends:

1.    Easy Does It.
I would have called this trend, “a return to simplicity”, but as far as I can tell, recruiting software has never really known simplicity. 90% of the people that I speak with are looking for a “simple and easy” system that offers them the capabilities to improve the process of recruiting, without headaches.

I believe that this quest for easy and simple is a reaction to stress created by people being asked to do more with less. No one that I speak with has time for complexity right now. They don’t have time to learn, tweak and teach others another new system. They’ve got a lot of other things on their plate, and they can’t relearn a software application when hiring is turning on and off every few months (or weeks).

For example, I spoke with an HR manager named Patty the other day who is basically doing 3 jobs. “I am the office manager, HR manager, and recruiting coordinator. Right now I am getting hundreds of resumes a week that I need to open, make sure they are not duplicates and then forward to the managers. All I need to know is if your system can help me get some control and save me time somewhere?” I hear things like this all of the time, and everyone asks for the same thing, “Will I be able to use it, tomorrow?”

Obviously the movement away from complexity and toward simplicity has been going on for some time, well before the recession. But the recession has really made us all focus on what makes us, and our businesses, more efficient. It’s kind of like stubbing your toe. The first time you stub your toe, it hurts. The second time it hurts 10 times more. The economic meltdown was the first stub, and anything that makes us inefficient or slows us down from here is likely to bring us to our knees. In these tough times software vendors should be listening to their customers and innovating. In the end, this will be good for the software industry as a whole.

2.    I Need this to Work, Now.
In 2007, when we started offering beta versions of Newton®, “deep customization” was high on our customers’ lists of requirements. In the past year, this request has become nearly non-existent.

Now this is entirely contrary to a recent poll on ATS (applicant tracking systems) I read, so I should explain. I would like to call it a little bit of the “tail wagging the dog”.  If you sell software without a good recruiting process built in, then you MUST make it deeply customizable. If you’re a software company without HR people and recruiters guiding your product design, then it MUST be customizable, because you don’t know the challenges faced by your audience (your customers).

Most buyers that I speak with are being asked to spend less on sourcing, recruiting agencies and to cut advertising budgets, while still providing service to multiple teams that demand fast service. Clearly, the “here’s a tool, now build your own” approach won’t work for them. I believe that this trend is characterized by buyers seeking software that helps them do their job better, instead of software tools that they must “teach” how to solve their problems.  “We need to fill these before we lose budget,” is a common refrain. These buyers I talk to don’t have time to wait for long customization process: they have a couple of openings, and they need them filled fast. Instead of a hammer, they need a house.

I get this a lot; “Let me be honest, we don’t have much of a recruiting process.” In some companies, the people that used to own and drive recruiting aren’t there anymore (often due to budget cuts). And, truth be told, there are many companies that have never had much of a recruiting process to speak of. People from these camps are looking for best-of-breed software that already has a powerful process built-in. “Our core competency is making renewable energy accessible, not recruiting. I just need something that works,” remarked an operations manager during a recent meeting.  Custom software for these companies is like a birthday present without the batteries.

I would like to add that I don’t just see this shift in recruiting software, either. Just the other day one of our customers asked if we could recommend “Newton-like” performance review software. She wanted something that “would just solve the problem so that I don’t have to build this process myself.” More and more, software vendors are building innovative “point solutions” to optimize business processes providing more options and ultimately better software for consumers. It’s about time.

3.    Come On! Make it cost less and take the handcuffs off. I am a customer.
Captain Obvious at your service: The recent financial meltdown has put an emphasis on thriftiness. All enterprises, even oil companies, are looking for ways to shave costs. Buyers that I speak with have no choice; they are short-staffed, under-budgeted and forced to do more with less in the most uncertain conditions of their lives.

So what’s the trend? Economizing? That’s part of it and very well could be the biggest driving force. But, what I find really interesting is that some software companies are structuring their businesses to entice cost-conscious buyers. And, potentially even more interesting is how this trend may turn the business of enterprise software on its ear.

Many progressive software companies, across all industries, are offering “Friction-Free” buying programs to attract and retain customers. These programs are highlighted by simple tiered-pricing models, free trial periods, pay-as-you-go-contracts and non-punitive cancelation policies. The reduced risks help buyers get purchases approved easily.

(As a side note, this new model for software pricing forces vendors to build better software because they don’t force people into long term contracts: if the software isn’t good, you cancel.)

Convoluted pricing hides the elephant in the closet behind long-term contracts. “With our current software every time I want to do something, like add a user, or increase our job limit I’m forced to call someone and pay a fee.” Or, “We tried to lower our user limit because we aren’t hiring as much, but they wouldn’t let us. When our term expires we’re going to cancel.” I hear these complaints almost every day, and the recession will be the end of this: the elephant has charged and is bowling over these anti-customer business models. Fair pricing is coming, for some buyers it has arrived, and it will benefit all consumers long after the recession is over.

Walk the Walk
As you can imagine, most trends are interconnected. Fatigued by complicated products, failed implementations and archaic pricing methods, buyers of recruiting software are seeking innovative products delivered with dynamic terms of service. I speak with at least 10 companies a week that are looking to move away from their legacy recruiting software and I can only guess that this will accelerate as the economy improves.  With better access to information and the creation of easy-to-use products offered with friction-free buying programs, consumers are more empowered than ever to shift allegiances from one vendor to another. And with modern systems, companies can easily move information from one system to another without incurring significant IT headaches and extended service outages.

Undoubtedly, the way business software is designed and delivered is changing and it must continue to change to satisfy the evolving demands of buyers.  Recruiting software vendors will need to examine how they develop and deliver their wares. And this brings me to why the recession will end up being good for you, the buyers of software. When it comes time to start buying again, you’ll for the first time have better choices: ease of use, built in intelligence, and fair pricing.