A significant issue that I see time and time again is the disconnect between what CEOs say they want from talent acquisition and what is delivered. Why does this disconnect happen, and what can talent acquisition leaders do to fix it?
To help answer this vitally important question I’m delighted to welcome Jerome Ternynck, CEO of SmartRecruiters back to the show. Jerome has recently written a book on Hiring Success which is aimed at CEOs and illustrates what they need do to compete effectively for the best talent.
In the interview, we discuss:
- What is currently happening in the market and how SmartRecruiters are responding as a company
- The disconnect between what CEOs want from hiring and how talent acquisition is measured
- What does an enterprise need to do to acquire top talent on demand
- What should the main focus be for talent acquisition to drive change
- Rethinking hiring budgets
- AI bias versus human bias
- The future of talent acquisition
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Transcript:
Matt Alder [00:00:00]:
Support for this podcast is provided by Smart Recruiters, the hiring success company Smart Recruiters offers enterprise grade recruiting software designed for hiring success. Move beyond applicant tracking with a modern platform that provides everything you need to attract, select and hire the best talent. From candidate relationship management to programmatic job advertising, recruitment, marketing, collaborative hiring and embedded artificial intelligence Experience. A talent acquisition suite with intuitive user experience that candidates, hiring managers and recruiters all love. Leading brands like Bosch, IKEA, LinkedIn and visa use Smart Recruiters to future proof talent acquisition and expand their businesses globally. Visit smartrecruiters.com to find out how you can achieve hiring success as well.
Matt Alder [00:01:14]:
Hi everyone, this is Matt Alder. Welcome to episode 256 of the Recruiting Future podcast. A significant issue which I see time and time again is the disconnect between what CEOs say they want from talent acquisition and what actually gets delivered. Why does this disconnect happen? And what can talent acquisition leaders do to fix it? To help answer this vitally important question, I’m delighted to welcome Jerome Ternynck, CEO of Smart Recruiters, back to the show. Jerome has recently written a book on hiring success which is aimed at CEOs and illustrates what they need to do to compete for the best talent. Hi Jerome, and welcome back to the podcast.
Jerome Ternynck [00:02:02]:
Thank you for having me, Matt.
Matt Alder [00:02:04]:
Always a pleasure to have you on the show. For people who may not know you, could you just introduce yourself and tell us what you do?
Jerome Ternynck [00:02:10]:
Sure. My name is Jerome Ternynck and I’m the founder and CEO of Smart Recruiters, the enterprise talent acquisition suite, French, as you can hear, based out of San Francisco and trying to make hiring easy for businesses around the world.
Matt Alder [00:02:24]:
Fantastic stuff. So we’re recording this interview early April 2020. So obviously it’s very important that we talk about what’s happening now in the world in the middle of the pandemic crisis, but also talk about the longer term. So just start with the right now, what are you seeing happening in the market at the moment?
Jerome Ternynck [00:02:43]:
You know, we’re seeing two, two main, two main trends in ta. And first of all, the entire market, I think right now is reacting well to protect their employees and protect the lives of families and the lives of their contractors. And I think this is remarkable to see what’s happening there. I’m really proud of the initiatives that are being launched left and right to protect and minimize the impact as much as possible from a TA perspective. I think the world divides into two camps right now. Freeze or frenzy. About 20% of the world, or if so, is in a hiring frenzy. They’re in delivery, they’re in some forms of retail, essential retail. They’re obviously in health care, and they’re in a hiring frenzy. The other 80% of tier leaders are in a hiring freeze or in a very slow hiring. And I think while the ones in hiring frenzy do what they do best, which is hire as many people as quickly as we can, the other 80% that’s sitting at home on a hiring freeze or a near hiring freeze are thinking, okay, how am I going to actually use this time to support my community, to support my team, and to come out of this crisis stronger than we come in? So we actually are seeing a really good amount of initiatives coming up. You know, we just. This last Friday we signed a large retailer, 100,000 employees, and the conversation with them and said, are you guys still good to go? And the TA leader there said, look, all our stores are closed. So if we don’t use this opportunity to actually upgrade our ATS and revamp our practices, we’d be foolish. And I think that’s a really good way to look at it. Right now is actually not a bad time to look at your team, to upscale your team, to upscale your technology, and to make sure you come out of this crisis on the bright side better than we came in.
