The organisations genuinely driving AI change in talent all have one thing in common: alignment with the C-suite. Decoding the C-Suite is a five part miniseries from Recruiting Future exploring how leadership really thinks about AI. Recorded over one day with the leadership team at SmartRecruiters, seven months into their acquisition by SAP, the series unpacks AI through five lenses: the thesis, the people, the money, the product and the market. If you want to understand the conversations happening around your own leadership table, and how to win them, this series is for you.
In the opening episode, the tables are turned as SmartRecruiters’ Allyn Bailey interviews Matt on the future of talent acquisition. Matt shares his honest assessment of the outdated stories the industry keeps telling itself, why mental models matter more than systems, how candidates are already breaking recruiting, and a prediction about AI agents talking to AI agents that he’s prepared to be held to. It sets the agenda for the four leadership conversations that follow.
Key Takeaways
- AI is not just another technology that makes recruiting faster or more efficient; it makes things possible that were never possible before, and the story is much bigger than efficiency.
- The biggest danger with AI is applying it to processes that were already broken; everything needs to be stripped back and redesigned before you automate it.
- Change keeps failing in recruitment because we change behaviours and systems without ever challenging the mental models underneath, so everything springs back to how it was.
- People are quietly automating big parts of their jobs and staying silent for fear of the consequences; AI adoption is a psychological safety problem before it is a technical one.
- The real AI innovation in hiring is coming from candidates, not employers, and candidates are already breaking recruiting.
- We are heading for a world where candidates' AI agents talk to employers' AI agents, and the question becomes at what point the humans actually speak to each other.
Transcript
Matt Alder: [0:18] Hi there, and welcome to Decoding the C-Suite, a five-part mini-series from Recruiting Future about how leadership really thinks about AI. Over hundreds of conversations with talent leaders, I've noticed a clear pattern. The organisations genuinely driving AI change in TA and HR all have one thing in common, and it isn't the technology they've bought. It's alignment with their C-Suite. When the leadership team is behind the change, the investment, the urgency, and the permission to experiment all follow. Without that backing, even the best strategies stall in a business case that never gets quite signed off. So if you want to drive change in your organisation, you need to understand how the people around the top table actually think. From the CFO weighing the numbers to the CMO reading the market, and the product and people leaders who all see AI through the lens of their own function. And that is what this series is about.
Matt Alder: [1:23] A few weeks back, I spent the day in New York with the leadership team at SmartRecruiters, seven months on from their acquisition by SAP, and right in the middle of an AI transformation. It was a rare opportunity to sit down with five senior leaders from the same company, on the record, each talking candidly about AI from the perspective of their own role. Over the coming episodes, you'll hear a CFO explain why the economics of AI break 30 years of SaaS business models, a marketing leader on building trust in a market full of hype, a product design leader on how far ahead of her customers she can afford to be, and a people leader rethinking what an organisation actually is. Their answers will tell you a great deal about the conversations happening around your own leadership table and how to win them.
Matt Alder: [2:17] This first episode is a little bit different. The team actually turned the tables and interviewed me. What you're about to hear is my honest assessment of where AI is taking talent acquisition, the outdated stories our industry keeps telling itself, and a prediction about candidates and AI agents that I'm prepared to be held to. It sets out the questions that I'll be testing in every episode that follows. This is Decoding the C-Suite, Episode 1, The Thesis.
Allyn Bailey: [2:47] Matt, thank you. Thank you for flying all the way out here to New York City. I really appreciate it. I appreciate you spending the time and having the conversations with the team. It's really valuable time spent for us to be able to, one, talk a little bit about what's going on, but also thank you for letting me flip the script a little bit, because it's really valuable time for me and the team. Because, listen, you spend a lot of time talking to leaders and practitioners and people even outside our industry about what's going on. So I'd love to get your perspective on a couple of things.
Matt Alder: [3:20] Absolutely. Well, it's always great to be in New York and it's great to be answering questions rather than asking them for a change.
Allyn Bailey: [3:26] That's what you say now. Let's see what I can do to that. Anyway, no, I appreciate that. So let's start with this. You've interviewed thousands, I mean, literally thousands of people across this industry. I'm really curious from your perspective, what do you think are the outdated stories that people are still telling themselves?
Matt Alder: [3:47] I think there are lots of them. I think that we've been telling ourselves outdated stories about recruitment for hundreds of years. But from a technology perspective, I think there's still a sense that technology is something that makes things more efficient or makes things quicker or changes resource allocations. I don't think people are fully appreciating the transformational potential of this moment and where technology is taking us and how it's going to change everything. There is still a sense of looking at this as just another piece of technology development, and it'll make us faster and more efficient. The story is much, much bigger than that.
