Podcast: Clovers AI CEO Doug Leonard on How Tech Improves Hiring

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Transcript

Mark Feffer:

Welcome to People Tech, the podcast of the HCM Technology Report. I’m Mark Feffer. Today I’m joined by Doug Leonard, the CEO of Clovers AI. Their intelligent interview solution helps recruit recruiters and hiring teams collaborate on hiring decisions, reduce unconscious bias and take advantage of real time interview feedback. We’ll talk about the platform and how it’s used on this addition of People Tech. Doug, welcome. Doug, can you tell me about Clovers and what it does?

Doug Leonard:

Sure. So we built Clovers to solve a fundamental problem that I think faces most companies today, with very few exceptions, we’re terrible at hiring. And when our investors and our clients and prospects ask, “What’s the value of building something like this?” We actually think that the TAM is in the trillions because we can help companies hire the right people at the right time, and that also includes exposing bias in the interview process. And economists would agree that is a trillion dollar issue all by itself. Nevermind questions that have to do with the hiring manager asking the wrong questions at the wrong time. I actually had one of my managers at another company spend 20 minutes in an interview talking about religion. And Clovers can help stop that. So that’s what we do essentially is make that hiring process better and faster and safer.

Mark:

What is it that prompted you to start Clover? What was the problem you were trying to solve?

Doug:

Thanks for asking that. So one thing I’ll be careful to correct you on, it’s Clovers with an S because Clover is another-

Mark:

I’m sorry.

Doug:

It’s okay. FinTech company that we have to steer clear off. So I don’t know, you might know of a guy named Jason Nazar and Adam Miller. Both of these guys are tech entrepreneurs in LA. Jason has had several successful startups over the years, and he’s the CEO Comparably. And Adam was the founder of Cornerstone OnDemand and CEO for 20 years. And those guys are friends and they actually were paying attention to conversational AI as something that is coming into its own over the last really the last year. And then of course the pandemic, the pandemic changed the way people do meeting. Look at us today, we’re online and we don’t think anything of it on video.

Doug:

So this idea of the pandemic, the social unrest that’s happened in the last two years in this country and conversational AI advancements, they saw that there was something that we could do to help that and to change that and to also capitalize on everyone using Zoom and Webex. So those two gentlemen came up with the idea and then they came to me because I have extensive experience in HR are and talent management, and I worked with Adam for almost 10 years and we just thought it was the right time to execute and to come up with this idea. So that’s where the idea come up. I wish I came up with it. I should have come up with it, but I was one of the early co-founders and I helped with the idea and moving it forward, but they came up with the original one. And it really had to do with where the country was in the last year and a half.

Mark:

You touched on this, but I’d like to ask it as a separate question, which is why do you think a solution like Clovers is necessary?

Doug:

Well, I think I have a great example. I’ve been in different C-level positions over the years, and I had a VP that worked for me and he was doing an interview and I happened to record it and I listened to it after the fact. And keep it in mind, he was a VP at a company that specializes in talent management. And ,I kid you not the first 20 minutes of the conversation, Mark, was about religion. And this was two years ago. So they have the conversation and it started innocuously enough. It was, “Oh, I went to St. Paul High School in Minnesota. Where did you go to?” And then they started talking about they both went to Catholic high schools and they moved it from there and just kept talking about religion.

Doug:

And I’m like, “Okay, there’s one indication.” And then as time went on, you could clearly see that people hire for the wrong reasons. They hire people that look like them and sound like them and are like them. And the reality is that is completely unfair and it perpetuates the diversity problem that we’ve had for the last 100 or 200 forever. So that’s one great use case and one reason why it’s a good time to start paying attention and really making changes in the way we do our hiring.

Doug:

I think another big part of that, and, Mark, you could probably Google this, in the last 18 months the statistic is 75% of companies in the Fortune 500 have hired executives for DE&. And I can tell you in my past when I was having conversations with clients, and in fact I was down in HR tech today and someone from Amazon came to our booth and he even said, “Look, it used to be don’t ask, don’t tell, we’re going to keep our head in the sand and if we have a rogue hiring manager that says something wrong or does something incorrect, we’re just going to ignore it and make it non-discoverable.” But today they want to know when they’re hiring managers are asking the wrong questions at the wrong time and inappropriate questions so that they can coach them and get better and then actually move the needle on DE&I.

Mark:

Is it fair to describe Clovers as a bit of technology that’s integrated into the hiring process?

