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Ep 552: Hiring Innovation in LATAM and Asia

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If you have been listening to the recent episodes of the show, you’ll have noticed the considerable amount of innovation currently happening in high-volume hiring. Driven by skill shortages and automation technology, high volume is the area that has given us an insight into what the future might be like for talent acquisition.

In episodes 551 and 552, I’m diving deeper into automation and AI in high-volume hiring by speaking to technology CEOs with products that are helping to shape the future.

My second guest in this mini-series is Max Armbruster, CEO at Talkpush. Max does extensive work around high-volume hiring in Latin America and Asia. Technology is driving innovation for different reasons in these markets than in the US and Europe, and Max has some deep insights into how hiring is developing and where things are heading.

In the interview, we discuss:

• The hiring market beyond the US and Europe

• Automation to reduce recruiter numbers and broaden talent pools

• Emerging markets and future economic powerhouses

• Cost per hire

• How AI improves the quality of hire

• The impact of the accessibility and affordability of AI

• Communication channels and candidate experience

• Developing local toolkits

• Advice to employers hiring remotely in these markets

• What’s the future for recruiters?

Listen to this podcast on Apple Podcasts.

Transcript:

Matt: If you’re a fan of the Recruiting Future podcast, then you will absolutely love our newsletter, Recruiting Future Feast. Not only does it give you the inside track on what’s coming up on the show, you can also find everything from book recommendations to insightful episodes from the archives and first access to new content that helps you to understand where our industry is heading. Sign up now, and also get instant access to the recording of my recent webinar on the future of talent acquisition. Just go to recruitingfuturefeast.com/webinar. That’s recruitingfuturefeast docom slash webinar.

[Recruiting Future podcast theme]

Presenter: There’s been more of scientific discovery, more of technical advancement, and material progress in your lifetime and mine than in all the ages of history.

Matt: Hi. This is Matt Alder. Welcome to Episode 552 of the Recruiting Future podcast. If you have been listening to the recent episodes of the show, you’ll have noticed the considerable amount of innovation that’s currently happening in high-volume hiring. Driven by skill shortages and automation technology, high volume is the area that has given us an insight into what the future might be like for talent acquisition.

In episodes 551 and 552, I’m diving deeper into automation and AI in high-volume hiring by speaking to technology CEOs with products that are helping to shape the future.

My second guest in this mini-series is Max Armbruster, CEO at Talkpush. Max does extensive work around high-volume hiring in Latin America and Asia. Technology is driving innovation for different reasons in these markets than in the US and Europe, and Max has some deep insights into how hiring is developing and where things are heading.

Hi, Max, and welcome to the podcast.

Max: Hi, Matt. Thanks for having me.

Matt: An absolute pleasure to have you on the show. Please, could you introduce yourself and tell everyone what you do?

Max: I’m the founder and CEO of Talkpush. Talkpush is a recruitment automation platform which is used in high-volume recruitment industries such as retail, call centers, healthcare, any sort of industry where you hire a lot of the same people every day, every week.

Matt: Tell us about the talent market at the moment. I suppose particularly for high volumes, there’s been a lot about shortages since the pandemic and how difficult high-volume recruitment now is. What are you seeing in the market with the companies that you work with?

Max: Well, the headline that you share may be absolutely true for Europe and the US, but there are many markets outside of those key economic powerhouses where there’s still a very high rate of unemployment, and there’s still a lot of youth unemployment and people who are just eager and hungry to work. So, I think the dynamics are a little bit different if you go to a place like India, or Brazil, or the Philippines than you would in these places.

Yeah, nonetheless, the automation is still a very hot topic. It’s automation with the idea of, let’s expand the town pool, let’s make it a better candidate experience, let’s reduce the number of recruiters. As opposed to automation, which is maybe in the US and in Europe, it’s more like we have such a small shallow talent pool to work with, because there’s just not enough candidates that we have to convert them immediately within 24 hours. So, yeah, these are some of the cultural differences.

Yeah, what I could say is for all the talk of recession, ups and downs and all that, basically, growth in the high-volume automation market has continued year over year. There really hasn’t been a blip.

Matt: So, what markets do you work with specifically?

Max: We’re focused on Latin America and Asia as our primary markets. We also have customers in the US and Europe, but that’s not been our focus and that’s not where we hire people. So, we have a globally distributed team and they’re closer to our customers and most of them are in places like Mexico, and Colombia, and the Philippines.

Matt: There’s been huge amount of talk for lots of years about emerging markets, future economic powerhouses. I’ve noted recently that there is lots of narrative about aging populations in Europe, and the US, and other countries’ economies coming to the fore. What does that look like post pandemic? What countries are emerging now? How do you see that sort of that global landscape?

Max: I’d say that good year, bad year. It’s what I said about the economy being good or bad. Some trends never seem to slow down. One of these trends is offshoring, which is sending work that’s in the service economy, such as call centers typically, but also IT and increasingly other areas like healthcare. That continues to go. That’s always happening. And so, that’s been the main driver for growth for an economy like the Philippines and a big driver for India, for example. Also, pretty big in Latin America. So, that’s a megatrend.