Allyn Bailey: [4:32] How much bigger? What else do you think is going to happen?
Matt Alder: [4:35] I think this is a really key point in the evolution of the whole people function. There's almost a kind of fork in the road here. AI just makes things possible that were never possible before. It has the opportunity to add a huge amount of value to the way that companies hire and retain and develop people, and probably solve a lot of the really stubborn problems that we've had for a really, really long time. On the flip side, if it isn't handled properly and doesn't live up to its potential, it could also make things a whole lot worse. So I think there's a real choice there, and it's important that people realise that and make that choice deliberately rather than it being made for them.
Allyn Bailey: [5:26] Yeah, I think that idea of making deliberate choices is a really important space. So if we're thinking about those sorts of deliberate choices, when you're advising and having deeper conversations with practitioners across the talent landscape, whether it be in talent acquisition, HR, or even business leaders in this space, what are the questions and spaces that you think they should be paying attention to?
Matt Alder: [5:51] I think that the biggest danger around this is you use AI and you apply it to processes that you already have. Processes that may have not worked properly for some time, processes that are just there because we have to work around things, because we can't do things in the way that we want to. Unfortunately, I've seen that happening, and it's happening quite a lot. Really, my advice to people would be to take a step back and look at exactly why they do things the way they do them. There are lots of questions that have never been asked, particularly about recruitment. Why do we do recruitment like this? Why do we have resumes? Why do we have interviews? Those are the questions that we need to ask right now, because everything needs to be stripped back so we can get a real sense of how we do this in a way that is a win for everyone. A win for the candidate, a win for the recruiter, a win for the employer and the hiring manager. That's only going to happen if you ask those questions and take that pause and look at everything, because you really need to redesign the way that you do things before you add AI to make them quicker or automate them or make them more intelligent or whatever that is.
Matt Alder: [7:06] So I think the advice is to ask questions that you've never asked before about why you do things. That's not just for recruiting, I think it's for everything, because we live in a world where we've just inherited ways of doing things over a really long period of time. They crystallise and they build up and they become the process and the way that things get done. The companies that are going to really win at this are the ones who ask those questions and say, why do we do that? Do we need to do that? Should we do that?
Allyn Bailey: [7:36] So this isn't a new concept, right? We've been talking about this for a while. The idea that we needed to reinvent from the ground up and have conversations about what this entire experience of work looks like, connecting people to work, being able to align people to the right work. These are questions that have been out there for a while. But transparently, I mean, I know I've seen it, I'm sure you have, it's not something that we've been able to answer as of yet, or people have been willing to go in and have that deeper conversation and dialogue. What do you think is preventing that?
Matt Alder: [8:11] I think it's really interesting. It's the layers on which this is built and how things change. When we talk about change in this area, the first thing is we look at people's behaviour. How are people behaving? If we can get them to behave in a different way, to do things in a different way, then that's going to be the change that we want. Then the people who go slightly deeper than that look at systems. So it's like, okay, actually the systems are driving the behaviour, so we're going to change the systems or change the way that it all works. And then it just kind of goes back to where it was and we don't get the change and nothing happens.
Matt Alder: [8:46] I think the reason for that is that behind all of this there are mental models about how work works, how work's supposed to be, how recruiting works. We never challenge those mental models. To give you an example, the pandemic was something that came along and did challenge those mental models. Suddenly people were working at home who didn't think they could possibly do their job at home. As time has gone on since the end of it, things suddenly start to spring back. It's like, no, no, we need people back in the office. A lot of that is because it's challenged those mental models and they're springing back into place.
Matt Alder: [9:24] So I think understanding that is really important. When it comes to work and it comes to jobs, everyone in the world who has a job has been through some kind of recruitment process and has expectations about what that includes and how it works. I think this is the real challenge. But if we understand that we're actually resetting the DNA of all of this, which is a very easy thing to say in a conversation like this, then we stand a much better chance of being successful. It's not just about changing the system. It's about changing the thought process and the models that sit behind it.
Allyn Bailey: [9:58] Yeah, I mean, I take that a step further. One of the conversations I was listening in on that you had was with Tom, our CFO, and you were talking about going and building a business case, having a conversation about the evolution of AI inside a company and talking about ROI in that space. So I think there's this interesting challenge, which is that to build a business case, you have to have some sort of assumption or something that you can validate, prove a hypothesis. And a lot of that is based on those mental models. So how do you see people starting to move past that? Are you seeing places where that's happening successfully, where people are able to position or have a conversation about how something may be different and move it forward?
