Transcript
Mark:
Welcome to PeopleTech, the podcast of the HCM Technology Report, I’m Mark Feffer.
Mark:
My guest today is Jim Buchanan, the CEO of Cadient. They’re a recruiting software platform that offers solutions like high volume hiring and an ATS, and they spend a lot of time studying the behaviors of the workforce. We’re going to talk about diversity, today’s labor market, and more on this edition of PeopleTech.
Mark:
Hey, Jim, it’s nice to see you again. It’s been about five months since you folks launched Cadient HireNow.
Jim:
Right.
Mark:
And I was wondering, how’s that been doing? Have there been any surprises with it, or is it just going the way you thought it would?
Jim:
It’s pretty much going the way we thought it would, Mark. It’s in an environment or a period of time where people are really scrambling to make things work in their talent acquisition program, and one of the big things is there’s a shortage of candidates across the board and you have to move very quickly, more quickly than people are accustomed to. So I think HireNow was the right tool for the right time. And people can move as quickly as they want to move in terms of getting a candidate hired, onboarded, making them an employee, so we’ve got a good reaction to it. I think people appreciate it.
Jim:
And there is a mindset that has to change that, okay, we have to do things more quickly than we have done in the past. And the mindset and the psychology is harder to change than the technology, but the tools are there, and people are speeding up the hiring process, and I think it’s helping their business.
Mark:
It struck me that there’s a fair number of companies who are launching new products into this market, which in some ways seems counterintuitive. Is it, or was it just the right tool for the right time because, specifically, something’s going on?
Jim:
I think what we’ve seen and what we do as a company and what people in this industry do, it is a constant evolution of trying to address needs. Needs generally change over time, but they have radically changed during this pandemic period that we’ve come into. And now we’re hopefully on the backside of a pandemic, but we still have an economic situation that has uncertainty around it. So the processes have changed, they will continue to change, and we and other people that work in the talent acquisition industry, we just try to keep up with that and try to provide what’s needed at the moment.
Jim:
HireNow was certainly something that was necessary to speed up the hiring process because you just got left behind. If you take weeks or even a month to make a hire, you’re going to get left behind. So you have to have a way to do it more quickly, and I think everybody’s trying to address that issue along with other issues, like diversity, and we’re one of those players that try to provide the right tool for the right time.
Mark:
I should have asked you this before, but could you give me just a brief description of HireNow, what it does and how it does it?
Jim:
Yeah, HireNow is a pre-configured tool that allows you to just do the hiring process very quickly. So when you get an applicant, we have structured HireNow so that you can evaluate the applicant very quickly using some of our screening tools. It’s very easy for the hiring manager to kick off the hiring process. We’ve streamlined a lot of the approvals that a hiring manager needs to go through. You can kick off the selection criteria that you want to use very quickly, whether it’s an assessment or a background check or something like that, and you can get the person onboarded quickly. So you can send out an offer letter very, very quickly, but the offer letter is typically a contingent on passing certain things that we’ll have to do later; but let’s get you in agreement that you want to work for us, and we want you to work for us, and then there are some conditional things in the offer letter that you can do later.
Jim:
But at least that person, that candidate, now feels part of our company because they have received an offer. They’ve had a good experience so far, “Wow, that was quick, I’ve already got an offer here and other people are still going through the evaluation process,” so that’s what it’s intended to do. It gives you a chance to engage very quickly in a very meaningful way, and hopefully then, if you want to do a background check later or some other kind of assessment, you can always do that, but you’ve established a relationship with that candidate. They’re not waiting on you to do something.
Mark:
Now the landscape of work is changing. I mean, you hear about the Great Resignation, hybrid work, and all of that kind of thing, but many of those issues really apply to office workers or knowledge workers. So what’s happening with hourly employees, and retail, for example, or hospitality? And why are they different in the first place?