Matt Alder [00:05:08]:
As a CEO yourself, tell us more about how you’re managing your organization during the crisis. How has it sort of changed the things that you’re doing? What are you, what are you doing to sort of get the company through to the other side?
Jerome Ternynck [00:05:23]:
We reacted fairly fast about three weeks ago and we defined a three point action plan which was one, protect our business. And that obviously started with our employees. And we put all our employees at home. We made sure everybody has the right equipment. This is fairly easy because we’re a tech business, right? So everybody’s laptop based. So that kind of got without disruption. We kept every employee engaged. We launched the Smart Cafe, which is actually a virtual zoom room where there’s happenings 24, five actually. So every day we have at least 10 different events happening. There are some cute like, you know, show up with your baby or your pet, and some more businessy like come for the, for the town hall or come to learn about this new product or we have customers coming to talk to us, we have partners. So the Smart Cafe is kind of being, uniting us. Very early on, I pledged to actually three weeks Ago I pledged to make no layoffs in Smart Recruiters. So I said we’re all going to stick to this together and obviously stand by that commitment. So making sure that the business runs, that our customers are keeping the service, we send a nice letter to customers explaining everything’s going fine, we haven’t had any service disruption. The second part was unite our customers. And I think in at times of crisis it is really important to understand how are you actually going to be there and step up for your customers. And so beyond reassuring them that we were going to keep service unaffected, we went ahead and launched a number of initiatives to unite our customers. So we launched regional user groups, zoom based user groups. We have like 30 of them going on. We launched a free certification classes. So normally getting cert like admin certified on Smart Recruiters is quite an endeavor. It’s like a thousand dollar course. Over two days you get a certificate like a diploma and then you can actually be a pro at the technology. So we’re actually launching these courses for free, but they’re still instructor led. Long time, long, good commitment and we’re getting like as soon as we open a new date, the registration just max out. So we’ve I think we’ll end up certifying several hundred people during this four or five weeks, six weeks of confinement, which is nice. Then we launched the hiring success masterclass so putting out the whole hiring success methodology in masterclass for recruiters. So really giving back. And we also help on redeployment. So we’re launching a redeployment platform like turnkey redeployment platform to help people bring employees that are either being laid off or that are in restructuring and help them find opportunities inside the organization or actually opportunities across different organization. So this is coming out now and it really helps customers minimize the impact of restructuring. So protect our business, unite our customers. And the third one was really step up in the market as leaders. As a leader in the market. And so we’ve donated our technology to several initiatives. Recruiters for good in the Netherlands, Jobs for Lebanon. We have a similar initiative going on in Australia like platforms for emergency jobs relief. And we’re actually working on a job matching service that would help anyone who’s been laid off being automatically matched and referred into any of our customers job. Because I think as a business whose mission is to connect people to jobs at scale, we do have to step up. So the whole 300 plus smartians, that’s how we call the people at Smart Recruiters and our thousand Enterprise customers are really united, focused, stepping up to minimize the impact of this crisis and come out on the other side stronger.
Matt Alder [00:09:48]:
I mean, that’s all fantastic stuff. And it’s really interesting because I think the very first time I met you was back in 2012 and we did a video interview in San Francisco and you were talking about the company was all in one small room then, and you were talking about the vision was all about connecting job seekers with, with, with recruiters. How has that vision developed over time? I mean, it sounds like it’s, you know, very much sort of the core of what you, of what you do. I mean, how has your sort of vision and mission developed over the last few years?