Matt Alder: [10:44] Yes, there are two types of companies where I've seen it happen. First of all, startups who are starting from nothing and can build these things from the bottom up. But actually, if we're talking specifically about AI-driven change in talent, AI companies and technology companies, because it's just in their DNA to understand it. You see some of the things that companies like Zapier are doing. They're just reinventing it and enjoying the process, because they have the resources to do it, they have the safety to do it, and it's within the overall objective of their business.
Matt Alder: [11:23] So those two types of companies, definitely. With everyone else, I think what we miss sometimes with that whole business case thing is a vision, if that makes sense. I always say to people, what is your vision for talent or TA within your organisation? That sounds like something that's a bit out there and aspirational, but everything comes back from that. If you are able to present a business case tied to a vision that sounds achievable, that is going to bring value, then there's more chance of people getting behind that, because people get behind visions and directions. They don't get behind strategic plans and business cases. So having that vision is just really important.
Matt Alder: [12:09] As a discipline, our vision should be huge. We've got the opportunity to really reinvent the way hiring works. We haven't had that opportunity for hundreds of years, and I think we should step up and do that. You could look at the future and say the future is unpredictable and uncontrollable and anything can happen, and that's true. But at the same time, people make the future. If you have a vision and you're driving towards it, you're helping to shape the future around that, and that gives you more control. That's how people should be thinking.
Allyn Bailey: [12:47] Yeah, absolutely. So thinking about that vision, there's a lot of different perspectives in the market. As a practitioner or somebody who is trying to drive change inside your company, do you look towards academics? Do you look towards the vendors and the products that are coming out there, or should vendors and products be looking to the businesses to see what they're trying to do? What is that blend? Where do you see that going, what's been working well, and what do you think are some hot spots?
Matt Alder: [13:17] Yeah, it's interesting, because I think the problem is that there is just so much information. There is just so much going on, and it's very difficult to cut through that and really understand it. I think it's a mixture of all of those things, because you have to have a view on what the art of the possible is going to be. Talent and HR are in a reasonably lucky position, because change is difficult and it can be quite risk averse, and there are other parts of the enterprise that have already taken this shift and moved forward more than HR has. Even finance in a lot of respects is way out there when it comes to looking at the technology and rethinking how they do things. So you can look at the other parts of the enterprise and get a really good steer on what might be possible and what we can achieve with this.
Matt Alder: [14:17] I think it's a mixture of things, and a lot of it comes down to the individual as well, and how much they educate themselves and understand what's possible and have that degree of AI fluency, whatever that looks like, with everything changing every two weeks. That's a big part of it as well.
Allyn Bailey: [14:36] Yeah. Are there places or experiences that you're seeing out there with companies who are successfully being able to build that AI fluency within their organisations?
Matt Alder: [14:48] Yes, and a lot of it comes down to understanding what that actually is and what that looks like. The key part of this is safety. It's psychological safety, because this is a very strange situation where lots of people within an enterprise are using AI on a daily basis in their personal lives or in the software that they use at home, and their corporation might not have caught up with that yet. Actually, they're afraid to speak up. They're afraid to speak up because they might be seen as violating some kind of corporate policy. They're afraid to speak up because they might be doing themselves out of a job. I know a number of people who have automated big parts of their job under the radar and are not speaking up about it because they're fearing the consequence.
Matt Alder: [15:36] I think that organisations need to really wake up to that, because these are the people who actually help them drive change. So a lot of it is about making it safe to talk about AI. It's difficult in an environment where AI is constantly being used as an excuse to cut jobs and change things. So a lot of this is not even about technical ability. It's about safety.
Matt Alder: [15:59] A big part of this is risk, because this is risky. Things are changing. We don't know what works. The companies who will be successful are the ones who realise that and tolerate it, obviously within guardrails, because the only way to get through this is to actually learn from failure, learn from getting things wrong. For a lot of organisations, that's not in their culture, and it just has to be for them to navigate this.
Allyn Bailey: [16:28] Yeah, this risk question is a big question in this space. I mean, you don't need to discuss where and how, but listen, there's been enough lawsuits and a lot of government scrutiny around what's happening with people and people's data and how it's being leveraged and utilised. It's making a lot of companies anxious. It's hitting against that risk tolerance. Where do you think that's going for all of us?
Matt Alder: [16:52] It's an interesting one. When you dig into it, a lot of the cases and the things that have happened haven't even been resolved yet. They may not even be cases, so we don't know what's going on. But actually, having spoken to a lot of legal professionals around this, in many organisations the legal function is getting its head around this and getting ahead of it, and understanding that things change all the time. It's important to protect the business, but actually, if you stand still and do nothing, there's more risk in that than doing something.
Matt Alder: [17:27] I think it's a problem, though, and the biggest issue is the perception around all of this. It's almost the perception of legislation and risk that hasn't actually happened. It's going to be like this for a while, so it's going to have to be something that people find a way to navigate.
