Podcast: Shifting Landscapes in Talent Acquisition

Candidates Waiting

Transcript

Mark:

Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer.

My guest today is Ryan Agresta, the CEO of Candidate.co. His platform makes it easier for employers to find talent and build more inclusive teams. Its model adds a human touch to talent acquisition by including personal referrals with each profile. We’re going to talk about Ryan’s company and its approach, the state of the labor market, and the impact of the pandemic on talent acquisition, all on this edition of People Tech.

Hey Ryan, thanks for coming by. What does Candidate do?

Ryan:

Candidate is a marketplace for personal referrals. So we work with employers that are hiring. They post roles with corresponding referral bonuses. And on the other side, anyone can sign up to be a referrer. Once they sign up, they can refer their colleagues those open roles. And if their referral is hired, then they collect 80% of that referral bonus, which averages about $4,000. We’re building that marketplace along with the technology to help referrers be successful.

Mark:

Okay. And technically, how does it work? I mean, is this a sort of an email or messaging thing, or is it more of a database thing?

Ryan:

So employers will go to Candidate.co, sign up to be an employer, and then post roles similar to how they would post roles with any other job board. For referrers, which is where most of our technology is, we have a desktop experience, we have a mobile web experience, and then we have an iOS app that you can find in the app store.

If you’re utilizing the app, which most of our referrers are doing, they can upload their phone contacts to that app, it’s an optional step, at which point we, Candidate can understand who refers now and can help make suggestions on who to refer to these roles.

But no matter which experience you’re using, you can look at those roles as a referrer, you can see who might qualify. We provide tools to help share those roles with your network. And then assuming you want to refer someone, you can fill out a form which takes less than five minutes. Again, that can be via desktop, mobile, web, or iOS app.

Mark:

So what’s different about this?

Ryan:

For employers who are hiring, what we’re aiming to do is really provide a new level of ability to have your job reach individuals that they wouldn’t reach before. So we have thousands of referrers from all different backgrounds across the US. Now, we’re starting to get into all of North America. And those individuals can go out and can recruit and refer on your behalf, along with there being no upfront pricing. So as an employer, you only pay if you make a hire successfully through the Candidate platform.

And for individuals working in tech, it’s a whole new level of access. So currently, as an individual in tech, you’re most likely constrained to be able to refer your friends to either your current company, an employee referral, or if you happen to know hiring managers at other companies. When you sign up on Candidate, you’re going to have access to dozens of companies that you might not otherwise be able to reach, be able to refer your friends or your colleagues to those roles, and you’re going to be compensated on average about $4,000 per role if your referral’s hired. So there’s both the access and the compensation side for people working in tech.

Mark:

So you’ve got essentially two sets of users, the recruiters and employers on one hand, and then the candidates and the references on the other hand.

Ryan:

Exactly.

Mark:

What do you hear from all of them about why this works? What attracts them to it?

Ryan:

On the employer side, those who are hiring, we’re really looking to play a low-volume, high-quality sort of referring process. So what I mean by that is you go post your role to a job board, you’re likely to get dozens, sometimes hundreds, we’ve even heard thousands of applicants.

When employers post a role through Candidate, they’re getting anywhere from five to 10 referrals per role. But those referrals are personally vetted by someone and then backed by Candidate. And so over 60% of the time those individuals that are referred through Candidate are being interviewed, which is a very high rate. So they can spend a lot less time reviewing resumes and more time actually talking to qualified individuals, as well as the pricing. Employers really like the pricing structure where they don’t have to pay upfront to post a role. They’re not paying any sort of fees upfront. They’re only paying if they make a hire.

And then on the referrer side, what we hear that they really like is that obviously that the compensation helps. Referring and being able to connect people can take time and having the option to be compensated for that can be really beneficial. But more than anything, it’s the opportunity to help out their networks. It’s the social capital that comes with connecting someone you know with a really meaningful opportunity that results in a new job for them. And the idea that they can go reach dozens of companies that they wouldn’t otherwise be able to connect their network to is something that’s proven to be really powerful.

Mark:

Now, when did you start the company?

Ryan:

I started the company in January 2020. So it was about two months before the pandemic hit the United States.

Mark:

And sorry, I was going to say that your company’s whole life has basically been in the pandemic.

Ryan:

That’s correct.

Mark:

So what has that taught you?

Ryan:

It has taught me to really focus on controlling what we can control. And what I mean by that is thinking about what is our customer’s experience? Are we building a great product? Are we building an offering that really adds a lot of value to all of our user base? And not worry so much about what we can’t control.

So when I started the company and I was raising funds, I was raising venture capital to go actually be able to hire people and build a product. This was when the pandemic was hitting the US. At that time, a lot of individuals thought that there would be hiring freezes, that the economy would be going into a really strong recession, and that there wouldn’t be any demand for a recruiting service. That was true for maybe about one to two months. And then it completely flipped. The talent market was tighter than ever.

