In today’s unpredictable economy, businesses must navigate shifting market conditions while maintaining efficiency and resilience.
Our host James Mackey and Hugo Malan, President of Kelly Science, Engineering, Technology, and Telecom, explore the power of a mixed labor strategy - a dynamic approach that blends full-time hires with temporary and project-based workers. Hugo explains how this strategy helps companies stay agile, control costs, and mitigate risks in an evolving landscape.
They also discuss the future of work, with AI-driven candidate screening and the shift from filling seats to solving business problems.
Thank you to our sponsor, SecureVision, for making this show possible!
Our host James Mackey
Follow us:
https://www.linkedin.com/company/82436841/
#1 Rated Embedded Recruitment Firm on G2!
https://www.g2.com/products/securevision/reviews
Thanks for listening!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello, welcome to the Breakthrough Hiring Show.
I'm your host, james Mackey.
We've got a very special guesttoday, hugo Milan.
He's the president of KellyScience, engineering, technology
and Telecom.
Hugo, welcome to the show.
Thanks, james.
Very excited to have you on theshow today, and we got some
really cool topics to discuss.
Before we jump into it, though,I would love it and I'm sure
(00:22):
the audience would if you couldtell us a little bit about
yourself.
We jump into it, though.
I would love it and I'm surethe audience would if you could
tell us a little bit aboutyourself.
Speaker 2 (00:26):
I'll give you the 30 minute snapshot.
I grew up in South Africa,studied electronic engineering
there and then subsequently inEngland as well.
My first job was with a startupin London, but after that I
spent a while working at LosAlamos in the US for a
consulting firm in New York, aninvestment bank in New York, and
about 15 years or so ago Iended up in the staffing
industry.
Speaker 1 (00:47):
Okay, nice, and currently you are running a
pretty significant largedepartment of Kelly Services
that I believe spun off aboutfive years ago.
Is that right?
Not totally but in terms of aseparate department within Kelly
Services, what I mean.
Speaker 2 (01:02):
Yeah, no, I can give a bit of context.
Kelly Services is a largepublic company.
We've been around for 75 years.
We currently have fourreporting divisions, of which
science, engineering, technologyand telecom is one, and out of
that division, of which I'm thepresident, we provide staffing
services, permanent placementservices, sow, solutions of
various kinds, outsourcingservices, but all under that
(01:25):
general umbrella of things thatfall into the science,
engineering, technology andtelecom categories.
Speaker 1 (01:31):
That's right, and one of your strategies right now is
growth through acquisition.
If I'm not mistaken, I thinkwithin the last year you
acquired Motion Recruitment.
Is that right?
Speaker 2 (01:41):
That's right.
We're very excited aboutwelcoming the Motion team into
the Kelly family.
Motion is a verywell-established brand,
particularly in the IT space,but interestingly they also had
a telecom business or have atelecom business, and so it
strengthened our telecomoffering.
They also have a stronggovernment business that
strengthens the Kelly governmentservice offering.
(02:02):
So it's been complementary onmultiple different fronts,
including into one of our otherdivisions.
They have an RPO organizationcalled Seven Step and that's
strengthened Kelly's RPO profileand offering.
Speaker 1 (02:16):
So it's essentially like acquiring a portfolio of
companies.
Speaker 2 (02:20):
It's been a remarkably complementary fit,
that's awesome.
It did strengthen ourcapabilities and our scale in a
number of different dimensionssimultaneously.
Speaker 1 (02:30):
That's great.
It sounds like you've been busy.
Speaker 2 (02:34):
It's kept us up a little bit, but it follows from
an acquisition we made a littleover three years ago of
Softworld, which was a strong ITorganization, but they also had
a significant science businessand a government business, and
so all these pieces we'reputting together and creating a
formidable offering in thesefour disciplines for our clients
(02:54):
in North America.
Speaker 1 (02:55):
I love it and I'm excited to learn more about it.
As a first topic for today, Ithink it'd be great to give
folks a lay of the land with thehiring market within the US, as
well as generally discussingthe economy.
There's a lot of uncertainty inthe market right now.
In your position, I'm sure youhave access to a lot of data
information through Kelly'ssolutions to understand how
(03:17):
essentially the market as awhole in aggregate is thinking
about full-time employmentversus temp placement and
leveraging staffing companiesessentially putting together
mixed labor strategies.
I would love to get yourthoughts on what's going on
through your customers' headsright now, when they're thinking
about how volatile the economicenvironment is right now, and
(03:39):
what kind of conversations areyou having with them about how
they should think aboutleveraging Kelly Services?
It?
Speaker 2 (03:44):
certainly is an interesting time right now.
