Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer.
Leigh Miller, senior customer advisor at Gem is my guest today. Gem just published its third annual recruiting benchmarks report, which helps talent leaders compare their results to industry averages. Leigh’s going to tell us about the report’s findings and we’ll zero-in on outreach, diversity, AI, and more in this edition of PeopleTech.
Hi, Leigh. So Gem recently completed a study looking at a lot of aspects of talent acquisition and what’s going on out in the real world. Could you tell me about it, tell me about the study?
Yes, we did. We released our annual benchmark study earlier this week, and that study pulls from 3.2 million email outreach sequences sent between June 1st, 2022 and May 31st, 2023 and 27.8 million candidates who entered our customers hiring funnel. So quite a wealth of data. And we released this benchmark report on an annual basis, both to show our customers and also new customers around what we are seeing in terms of trends within talent acquisition.
So the benchmark report I think is hugely relevant, not just for TA leaders to get a sense of what is happening out there in the market, but I think it’s also really helpful information to bring context to the other side of the story. So not just what is happening within your organization, but to get a sense of what is happening out there in the industry and to be able to compare what organizations are doing in a similar industry or a similar size. So it brings the entire story.
So benchmarks, I said really, really important and I think are super valuable. And yes, as I said, we released ours this week. So lots of great information in there for a variety of different organizations and certainly a couple of elements that stood out to me that I’d love to step through with you.
One of the things that struck me when I was reading the report is a discussion about emails compared to texts in terms of response rates and such. There’s a lot of people who think that email is kind of like the old-fashioned way nowadays. It’s what baby boomers like. And younger workers are more into texting. Could you sort of recap the results of what you found there and tell me what you think it means?
Yeah, so we have… And taking back a couple of steps. So within Gem, we have the ability to… And those who use Gem have the ability to send outreach messages either via text, via email, or via, say, LinkedIn, which is pretty common as well. So we analyze all of those three channels to get a sense of who is using what and the response rates and how that converts through the funnel. I think it’s really interesting when you think about email versus text. And yes, I do think it’s perhaps generational as to whether or not you’d feel comfortable if you were to receive a text message about a job where perhaps you hadn’t shared your details. So I, for one, I’m pretty uncomfortable with that and maybe you are the same, but we have seen that it provides… We see a lot of uptick and conversion when we are reaching out to younger generations.
I think we see it used a lot in varying industries. So for example, one of our customers is manufacturing, and that is the best way to get in touch with potential candidates because they’re not in front of their computers, what they have access to is their phone. So I think that is a subset of the population where that is really the only way you can connect with them about opportunities and you start to see engagement from that perspective.
So yeah, I think it’s an interesting one, and we see our customers kind of A/B test what works for them and what works for the population or the type of jobs that they’re recruiting for. But we have seen when we go now switching from email to say LinkedIn, whereas LinkedIn has for the last 10 years or so, always been the way or typically the way that you hear about opportunities, it’s pretty saturated at the moment. So sometimes we’re seeing cut through with certain job families, like engineers for example, just won’t even look at LinkedIn now because they get so many messages per day, whereas a way to get to them is through email.
So trying a variety of different outreach methods I think has its value and I guess it’s dependent on industry, generation, job family, et cetera. So I think that’s why you start to see varying responses through those channels.
Another interesting area was you talk about racial disparities. On the one hand, there’s been a lot of talk in the last couple of years about DEI and companies and employers becoming more active and sort of building up their record and their programs in that area. On the other hand, now the economy seems to be a little queasier and a lot of employers seem to be pulling back on softer aspects of their employee engagement and candidate experience, including DEI. So I’m wondering first, do you think overall talent acquisition has made progress in approaching people from communities of color or what have you? And where do you think it’s going? I mean, do you expect them to pay less attention to diverse candidates in the near future or keep plugging away the way they’ve been?
Yeah, it’s a really good question and one which I’m also unsure because over the last five years or so, 10 years, you’ve seen a real concerted effort to be very thoughtful around how organizations build a diverse workforce. And whether that came from bubbled up from the recruiting teams themselves or was led by CEO of an organization around the importance of DEI, it was very much the top of all conversations within recruiting over the last, at least five years.
Over the last couple of years though, or certainly within the last one or two years, I think the economic climate has had a real impact on DEI initiatives within organizations. And I would like to think it’s not the case, but our data suggests that still we are seeing disparities when it comes to outreach to certain groups. So for example, the results that we saw through the benchmark report shows that men consistently receive more attention across industries than females. With Asian talent receiving 1.2, more outreach than white and 4.7 more than Hispanic, and five times more than Black African-American candidates.
So it’s a clear inequity in the recruiting process, and that’s just from the last year or so, which I thought we were beyond that. So I think it’s interesting. DEI is important, but is it still a priority even when the company is financially going through certain hardships. Or when there’s layoffs across an organization, is that being kept top of mind? This seems like the answer is no. So it concerns me that all of this great work that we’ve done within recruiting, it may not be continue, or it may just be a bright shiny thing, but it falls to the wayside when a company experiences a turbulent moment.
It’s pretty much required that I ask you a question about AI, but my question actually ties back to this discussion around diversity. Is AI going to help those efforts do you think? Or is it just going to be a way of doing it a little bit faster and a little bit better?
It’s a good question. I think AI is going to help all elements of recruiting. And I’m really excited to see what is going to happen over the next couple of years. We’re right for disruption within the recruiting industry. The last time we had a significant disruptor, I think I traced that back to the time of when LinkedIn was first introduced. I remember pre and post of that, and I think that was a disruptive moment, and I think AI is going to be the next one.
