Bloomberg News

SkillSurvey Helps Employers Get ’Honest’ References for Potential Hires

March 02, 2012

After 15 years in human resources at Emory Healthcare, the largest hospital system in Atlanta, director of recruitment and retention Adair Maller was frustrated. Playing phone tag with job applicants’ references could drag on for weeks. And when her staff could get references on the phone, they were reluctant to share their unvarnished opinions, wary of defamation lawsuits.

So in early 2010, Maller tested an online service from a Philadelphia company called SkillSurvey that promised to speed up the process from weeks to days and elicit candid answers by granting references anonymity. Impressed by their candor during the test period, Emory spent $50,000 to implement the service across its HR department a few months later. Now, Maller says Emory “eliminates from consideration” 20 percent of applicants early on and interviews only two or three candidates per position. “We find people are very honest in this process because they’re anonymous and the candidates have given them permission to do this,” she says.

Eleven-year-old SkillSurvey is a pioneer of so-called recruiting analytics and automated assessments, selling an online software service that is changing how HR departments operate. Its reference-checking technique flips a longtime method traditionally used to assess current employees’ performance and uses it on applicants who haven’t yet been hired. Job seekers ask their former (or soon-to-be-former) managers and colleagues to rank their behaviors and skills on SkillSurvey questionnaires. Then, SkillSurvey software assesses the data and creates reports reflecting the applicant’s strengths and weaknesses regarding skills and behaviors. The SkillSurvey system ensures compliance with federal employment laws and Equal Employment Opportunity Commission regulations, according to SkillSurvey Chief Executive Officer Ray Bixler, 49.

As recruiting analytics catches on, the talent management market is consolidating. In February, Oracle bought Taleo Corp. in Dublin, California, which began in recruiting and now offers a more comprehensive system, and SAP bought performance management company SuccessFactors in San Mateo, California. Competition is increasing as well. HR software makers Checkster in Mill Valley, California, and Chequed in Saratoga Springs, New York, sell online tools similar to SkillSurvey’s that check references, assess talent and predict employee behavior.

To protect its intellectual property, SkillSurvey filed for a patent in 2008 to use its assessment tool to evaluate a candidate’s skills via the Internet. Bixler expects a decision from the U.S. Patent and Trademark Office by the end of the year. Esther Kepplinger, chief patent counselor at Wilson, Sonsini, Goodrich & Rosati in Palo Alto, California, and former deputy commissioner for the Patent and Trademark Office, says the four-year lag “is not out of the ordinary for a patent, since on average it takes over three years for all technologies, and longer for those in electrical areas, which includes software, hardware, and telecommunications.”

SkillSurvey has raised $5.7 million from Milestone Venture Partners, Inflection Point Ventures and other investors. The 34-employee company, which has some 500 hospitals as clients, focuses primarily on the health-care industry, though EBay, Iron Mountain, Boston Scientific, John Hancock and McDonald's also use its services. Bixler says last year’s revenue was $9.5 million and expects more than $14 million in 2012. Forrester Research pegged the worldwide market for recruiting systems at $1 billion in 2011 and projects it will be $1.3 billion in 2014.

Katherine Jones, an analyst with Bersin & Associates, an HR research and consulting firm in Oakland, California, wonders whether SkillSurvey’s main service -- objective information about a candidate -- will catch on among most of corporate America’s HR managers. “Their surveys have over 25 questions. That could be an imposition [on a past manager] or not,” she says. Forrester Research analyst Claire Schooley in Berkeley, California, notes most businesses want one solution for all the steps in talent management. She says there are lots of small companies selling expertise and tools for specific HR tasks, “but to a large extent the industry remains a boutique business.”

Although SkillSurvey is focused on the early stages of recruitment, Emory Healthcare’s Maller says SkillSurvey’s benefits go beyond vetting potential hires and assessing new recruits. When references were asked if they wanted to be informed of new jobs at Emory, half opted in, creating a fresh pipeline of potential employees. “I mined that talent. We made a job offer in January to someone we found from our SkillSurvey database and hired them.”

To contact the reporter on this story: Karen A. Frenkel at kfrenkel@nyc.rr.com

To contact the editor responsible for this story: Nick Leiber at nleiber@bloomberg.net


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