On many different fronts, we'vegone through some, I'd say,
turbulent waters in the last 24months.
On the one hand, if we look onthe positive side, there's been
meaningful economic growth, bothin 2024 and 2023, we saw
meaningful economic growth andthat's great and there's also
(04:04):
been significant job creation.
If you look at the job reportsevery month, as we do avidly,
you'll see in some months it'sbeen significant.
In other months it's been alittle disappointing, but
there's been consistent jobcreation over the last two years
.
So these are good things.
It's great to have both jobcreation and economic growth and
generally that's been good forthe staffing industry.
(04:26):
If you go back, even 20 years,whenever there's been positive
GDP growth, there's typicallybeen positive staffing industry
revenue growth.
That's not been the case overthe last two years.
If you look at the numbers ofthe public companies are
reporting in general, or if youlook at institutions like the
SIA and the ASA and the numbersthat they publish, then those
(04:47):
have not been great.
So it's a complex economicenvironment to navigate and
we're having a lot ofdiscussions with our clients
about how they are workingthrough this.
What has been surprising isfrom a staffing perspective
particularly, but I thinkeconomically speaking more
generally.
What's been surprising is thefact that there's been
(05:07):
significant job creation insidecompanies but less utilization
of staffing companies to helpwith that, both in terms of the
permanent hiring and in terms oftemp labor.
Speaker 1 (05:20):
Yeah, it's really interesting, and I was reading
one of the articles you wrote onstaffing industry analysts and
I believe one of the points youmade was in your article.
Did I clearly articulate that?
(05:49):
Is that right, yeah?
Speaker 2 (05:51):
Yeah, that we think has particularly affected the
use of staffing companies fordoing permanent hiring inside
client companies.
What we identified through someinternal research and analysis
inside Kelly is that there's aratio that's really
significantly correlated in factinversely correlated with
permanent placement revenue inthe staffing industry, and that
(06:13):
ratio is the number of jobseekers to the number of job
openings.
And it makes intuitive sense Ifthat ratio goes up in other
words there's many more jobseekers for the available job
openings it becomes pretty easyfor a company to fill these
openings.
They put a little ad onLinkedIn and they get lots of
applicants.
If that ratio shrinks, on theother hand, then when you put a
(06:35):
little ad on LinkedIn, you mightnot get that many applicants
and that's when you startlooking to outside help.
That ratio has been elevatedsignificantly over historical
levels for the last 24 months.
Now you can pose the questionwhy is that?
And that's a whole interestingdiscussion in and of itself.
But it does mean that I thinkat the high level you can say
that the job market has becomemore liquid.
(06:57):
There's more applicants outthere pursuing opportunities, or
it could be more applicantsapplying to more opportunities,
and we can talk about thestructural reasons for that, but
in part it's things like remotework.
In part it's things like payrate transparency laws that have
been passed in a number ofdifferent states that make it
easier to evaluate jobs andeasier to apply more broadly.
(07:18):
But when job markets get moreliquid, there's somewhat less of
a need for the services ofstaffing companies.
Now whether this will persist isa whole separate question.
Speaker 1 (07:29):
Right, it's just such an interesting time to be in
staffing and recruiting over thepast five years, which is also,
I'm sure it'd be veryinteresting for you because
you've been with Kelly now forabout five years, so it's like
you came in during this time ofthe economy going through so
many different cycles andunexpected shifts, so I'm sure
that's been pretty cool toexperience Cool and stressful
(07:50):
and everything in between, butat least stimulating, right.
It really has your brain working, I'm sure, thinking about these
different solutions.
So it's exciting.
But if you're like me, one ofmy companies Secure Visions, an
RPO firm and it's definitelybeen some late nights, some
stressful times trying to thinkthrough how to best service our
customers and think through abusiness strategy.
One of the most challengingobstacles that we've had to
(08:11):
overcome is really evaluatingdata our own data, market data
to drive strategy and value forcustomers.
Because back before 2020,before COVID, we had years of
data that was somewhatconsistent and we could see
potentially shifts over time,but then, essentially as soon as
COVID happened, all of ourmetrics got totally skewed and
(08:35):
the data has been a little bitharder to interpret over the
past several years.
So it's definitely beeninteresting trying to navigate
that.
Speaker 2 (08:44):
I couldn't agree more .
I think stimulating is perhapsthe most positive word you can
use to describe it.
But yeah, a lot of thehistorical I think what you
could call conventional wisdomin the staffing industry really
got upended to some extentduring COVID.
But I think everybodyunderstood that there was going
to be a tremendous contractionduring COVID because of
everything that was going on.
And then there was thepost-COVID surge, which was also
(09:06):
somewhat similar to historicalrecession or post-recession
surges.
