By Peter Weddle, CEO TAtech
The vast majority of today’s job boards and talent technology companies are leaving money on the table. Unconsciously, they don’t think they can or should walk and chew bubblegum at the same time. Now, before you rise up in righteous indignation, hear me out. The problem of blinkered business vision has afflicted (and continues to afflict) a whole lot more companies than those in the TA solutions industry. In fact, it’s a problem in most of today’s business community. But one company has figured it out and it’s making a ton of money in the process: Best Buy.
Best Buy describes itself as “… an electronics company that sells everything from computers to televisions and cellular phones.” It’s a retailer that sells stuff. But, in reality, it’s selling solutions to customer needs and wants. Go to its website and you’ll see ads for stuff that tells time, washes clothes, supports word processing and a host of other business functions and offers entertainment on demand.
Selling all those things has made it a very successful company. But at some point in the first decade of this century, it realized it was leaving money on the table. The company was meeting all those consumer wants and needs, but totally ignoring the single biggest problem their customers had: making all that stuff work as it should. So, in 2002, it went out and bought Geek Squad.
The pundits called it a dumb move, but Best Buy knew it could walk and chew bubblegum at the same time. Ten years later (in 2012), the Minneapolis Star Tribune wrote, “The company does not disclose separate financials for the business. But analysts estimate Geek Squad generates a gross profit margin of 40 to 50 percent based on a minimum annual revenue of $2 billion, or about 4 percent of Best Buy's total revenue of $50 billion. That’s real money in anyone’s book.
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But, what does that have to do with job boards and talent technology companies? After all, their customers aren’t individual consumers with no expertise in making stuff work. In many cases, employers have their own IT Department to help them onboard and integrate new products. And even in those cases where a solution provider has a dedicated team to help with the introduction of its product, it’s the IT Department that runs the implementation effort and oversees the product’s integration into the company’s tech stack.
And, there’s the rub. A whopping 66 percent of IT projects fail. That’s according to an analysis of 50,000 such projects globally by Faeth Coaching, a leading executive coaching firm. Vasa Digital Architects puts the number even higher. It reports that 70 percent of IT projects fail and 25 percent are cancelled outright. And, what’s behind such a dismal track record? According to research published in Forbes, 54 percent of IT project failures are due to poor implementation, while just 3 percent are caused by a problem with the product being introduced.
Those failures inflict pain on recruiting teams in a number of ways. First, the new TA solution is their baby, so they often shoulder most or all of the blame for its not working properly. Second, the inept implementation ensures they will not achieve the performance improvements that were the justification for buying the solution in the first place. And third, all of the above means that the recruiting team will fail to deliver the return on investment it promised the c-suite, and as a result, see both their credibility and clout in the organization diminished.
When job boards and talent technology companies ignore that very real and festering pain point among their customers, they’re leaving money on the table. The better strategy is to mimic Best Buy and solve that problem for employers, both those that are their customers and those that aren’t as well.
Moreover, they don’t have to buy a Geek Squad to do it. In many cases, they already have the technical expertise on staff, not only for the introduction of their own product, but for the implementation of all (or most) other products as well. Yes, that can distract them from their core work, but once successfully launched (even on a pilot basis), the service will provide the foundation for adding staff and formalizing the new revenue stream. Think of it as going into the business of making stuff work with your very own Performance Posse.
Food for Thought,
Peter
Peter Weddle has authored or edited over two dozen books and been a columnist for The Wall Street Journal. He is the founder and CEO of TAtech: The Association for Talent Acquisition Solutions.