Doug:

Yeah. And I think that’s one of our big differentiators, and thanks for bringing it up, because we like to call it and we have a word for it, call it the flow of work. So we do everything in the flow of work. And that goes into we didn’t start this company, as you probably are aware, we didn’t raise a typical seed round. A typical seed round in the United States is two million, three million, whatever it is, it’s 15 million we ended up praising. So we made a decision to go and make sure we build this product for the enterprise. And when we say we’re built for the enterprise, we’re specifically built for being in the flow of work. And what we mean by flow of work is we’re doing SSO, which is not typical for a startup. It’s a little complexity. We integrate with whatever ATS. We built it so that it’s ATS agnostic.

Doug:

So we pull any of the candidate records from the ATS. We use LinkedIn and the resume right there on the screen. We want our clients to use the solution in the video conferencing tool that they use today. So we all know Zoom became a verb in the last year. So right in Zoom we have all of this information and right in Zoom in our companion app, we’re calling it, you could rate the candidate, you could create a highlight reel and the user, it’s all integrated with the systems that they use today. So we’re really focused on that because we want to make it really frictionless for our clients to use. And for what it’s worth, the candidate really is just seeing the Zoom experience or the Webex experience or the Team’s experience. So I would say the strategic goal being enterprise class is to make sure that we’re integrated fully with their HR tech stack.

Mark:

Let me shift gears a little bit. And you just mentioned the last 18 months. The last 18 months have obviously been pretty choppy in terms of business conditions and the economy, has that impacted your business?

Doug:

Yeah. And I’m the CEO and of course I’m looking at everything very optimistically, but it has impacted our business significantly because really the data is clear, 95% of the skilled workforce now uses video conferencing tools like Microsoft Teams and Zoom. So it’s become very common. And the idea that companies are going to continue to be hybrid, working at home or working in the office or having the flexibility for both, that has significantly impacted us. So if you look back years ago, I remember doing a video interview years ago and I remember how uncomfortable I felt. It’s like, “What? They’re going to have it on video? How awkward. I don’t want them record it.” And now it is commonplace. Obviously we’re growing. We’re growing and doing a lot of interviews, not one candidate said, “Don’t do it on video. Don’t record it.”

Doug:

I think it’s impacted us pretty positively. And the diversity, equity and inclusion has also impacted our business significantly. Again, it’s for companies, especially in large companies, this idea of DE&I is not window dressing anymore. It’s like they want to have an impact on society, on their company and in the communities in which they operate and they’re hungry for these tools. So it’s impacted us now in a positive way. And frankly, building a company from scratch had its own challenges during a pandemic. But using technology, we’ve been able to keep our employees highly engaged, to where we actually did an engagement survey and we had a 97% engagement score, which is unheard of, because we are really leveraging technology everywhere we can.

Mark:

Last question, where do you see this all going? What’s the ultimate vision for Clovers?

Doug:

So I’m focused on a very short term goal right now. So I’ll give you a little bit of the short term goal. We raised our 15 million in seed. Our next goal is to get to a very small ARR number and get really good at helping companies do a better interview and leveraging the technology that’s out there. So that’s the short term goal. The use case though lends itself for automatic growth and change and enhancement because as you use artificial intelligence more, the value that it gives back increases significantly. So now, look, we’re collecting data now for AI in the questions and in the answers, but there’s going to come a time where we have such a good database and we under understand what successful questions look like and better yet, what successful answers look like, as that matures we can now give back to our clients and say, “Here’s best practice that can influence your turnover rate. Here’s best practice that can increase your diversity or improve your diversity.”

Doug:

And I started off telling you that the TAM was in the trillions, the reality is we have so much runway and so much growth just in this use case. Now, after we get great at that and we’re delivering these insights to our clients, there’s no reason why we can’t move outside of interviewing. But, again, gosh, that’s probably years out, but we’re building a tool that integrates with all the things that they’re using today in their HR stack, so there’s so many other use cases out there. But we just want to be great at what we’ve set out to do today, which is accelerate hiring, uncover bias, and put the right people in the right roles. And it’s pretty obvious, and not because I’m a marketing genius, but because our clients are already asking, “Hey, it’s great if you can expose bias, but can you help me change behaviors?” And that becomes a services question. And we’re thinking a little bit about how do we help our clients actually change behaviors once we do serve up some of these results. But, again, that’s down the road.

Mark:

Well, Doug, thank you very much. I appreciate your coming and talking with us today.

Doug:

It was my pleasure.

Mark:

My guest today has been Doug Leonard, CEO of Clovers AI. And this has been People Tech, 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 Nark Feffer.

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