This is Part II of a two-part podcast LIVE from Tempe Arizona and the TAtech AI Summit. It’s a hype-free discussion around “AI and Automation” Aaron Matos – CEO of Paradox Olivia Yongue – Director of Client Strategy at KRT Marketing Sahil Sahni – Co-Founder of AllyO.
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Announcer: Hide your kids. Lock the doors. You're listening to HR's most dangerous podcast. Chad Sowash and Joel Cheesman are here to punch the recruiting industry right where it hurts. Complete with breaking news, brash opinion and loads of snark. Buckle up boys and girls, it's time for the Chad and Cheese Podcast. (music)
Chad: Hey it's Chad and this is part two of a two-part podcast, we're just finishing up in Tempe, Arizona at the TA Tech AI Summit. It's a hype free discussion around AI and automation with Aaron Matos, CEO of Paradox, Olivia Youngue, Director of Client Strategy at KRT Marketing and Sahil Sahni, Co-Founder of AllyO. And, of course, some snark and opinion from Chad and Cheese. Enjoy.
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Chad: It's show time.
Joel: One of the things I loved early on, Aaron, when we spoke about Olivia and ... It's not necessarily a question for him, that's fine ... Is, you're trying to solve the mobile apply issue, which was the heart of the whole movement. For you, anyway. And as anyone in this audience knows, we've been trying to figure out the mobile apply thing for a long, long time. Just pushing apply through LinkedIn and then going to LinkedIn and then coming back, it just didn't work. And you created this mobile chat bot, or whatever you want to call it, to create an apply system through-
Chad: Assistant.
Joel: Yeah. Through a conversation-
Aaron: He's getting it.
Joel: ... and I thought that was fantastic, so a year or so since launching, talk about the mobile activity versus desk top. Maybe what's next for this, are we going to see voice assistants? Walk someone through an apply process.
Aaron: We got to the concept of this behind two things, one was, yes we were trying to solve mobile. We had made it not pinch and zoom ugly, but there was still crazy forms, and so this has been an obsession. How do you fix mobile apply, where candidates want to raise their hand in a mobile environment. The other piece that was driving us was we saw the problem that when I walked in to large TA teams, where they were all staring at their computers.
Aaron: And I just did not believe that the value of recruiting is in us playing with software. And so, it kind of got to be a pebble in my shoe of like, I think there's the 80/20 problem of, we're spending 80% of our time on admin stuff and 20% on people stuff and we should flip that. So, those two things juxtaposed to drive. Today, mobile on the candidate experience side is utterly amazing. Conversion rates in the hundreds of percents better because the process is easier.
Aaron: And that piece, I think, will just continue. The computer of the future is a mobile device. And that's still working it's way through the enterprise. I joke about this all the time, go take a Millennial and put him in front of [Toyo 00:03:46]. No offense to Toyo, but they look at it and they're like, "Where the hell do I Skype?" Like it's the most confusing stuff in the world and so, our enterprise software also has to take a transition from the last 20 years we built software purely for the enterprise.
Aaron: For the recruiters, for the HR departments, and we have to change that. We have to start building software first and foremost for the candidates, because if you build great candidate experiences, you'll actually have a great experience for the company.
Joel: Kyle, for the record, he drew first blood on Millennials, just for the record.
Aaron: I love Millennials. They're our favorite.
Joel: How are you working with ATS's, are integrations that paramount? Do you care?
Aaron: oh absolutely, I think it's ... We have a huge network of partners on the ATS and the CRM side for ... All the enterprises have these. We have to plug into this, there is a system of record and we have to help facilitate communications in a different way. We view that as our strength, our strength is to help facilitate communications, be able to talk to candidates in a new way, do that through different channels; through the mobile, mobile web, whether that's their Facebook, WhatsApp. Any kind of channel.
Aaron: But the ATS is still core, that's not changing. The CRM systems have a different layer, someone talked earlier about the CRM penetration, and the enterprise, I think, is pretty high. And that idea is, how do we get more candidates into the CRM to actually start doing work?
