These are turbulent times for talent acquisition, particularly for those teams operating in the technology sector. Despite the continuing demand for technology skills, layoffs are still happening, with many TA teams now considerably downsized from where they were a couple of years ago.
Proving TA’s strategic and monetary value has never been more critical, so how can TA leaders make their business case against such a challenging backdrop?
My guest this week is Sam Bethoud, VP of Talent Solutions at hackajob. Sam combines his experience working with a vast number of talent acquisition leaders with hackajob’s huge dataset to provide some excellent insights into the tech recruiting market and highly actionable advice on tactics TA can employ to prove the scale of its value to the business.
In the interview, we discuss:
• The current state of the tech recruiting market
• TA’s commercial impact
• How does TA create measurable monetary value?
• The importance of data
• How else can TA be strategic?
• Changing job seeker behaviour
• What impact will AI have on the future?
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Transcript:
Matt: Support for this podcast is provided by hackajob, a reverse marketplace that actively vets engineers. Hackajob flips the traditional model on its head. Meaning, companies applying to engineers versus candidates applying to jobs, with companies getting an 85% response rate to the candidates they reach out to, as well as exposure to tech talent that directly meets their organization’s diversity objectives. After all, the ability to attract, hire, and retain tech talent from all backgrounds is critical to every organization’s success. Companies such as S&P Global, CarMax, and Sensor Tower are all using hackajob. So, why not join them? Go to hackajob.com/future to get your free 30-day trial today. That’s hackajob.com/future, hackajob is spelled H-A-C-K-A-J-O-B.
[Recruiting Future Podcast theme]
Hi, there. Welcome to Episode 595 of Recruiting Future with me, Matt Alder. These are turbulent times for talent acquisition, particularly for those teams operating in the technology sector. Despite the continuing demand for technology skills, layoffs are still happening, with many TA teams now considerably downsized from where they were a couple of years ago, proving TA’s strategic and monetary value has never been more critical. So how can TA leaders make their business case against such a challenging backdrop? My guest this week is Sam Berthoud, VP of Talent Solutions at hackajob. Sam combines his experience working with a vast number of TA leaders with hackajob’s huge dataset to provide some excellent insights into the tech recruiting market and highly actionable advice on tactics. TA can employ to prove the scale of its value to the business.
Matt: Hi Sam and welcome to the podcast.
Sam: Hey Matt, thanks for having me on, buddy.
Matt: An absolute pleasure to have you on the show. Please could you introduce yourself and tell us what you do?
Sam: Yep. So, I’m Sam Berthoud, I look after talent solutions at hackajob, which is a broad title, working with customers and their biggest challenges, and then also supporting across marketing, new business, and our existing customers.
Matt: Fantastic. Tell us a little bit more about hackajob for people who are not familiar with it.
Sam: Hackajob is a total talent platform for technical hiring. So, we are focusing across four key areas. So insights and when we think about insights, we’re thinking about the vast set of first party data, which we capture millions of data points on candidates to give that overall market perspective and overview, data from companies and their hiring processes, and helping identify particular bottlenecks or challenges, not just with hackajob candidates, but with their entire hiring funnel and yeah, influencing strategy. Our brand proposition, which is across podcasts, events, newsletters. And really what we’re looking to do there is elevate organization’s brands and position them as a technology employer.
And then the last two parts, diversity, equality and inclusion, is a new suite for us that’s seen great adoption, that’s really looking across neurodiversity, ethnicity, sexual orientation data, veteran status, gender, and allowing organizations to understand what those demographics, audiences think about them as a technology brand, how they interact with their process, why they do and don’t want to work for them. And then in the context of the broader market, what they are against their kind of competitors as a benchmarking exercise. And then the final part, which is what we’re best known for, is our two-sided marketplace, which allows candidates to have control of the process where employers are connecting with candidates that are matched to them via an algorithm, the largest marketplace in the UK and the fastest growing in the US.