Jerome Ternynck [00:10:18]:
You know, I, I had the benefit of starting Smart recruiters in late 2010, 2011, having done 10 years of an ATS before, right? So I founded Mr. Ted back in 2000 over in London, and for 10 years I was selling applicant tracking systems to large enterprises, right? Until I really realized that ATSs aren’t making hiring easier. Right. If you think, what do you need to make a good hire? Right? Well, you need to attract great candidates, then you need to choose the right one. And as a TA function, you need to stay organized with all of your data and processes in one place. And so like, okay, does my ATS help me find candidates? No. Right. It was never designed for that. Do managers use it every day to collaborate with me to select the right person? Absolutely not. Managers don’t do that. And as a result, are my recruiters happy and productive? Absolutely not. So when I started Smart Recruiter, I was like, okay, let me take a blank sheet of paper and really design in an ideal world, what would an enterprise need to achieve hiring success? What would an enterprise need to actually acquire amazing talent on demand, which, when you think about it, is what the CEO wants, right? Every CEO in the world says, I want to hire the best people in the market, but then they don’t really know how to execute around this. And so my vision around hiring success, really, and the core pillars of hiring success has been very intact from day one. We spend the first four, five years of smart recruiters in pure R and D mode. So 210 to 215, we were in R&D, 40 engineers, and me basically was the team. And in January 15, we launched our enterprise platform. And since then we’ve had over a thousand enterprises, large enterprises, the likes of Bosch or Ikea or Anglo American Publicis, even LinkedIn actually uses us to manage their own recruiting. Sign up to Smart recruiters. And really where we make the difference is we give you everything you need to attract great candidates. So it’s a whole slew of marketing, CRM, advertising job sites, excellent candidate experience. So how you attract candidates, we solve that problem. Two, we made it super easy and enjoyable for managers to be part of that process and to collaborate with recruiters. We completely flipped on its head the relationship between recruiters and managers. So they are no, there are no really a team working towards making the right hiring decision. And three, we made sure that we can give recruiters all of their data processes in one place on a global scale. So we’ve pre integrated 400 vendors into the platform, we’ve localized the platform in like 40 different languages. We’re all compliant and everything. So at the end of the day, customers who use smart recruiters end up having a good way to find candidates, good collaboration with the managers and to pick the right one. And recruiters that actually for the first time have, have like an operating system, right, have their first thing and more, more than anything, if you can achieve that, then this is the best way to connect people to jobs.
Matt Alder [00:13:37]:
So hiring success has become the phrase that you and, and, and, and your company is best known for. You’ve kind of recently written a book about that. Why did you write the book? Who’s aimed at and what’s it actually about?
Jerome Ternynck [00:13:50]:
Yeah, I wrote, I published it about five weeks ago now, six weeks ago. And really what strike me is the gap between CEOs who do want to hire the best people in their industry and TA leaders who are being measured on faster and cheaper time to field cost per hire. So we’re actually squeezing recruiting, underfunding, recruiting. While 80% of CEOs put hiring top talent as their number one priority, 85% of Fortune 500 believe they don’t hire great people. And so I was like, what is wrong here? And actually I think what is wrong is we’re witnessing a natural evolution of recruiting. The traditional staffing function that became recruiting, that became talent acquisition. Actually I think of it as hiring success, the hiring success function. And I think if we fast forward a few years, the head of recruiting in an organization will be a VP or an SVP of hiring success whose job it is to hire amazing talent on demand for the organization. And that person will get funded with a marketing like budget because you invest in recruiting to acquire great candidates just like you invest in marketing to get more customers. And I wanted to write this for the CEOs for the C suite to say, oh, Mr. CEO, you want to. Or Madam CEO, you want to hire an amazing talent on demand? Well, this is how you do it. Start by funding your recruiting team and think of it as a sales and marketing function. And so in the book, I outline the new metrics, the new strategies, the new approach to actually achieve hiring success.
Matt Alder [00:15:43]:
And digging into that just a little bit, a little bit deeper. Obviously, hiring success is fairly complex, simple to understand, but perhaps complex in terms of execution. What do you think the most important element, elements of it are for employers to focus on or to focus on? To focus on first.