Jim:
Well, as you mentioned, if you’re talking about a retail establishment, healthcare, even many business services, like security services or something like that, you don’t work from home in that kind of environment. You can’t be a stock clerk or sales associate or work as a security guard and do it from home, so remote working is kind of out of the question for a lot of those kinds of jobs.
Jim:
So what we have seen is, first of all, there’s been, as you mentioned, the Great Resignation. There has been, I’ll call it, an upheaval in that market. You’ve had a lot of people who reconsidered what do they want to do for a career. And I have a job, maybe I have a job as a retail sales associate, and I just stopped to think, is that really what I want to do? And maybe the store that that person worked at cut back on hours, or maybe they even closed for some period of time, and that gave people the opportunity to think about and plan for their future in a way that probably they haven’t done before.
Jim:
So we’ve seen a lot of people who just want to change careers and do things differently, so they’re applying for different jobs in different industries that they may not have thought about previously. So there is a lot of churn within even… Those industries that have a lot of hourly workers, we’re seeing a lot of churn there. Turnover rates have gone up in many cases. Application rates have gone down pretty much across the board. But what’s happening is, if you combine that with what job boards have done, job boards have made it easier and easier to apply for jobs, so that’s a good thing for the candidate.
Jim:
When a candidate goes to a job board, you create a profile, you could apply for a dozen jobs at the same time, essentially. And they’re serving those jobs up to you, “You might be interested in this or that,” and they’re in different various industries. So as an employer, let’s say I’m a retail company. I got an application in from you as a candidate and I think you’re my candidate, you’re applying to me to be your employer. But what has happened is you’re also applying to 10 or 12 other people at the same time, so that’s where the speed comes in.
Jim:
The days are gone where, “I just think I want to work at your location, I’m applying to you and I’m not applying to anybody else, and I’m going to wait and see what happens. I really want to work for you. I want to wait and see how you’re going to respond,” that doesn’t happen anymore. You’re going to get a response from somebody, and whoever can do it most efficiently and quickly is going to be the winner in that game. I call them first responders. Whoever is the first responder is got a good chance to win because, “You got back to me right away. I’m thinking about you now because I’ve engaged with you in some way,” so it’s different.
Mark:
One of the things I’m wondering is, you talk with a lot of employers, executives and managers and so forth, what are you hearing from them? I mean, what are their hot buttons right now about talent acquisition?
Jim:
The number one thing, Mark, is, “I can’t get enough applicants.” Is it true? I have debates about it because somebody who was getting 100 applicants for every… We have some clients who, pre-pandemic, they got 130 applicants for every one that they hired. These are big brand names, these are household names that people just almost wake up thinking about, “I’d like to work there,” so they get a lot of applicants. Now, they might be getting, instead of 100 or 130, they might be getting 50 or 60. So they think, “We don’t have enough applicants, because we used to get twice this many, or 40% more than what we’re getting today.” So it’s a little bit of a concern on their part that, “Geez, I don’t have 130 to choose from anymore, I’ve only got 50 to choose from.” Well, that’s a lot. There are good candidates in that 50 that you need to get to right away. And yes, I’m sorry, you don’t get 130, but you probably didn’t look at all 130 anyway previously, so it really shouldn’t impact your overall program.
Jim:
However, having said that ,there are companies that don’t have as good a brand, and they do have a challenge getting candidates. And maybe they used to get six candidates for every one they hired, and now they’re getting two or three, and they can’t afford to be as selective as they might have been previously. So that is the number one complaint or need that I hear from people, “We can’t get enough applicants to fill the jobs that we have.”
Jim:
The second thing would be, “People don’t show up. They don’t show up for interviews. Maybe I onboard a person and they just don’t come to work on the first day that they’re scheduled to come to work,” and I think all of that speaks to the competition that’s out there. And every day in the news, you hear about the fact that we have more job openings than we have unemployed people, and that’s true, we’ve got 11 million or so job postings that are advertised every day; we’ve got about three and a half to 4 million people that are unemployed.