Matt: Fantastic stuff. And it’s been an interesting couple of years in the tech space. Lots of headlines about layoffs. In fact, we’ve seen more of those this week. You obviously have access to a huge amount of data in terms of what’s actually going on in the market. So, what’s actually happening and what do the real trends look like now?
Sam: Yeah. And I think important to kind of clarify, we’re not a complete index of the market, so our data is directional in terms of live jobs and activity, and then just more broadly, kind of wider benchmarking data. I think we’re seeing this across all sectors, not just tech. If we zoom out a little bit, and if you think the kind of employment figures, job advertisement numbers and open requisitions in many industries, in many places, we are simply returning back to pre-COVID hiring volumes. And I think there’s certainly a resettling that’s happening after that hiring boom of 18 months’ worth of high impact, high velocity hiring across the globe in almost all sectors and industries, that followed a period of two years almost, of very, very reduced hiring.
And yeah, I think a big part of it is just a rebalancing that we’re seeing of organizations. From a hackajob perspective, certainly the UK and the US, January is looking like, across all of our major metrics, the highest for successful matches for new jobs posted for candidate sign ups across the last kind of 14 or 15 months. So certainly, a positive start from the year, from a job posting perspective. And then when we think about the, I suppose that interplay and it’s largely in Big Tech. Big Tech has been hiring in huge numbers over a sustained period of time, seeing revenue growth of typical organizations, Footsie listed, Nasdaq listed companies would have dreamt of seeing the kind of percentage growth which you saw within Big Tech. And with that followed big waves of hiring and this kind of ambition to work for one of those organizations, kind of subsequent redundancies as painful as they are for the individuals involved, are only a fraction of those overall hiring numbers for those organizations over the past kind of 12 to 24 months.
So net-net, if you look at the US kind of tech job growth is actually still increasing year on year. But yeah, there’s certainly a slowing of demand or there was a slowing of demand in the past year to the kind of frenetic levels which it was at before. So again, I think part of it is resettling post COVID. Part of it is also a resettling in tech from truly disparate levels of supply and demand which still exist, but just not quite to that same frenetic pace in the past year. But we’re certainly seeing that change in the first month of this year.
Matt: And I think the other story behind the headlines is it’s not just big tech companies that hire tech people, is it? It’s everyone.
Sam: Yeah, exactly. We were in conversations this week. There are a number of organizations that are adding 2000 to 3000 new technology roles and they’re not tech first organizations. There’s tremendous growth in the public sector in both the UK and the US when we think about technology roles. Big growth in defense, in gaming companies, in Fintech organizations, in kind of traditional banking. Launch of Chase in the UK is a great example of that. So yeah, I think the news, the story grabbing headlines have been focused on Big Tech, which I think puts a bit of a lens on the industry as a whole. Probably one of the other bigger kind of macroeconomic shifts that we’re going to see is almost half of the world’s population are going to election this year and we’re going to see a real change in one way or another. But the three biggest technology markets in Europe, India, and the US all going to election and obviously there’s a lot of migration between those territories in particular for technical talent, and I think that’s going to really change that balance as well. So yes, it’s certainly going to be an interesting year coming in as we’re looking ahead.
Matt: Absolutely. I think one of the things that obviously is true is that any kind of reduction in demand for talent is always going to impact TA. And we saw a couple of years after the pandemic that TA hiring was probably on par with tech hiring in terms of the amount of people who were coming that companies were looking for. But in the last year or so, it’s been a pretty tough time for many TA leaders across the board, really, but particularly those attached to tech companies. How do you think they should be looking to position themselves and their teams in their businesses moving forward?
Sam: Yeah. I think I’ll kind of touch on one other point and then come to that, because you mentioned TA leaders, particularly in technology businesses. I think the one other kind of major change in the past year or so is the kind of VC funding, private equity market into technology businesses and record numbers of investment, and then subsequently really tailing off last year in terms of the volume invested. And what we’re seeing as a shift in kind of fast-growing startups is this growth at all cost mentality is certainly switching to much more sustainable growth, and in part that has then impacted TA leaders that are working within this kind of fast-growing businesses. I think the challenge, and this is an aggregated view of TA leaders that I’m speaking to, as opposed to just my own opinion. But the challenge that TA leaders have is, like you say, “Whenever there’s a macroeconomic or any form of uncertainty, it swings in either direction.”