Chad: On the data side, some of the data that we have to work with is garbage. I mean, take a look at job descriptions. They haven't changed for five years, or even Plus, right? So, if you're trying to build algorithms off of data that's garbage ... We've always heard, garbage in, garbage out. How do you get ... And not only that, from a resume standpoint, when I have an asshole who puts frickin' 'ninja' on their resume, right? How does that even correlate to what I'm looking for?
Chad: Wizard. Something of that nature, right? So if you're working on ... Yeah ... If you're working with garbage data, I mean, how do you get passed that? How do you build ontologies that gets passed garbage?
Sahil: Well that is the challenge, and that's the IP. You cannot take the Google AI and assume that it applies to recruiting. We, Google as a customer and a partner for us, you just can't do that. You have to build it. And even recruiting as a generalization is very broad. Different kinds of skills, different kinds of challenges you're solving. So when you say "role" even the world "role" could mean very different in the usual Google sense, which is very broad, versus what you're looking in recruiting.
Sahil: To your point, we built the whole ontology to parse all the jobs recs. You guys know of how LinkedIn and Indeed scrape every job rec an ATS and just show the job recs. We took that a step forward and we said, "Hey, can you parse the information in there to extract the job title? The location? And the requirements?" And it's-
Chad: The requirements in many cases are still junk.
Sahil: Oh 100%.
Chad: You'll see, you'll see, you'll see "needs a bachelor's degree," and it's like, "Oh yeah we haven't needed that for two years, because it's a tight job market." So it's like, yeah we haven't needed that for a couple years now. What the hell do you do?
Sahil: Well, this is what you do. A, you use technology to parse that and surface what's on there, because the recruiters are not looking at it. Right? The hiring managers posted it, and no one's looking at it. That's number one.
Chad: Because they're too busy scheduling shit.
Sahil: Right, they're too busy doing other stuff. Who has the time to go change the years of experience from three to two? When you've got 80 candidates to schedule? Second, what we push for is rapid deployment. When you deploy and you're scheduling interviews with McDonald's in San Jose, and they're getting candidates who have one year of experience, within a week or two weeks, they will text or email AllyO and say, "Hey this needs to be two years."
Sahil: So you've taken what they have, you deploy, you let them review it. They need to sign off, we don't take liability for that, but you deploy because it's publicly out there. And then they, over time, optimize. That's the way you do it. You could spend all your time doing material, what's the perfect job description? But the reality is, a job description should vary by region because the label market changes.
Chad: So, Olivia, is this a major point that you talk to your clients about constantly? We were talking about this for decades, have we not? We've been talking for at least 20 years, as long as we've been doing goddamn job postings, right? Before Monster was Monster. Why hasn't it changed? And will it? And will these types of platforms start to surface the need to be able to do that?
Olivia: Absolutely. I mean, job descriptions are stale. All of my clients are like, when we talk about low-converting jobs and why they're not converting, we take a look at the job title, the description, maybe there's something in there that we could change and tweak to increase SEO, to increase traffic. And so, those are conversations we're having with them daily that, ultimately, impacts larger discussion of going back and updating all job descriptions.
Olivia: But just thinking about ATS integrations and, I want to talk about programmatic a little bit, we've been doing a lot of work of integrating with ATS's.
Chad: That's gotta be hard, though, from a programmatic standpoint, if you've got garbage, right? To be able to target.
Olivia: And the reason why it's important is right now in current state, we, essentially, get a live feed of completed applications feeding back to our system. So we can optimize programmatic campaigns, based off how many completed applications are coming through per job. However, we'd like to take this a step further and optimize per qualified applicant.
Olivia: And so, having that live feeding integration set up with ATS's is so important. I mean, not only driving the cost-per-application down for our customers, but just having that real-time data that we're not getting today. So, it's just something difficult that we're working towards to, essentially, offer in the near future.
Chad: Yeah, this is the bane of your existence right now. The job description.
Aaron: I mean, the job description's always going to be a challenge. I think that's part of the challenge in matching. We're trying to take incomplete job descriptions and match them with incomplete resumes. People and jobs are complicated. They're very, very complicated. I mean, there's companies they're doing incredibly interesting, innovative stuff. Companies like Intel that have kind have gone reckless, not reckless, but "reckless". And are managing talent pipelines and looking more at how do I ... look at people and instead of them applying for our jobs, we look at what they can do and match them to jobs in our company.