Jerome Ternynck [00:16:02]:
I think first we have to change the metrics. We have to change the measures for as long as cost per hire and time to fill faster and cheaper are your measures of success, then it’s going to be very difficult to drive change. And so we’ve designed, with many TA leaders, actually across our customer base and around the world, in fact, a new hiring success scorecard which has three metrics, a time equality and a cost metric, which is the core of how you can measure any function. And we measure cost as a hiring budget, which is a total cost of recruiting divided by new year salary. And so you end up with a percentage, 5% of my new year’s new hire salary. I invest in recruiting. The interest of that is if you come to me and you say, hey, Mr. CEO, Jerome, my cost per hire is 3,252. I’m like, why do I care? Right? Like, it doesn’t mean anything to me. And no TA leader has ever been to a management meeting saying, next year I think we should double our cost per hire, Right? Whereas as a CEO, I’d say, well, actually, why not? What’s in it for me if I actually invest more in recruiting, Do I get better candidates? Do I get them faster? Like, what’s in it for me? And so measuring it as a percentage of new hire salary is really interesting as compared to a cost per hire, because you can compare across departments, you can compare across organization. So hiring budget number one. Number two, we kill the time to fill, and we replaced it with a hiring velocity. Hiring velocity being the person percentage of jobs that are filled on time. Again, you come to me and say, my time to fill is 57 days. I’m like, I don’t care. Start earlier. But if you come and you say our hiring velocity is 90%, which means 90% of our jobs are filled on time, I know that hiring velocity translates into business velocity. And I know that if I have a 90% hiring velocity and I decide to Invade Belgium. The soldiers are going to be there on the day of the invasion, which really is actually what I care about as a CEO. And the third one is quality of hire, which always gets measured like five years later, how did this person perform in no really good way. We don’t really do a good job at bringing this back into our recruiting process. So we introduced the net hiring score, which works like an NPS. So on a scale of 1 to 10, how much of a fit is this new candidate or this new hire for you? That’s the question we asked to the manager 90 days after hire. On a scale of 1 to 10, how much of a fit is this new job for you? Is the question we ask to the candidates 90 days after they start, or 30 days for contractors. And the first time we ran this survey in a large tech company, 10,000 employees here in Silicon Valley. In 52% of cases, either the new hire or the manager said, not great. So then we go Back to the CEO. You know that 52% of your new hires are basically mediocre hires. Make mistakes, they might leave, they might stick around for a couple of years. So it doesn’t look bad in the resume, but you’re just basically killing your company. And that CEO was underfunding his recruiting quite significantly, right? So armed with this scorecard that says, I have a hiring budget that is 5% of my new hire salary, I achieve a hiring velocity of 75% and I have a net hiring score of positive 10. Now I can go to the CEO as a TA leader and I can actually have a business conversation. Give me more budget, I can give you more velocity, achieve higher quality. And if we position ourselves in this way, then we are not a cost center. Then it becomes clear to me as an executive that, yeah, if I cut your funding, your velocity and your quality are going to go down. I cannot like those three are linked. And I think we have to change that and stop being measured by cost per hire and time to field. So that’d be my first change. Now, once you have that, there’s a lot you can do to actually execute and improve your velocity and your net hiring score.
Matt Alder [00:20:31]:
To flip the conversation slightly towards technology, we’re currently sort of very much in a discovery period for artificial intelligence in recruiting. What should employers be looking for here? And do you think there’s a danger of bias? What’s really going on in this space?
Jerome Ternynck [00:20:49]:
Artificial intelligence in recruiting is, in a way, it’s the latest buzzword. And I would say to employers, look behind the marketing speech here. And what we’re really doing is machine learning. So it’s actually learning vast amounts of data to detect patterns and provide a recommendation or a solution that may be more powerful, more in depth, more intelligent than a human could provide. The one area where this applies very well is matching. Matching people to jobs. Like an AI can actually read millions of job descriptions and millions of resumes and detect patterns and analyze data such that it can look at a resume, say, well, actually this could be a good candidate for this job. Or likewise, this actually could be a good job for you, Jerome. And that matching is a data problem. That’s the crux of it. Other areas of AI, as in, I analyze your video interview so I can see if you’re smiling and this is, I think, very dangerous, or you’re going to give me a call and I’m going to hear what you say and respond automatically. These are mostly scripted today. So I think, I think everybody uses AI for various things. The one area where it applies is can you read the resume and tell me if this could be a good candidate? And vice versa, can you read this job and tell me if I should apply? So on this side, it actually works. Now, does the AI have bias? Of course the AI has bias. It’s a machine. It by definition has a bias. The question is, does it have a higher bias than, than a human or does it actually help reduce bias? And last time I checked, or I think rather last time the BBC checked, the same resume being sent to a hundred different companies with just a different name on top of the resume. There was Adam Fenton and Mohamed Aled, something like this. Adam got three times more callbacks than Mohammed. Three times more callbacks. That is the reality of our current human screening. I think an AI can do better than this because guess what? The AI doesn’t read the name because it actually doesn’t care about the name. I think we can totally use AI to reduce bias in organization and make sure that actually people that have different backgrounds are brought to the surface. Because the AI will know that this small university in, I don’t know, Czech Republic actually has an amazing user experience design program and that people who graduated from this are actually really talented UX people. Whereas a recruiter in the UK would look at this like just a Czech guy and move the resume aside and actually not know this university, the skills associated and the potential that this person might have. So the AI actually has many more data points that are far more rational. So I strongly encourage the use of AI or in matching screening and talent discovery. And we’ve made big investments on this at SmartRecruiters over the last five years now. And of course we see tens of millions of resumes and hiring processes every year so the machine can learn well and it’s proving quite effective.