One megatrend that never stops is the fact that emerging markets are emerging. Meaning, the purchasing power is increasing, the domestic economies are growing, and within 2030 years, economies that were considered an afterthought will become bigger than some of the big established European economies. I think like in 30 years’ time, Mexico is going to be a bigger economy than the UK, for example.

Matt: Yeah. I suppose that makes perfect sense, because if we look at the broader context of history over hundreds and thousands of years, that’s always happened. It’s nothing new, is it?

Max: There’s a sort of race to the middle where– I think it’s in human nature, if you’re in the bottom half to seek to reach the top half. And so, I think that there’s just a hunger for prosperity which is more acute in places that is running behind. You don’t hear things like nobody wants to work in retail [chuckles] in a lot of the economies we operate in. So, I think that’s exciting.

From a technology standpoint, these are still very small markets today. If you look at all the markets I just mentioned like, Colombia, Mexico, and Philippines, if you look at them from a GDP standpoint compared to some of the European markets, they’re very small. They’re almost laughably small. But all the economists agree that 20 years’ time. it’ll be a different story.

Matt: So, to focus in on some of the things that you were saying about high- volume hiring in that market– It’s really interesting because over the last couple of months I’ve had quite a lot of content around innovation in high-volume hiring in the UK and the US. You mentioned that something similar is happening, but for different reasons in those markets. Talk us through what innovation looks like, what’s driving it, how is high-volume recruiting, the intersection between high volume recruiting and technology working in those markets?

Max: I’d like to answer your question by breaking down the cost per hire as, perhaps the biggest driver for any technology investment and any discussion on automation. There are two elements on the cost per hire is the internal cost and the external cost. The external is like marketing, advertising. Internal is headcount. And typically, the internal headcount cost is the highest element of the two. I think that’s been true in both markets, emerging and developed. But I think that the technology is becoming cheap enough. Meaning, AI is becoming accessible and affordable enough, where we can actually drive really good automation and start to take on the internal cost per hire, even in emerging markets, even in markets where the price sensitivity is higher.

For most of these markets, ploying one of the vendors are exorbitant. It’s ridiculous to spend $50, $100 per hire on technology when that’s your total cost per hire. It’s always like a battle between, should I buy some technology or should I hire another recruiter? In emerging markets, well, the battle has typically been, I’m going to hire another recruiter. But I think the bounce is shifting because of innovations. A lot of the cloud movement and innovation on LLMs and ChatGPT, it’s making it affordable to use AI even in markets where your manpower cost is much lower.

Matt: What differences are there or considerations are there in terms of things like candidate experience? Because you mentioned that one of the drivers in the US and Europe is around speed, because people need to hire people very quickly. And in a way with a good candidate experience, what are you seeing in those markets?

Max: Thank you for the question. I love talking about the cultural insensitivity of global vendors, or rather talk about how you need to customize and localize your approach to each individual market. So, one thing that I think is a bit arrogant from some vendors is that they think that everywhere in the world, job seekers, they want to go to a career website and read a bunch of content about what life is at company XYZ.

In high-volume recruitment, that fails to empathize with the feeling of the job seeker who is applying for 10 jobs, 20 jobs that day, and does not really want to hear a marketing spiel. They just want to get on with it, get prescreen. The only question that they really have is, do you have a job for me? So, I think that there’s a directness– You need to give them a direct answer to a direct question as fast as possible. Sometimes, that’s lost on vendors that are really heavy on marketing and messaging, and a little bit lower on tech and automation.

Then another big difference is the way people communicate. So, the favorite communication channel, for example, in India is email, followed by actually phone calls, voice phone calls. The favorite communication channels in most of the world is WhatsApp, which is almost not used at all in the US or in Australia, because these are markets where the iPhone is dominant. And so, iMessage has overpowered WhatsApp. And then there are markets like the Philippines, where it’s Facebook Messenger. In Japan, it’s LINE Messenger.

So, if you’re in recruitment and you consider your main job is, I need to talk to candidates, activating the main channel where you talk to candidates seems pretty obvious, like, most important step that employers should take. That’s lost on a lot of technology platforms today. So, I’m happy to fill that gap with Talkpush.

Matt: [laughs]

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Matt: I suppose for companies US, Australian, European based companies who are looking to hire in these markets, they’re either setting up operations or they’re offshoring. What would your advice be to them about hiring remotely? What do they need to keep in mind? How do they need to be set up?

Max: I’d say, first, you have to enable your sourcing team with a local toolkit coming in with your standard CRM, your standard ATS. It may not work locally for some of the reasons I previously mentioned. I’d say that employer branding is best carried by your local ambassadors, and you can make use of tools like Facebook, social media to empower and enable your local teams to tell a local story, because no matter how powerful and ubiquitous your employer brand message is, it’ll be even more powerful if it’s localized.