And so that was a great example of me having to learn and not worry about what I can’t control, and instead just focus on Candidate, our users, our customers.

Mark:

What do you think is coming in terms of as the pandemic recedes, business gets back to something like normal?

Ryan:

Yeah.

Mark:

What impact do you think that’s going to have, not just on you, but on sort of the world of recruiting and talent acquisition?

Ryan:

I think the most tangible change we’ve already been able to feel is the move to remote work and having employers allow their employees to work from anywhere. And what we’re seeing now as we sort of return to, let’s call it the normal state, is some companies are remaining very dedicated to that. Some companies are saying we are a remote-first company. We believe in that, and we’re going to continue to hire in that way. And then you’re seeing a lot of companies kind of slowly go back to the old way of working.

And from every study that’s been conducted, you can go look at, the remote roles and the remote companies attract a much higher volume of applicants, and those employees end up being more satisfied in their day-to-day jobs. And what I foresee happening as the pandemic really kind of ends, as we return back to that “normal state of work,” is those companies that are embracing flexibility for their employees, whether that’s hybrid work environments, remote working environments, are going to be the ones that are going to continue to attract talent or actually going to pull talent away from those companies that aren’t focusing on those flexible work situations, and they’re going to be much better positioned to succeed in the long run.

Mark:

Do you think that Candidate works better for some types of businesses than others?

Ryan:

We’ve focused so far on mostly venture-backed tech companies, but we have worked with a wide range of those. So we’ve worked with anywhere from two founders hiring their first employee all the way through 1,000-plus-person publicly traded companies.

I think where we’ve seen it work the best so far is for companies that are in that very rapid growth stage. So the companies that oftentimes have more open roles than they have sort of recruiting teams that can support them, the companies that have oftentimes either rapidly increase revenue or received a new round of venture capital and are very much poised to grow. And we’re able to really help provide them the recruiting support because one, they’re underwater and they’re looking for access to more talent, but they’re not going to have to spend time going through hundreds or thousands of resumes.

And so those companies that are really in that rapid growth stage are the ones where we’ve seen, I think find the most use of our services.

Mark:

And any particular industry? I mean, is this the kind of thing that high-tech companies would use versus retailers or something like that?

Ryan:

Yeah. So we’ve worked primarily with B2B SaaS companies, but we’ve really worked on expanding that recently. And so we’ve gotten more into consumer good companies, even a couple companies that have some sort of physical presence. But so far we have worked with a lot of B2B SaaS companies.

And if you could imagine those companies, they are the ones that have tended to be willing to accept remote talent. And if you could imagine our platform for a company that’s open to remote talent, literally every referrer who has signed up for Candidate can make a referral to that role. And so their access to our entire referral base is really capitalized on. So it’s been a lot of those B2B SaaS tech companies, specifically those open to remote talent.

Mark:

We were talking before about the job market and coming out of COVID and all that kind of thing, but what are you seeing out there today? You know, hear so much news about there’s too few candidates, or now there’s enough candidates, or there’s not. Everyone seems to have a different read on it, what’s yours?

Ryan:

It’s a really confusing time out there, I think particularly if I’m a job-seeker or someone who is thinking about leaving my company and maybe looking for a different opportunity. Because on one hand, what we’re seeing are a lot of layoffs, a lot of warnings about what’s going to happen to the US economy in the coming months. But on the other hand, we see unemployment at a low that we haven’t seen in years. And so we’re really seeing a really strong demand for talent at the same time.

I think from our perspective, when we’re talking with employers, we still see most roles being in demand as ever, particularly software developers and software engineering talent is very high, I won’t say an all-time high, but as high as it’s ever been. And these companies really are still hiring.

I think there is some hesitancy. And so if I’m a job-seeker and I’m looking in kind of Q4 2022, right now, in this moment, might not be the best time to go look for a job. But a lot of these companies are working on annual budgets. They’re going to be opening up headcount again in Q1. And I think it’s going to continue to be a more talent-constrained market than it will be a job-constrained market.

Mark:

And where do you think we’re heading? Do you think that dynamic is going to continue for the long term? Do you think it’s just sort of a phase we’re moving through?

Ryan:

I think any pullbacks we see, any sort of layoffs or temporary hiring freezes are just that. I think they’re temporary. If you look at any sort of long-term trends, many studies have indicated that the US, and it’s not exclusive to the US, is going to be at a labor shortage, whether that is retail jobs, hourly service work, high-salary software engineering roles. If you look at sort of the long term over the next four to six years, we’re projected to be at labor shortages. And so if we do see some temporary pullbacks because of what happens at the economy, I personally would not guess that those are long term.

Mark:

Well, Ryan, thanks very much for stopping by today and sticking with me through your cold.

Ryan:

Thanks so much for having me. I really appreciate it. It was great to talk with you.

Mark:

My guest today has been Ryan Agresta, the CEO of Candidate.co. And this has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication of Recruiting Daily. 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.

Image: iStock

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