Start-ups Make Their Case

Human resources departments know they need to innovate. They know they need to make more workforce decisions based on predictive analytics. In both cases, they also know change means swapping out old HR applications for new ones.

Despite all that, many large enterprises are risk averse, which makes them reluctant to work with start-ups offering the kind of technology that could meet their needs. It’s one reason HR is years behind sales, marketing, accounting and other corporate functions in adopting new technology platforms, according to fast-growth HR analytics and recruiting tech start-up founders speaking Wednesday at a session titled “Start-up Spotlight: What’s New and What’s Next in HR Technology” the HR Technology Conference in Las Vegas.

“Selling into HR is bizarre,” said Shon Burton, chief executive at HiringSolved, a recruiting and sourcing data aggregator tool.

Being more compliance-heavy than other departments could have added to the reluctance to embrace new options, Burton said.

But things are starting to turn around, he said. “You’re hearing CEOs talk about how they didn’t hit goals” and need to change up processes as a result, he said. “The need to innovate has outweighed the fear of new technology.”

Organizations are hungry for something new. But when HR buyers talk to a vendor, they want case studies, white papers and other formal sales collateral that start-ups might not have had the time, resources or longevity to create, said Elliott Garms, chief executive at Human Predictions, a recruiting analytics platform for the tech industry.

At most organizations with predominately white-collar workers, employees account for 60 percent to 70 percent of costs.

You’d expect those organizations to use technology to make their people practices more efficient, said Manish Goel, chief executive and co-founder at TrustSphere, a relationship analytics start-up. The hesitancy to work with relatively untried vendors could result from a lack of awareness of what’s out there, “and that lack of awareness is slowing down the rate of innovation,” Goel said.

Larger companies also have lagged behind in adopting new technology because of the logistical challenges that come with making changes that affect thousands or tens of thousands of people, said Kieran Snyder, chief executive and co-founder at Textio, an augmented writing service that screens employment marketing content for unintended biases that could turn off job seekers.

“But if your competitors are using competitive technology they will beat you for talent,” Snyder said.

If you’re ready to look at upgrades, Snyder suggested starting with well-defined pain points or targets you’re not hitting. “Pick one thing that’s important enough that it’s impeding the productivity of the team” to focus on, she said.

In the end, it’s not about the technology, it’s about the business problem you’re solving. “You have to deliver better outcomes, making things faster, better or more efficient,” Goel said.

Once you’re ready to pull the trigger on a new buy, be wary of vendors that can’t explain the measurable results you’ll get from using their service, start-up executives said. “The whole point of any of this tech is that it can make predictions,” Burton said. “If people aren’t willing to commit to you about the results you’ll see in your hiring pipeline, be skeptical.”

Michelle V. Rafter is a Portland, Ore., business reporter covering workplace issues and technology. To see her tweets from #HRTechConf follow @MichelleRafter.