It's since then where it's beenreally puzzling, and I think
it's because there were somestructural changes that got
accelerated through COVID andthey've just persisted.
So we're in maybe an enduringnew normal.
It doesn't mean that I'mnegative about the future of the
staffing industry, by the way.
(09:26):
I just think it means that wehave to evolve and create a
value proposition that stronglyresonates with the new needs of
our clients, which is notexactly the same as it was five
years ago.
Speaker 1 (09:37):
Oh yeah, no, it's definitely.
There's a massive opportunitybecause the reality too is a lot
of staffing companies won'tevolve right.
They're still gonna be doingthe same playbook they've been
doing for 30, 40 years.
They're not going to bethinking forward thinking.
And what you were saying aboutavailable talent on the market
and folks applying for more jobsand more readily ready to shift
to new opportunities I coulddefinitely see that impacting
per emplacement.
That makes sense.
But what puzzles me a littlebit more is on the temp side,
(10:00):
because it does seem intuitivethat, okay, if there's more
market uncertainty, you're goingto see a higher percentage of
companies leveraging essentiallymore temp workers.
So I've been trying to figureout, thinking about our
conversation today ahead of time.
I read your article and I wasstill trying to think through
what else could be driving thattype of shift and I was
(10:22):
wondering maybe companies arehiring more 1099s directly.
I don't know if that would gointo your staffing metrics in
terms of temp, if that number iscalculated in there or what
might be going on it is and thatcould be playing a role.
Speaker 2 (10:38):
It could also be that some of the technology
platforms where you can sourcetalent directly are eroding the
market a little bit, but if youlook at the total penetration of
those sorts of platforms versusthe size of the staffing market
, it's still comparatively small.
And one of the things thatwe've been analyzing inside
Kelly and where I think weformed a point of view to try
(10:59):
and explain exactly what you'rereferring to, which is it's
uncertain times and yet peopleare not using temp labor.
That seems like a strangereaction, you think, at
uncertain times you want tocreate flexibility in your labor
expense, a natural way to dothat is to turn to a staffing
company and say I'm going tohire 20% of my people through
(11:20):
the staffing company so that Ican flex that up and down more
easily.
We've not been seeing that.
So what we found when we reallylooked at the data and what we
believe might be driving this iswe think there's a fundamental
shift in how companies perceiverisk.
That's relatively unusual, butit's remained in place now for
(11:41):
about two and a half years.
It's unusual in that in normaltimes and I use that normal over
a very long kind of time frame,the near-term risk is
considered less significant thanlonger-term risk, and that
makes intuitive sense.
The near-term you can predictwith a high degree of certainty.
The medium and the long-term itgets cloudier and cloudier.
So normally, if you think ofrisk lying along a curve, that
(12:05):
curve kind of slopes up as youget further out in time.
Now, if you think of whatdrives the use of temp labor,
it's frequently short-termprojects that you're going to do
in the relatively near future,whereas people that you hire
(12:26):
permanently to the company arepeople that you expect to be
around for a longer or even avery long time, and permanent
hiring, we think, is driven by aview on medium and long-term
risk.
Temp hiring, we think, is moredriven by a view on near-term
risk, what we've seen.
There are ways to measure theview on near-term risk.
The one we've been using issomething called the Anxious
(12:48):
Index, which is published by thePhiladelphia Fed, where they
literally survey a large groupof forecasters and ask them what
do you think is the risk of arecession in the next quarter or
a contraction in the nextquarter?
So, very much measuringnear-term risk.
It's called the Anxiety Index,and this Anxiety Index spiked up
in 2023 unexpectedly, eventhough the economy was growing.
(13:09):
Companies were hiring people.
This thing just shot up.
It remained pretty elevated itcame down in 24, but it's still
elevated versus historical norms.
We think that's the reason whycompanies were investing in
hiring people permanentlyinternally.
They weren't using agencies forthat either, as we talked, but
they stopped really using a lotof temp labor because they had a
(13:31):
negative perception ofnear-term risk.
They were afraid that there wasgoing to be a recession soon,
but their outlook on the mediumand longer term were pretty good
.
Interest rates are going tocome down.
We're going to get through theelection and so on.
Now, here we are today, and sowhat does that mean for the
future?
I think, even though we wereall expecting a degree of
stability and certaintypost-election, that's perhaps
(13:54):
not exactly what we're seeing.
So we still have a fairly highdegree, I think, of near-term
uncertainty, and that might meanthat we are in for a somewhat
depressed temp staffing marketfor a while.