I like to mention the example of McDonald’s as a world valued champion in localization, because McDonald’s is perceived by everyone as this is the brand that knows how to do standardization, and where you can get a Big Mac wherever you go in the world, it tastes the same, it looks the same. McDonald’s actually has a very good localization technique. They sell MAC paneers in India, MAC spaghetti with ketchup in the Philippines, and McMolletes, which is a Mexican breakfast in Mexico.

So, even if a brand like this, which is known for standardization, it chooses to localize, that tells you something about how to do effective marketing. I think that’s missing for a lot of international global operation who, because of their drive to standardize in order to control a good– It comes from a good intention. The intention is, I want to control the candidate experience to make sure nobody gets left behind, everybody’s taken care of. But it can have an adverse effect where this control actually makes them lose an edge, lose a step against more localized marketing strategies.

Matt: You mentioned AI there. I think what’s interesting about what you were saying is almost the democratization of access to it. Again, I had a lot of conversations recently about how AI is working in that respect, and how it can be, how vendors can use it, train it, personalize it, all that kind of stuff. So, it’s pretty clear that we’re in for quite some revolution in recruitment that’s going to be driven by AI. Well, revolution everywhere, but we’re obviously talking about recruiting.

What do you see happening? What do you think the potential is for AI to change and evolve the way that we recruit? And obviously, that’s already happening to a certain extent in the area that you work in. But tell us, what do you think is going to happen in the future?

Max: Well, I don’t want to come off as an absolutist, because I am one. [laughs] I think that AI is going to take us very, very far from current practices, where I think in the next 5 years to 10 years, it will be considered almost unethical to let a human recruiter do most of the interviewing and selection. I think it’s going to flip. We’re going to go from questioning whether the AI makes good decisions to not questioning it and questioning everything else. That’s a bold prediction. We’ll see how it is– [crosstalk]

Matt: Well, you’re building a tech company.

[laughter]

Matt: I’d expect nothing less. It is a bold prediction, but it’s a prediction that is quite common. Do you think would that be true for every type of recruiting or just certain types of recruiting?

Max: Well, initially, in the space where I am, which is retail, service, healthcare, all that, hospitality, transportation, logistics, when you start adding up all these industries that are considered high-volume, you realize like, that’s most of the market. That’s 60%, 70%, 80% of global workforce. So, once you’ve done that– Yes, the other 10% or 20%, it may take much, much longer, but at that point, I think that the debate has moved on from, will this happen to– Yeah, what happens to the remaining 20%? Well, that may take longer, of course.

I think what’s going to happen in the next two years to take a shorter time frame is that, we will still call upon the humans to make that connection with the candidate. I think candidates will mostly want to come to work to make human connections, and the recruiter will be that first human connection. So, the recruiter will play a critical role in the candidate experience, because it’ll be that human touch that, “Oh, this is who I’m going to be working with kind of moment.”

But when it comes to deciding which interview questions to ask and how to analyze the answers, it’s obvious that human bias is getting in the way and that there are better solutions in the works. So, I think interviewing is going to be disappearing and will be replaced by something else, which will be more like welcoming and making people feel desired.

Matt: So, final question for you, and it’s another question about the future. So, we’ve spoken about Colombia, Mexico, the Philippines, those economies, those markets. And obviously, AI is bringing this speed to hiring, which is great for candidates and also great employers, reducing what would seem to people looking in from another country a low cost per hire and making it even lower. What impact do you think that will have on the economies and societies of those countries, recruiting can be done this efficiently and this effectively?

Max: I wish I could give you a quantified answer, but it’s more of an intuition. The intuition is that, today, if a job is being advertised, an entry level job and you get 30 candidates, 40 candidates and let’s say, resume format or coming through an agency, you’re quite happy with that ratio, 30:1. Surely, I’ll find somebody good in there, and you hire the best available according to your human assessment. [chuckles] Tomorrow, you’ll be able to consider 200 candidates, 300 candidates, maybe 3,000 candidates for the job, and you will have given every single one of them a chance to express what makes them excited, give you a sense for their psychology for why this job is exciting for them. Out of that experience, of course, you’re going to get a much better candidate, on average, than using the all-traditional method.

There’s no telling what this can do for an economy when you have a good hire versus a great hire. If you have a great hire, it could make a world of difference. You might be hiring somebody to be in a cashier position, who will end up being a store manager, a regional manager, departmental director, and a CEO of a company, and who will be driving that kind of productivity, and drive across the entire company one day. So, I think hiring the best available talent at the base, not just at the top of the pyramid, but at the base is going to be an enormous driver for productivity and for wealth creation, especially in the markets where there’s a lot of human capital. Those are the markets I’m describing are the ones where the demographics are in favor of creating huge economies.

Matt: Max, thank you very much for talking to me.

Max: It’s been a pleasure.

Matt: My thanks to Max. You can subscribe to this podcast in Apple podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for @recruitingfuture. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to our monthly newsletter, Recruiting Future Feast, and get the inside track about everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time, and I hope you’ll join me.

[music]

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