Aaron: So it's a lot of innovation that's happening around this. There's no perfect answer for that.
Joel: Olivia, quickly, what percentage of your clients are using an AI tool, currently?
Olivia: I'd say, probably, it's grown over the past year. There's definitely more awareness, some people just getting buy-in from leadership, but it's probably 30, 40%. So definitely room to increase that.
Joel: How big do you think it will get? Do you think it will be 100% at some point? And if so, how long is it going to take us to get there?
Olivia: I'd hope it'd be 100%. I mean, I want my clients to be using technology to make smarter decisions, to just work on areas of challenges; whether it's bandwidth or cost savings. A lot of the points I think Eric talked about today on one of the, I think four or five factors that you focus on, but I think it's going to take a little while. I think as awareness continues to grow and customers learning and understanding how it can help, probably in the next three years we'd see that adoption increase.
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Chad: It's showtime.
Joel: So let's talk, I'm going to talk about the great consolidation, if you will. So, recent news, TextRecruit was gobbled up by iCIMS a year or two ago. Canvas was in the news recently, these are text ... I guess text recruiting tools. We see Mya getting 30, 40-million. We see AllyO getting 18-million-ish, 19? Okay. I'm pretty good. Pretty close. Wade & Wendy are in the news this week, 7.6-million. So I'm assuming we're not going to see a flux of IPO's from chat bots and these kind of tools.
Joel: What happens with the consolidation of these? Is this going to be something in the next 12 months that we're going to see? Is it further out? And if so, who will be the companies most likely to buy up the chat bots and the automation tools? I would assume ATS's, but I could be incorrect.
Chad: So that's a good question.
Sahil: So when you look at, when you look at new categories in an industry, so let's take talent acquisition here, typically consolidation gets pretty rampant when you have only one or two, or say one major player. So, consider the case of video interviewing, HireVue went off and others got consolidated. And then that one vendor ... That one vendor grows to a size where they become the plateau. HireVue, Hire.com, a lot of the CRM's are that category.
Sahil: What's interesting about the space that Aaron and I are in, is that there are at least three or four very dominant players who are all feeding off each other's growth here. They're really feeding off each other's growth. And that is very unique-
Sahil: What's that?
Joel: Who are those three?
Sahil: I won't name them, but one is AllyO. AllyO and, sorry, there are two dominant players. AllyO and Olivia. But you know, everyone focuses ... Mike's looking at me with a sad face. Please... and Mya. I'm sorry. But, my point is ...
Chad: Go get a beer, Mike. You deserve a beer.
Sahil: The reason why 40% of the customers are into this, is not because AllyO just went in, went crazy. It was contribution from all three of us, and we're feeding off that. That is unique. And that uniqueness creates opportunity to actually have some major exits here. Some major exits meaning either going public or exits that are not a 500-million but you rarely see in the talent acquisition space. So that's point number one.
Sahil: Point number two, in terms of who will acquire, I think consolidation will happen. Customers are asking for AI, vendors want to just demo ... Again, it's a pre-sale thing, it's not a post-sale thing. So customers just want to show something. You acquire ... I'll take a name ... You acquire Canvas and you can show, "Hey, I have texting feature in my tool kit," and then you can make the sale. Or you can retain the customer.
Sahil: So that kind of acquisition is going to happen. For the larger acquisitions, where there is Olivia, AllyO, it really comes down to the most strategic partnerships here. And the way at least AllyO is growing, when we don't think we belong to, as an add-on on an ATS, or enhancing the staffing company or CRM, we actually, when we say it, we mean it.
Sahil: We want to go end-to-end because customers really benefit, and the AI from the end-to-end is super powerful. And that puts us in a weird situation where we necessarily don't have a very solid acquisition strategy. We're not saying we built a feature of video interviewing, which would be bought out by an ATS. So, I hope that gives some color-
Joel: I'm hearing AllyO IPO 2022.
Sahil: You're close. You're close but you're a little further out. You need to be more optimistic.
Joel: See, Aaron, if you don't ask the questions, you don't get the answers.