Speaker 1 (14:08):
Well, it's interesting and I don't know
about your business, but my RPOcompany post-election actually
saw a rapid increase in demandvery quickly in terms of our
lead generation funnels,business pouring in, customers
coming back and very quickly,when news of tariffs started to
come out, which fueled a lotmore economic uncertainty, we
(14:30):
start to see those inboundfunnels start to contract again.
So it was interesting.
We saw an initial optimism inthe marketplace post-election
and then very quickly slowingdown again a month and a half
later.
It's pretty wild At this point.
There's been so many little upsand downs that I've seen over
the past couple of years.
It's whatever.
There's this uptick.
There's been so many little upsand downs that I've seen over
the past couple of years.
(14:51):
It's whatever.
There's this uptick, this swiftuptick in demand.
Let's just wait for three tosix months and see how
consistent this is going to be.
We're seeing more consistentgrowth.
Last year was certainly betterthan 2023.
But again, every once in awhile, we'll get this rapid
increase that lasts like a monthor two and then it settles down
again.
Speaker 2 (15:14):
It's funny that dynamic that you describe.
I've heard many people out ofindustry now refer to that there
was a month of optimism, yeah,and everybody was talking about
restarting deferred projects andramping up hiring and so on.
And then a lot of folks willsay let's see what the impact is
going to be of some of thesteps.
Speaker 1 (15:35):
And so I'm wondering, like, from your perspective,
just being at the enterpriselevel in our industry and having
access to so much data throughvarious customers in various
industries, what are folks thatyou're speaking to, the
executives you're speaking to,how are they thinking about
potential impacts from tariffs,even if maybe they're not in an
industry that's directlyimpacted?
(15:56):
I'm wondering how muchexecutives at larger
organizations are thinking abouttariffs in relation to their
hiring plans.
Speaker 2 (16:05):
I think folks are thinking that tariffs could be
very impactful.
It obviously depends on whereand which industry they sit in
and where in the value chain inthat industry.
But even something as simple assteel tariffs, that's an input
cost for many industries andthat input cost needs to be
offset somewhere, whether it'sin higher prices, in the
(16:29):
finished goods that they thensell on or simply reduce profits
.
But somehow that impact isgoing to be felt and that's
going to ripple through to theirsuppliers as they start cutting
back on what they purchase andwhat services they purchase,
including staffing services andso on.
So there's definitely a broadrippling effect that will happen
(16:49):
across the economy, and I thinkwe're seeing that sort of
impact play out from a number ofdifferent angles, all of which
are very difficult to predict atthis point.
On the one hand, there aresteps that could end up really
stimulating the economy, butthere are other steps that could
do the opposite.
If, right now, we are seeingsignificant steps to reduce, for
(17:11):
example, the labor force in thefederal government, if that
simultaneously affects hundredsof thousands of people, as it
might, then that's a significantamount of spending in the
market that's likely to contractin the near term.
Many of those are highlyskilled individuals, and that
could ultimately provide a boonfor the economy, as all these
(17:32):
skilled workers find ways tocontribute in the private sector
, but it's going to be awrenching, not least for the
people involved, but also forthe economy.
A wrenching few months, ormaybe even a few years.
Difficult to predict, though,because there's so many factors
mitigating in differentdirections, because there's so
many factors mitigating indifferent directions.
Precisely what the impact isgoing to be, I think, remains to
(17:53):
be seen, because, certainly,some of the steps that are being
taken are very much gearedtowards creating jobs inside the
US, and so it really dependshow these play out over time and
which are the bigger impacts.
Speaker 1 (18:08):
That's what I've been thinking a lot about is how
tariffs are going tospecifically impact staffing,
and of course, that's a complexquestion because you have the
macro impact on the economy, butthen you also have job creation
within the United States withincertain industries, which may
become high growth.
It's interesting.
Maybe they might even contracta little bit in terms of overall
revenue growth.
Possibly I don't know, but thenthey're also increasing.
(18:30):
They're going to have toincrease headcount.
So does that then mean that, ofcourse, short-term risk would
be incredibly high.
So, by that method of thinking,they would still potentially
steer away from temp staffing,but the reality is, in order to
produce, they're going to haveto ramp up staffing.
So I'm almost wondering ifwe're going to see staffing
(18:50):
companies that specialize inimpacted industries increase,
have a lot more demand as aresult of these tariffs and even
if these tariffs are delayed orfor several more months, I
think, just the threat oftariffs, even if all of them
don't go through for the nextpotentially several years, I
could still see companies in theUnited States upping their
(19:12):
manufacturing within the UnitedStates just to mitigate the
risks.
Should, even if it's not now,trump come back and implement
tariffs six months from now?
Speaker 2 (19:21):
Yeah, no there's clearly a reshoring trend and
that could, like you say, leadto increase employment levels in
the US and then the staffingindustry would benefit from that
, but I think it's reallydifficult to predict.