So COVID, obviously it was a really difficult time for TA leaders and then for that post period, like you say, more in demand than software developers. And then subsequently in this period which we’re seeing now, many great leaders are sitting on the bench, as it were. I think we’ve still seen some great movements in the start of January, lots and lots of leaders which I know in my network are entering into new positions. But I think the bigger challenge and the bigger kind of press back to the industry as a whole is what’s the commercial impact of a TA function? How are we contributing to organizational goals so that we can add a little bit more of a buffer when we think about TA capacity just being directly aligned to requisitions. And we think about the long-term tenure and impact of TA as a function on the overall business, which I think is the go, you know, to really safeguard individuals and their teams within these kinds of periods of lower hiring.
Matt: What do you see the key areas where TA is creating that monetary value for the business.
Sam: So, I’d say something which is fairly ubiquitous and maybe we don’t cover this enough as functions or as an industry, is the operational expenditure and time savings within organizations. So that’s not just, “Hey, we’ve implemented this tool and we’ve saved our recruiters sourcing time, etc.” Thinking about it more broadly, you’ve noticed that there is a problem in your process and you’ve changed your hiring process to reduce the amount of time that hiring managers are involved, while still not negatively impacting some of those key metrics which you’ll be running your organization against. And thinking about those hours saved either particularly in the context of a product or technology team, which is by and large in most organizations, some of your most expensive teams on a per person basis, saving thousands and thousands of hours by changing your recruitment process is a significant multimillion pound cost saving to the business.
But are we replaying that back or are we playing back the data that sits alongside that which might be hiring manager experience, candidate experience, recruiter experience along the process, and our typical kind of conversion metrics and funnel metrics when we think about that? Or are leaders able to dovetail and think, “Well alongside this, we’ve actually saved net this many thousand hours.” So, I think that’s a really interesting one which is pretty ubiquitous. Some of the other ones which are clearer are those revenue generating individuals and it’s that empty chair cost and ascertaining the impact of it. Certainly, when you’re looking at day rate contractors, metrics like time to hire all of a sudden have a compounding effect on your ability to generate revenue for your organization. They also avoid revenue leakage and slippage when you’re unable to deliver on client projects. The same could be said for kind of go to market teams when you think about sales, marketing, etc., where there is a clear revenue number attached to individuals that you are hiring into the organization already.
It’s more subtle and more difficult for organizations to do when we’re thinking about non-revenue focused individuals. But certainly, there are organizations out there that are building pretty compelling cases and being able to replay that business impact back to the organization. So, they’re like some examples, but there’s tons of other areas as well. But traditionally, where are we anchored as an industry? We’re anchored on cost avoidance; we’re anchored on savings versus recruitment agency as opposed to business impact. And invariably, I think the pressure from CFOs back down into HR and then down into TA is, well, we’re now at 2% agency reliance or 5% agency reliance and we’ve already saved these millions of pounds. So, what’s next? What is the next kind of piece?
Matt: Yeah. I think that’s a really good point because certainly the story over the last 10 years is cost avoidance, but things that we move in a very different time now. And I suppose the challenge for people and leaders is how do they communicate that to their business? I mean, how do you take that data and make it into that compelling case that proves the proactive value of what they do?
Sam: So, I think find somebody difficult [chuckles] within the organization. Find somebody that typically challenges your data from a kind of finance background and think about presenting things back in a spreadsheet as opposed to a PowerPoint presentation. A great phrase stolen from [unintelligible 00:15:01] many years ago on challenging TA leaders in a room that I was in. And I think that is the palpable difference. So can you build, I suppose a foundational set of data that is easy to interrogate and stands up to scrutiny that says, “Hey, by impacting this metric as part of the recruitment funnel, we’re able to save hire managers X amount of time, which to the organization costs this much as a landed cost. And here’s the multiple and here’s the impact over the next three years if we continue to do this process, this is the revenue impact which we’ll be able to have on the organization.