Olivia: I would just add that one of the biggest pain points that I hear from customers is just all the different integrations that they have to even consider. So when vetting new technology, that is the absolute. One of the first questions that we ask is, who do you integrate with? What do you offer? What is the process like? Timelines? It's just so important that whatever technology and the tech-stack that comes under that, integrates with their current resources so it's not just this isolated resource that they're using.
Olivia: So, I would hope that there are more acquisitions happening in the near future. And I have heard, also from clients, that it does make the decision easier on their end if they're looking at a new career site vendor. If they're already working with a chat bot vendor, that it's just easier to just bundle everything together instead of going with a career site vendor, and then vetting out different chat bots. So, just thinking ahead, with where the industry's going, I would definitely ... would like to see, maybe, job cases in the running with the 100-million-dollars that they just got.
Aaron: Can I answer that one?
Chad: Yeah.
Aaron: I want to throw one out.
Chad: Go right ahead. Have at it.
Joel: Are you really going to answer it, though?
Aaron: Yeah, I mean. He's going public in..
Joel: Yeah, so 2023?
Aaron: I mean, I think the whole idea that there's consolidation in the industry might be over-stating it. This is an incredibly fragmented industry. The large ERP systems, the large ATS systems are ... This isn't like someone's got 40% market share. K1 did a cool thing with Jobvite and-
Joel: You just said those three dominant players.
Aaron: Well I think he meant in the ...
Joel: In the room?
Aaron: In the assistant chat bot space. I appreciate being put in the category, I also think that we are all really small. None of us are a 100-million-dollar company, unless there's something I don't know.
Joel: Paul?
Aaron: We're all small. We're all growing, and I think that's the opportunity. The space is getting ... The challenge is, you get to big system of records and then everyone wants innovation and the innovation's going to happen in point solutions. And so, if you're a big enterprise that needs to be cutting edge on candidate experience, you've got to go find a point solution that integrates them with your system of record. And that process is just ever continuing.
Chad: So we're talking about tech stack earlier, right? Many hiring companies have a tech stack in place, and they're not even leveraging half. Maybe 25% of the power of that current stack. How do you get past years of companies saying I hate my ATS, even though they use 10% of it. And really start to understand, and imbed, your product into their process. Because, again, we heard earlier that process over tech. If their process is all jacked up, what are you doing other than putting tech on top of it and then them being able to point at you later and saying it's your fault.
Aaron: I think the ATS is always at the challenge of ... have you ever met anyone who's like, "Oh my God, I love my ATS." That doesn't exist, really. I think trying to get adoption is something that we probably think of differently. We're trying to build tools that don't need adoption because they actually do work.
Chad: So you're saying the ATS doesn't work?
Aaron: No, not 'do work' that way, but they actually do work.
Chad: Do work, gotcha.
Aaron: But there's actually automation that's happening and functionality of ... So it doesn't need, per say, recruiter adoption, the tools actually start running in the background. So I think that piece, we see happening. I'm sure others do as well.
Chad: Okay.
Olivia: From what I see with my clients, whenever they're responsible for reporting back any KPI's that are related directly to their business or making a change, that's where they're more invested. So, I would say, talking to the stakeholders, our companies and trying to educate them more, if they're being tasked to come back and change, move the dial in one area, whether that's candidate engagement-
Chad: What's the cornerstone KPI? What is the cornerstone KPI? 'Cause there's so many.
Olivia: Depends on what product you're using. So, I mean, chat bot, could be engagement, it could be looking at scheduling software, how to improve rates there. It
really depends what you're using.
Chad: We're looking, and I think Xor was talking about time to fill? So, time to fill being ... I mean, that's something that's not as subjective, per say. 'Cause it is hard where the higher ratio, I mean you have to work with humans, and that's fairly subjective because you get hiring managers who make different decisions. So I mean, what do you see from your clients that is the KPI for them that just makes sense. Or the one that you guys are trying to push to them.
Olivia: It's that 98% that I mentioned earlier that it's the percentage of candidates that aren't getting hired. Looking at the candidate funnel. And so, if they're going back to their team and, I mean, they're spending so much money recruiting for talent and recruitment marketing and trying to make sure they have a strategy in place if they're reaching the right talent.
Chad: With a huge candidate data base, by the way.