Allyn Bailey: [17:43] Right. So to the companies who are out there saying, okay, well, fine, I'm just going to wait until all the dust settles before I start diving into the world of AI, what would you tell them?
Matt Alder: [17:52] I mean, that's always the default stance with a lot of companies, and certainly a lot of HR functions. This time it's just not going to work, because you are going to be so far behind your competition and everything that happens. It's just not an option in this time of technology change. If we look at all the other technology changes that have come in that have affected business, they've all taken a lot longer. I remember I started working in the internet in 1999, and it wasn't until about 2003, 2004 that a lot of the changes actually really happened. With AI, while we're sitting here, they could have announced something that changes everything. It's just moving too quickly. The wait and see position that's served so many companies so well for so long just isn't going to work.
Allyn Bailey: [18:44] Yeah, it's not necessarily the way we can move forward. So, Matt, I'm going to really flip the script on you. We've had many chances over the years to sit down and chat with each other. Usually I will come off the cuff and say some wild thing that changes the world as we're going. So I'm going to pose one to you. What do you think is going to happen to the field of talent acquisition and HR in the next two years that we're not ready for?
Matt Alder: [19:13] It's already happening, and we're still not ready for it. What I mean by that is that the innovation in this space is coming from the candidate side. It's not coming from the employers, because they can't move quick enough. It's coming from the candidates, because the market the way it is at the moment, they're desperately looking for jobs. They want to stand out. They're using AI in lots of different ways to do that. They might be using some of the standard large language models that are out there to rewrite resumes. They might be using specialist software to bulk submit applications. Talent acquisition looks at that as a bit of a fad or a bit of grifting and doesn't take it very seriously. But I think that's where the innovation is going to come from, because they're the people who can move the fastest. Ultimately, the candidates are breaking recruiting. It's happening. It's already happening, and I think that's just going to continue.
Matt Alder: [20:09] Where are we going to get to? Here's a prediction for you. We can see if I'm right.
Allyn Bailey: [20:13] Okay, let's see where we are.
Matt Alder: [20:13] We're going to get to a point where there's a huge focus on employers having AI agents working in various areas of the employee lifecycle. The candidates are going to have their own agents, and the candidates' agents will end up talking to the employer's agents. That changes everything. It's just like, at what point do the humans talk to each other in that process? It's going to happen, and I don't think that employers are thinking about it, or they're not ready for it, or they're just not even considering it. We're already seeing aspects of it in how people discover opportunity and jobs. They're asking ChatGPT or Claude to find a job for them, and they're not going to job boards or using the things that employers have put in place. So I think candidates are setting the pace, and that is what drives change. That's what I don't think talent acquisition is ready for.
Allyn Bailey: [21:07] Yeah, it's like a full circle moment back to the mental model conversation.
Matt Alder: [21:10] Absolutely, yeah.
Allyn Bailey: [21:11] It's really pushing on all of those fundamentals of what we think this whole process of connecting people to jobs is all about.
Matt Alder: [21:17] Yeah, because the implications of that are huge. Your agent, your career agent, is effectively going to be making decisions for you on the type of jobs that you're good for, the way you can apply and all of those things. And it's like, how do you influence those decisions as an employer? So I think it's really interesting, and I think that's the direction we're going in.
Allyn Bailey: [21:38] Fascinating. So before I let you go, I know it's been a long day, but I have one last question for you. I sat here and I watched all of your conversations with all the executives across our team, and you asked every single person a really interesting question. You asked them, what does it take to really lead? What does leadership look like in this new age, in this new era? Why do you ask that question?
Matt Alder: [22:03] Because I was really interested in what they were going to say. If we think about everything that's changing, the skills that are important are different. But it also comes back to this whole idea of uncertainty and risk and safety for teams and for employees. Although a lot of that, as a couple of people said, doesn't change, because good leadership doesn't change, there are bits of it that amp up in this current environment. Embracing that, not being afraid, and really making your teams realise that is so important. I was just really interested in what people said and how they were thinking about it.
Allyn Bailey: [22:43] Thank you, Matt. Once again, I appreciate it, as always.
Matt Alder: [22:46] My pleasure. Thank you.
Matt Alder: [22:46] That was my conversation with Allyn Bailey at SmartRecruiters. In the next episode of this series, we start with the lens closest to home for most of the audience, the people. Lehua Stonebraker leads the people function at SmartRecruiters, and she makes an argument that genuinely made me stop and think, which is that the org chart as we know it is gone. We talk about psychological safety, fear, and what happens to organisations when the work itself starts to change. You can subscribe or follow wherever you listen to your podcasts, and I'll see you in episode two.