But my advice would be is toanybody trying to navigate this
stay nimble and agile.
It's just as important for ourclients to have flexibility in
(19:44):
their cost structure as it isfor staffing companies to have a
nimble and an agile approach toplanning their business.
But I think if staffingcompanies continue to focus on
the strong parts of our valueproposition, which is we're
really good at sourcing talent,finding great matches for our
clients, but we're also reallygood at providing that flexible
(20:07):
labor structure that allows youto more effectively navigate
turbulent times Increasingly,staffing companies and we're
very focused on this are takingthe next step, and that's
providing more comprehensivesolutions, and that can be a
solution in the form of an SOW,where we commit to providing a
(20:27):
team with a certain skillprofile on an ongoing basis.
It can be an SOW where we takeon a piece of project work and
commit to delivering, whetherit's a chunk of software code or
a piece of engineering designwork, or a piece of radio
frequency optimization work in aregion for a telecom company.
Those are the kinds ofsolutions where we see a lot of
(20:48):
demand.
In fact, if anything, there'saccelerating demand in those
areas, even as the demand fortraditional staffing services
continues to be.
You're not as strong as we'dall like it to be.
So I think by focusing on beinga solution provider to your
client and asking first, what isthe business problem you're
trying to solve, what's thetechnical problem you're trying
(21:09):
to solve?
And now let's devise a laborstrategy around that, you can
ultimately be in a strategicconversation with your client.
That's much more meaningfulthan just asking do you need
people?
Speaker 1 (21:19):
To pivot the conversation a little bit, which
is, I think it's still relevantto the SOW conversation how are
you thinking aboutincorporating technology and AI
into your solutions, whetherthat's behind the scenes, with
your internal staff to driveefficiencies, or what you're
thinking about putting togethersolutions for your customers?
(21:39):
What are your thoughts onleveraging AI?
Speaker 2 (21:44):
We're very excited about AI.
We're aggressive adopters andexperimenters at this point
because there seems to be somany different places in the
staffing value chain inparticular where AI can play a
meaningful role.
There's interesting things tobe done on the sales front in
terms of identifying clientsthat may be in need,
automatically scouring themarket for buying signals,
(22:06):
whether it's new hires, newproject starts, new capital
commitments, and so on.
Many of these you can find frompublic sources, and AI is
particularly good at scouringthrough a vast trove of
information and narrowing itdown to the things that's
relevant for you.
So we think that's a reallyinteresting opportunity.
On the recruiting side, theopportunity is at least as
(22:26):
interesting, if not more,sourcing talent again.
Scouring thousands or evenmillions of profiles to find
just the right folks for aparticular job description is a
very obvious applicationautomatically reaching out to
candidates in a personalized way, gauging their interest, doing
(22:47):
some pre-screening questions andthere's some really convincing
audio avatars these days andeven video avatars that can do
that.
So that's clearly the way thingsare going to go, and we're
excited about that for tworeasons.
One, it's going to drivesignificant jumps in
productivity in how we do ourbusiness, which is going to
create additional resources forus to reinvest and get even more
(23:09):
sophisticated on these fronts.
But two, I think from arecruiter perspective, it's
going to change their day andsome of the somewhat more
routine and maybe even somewhattedious activities are going to
be taken over by AI and they'llbe able to spend their time
doing the things that they aredistinctively good at and that
only they can do, which isreally understanding what are
(23:32):
the subtle elements that drivesuccess from the client's
perspective in a particular role.
The things that's not stated inthe job description but that
you can tease out through athoughtful conversation with the
client and, similarly, with thecandidate.
What are the aspirations thatare not showing up in their
resume or in their applicationbut that would make them really
(23:53):
gravitate towards a particularrole and ultimately be
successful in it.
And those sorts of subtle humaninteractions the moment and I
think for many years still onlyhumans can do, and if we can
spend more of our time on thoseand a little less of our time on
the tedious activities, that'sa win for everybody.
Speaker 1 (24:09):
Yeah, I think so, and I think that the staffing
companies that are really goingto thrive in the future are
going to be the early adoptersto AI technology, and I've made
a big bet on that recently,starting an AI company that is
primarily focused on servicingthe staffing industry.
I think there's a few primaryreasons.
Right, it's like, literally,your business is hiring, so it
(24:33):
makes sense to optimize there.
Also, I think it's somethingwhere it's in order to
efficiency gains are directlycorrelated to revenue, and so I
think that for that reason it's,they're going to be early
adopters.
And then, thirdly, there'sservices companies that are a
little bit lower, smallermargins than software companies,
and so looking for thoseefficiency gains, not only from
(24:55):
a speed to additional revenue,but also looking at margins and
making those healthier andbigger for a staffing company, I
think is also going to driveearly adoption.
