Have you taken any calls recently from software providers? Calls where you’re promised the world if only you would switch from your existing software provider? The chances are that you’ve taken a few of these, and that’s a conservative estimate. For those of you who haven’t it begs the question, what exactly is cloud-based recruitment software, and how can it help SMEs?

Habits of the small recruitment agency

In order to understand what the future holds it’s important to appraise the tools being used in the present. Regardless of how long SMEs have been trading, they tend to exhibit the same reluctance to integrating modern technology into their business. Therefore it’s commonplace to visit a small recruiter and bear witness to the following;

• Overreliance on filing cabinets and paper-based administration.
• Compensating for their lack of technology by hiring specialist administrators.
• Slow, cumbersome response when preparing for audits.
• Administrators spending valuable time correcting errors affecting the business.

Whilst this continues to occur in recruitment, it’s only fair to consider why small agencies continue to persist down this road. Traditionally the cost of implementing new software or IT infrastructure has been relatively expensive, presenting a significant barrier to entry for business owners. I’ve lost count of the number of agency owners I’ve spoken with who appreciate the merits of technology, but they couldn’t take the financial risk to implement it.

 It would seem then that recruiters rest on the horns of a dilemma. How can recruiters save valuable time and money, without exposing themselves to unnecessary risk?

Eliminate installation costs

The early adopters within recruitment have already begun to change the way which they do business. This is due to recruitment software providers offering a modern distribution model, one which eliminates the cost of installing the technology within their client’s business. That distribution model is cloud computing.

Software providers host their own IT infrastructure and allow their clients remote access to the services which they’ve subscribed to. No longer will small recruitment agencies be quoted thousands of pounds to purchase and configure their own server farm at head office.

To the SME this is of critical importance. The most significant barrier preventing the adoption of technology hasn’t just been removed; it’s been vigorously swept aside.  In the wider business world we only have to look at the radical changes Adobe has made to their own distribution model. They’ve replaced their annual software development cycle with a cloud-based distribution model, allowing customers to simply subscribe to their services every month as opposed to purchasing the software outright.

We’ve established that cloud computing can save the SME time and money, but can it really become the SMEs best friend overnight?

How software builds the agency-client relationship

As recruiters, we know that there’s more to the industry than making money. Every day recruiters place candidates in new roles, making a positive, life changing impact on their candidate’s lives. However a massive part of recruitment in 2013 is the way that recruiters build relationships with their clients.

Revisiting our small employment agency from earlier, there are a number of key observations one can make when on-site with a recruiting SME;

• Errors in data processing cause problems with payroll.
• These errors strain the recruiter’s relationship with their clients and candidates.
• The time taken to resolve these issues prevent recruiters from developing new business.
• Clients are inclined to take their business across the street when service quality remains inconsistent.

These issues are well known in the industry and software developers have considered them at all stages of development. Fortunately the benefits of any software – cloud computing included – is that electronic data processing comes to the rescue of today’s recruiter, improving efficiency and accuracy.

Recruiters can use software as a crutch, leaning on it to industrialise the administrative process, resulting in less errors, faster processing times and happier clients. However that’s simply one piece of the puzzle. Many of the current raft of software providers are bending over backwards to offer recruiters added value. It’s commonplace to find recruitment software which can deal with additional requirements including payroll, MI analysis and compliance.

Recruiters I’ve spoken to who use cloud-based recruitment software are glowing in their praise. Their advocacy tends to be offered most when considering how the software forges long lasting and profitable relationships with their clients. Being able to offer detailed MI with appropriate analysis is the area which impresses their clients the most. Offering breakdowns in resource and cost not only impresses the client, but can help save them money when presented with prevailing business trends.

Why isn’t everyone using this?

The reality of the situation is that not all employment agencies will benefit from cloud-based recruitment software. Whilst we’ve discussed that it’s the proverbial godsend for SMEs, larger recruitment organisations will find it incredibly difficult to switch from their established processes.

Recruiters with a number of branches will balk at transferring their databases of information as it’s an administrative nightmare. It becomes even more difficult for larger recruiters when you consider that no two software providers offer the same software.

Another drawback is the inability of niche employment agencies to take the plunge into the world of cloud computing. Agencies may simply not have enough temporary employees to take advantage of the software, and may only require a humble Applicant Tracking System to manage their permanent candidates.

The verdict

All things considered, cloud-based recruitment software definitely has a place in today’s recruitment industry, however it seems destined to only be widely adopted by small organisations. Creating a sustainable competitive advantage will revolve around saving time and money over your competitors, but there’s more than one way to achieve this.

In a world where agencies are striving to become leaner, stronger and faster animals, recruitment software is definitely an answer to the conundrum. But is it the only answer?