As for whether it is going to improve DEI efforts, I think that remains to be seen. I’m bullish on all other aspects of what it can do within recruiting, but this is the one where I am concerned and I question whether or not there are limitations. And the reason why is that with generative AI and my high-level understanding, I’m by no means an expert in this area, but with generative AI, it’s all based on the source code, the source material that you bring in, which is I think right with bias.
And so I’ll be really interested to see what will happen in this area. I feel like it can only be somewhat improved. Whether it can be solved is another thing. But hopefully it’s going to help us because clearly imperfect as it is today, and I think we’ve got a long way to go. And even if it can help us move a couple of percentage points or a couple of steps along that, the pathway, I think that’s great news, but I don’t think it’s going to solve it. I don’t know. That’s what I’m seeing at the moment. But it is early days and I haven’t seen a huge amount of AI when it comes to anything DEI-related. I’m seeing it more like your low-hanging fruit, your job descriptions, your general administrative work that recruiters do. I’m yet to see something that has really wowed me when it comes to AI as it relates to DEI.
It seems like a lot of people, if they’re using ChatGPT or something like that, are accepting whatever the machine says almost by faith. So it could suggest approaching DEI this way or that way, and one of them may not make sense in the real world. Is that another burden for talent acquisition that they may have to spend more time checking the accuracy or logic of what the AI comes at them with?
I’d say it’s a burden or something for everyone to be mindful of with AI, not just recruiting, that it is somewhat imperfect. There’s limitations to what it can do, although it’s proved to be that AI, the language learning models have proved to be very accurate and could pass a whole lot of high bar tests. I think still putting all your faith in the results is a concern. So I think yes, there’s limitations and accuracy is one of it, but I don’t think it’s going to be a huge burden for recruiting. But knowing that not everything that comes out and what everything you get say from ChatGPT is going to be 100% the way to go, or 100% apply to your business. I think it’s something we all need to sense check ourselves on.
It’s not earth-shattering when I say that there’s a lot of parallels between talent acquisition and marketing. And those really struck me reading the report because you’re talking about so many of the same things, open rates, what have you, engagement rates. What is the relationship between talent acquisition and marketing in most places? They’re doing the same thing, representing the same company, but you don’t hear a lot of talk about those two functions working together. Are they? Should they? I mean, what do you think?
I think it ranges. So within my role, I implement a talent maturity survey, which gives an indication of how your teams are operating within talent acquisition on a scale of maturity, and I have seen with the work that I’ve done with customers as it relates to partnering with marketing, your talent attraction or talent marketing strategy and how close you are with marketing teams. And I’ve seen a whole range that there’s some organizations out there who have no contact with their marketing teams, and so there’s no alignment there. Whereas there’s some organizations that are far more on that innovative scale who have developed a very close relationship, are in lockstep when it comes to how they are presenting their employer brand, how they are representing their careers’ website. So they work in partnership. And I do think that that partnership is where we all need to get to because there are so many parallels.
I think when you look at marketing versus recruiting, I think marketing is way ahead when it comes to their use of technology, how they think about the funnel, which is exactly how recruiting operates. We just haven’t always operated in that way or we haven’t been… I guess, many people haven’t been taught to think about it in that way. So I think that that’s where we all should… I think if we could all get there, that would be a great place to be.
And that I think will depend on within organizations, building relationships with the marketing team, clear lines of what you do versus what I do. So there’s no kind of, I guess, what would you call it? You don’t think you are encroaching on each other’s area. But I think the more you can partner together, the best outcomes that you’ll see for recruiting, because it is very much about marketing. And I think more and more, we see that. It’s about how you position yourself, the storytelling that you do. How you’re attracting and continually engaging talent is very much like what marketing has been doing for years. So I think as said, some people are doing that exceptionally well or some organizations are doing that exceptionally well, and some are still on the journey.
So what’s your favorite part or what’s the most interesting takeaway of the study to you?
I think when I look at the benchmarking report, a couple of things stood out to me. First, there’s a piece of data in there that talks about the market shift to larger companies, how in 2021 you saw a offer accept rates were the highest at small companies. So certainly here in the US I saw that where there was a surge of talent to tech startups where there was flexibility and there was a financial upside. Whereas in 2023 in this current market, you’ve seen that completely flip. So you’re seeing the talent and higher offer accept rates at larger companies, which I think is indicative of the economic environment, talent looking for more stability within large organizations and really wanting to hunker down there. So that was one that spoke to me, and maybe it’s more because of my own experience as well. I thought that was pretty interesting.
And then I think the other big takeaway is just looking at the aggregate numbers that we share in the report. And what I mean by that is that having a look at on average, offer acceptance rates across all of the companies and the data that we looked at was at 82%. That’s just a really good general benchmark to have to say, “Are we higher or lower than that? And what can we do with that?” The days to hire as well, was it 36? Again, just a really good general data point to have and I think is something that all organizations could take a look at.
And then the final piece was around, in the report it talks about sourced candidates are four to five times more likely to be hired for a role, which we’ve kind of heard that before. But what we’re seeing here is that also we source some pretty compelling data that for sourced candidates we’re seeing a lot longer hiring times and a 7% lower offer acceptance rates when it came to offer. So it just highlights the needs for, yes, that sourcing could be a really valuable channel, but there’s also some downside to that. So really just to take that into account when creating a strategy for the channels that you use, why you use it, and what you think you’re going to yield in terms of results.
Well, Leigh, thanks for stopping by and talking this through with me. It’s great to meet you and I hope you’ll come back sometime.
Thanks for having me, Mark. It was a pleasure.
My guest today has been Leigh Miller, senior customer advisor at Gem. 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.