Jim:
So it’s the applicant in the driver’s seat and the employer trying to catch up, but it’s really a tale of the haves and the have-nots. The haves still have plenty of applicants to choose from, the have-nots are struggling in terms of applicant flow, and that’s a sourcing issue. That’s going to new places to get more candidates and expanding your reach, and it’s hard to do. It’s hard for these companies that don’t have a brand that people are familiar with to attract good candidates.
Mark:
Now, when you think about the industries you cover, hospitality, retail, and healthcare, first of all, do those dynamics you were just talking about apply to those particular industries, or do you think what you were talking about is a profile that’s hitting most industries?
Jim:
Yeah, there is a dichotomy, and it really goes back to the brand and the familiarity with the brand and the reputation that a company has. A lot of people want to work at Costco, a lot of people want to work at PetSmart, and so they get a lot of applicants. They have earned it; they’ve built up a great company, they’ve got a good reputation, and they have done things very well, and people want to be part of it, so they enjoy that. As I said, they don’t get as many as they used to, but they still get enough to get their work done. But when you take a small boutique retailer or a local restaurant or somebody who the net that they cast to get applicants is not as wide, or a lot of regional healthcare facilities who have specialized needs, maybe in nursing or nursing assistants or something like that, it’s just very difficult for them to get as many applicants as they need.
Jim:
If we look at the applicant to hire ratio for all the companies that we work with, at the high end, it’s around 100 to one, at the low end, it might be three to one. And you’re going to find those companies, like healthcare, smaller healthcare facilities, local restaurants, local grocery stores that only have a few locations, you’re going to find them at the low end. And they’re the ones that are really having a difficult time, in this environment, trying to attract the people. If you got a good brand and a good name and a well known brand, you’re going to get candidates.
Jim:
But you got to also remember that those candidates are not just applying to you, they’re applying to a variety of companies at the same time. And one of the barriers that has collapsed during this pandemic is that if I worked in a certain industry, I thought, “That’s my career. I’m going to stay in that industry and I’m going to apply to… I may look for another job, but I’m sticking within that industry.” That barrier’s gone now. People are applying at industries that they’ve never worked in before and companies are welcoming those applications, “You don’t have the experience, but we have good training programs and we can teach you what you need to know to do that job,” so it’s a more wide open field right now.
Mark:
Now, do you see yourself getting into any other industries fairly soon? There’s other high volume sectors out there.
Jim:
Yeah, we do. I mean, there are opportunities in… We don’t have a lot of clients in the area of manufacturing. There are other hospitality areas that we can get into, we don’t do much with travel. We are into hotels, restaurants, those kinds of things. Basically, any… Construction would be another one. Any industry that has a high contingent of hourly workers is a good place for us because, although we have a solution that can deal, we have a module for salaried or requisition based hiring, and also a module for hourly or non-req, where you basically work with applications. And we have clients who use both, but the vast majority of our applications that we process are on the hourly side. So that’s really where our primary strengths and differentiators are, on the hourly side, so we tend to stick with those industries.
Jim:
Right now, it’s retail, it’s healthcare, it’s business services. Those three make up about 70% of our revenue today. We do a little in hospitality, we have some government clients, state and local government clients, and we do some things in the area of manufacturing, but there is head room for growth for us in some of these other industries.
Mark:
Sometimes you hear about a disconnect between executives and employees. For instance, “Well, they have different priorities,” for one thing, or, “They have different goals,” for another. Is that ever a challenge to you and to the whole talent acquisition process?
Jim:
Well, it does affect us, and I’m recalling a conversation I had with someone that will remain nameless, not one of our clients actually, who said, “Look at all the money that we spend at the executive level. And I think that some of that money should be diverted to talent acquisition. And if I had a tenth of what that team makes, I could have a much better talent acquisition program.” So I think there is a situation where people feel like they need to do more to make their talent acquisition program. They may not be getting the funding that they desire, and they see other areas that get funded at a higher rate than what they do. And they realize that if you’re a retail establishment, the people that interact with those customers is one of the most important connections that you can make for your business. Because if you don’t do a good job with that customer, they’re not coming back to your store, so that is a really important thing to take care of.