Of course, alongside that, there’s probably then layers of variation right beyond the foundation where you can say there’s auxiliary benefits, but that’s where it becomes harder to attribute it directly to TA. So, does that impact tenure? Does that impact employee satisfaction? Does it impact the speed at which you’re able to roll out a new product? There’s probably impact there. There’re probably things which you can point to, but there maybe not the grounding of being able to replay back that commercial value. And I think there’s probably a process where you’re building that foundation, having people interrogate it, get it to a place where it stands to scrutiny and then adding some of those layers on beyond it. And it might just be things to point to. It might be things you can make tangible.
Matt: What other ways can TA be strategic in 2024?
Sam: I think some of the best functions which I’ve seen over the years and certainly past in 100 days sitting around those roundtables is understanding the business objectives, understanding those problems and coming back with a range of solutions. It’s not just thinking about hiring, putting bums on seats. Well, what are the skills that we need in order to reach those business objectives and actually attaining those skills might not be as simple as adding 500 permanent headcount in these three locations. It might be a blend of building talent for tomorrow and an early careers program. Because you know you’re going to have a sustained need for a particular type of talent in that region. It might be bringing in a third party, it might be offshoring, it might be onshoring.
So, there’s that kind of broader strategic lens where it’s almost scenario based, where this is the cost implication, these are the benefits, these are the values. And this is what we think the bottom-line impact can be on delivering on skills as opposed to headcount. And then the secondary piece is then, well, all of those operational elements that come alongside it, all of the metrics that drive to deliver those scenarios. How can you play each one of those individually and talk about incremental operational expenditure impact plus any kind of broader revenue impact which you can drive to it? So yeah, I think tying yourselves to business objectives is critical. And then thinking about something like headcount costs within ordinary organization is often overlooked of people being brought in at the right salary have the right skills.
And there’s particularly in tech, you’ve got this opportunity to build networks as a recruiter in areas like cybersecurity and AI and ML, where there is still incredibly high volumes of demand versus supply, it’s enormous. And if you’ve got a recruiter who is only hiring one to two people per year within your team in one of these critical AI, ML roles, that’s transformational for an organization. If you don’t have roles that you’re expecting as part of your hiring plan for 12 months or 18 months, well, what’s really going to be your ramp time for somebody to understand the intricacies of your internal workings, plus have a network of people that they can go and reach out to and build and foster those communities. So even down to the value of an individual talent acquisition partner within an organization, we should be thinking much more longer term and also evidencing that value and impact, and thinking about the cost impact to an organization of losing somebody who has those intrinsic networks as well?
Matt: You obviously work with a lot of people and talk to a lot of TA leaders who’s doing this well, which clients do you have who are kind of really excelling at this and sort of really moving their team and their business forward?
Sam: So, I think as a general rule of thumb, IT service consultancies tend to be at the kind of more mature end of evidencing business impact. And part of that is just a natural ability to do so because they have revenue-generating employees that are directly tied to their hiring goals. And the revenue of the org is directly tied to hiring performance. So, I think as a general rule of thumb, that’s a really good grouping of organizations that are doing this very, very well. When we think about public sector, we’re often thinking about savings versus contractor spend by bringing permanent headcount in as a big government directive more broadly. So again, pretty tangible and easy to replay that back. If I think more broadly, the kind of leaders who I’ve always seen do well within this space, Dave Vinton, now at BP looking at, I suppose, big structural offshore wind projects that again, have that kind of natural inclination because of the timeframe to build and deploy, that you can have better forward planning, but also an elite leader and able to structure scenarios and replay that back to the business at that seat at the table level.