And I just think it's in orderto build a successful agency and
to compete, like I think a lotof old school agencies are
really just going to get leftbehind, and I think it's going
(25:16):
to happen at Accelerated Clip,like over the next few years.
Agreed, agreed.
Speaker 2 (25:21):
I think it is going to be kind of a shakeout in the
market.
We've already seen a prettysevere shakeout in the market
because of the challengingeconomic conditions for the
staffing industry.
Over the last two years it'sbeen a full-blown staffing
recession and that always causesa realignment and an adjustment
in the state of play.
But AI, I think, is going todrive that to a next level still
(25:43):
.
So these are interesting yearsto be in our industry.
Speaker 1 (25:46):
When you think of AI in your business, I'm wondering
do you see it because obviouslythis is my world, I'm thinking
about this stuff a lot Do yousee it as incorporating it for
more of a revenue generatingmotion or value creation motion,
or do you look at it from anearnings and profitability
perspective to optimize yourdelivery?
Speaker 2 (26:07):
I think the impact is going to be on many different
fronts.
You could think of it as it'sgoing to accelerate the
productivity of your existingsalespeople and recruiters.
So, with the same number ofpeople or the same cost base,
you're going to do a lot moregenerate more revenue, make more
placements, etc.
That's a good thing, and thatultimately means that your
bottom line is going to expandsignificantly as well.
(26:27):
That assumes that there's moredemand out there for you to go
and capture as you grow all thisproductivity.
If there isn't, you could sayI'm going to do the same that I
do today, but with fewer peoplethat are in more interesting and
meaningful roles, but in ahighly accelerated productivity
environment.
But that, too, accelerates andexpands your bottom line.
(26:49):
The impact is as you driveproductivity and you drive that
up and down the value chain.
It can drive the bottom line,it can drive the top line.
It can drive both.
Certainly, it would be ourintent to drive both pretty
aggressively.
We want to do a lot more withthe people that we have today.
Is there a specific use casewithin AI and staffing that
excites?
Speaker 1 (27:04):
you the most right now?
Lot more with the people thatwe have today.
Is there a specific use casewithin AI and staffing that
excites you the most right now?
Speaker 2 (27:11):
It's a good question.
The traditional, the holy grailof staffing automation that
everybody has chased now formany years is the perfect match
Having an AI ingest and part andinterpret a job description and
do the same with thousands ormillions of profiles, and then
pull these things apart intoskills and experiences and
(27:32):
perhaps refer to some sort of ataxonomy but eventually use that
analysis to create the perfectmatch.
I think what we've learned isthe match only gets so good
because there's always thingsthat's not in the job
description and there are alwaysthings that's not in the job
description and there are alwaysaspirations and even sometimes
skills and experiences that arenot fully captured on the resume
(27:53):
.
So we might be nearing a pointof diminishing returns there in
terms of additional investment,because so many people have run
at that and they've made somepretty good matching algorithms,
but nobody's made a perfect one.
So I think that's aninteresting use case, but I'm
not sure how much more there isto do there.
I think the use case to methat's intriguing is doing the
(28:15):
first part of the interview insome sort of an automated manner
, but doing it not as a tediousset of questions but as an
interactive experience that'sultimately fulfilling for the
candidate.
Ai seemed to be pretty good atthat initial superficial
conversation, not the ultimatelyin-depth brokering that only an
(28:37):
experienced recruiter can do,but the initial kind of survey
discussion to see if there's atleast a potential fit.
And there may be ways to gamifythat and make it a bit more
amusing and entertaining.
And of course you can have anAI engaged in a thousand of
those simultaneously withoutbreaking a sweat, whereas
traditional recruiters don'tscale quite as effectively.
Speaker 1 (28:58):
I'm really happy you said that because, literally,
the company I started Junethat's what it does and I came
to that conclusion that it'sgoing to be the most valuable
use case for staffing and,honestly, I think, hiring in
general.
From 10 years of experiencerunning an RPO and then honestly
, on the podcast I invited onall of the CEOs of every
recruiting tech company that'sincorporating AI into their
(29:21):
solution and we've been havingconversations about this for a
long time and so I got to learnfrom literally all of the CEOs
building these products and thenmy own experience like in-house
and building an agency and whatI really came down to is that
like high level evaluationturning like large applicant
pools into qualified candidateshortlists, where that's a very
(29:42):
compelling use case.
Very compelling use case andit's a way that we're thinking
about.
It is essentially optimizinginbound recruiting for a more
significant ROI and contributionfor hiring and essentially,
when somebody applies to aninbound job, june automatically
reaches out to conduct all thepre-screening questions.