Olivia: Yeah.
Chad: Go ahead.
Olivia: Exactly. So it's waste. There's a lot of waste coming in, going out. And so, it's just a missed opportunity for these companies not to figure out a way to engage with that 98% that are not getting hired.
Joel: How are you guys integrating your product with Second Life?
Chad: Oh Jesus. Okay, we're going to skip that one.
Joel: Just making sure everyone's awake. Okay.
Chad: Who's doing virtual reality?
Joel: I would say ... Let's give that back. Let's talk about ghosting. Ghosting is a real problem for employers. And a story I recently did someone ... Akin to you guys said, "Messaging, automation, chat bots are anti-ghosting magic." Talk about that.
Sahil: One needs to go deeper as to what's the problem with ghosting. So the problem with ghosting is not somebody not showing up for an interview, the problem with ghosting is them not knowing that they're not going to show up. So let me just synthesize that down. If you knew they're not going to show up, then you don't need to wait for them.
Chad: Yeah, give me a second, I got to take this, man. Okay, go ahead.
Sahil: You got it?
Chad: Yeah, I got it now.
Sahil: Assistant. Okay. So-
Chad: Tell him.
Sahil: So, it's the ability to either have enough of an indication to be able to go back to the hiring manager and say, "Hey Sahil has less than a 25% chance that they're going to show up, because in the last two days, every interaction I've sent with them, they've just been very low." Plus with some macro data, which is ... In this market, X% of people are just applying for welfare or whatever, especially in their hourly or whatever it might be.
Sahil: So ghosting is a problem. In fact, in the hourly world, if you guys don't know, seven out of 10 people who are scheduled for an interview don't show up. Seven out of 10. The value is not to make all seven show up, really, because they may not show up in the next interview. The value is being able to tell that hey, of the 10 people who are scheduled next week, here are the three that are most likely to show up and here are the six who may not show up. Or however that might be.
Chad: Last question. Google. How is Google impact [crosstalk 00:23:09] client standpoint. Hired by Google, hired by Google, the API, Google for Jobs. I mean, not so much in Microsoft, the big names landing in this industry. How's that helped the other products to be able to really rise up? Because, again, Peter's first message to us is, you know, it rises all the boats.
Olivia: So, with all of our clients, we absolutely talk about innovation when we think about their ... Let's pretend, 2019 recruitment media strategy. We always include a line item in our media plans for innovation and put a bucket of dollars there. We are just waiting for Google for Jobs to have an advertising product, because we know it's coming. So hopefully it's within this year.
Olivia: So, that's something that we're paying very close attention to and we have, not a shameless plug, like on [KaraT's 00:23:57] website we have a whole Google for Jobs hub that we keep up with the latest and greatest trends. But second to that I think Google Cloud and layering that technology on top of a customers career site has been making a big impact on the way that candidates are searching for jobs.
Olivia: And then also impacting once they are finding the right job, completing the application and then, ultimately, going in the hands of a recruiter. They're not getting so much waste and non-qualified talent because that does increase the jobs that they're looking for and what's coming up in the search results.
Chad: Thank you all. We appreciate-
Joel: Let's hear it for our panelists. Thank you guys.
Chad: Give it up. Give it up for Hireology and JobAdX for the beer, we really appreciate it.
Joel: Do you have any post questions, just on Twitter hashtag ChadCheese and we'll try to get answers.
Chad: Thanks guys.
Joel: Thanks guys.
Joel: It's commercial time.
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Chad: Thanks again to the team from TA Tech who always run a great event. Aaron from Paradox, Olivia from KRT and Sahil from AllyO. Joel and I will be at TA Tech events all over the world, so go to TAtech.org, heck out events, register and then grab a beer at our show. Sowash out.
Tristen: Hi, I'm Tristen. Thanks for listening to my step-dad, Chad, and his goofy friend, Cheese. You've been listening to the Chad and Cheese Podcast. Make sure you subscribe on iTunes, Google Play or wherever you get your podcasts so you don't miss out on all the knowledge dropping that's happening up in here. They made me say that. The most important part is to check out our sponsors, because I need new Trax bikes. You know, the expensive, shiny gold pair that are extra because ... Well ... I'm extra.
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