So, I think that’s certainly some good examples of organizations that are doing this well, and there is a common theme across them. The common theme is there’s something tangible which you can attach yourself to, I think, where it becomes more difficult to do so as an organization. If you’re in an industry that has big fluctuations in hiring, and maybe you’re hiring lots of entry level roles, it can be more difficult to kind of ascertain this commercial impact back to the business because there’s so many other component parts that impact revenue.
Matt: Final question, what do you think the future looks like? What kind of impact is AI going to have on all of this, and hiring in particular?
Sam: Yeah, huge question to finish on. Where could we start? We could get 40 follow-on questions, [chuckles] couldn’t we? I think. When it was truly a generational moment 18 months ago, when new kind of waves of large language models were coming to the fore, particularly with OpenAI and ChatGPT is the one that kind of captured hearts and minds of individuals and businesses alike. And the subsequent rollout of technology based on large language models like that and from other providers has been significant and certainly something which we are working with at hackajob today. And I think as a TA industry, we often spend a lot of time thinking about where can new technologies be used and applied to impact the hiring process. And of course, there’s wide ranging uses for generative AI.
And again, we could run over a whole another podcast thinking about the impact from a hiring perspective from an organization’s point of view. I think what’s more pronounced and certainly what we’re seeing, and this is across the board, not just in tech roles, but it’s more prevalent, it feels, in tech roles, is AI in the hands of candidates. And there’s hundreds of tools out there that are able to automatically apply for roles at pace, creating custom cover letters, custom CVs, and applying to 400 jobs in a matter of minutes across the web. If we think about the big job aggregators that have been pushing largely towards this cost per application model, this is a compounding effect of a preexisting trend of increasing volumes of applications and not necessarily increasing the relevance with those hundreds and hundreds of tools which are out there now.
It’s now got to the stage from a candidate’s perspective that there’s now a wave of candidate focused ATS’ because candidates are in so many processes, three, four, five, six hundred processes, that they need autoresponders to go back when recruiter is saying, “Hey, we’d like to invite you to interview, they’ve got it synced to their calendar so that they can find a time within their diary and they’ve got their own Kanban dashboard where you think from left to right, I mean, 500 applied, 400 at first stage. Well, if you had that high hit rate, you probably would take a few, but 500 applied, 50 at first interview stage, three at second interview stage, etc. Again, to think about the day-to-day impact, we’re talking about TA teams that are probably working with reduced teams. They’re probably asked to be doing more with less.
And then you kind of couple that together with the desire to find the right candidate and your kind of want to not ghost candidates. We see so much stuff on LinkedIn about candidate ghosting and wanting to go back to people. Do we need to change the social contract between candidates and employers here? Because if candidates are spending no time at all in applying for jobs and they’re doing it via automation, is there still the requirement for employers? Should you still be having an SLA? Is that limiting your ability to have the broadest possible pool of talent? So, I think that’s probably the bigger challenge is actually it’s enabling candidates to apply en masse, which is causing an operational impact, but it’s also going to lead to increasing standardization. We’re going to see more and more CVs looking more and more similar, more language in emails and in social posts and across the board. Anything that’s written is going to have increasing standardization.
So yeah, there’s definitely those challenges there. And then you get into all of the kind of crazy horror stories which I don’t think are as far spread as they might otherwise seem to be, where you’ve got candidates with a live feed of speech to text that’s putting questions in, that’s then feeding you stuff while you’re on a video interview to give you the right answer. Honestly, if a candidate has gone to that level of ingenuity to nail your interview, you probably want to hire them anyway.
[laughter]
I don’t see that being too much of a widespread issue, but that’s certainly like the fear-mongering stories from the candidate side of do you even know they’re real? Is it even them doing it, etc. But yeah, there’s definitely a lot of challenges there. And then, as I say, on the employer side, we could talk for days right on bringing AI into your process and where you can and the ethics of it, etc.
Matt: Sam, thank you very much for joining me.
Sam: Awesome. Thanks for having us on, Matt.
Matt: My thanks to Sam. You can follow this podcast on 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.