So it's like as soon assomebody hits apply, they're
(30:02):
getting outreach and follow-upto essentially answer what we
would consider knockoutquestions.
Right, like those questionswhere a recruiter is on the
phone for five minutes and theyknow whether or not the person
is a fit, and so they can avoidlike going through all the
resumes, all that kind of stuff.
They can avoid doing all thescheduling right and they can be
scheduling with folks thataren't necessarily going to be
(30:23):
the right fit and they can justessentially evaluate a short
list of people.
So that's a really, I think,one of the most exciting use
cases right now, and what we'redoing is we are like signing
folks in different industries,but our primary focus is dialing
into staffing and recruitingand for people tuning in Huga
and I did not discuss thisbefore, so when he was giving
like, when he was talking aboutthis use case, that was totally
(30:45):
random.
But I'm really happy that'swhat you said, because it makes
me feel even better and feellike we're on track to build the
right solution for the market.
So that's pretty cool.
Speaker 2 (30:55):
Yeah, I think if you guys can create a better
mousetrap there, then certainlythe world, the staffing, will be
the path to your Peter.
Pass your door.
Speaker 1 (31:03):
Yeah, we'll just have to see Any final thoughts.
We're wrapping up on our timehere, but if there's anything
else you want to share with theaudience about what you're doing
or what Kelly's doing, we havea few minutes to discuss that.
Speaker 2 (31:14):
The final words.
I think, in terms of speakingto our potential clients
listening out there at Kelly, weare very focused on being able
to provide a solution thatsolves your business problem,
and we're able to operate acrossthe full spectrum of potential
solutions.
So if you just need a permanentplacement, we can help you with
(31:35):
that.
If you need traditionalstaffing, we can help you with
that.
But if you need a solution thatencompasses a team of people
that's being supervised, we cando that or deliver a project.
Or if you want to outsource anentire piece of your business,
and we can do that for you,onshore or offshore, with mixed
bill rates, whatever isoptimized.
So that's really the approachthat we are taking and it seems
(31:57):
to be working quite well for us.
So I'd offer that as freeadvice to my staffing
competitors even out there.
But I think if we're going tobe successful as an industry
going forward, we have to startthinking in terms of how we're
solving the business problems ofour clients and not just how we
provide 10-blamer.
Speaker 1 (32:14):
Yeah, and I'm really excited for you and for Kelly.
I think it's been great gettingto know you a little bit and I
think what makes you differentin your background as well,
versus a lot of executives andstaffing, is you're actually you
have an engineering background,right Cambridge, so it's I
think, when you're thinkingabout SOW work and creating
custom solutions, you'reprobably you and your team are
(32:35):
probably much better positionedin order to do that most
effectively versus, I think,probably a lot of staffing execs
that have more of a businessops go-to-market background.
Speaker 2 (32:45):
I will say it does take an investment going down
this path.
You need folks that are good atidentifying solutions,
designing solutions, pricingsolutions and then running the
projects.
It's all well and good to sellan SOW project.
The challenge is delivering anSOW project.
So it does take a bit of adifferent skill set.
It's not easy to step from justthe traditional staffing world
(33:10):
into that space, but it's veryrewarding and I think that is
where our future lies.
Speaker 1 (33:15):
I love it.
I love it, Hugo.
Thank you so much for joiningus today.
I know our audience is going tolove this episode, so I
appreciate you coming on theshow.
Speaker 2 (33:23):
My pleasure.
Thanks for the invitation,James.
Speaker 1 (33:25):
All right and for everybody tuning in.
Thank you so much for joiningus, Take.
Hello, welcome to the Breakthrough Hiring Show.
I'm your host, james Mackey.
We've got a very special guesttoday, hugo Milan.
He's the president of KellyScience, engineering, technology
and Telecom.
Hugo, welcome to the show.
Thanks, james.
Very excited to have you on theshow today, and we got some
really cool topics to discuss.
Before we jump into it, though,I would love it and I'm sure
(00:22):
the audience would if you couldtell us a little bit about
yourself.
We jump into it, though.
I would love it and I'm surethe audience would if you could
tell us a little bit aboutyourself.
Speaker 2 (00:26):
I'll give you the 30 minute snapshot.
I grew up in South Africa,studied electronic engineering
there and then subsequently inEngland as well.
My first job was with a startupin London, but after that I
spent a while working at LosAlamos in the US for a
consulting firm in New York, aninvestment bank in New York, and
about 15 years or so ago Iended up in the staffing
industry.
Speaker 1 (00:47):
Okay, nice, and currently you are running a
pretty significant largedepartment of Kelly Services
that I believe spun off aboutfive years ago.