Matt Alder [00:24:48]:
Final question. It’s probably difficult at the moment to make short or even medium term predictions, but what are your thoughts on what the talent acquisition marketplace is going to look like in a few years time? If we were having this conversation in say four or five years, what would we be talking about?
Jerome Ternynck [00:25:07]:
I think we would be talking about three things. One, we’re going to talk about how did this function finally became a marketing driven function, a marketing tech enabled function? I think we’re just following our peers today in the marketing department. We started by advertising jobs like putting adverts out. Then someone told us that there is a new phone book called LinkedIn and we should pick up the phone and smile while we dial and go direct to each candidate. And we’re actually realizing that proper marketing campaign with good content nurture and lead capture works a lot better at scale than just picking up the phone. And what that all comes down to is, well, actually there’s a marketing function. So why don’t you start by segmenting your talent between impact and scarcity and then based on this, have the right marketing strategy and the right budget allocation to each of your target group and then based on this, what’s the team you need, the technology you need? I think the modern TA leader is going to be coming from the marketing function and marketers are pros at acquiring contacts. So we are going to see a maturation of marketing. The second is not to go back on AI, but I think the clear rationalization of data and machines. I think candidate profiles are going to get much more detailed, much better accessible and at the same time more secured. The resume, the word documents you have on your computer definitely is going away. LinkedIn profile is not really detailed enough and actually probably not accurate enough to be your replacement resume. But there is something there that’s going to emerge to make data easily available, yet very well controlled. So data privacy will play a big role in that. But ultimately I think if I am an employee or an employer looking to make a match, it’s going to get easier. Not saying it’s going to get as easy as renting an apartment in Moscow with a view on the Red square next week on Airbnb, which you can do in two clicks in any currency in any country, which is actually an interesting way to think about it. But it’s going to get pretty damn close. So I think we’re going to get the acceleration of sourcing automation there. Good marketing, good sourcing automation. And then the last one is I think we’re going to go to become way more professional in how we evaluate talent. I think the, you know, the manager who behind closed door does an interview and then doesn’t give feedback to the recruiter, decisions that are full of bias and individual are going to go away and we’re going to definitely get more professional in how we evaluate candidates with proper scorecards, cards, interview scorecards that are focused on mustachieves and not must haves. Right? So must achieve, write great Java code. Must have four years of experience. I don’t care how many years of experience you have. I actually just need you to write great code. So I think we’re seeing people trend towards mustachieves and towards a collaborative hiring process. So that’s in a nutshell. We’re becoming marketers as TA leaders. The sourcing matching problem is going to get resolved and going to work much better with our hiring managers to pick the right candidate and for the candidate to pick the right job.
Matt Alder [00:28:57]:
Jerome, thank you very much for talking to me.
Jerome Ternynck [00:28:59]:
Thank you for having me, Matt.
Matt Alder [00:29:01]:
My thanks to Jerome. You can subscribe to this podcast in Apple Podcasts or via your podcasting app of choice. Please also follow us on Instagram. You can find the show by searching for recruiting future. If you’re a Spotify or Pandora YouTube user, you could also listen to the show there. You can find all the past episodes@www.rfpodcast.com on that site. You can subscribe to the mailing list and find out more about working with me. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.