Jim:
But here is where I think the problem lies, and that is that HR people in general and people that are in charge of these talent acquisition programs, they don’t do a good job generally of translating what they do into the outcome for the business. What’s the return on investment? If I do something in the talent acquisition program, what is it going to produce for the business? And let me quantify that for you and show you that it’s actually a good investment to make, and that will have a better outcome on the business. For example, if I can reduce turnover by 20 points on an annual basis, that’s a significant savings to the business, not only in terms of replacement costs, I don’t have to hire as many people.
Jim:
And from our studies and talking to people, the average replacement cost is about $2,500 per employee, even for an hourly employee. I’ve had some transportation companies tell me that, “No, that’s way low. It’s more like $20,000 to replace a long haul driver, because a lot of bad things can happen when a long haul driver terminates. They might walk away from a load of pharmaceutical equipment and we got to go find that. We know where the truck is, but we don’t have a driver within 300 miles of that truck, we got to go get that. Or the truck can be damaged, or whatever,” not to mention that your better customer experience translates to increased revenue.
Jim:
So if I can change my talent acquisition program on the front end so that I’m making better selections, I’m making more quality hires and they’re going to stay longer on the job and be more productive and reduce turnover, that’s a return on that investment. And we haven’t done a good job in the HR industry of communicating that or quantifying that to executives in a company so that they can see this as an investment. It’s mainly, I would say… I’m going to generalize here, so forgive me for that, but I think in general, HR is viewed as… It’s a compliance area. It’s a cost center that will keep us out of trouble, that will make sure that we’re in compliance with everything, but it really doesn’t have an impact on our business overall.
Jim:
But it does, it has a huge impact, especially in a situation like retail where that person is interacting with your customer and giving them the impression, and basically formulating that customer experience as to whether they’re going to come back. Are they going to go home and write a negative review on a social media site? It’s crucial that person be the right person in that job, and there is a financial benefit to getting the right person. And we try to quantify that for all of our clients, our prospects, to say, “If you can reduce your turnover by 20 points, you can save millions of dollars to your company,” that’s the way you have to present this.
Jim:
And as you know, Mark, we have done a lot around predictive analytics. We have a product called Decision Point that we offer our clients, and we have a number of clients using it, that you can use machine learning and predict which candidates are going to be longer term employees. And that’s a big financial savings for your business, it’s a big improvement to your business, and that’s the kind of message you should be taking to your executive level.
Jim:
So when I hear people talking about, “I don’t get enough funding for my program,” well, you don’t deserve more funding unless you can make the case that you’re going to get a return on that additional funding. So that’s one of the things that we work with our clients and I talk to a lot of prospects about. And I think we’re getting better at that, but we still have a ways to go.
Mark:
Jim, let’s talk about diversity and inclusion for a bit. You’re going to be launching a diversity hiring dashboard soon, and this is pretty relevant right now. Can you talk about it? Tell me about it?
Jim:
Yes, as you know, Mark, we have a product called Decision Point, which is a predictive analytics product to help people prioritize which candidates they should make the highest priority and which ones they should go after first. And Decision Point was built based on which candidate will become the highest quality hire, be the longest tenured, most productive? And as we worked through that process, we realized that that’s some great information that can be applied to diversity within an organization. And so with Decision Point, we don’t use any information that would be included in a diversity analysis. So we don’t look at age, we don’t look at gender, we don’t look at race, we don’t even look at the name of a candidate. So for Decision Point to make a recommendation, it’s a completely blind application. We don’t know anything about that candidate except their work experience, their education, those kinds of things.
Jim:
But after the fact, you can add the diversity data back in. You can add back in age, gender, race, and you can start to see a picture of diversity in your company. So when you break it down, I like to put it into three buckets. The first bucket is, are you getting diverse candidates for the jobs in your company? And just about any company can tell you that. And there’s a lot of focus on that recently, people are doing their best to get a diversity of candidates; and if they’re not, then they’re trying to fix that. They’re trying to go to different job boards or different places to increase the diversity of applicants.
Jim:
So this dashboard, the diversity dashboard, will tell you, what’s my mix of candidates, and is it a diverse set of candidates? The second question is, if you’re getting enough diverse candidates, are they qualified to do the job that you have, or the job that they’re applying to? That’s the piece that’s missing, generally. Because without a tool like Decision Point to evaluate all the candidates, your hiring managers or your recruiters are not going to be able to say, “You know what? We do have a good set of diverse candidates who are qualified to do these jobs.” That piece is missing, so that’s what we add with the Decision Point tool.
Jim:
So if you follow the chain, yes, I’ve got enough diverse candidates. Yes, they’re as qualified across the board. The third part is, am I actually hiring those qualified diverse candidates? And in the work that we’ve done here with several clients, that’s where it generally falls apart. So if I back up a second and talk about our business at Cadient, we deal a lot with the hourly workforce for our clients, so it does tend to be a very diverse set of applicants. And what we’ve found is that, generally, all the applicants are qualified in a proportionate way. If I get X percent minority candidates, just about X percent of those minority candidates are qualified, just like the Y percent of majority candidates, so we don’t see a big drop off there. What we do see is that we’re not hiring at the same rate of qualified candidates, and that’s something that we need to fix.
Jim:
So what I love about this dashboard that we have created is that it’s very prescripted. If you take a retailer, a national retailer, all of your information is in this dashboard by location or by store. So you can look at all the stores to say, “Okay, where are the problem? Where do the problems exist?” In any of those three buckets. I might not be getting enough diverse candidates in my store in New York, let’s say. Okay, I know what to do now. I know that I need to get more diverse candidates. Maybe they’re not as qualified, maybe minority candidates are not as qualified in that New York location. Okay, I need to do something about that. That’s a sourcing problem. I need to get a different source. If I have the applicants and they are qualified and I’m not hiring them, that’s a hiring problem, that’s a selection problem by the managers in those stores, and I know that I can address that.
Jim:
So we’ve found that, across the companies that we’ve analyzed, it tends to be your typical 80/20 problem. 80% of your shortfall, of whatever your diversity goal is, 80% of that can be remedied by working with 20% of your locations. It’s really a fascinating process. And what I love about it, it’s a prescription for diversity hiring, how to hire a diverse workforce, it provides a prescriptive path. There’s a lot more to equity and inclusion and diversity as well, but if you want to achieve goals in diversity, equity, and inclusion, you have to start with hiring a diverse workforce. You can’t be diverse if you don’t hire in a diverse way.
Jim:
So we’re very excited about this, we’re working with some of our current clients on rolling it out in their organizations, and I think it’s going to be a fantastic tool for just about everybody today. Certainly, everyone that we work with has made DE&I a priority for their company, and good for them for doing that. And we have really helped them. I think this is a tool that will help them do something prescriptive, because a lot of the programs that you see in DE&I are just… They identify problems, but they don’t give you a roadmap on how to fix them; and that’s what we’re all about. So we work with our clients on this, but this, I think, as we’ve explained to you, Mark, that this Decision Point and now this diversity dashboard has been developed to work with any ATS, so that no matter who you use in your ATS program, you can get the benefit of this. So it’s a fantastic tool, I’d love to show it to you sometime, and it’s really powerful.
Mark:
Yeah, I’d love to see it. Well, Jim, thank you again.
Jim:
All right, thanks, Mark.
Mark:
My guest today has been Jim Buchanan, the CEO of Cadient, and this has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication of RecruitingDaily. We’re also a part of Evergreen Podcasts. To see all of their programs, visit www.evergreenpodcasts.com. And to keep up with HR technology, visit the HCM Technology Report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com, I’m Mark Feffer.
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