Is that right?
Not totally but in terms of aseparate department within Kelly
Services, what I mean.
Speaker 2 (01:02):
Yeah, no, I can give a bit of context.
Kelly Services is a largepublic company.
We've been around for 75 years.
We currently have fourreporting divisions, of which
science, engineering, technologyand telecom is one, and out of
that division, of which I'm thepresident, we provide staffing
services, permanent placementservices, sow, solutions of
various kinds, outsourcingservices, but all under that
(01:25):
general umbrella of things thatfall into the science,
engineering, technology andtelecom categories.
Speaker 1 (01:31):
That's right, and one of your strategies right now is
growth through acquisition.
If I'm not mistaken, I thinkwithin the last year you
acquired Motion Recruitment.
Is that right?
Speaker 2 (01:41):
That's right.
We're very excited aboutwelcoming the Motion team into
the Kelly family.
Motion is a verywell-established brand,
particularly in the IT space,but interestingly they also had
a telecom business or have atelecom business, and so it
strengthened our telecomoffering.
They also have a stronggovernment business that
strengthens the Kelly governmentservice offering.
(02:02):
So it's been complementary onmultiple different fronts,
including into one of our otherdivisions.
They have an RPO organizationcalled Seven Step and that's
strengthened Kelly's RPO profileand offering.
Speaker 1 (02:16):
So it's essentially like acquiring a portfolio of
companies.
Speaker 2 (02:20):
It's been a remarkably complementary fit,
that's awesome.
It did strengthen ourcapabilities and our scale in a
number of different dimensionssimultaneously.
Speaker 1 (02:30):
That's great.
It sounds like you've been busy.
Speaker 2 (02:34):
It's kept us up a little bit, but it follows from
an acquisition we made a littleover three years ago of
Softworld, which was a strong ITorganization, but they also had
a significant science businessand a government business, and
so all these pieces we'reputting together and creating a
formidable offering in thesefour disciplines for our clients
(02:54):
in North America.
Speaker 1 (02:55):
I love it and I'm excited to learn more about it.
As a first topic for today, Ithink it'd be great to give
folks a lay of the land with thehiring market within the US, as
well as generally discussingthe economy.
There's a lot of uncertainty inthe market right now.
In your position, I'm sure youhave access to a lot of data
information through Kelly'ssolutions to understand how
(03:17):
essentially the market as awhole in aggregate is thinking
about full-time employmentversus temp placement and
leveraging staffing companiesessentially putting together
mixed labor strategies.
I would love to get yourthoughts on what's going on
through your customers' headsright now, when they're thinking
about how volatile the economicenvironment is right now, and
(03:39):
what kind of conversations areyou having with them about how
they should think aboutleveraging Kelly Services?
It?
Speaker 2 (03:44):
certainly is an interesting time right now.
On many different fronts, we'vegone through some, I'd say,
turbulent waters in the last 24months.
On the one hand, if we look onthe positive side, there's been
meaningful economic growth, bothin 2024 and 2023, we saw
meaningful economic growth andthat's great and there's also
(04:04):
been significant job creation.
If you look at the job reportsevery month, as we do avidly,
you'll see in some months it'sbeen significant.
In other months it's been alittle disappointing, but
there's been consistent jobcreation over the last two years
.
So these are good things.
It's great to have both jobcreation and economic growth and
generally that's been good forthe staffing industry.
(04:26):
If you go back, even 20 years,whenever there's been positive
GDP growth, there's typicallybeen positive staffing industry
revenue growth.
That's not been the case overthe last two years.
If you look at the numbers ofthe public companies are
reporting in general, or if youlook at institutions like the
SIA and the ASA and the numbersthat they publish, then those
(04:47):
have not been great.
So it's a complex economicenvironment to navigate and
we're having a lot ofdiscussions with our clients
about how they are workingthrough this.
What has been surprising isfrom a staffing perspective
particularly, but I thinkeconomically speaking more
generally.
What's been surprising is thefact that there's been
(05:07):
significant job creation insidecompanies but less utilization
of staffing companies to helpwith that, both in terms of the
permanent hiring and in terms oftemp labor.
Speaker 1 (05:20):
Yeah, it's really interesting, and I was reading
one of the articles you wrote onstaffing industry analysts and
I believe one of the points youmade was in your article.
Did I clearly articulate that?
(05:49):
Is that right, yeah?
Speaker 2 (05:51):
Yeah, that we think has particularly affected the
use of staffing companies fordoing permanent hiring inside
client companies.
What we identified through someinternal research and analysis
inside Kelly is that there's aratio that's really
significantly correlated in factinversely correlated with
permanent placement revenue inthe staffing industry, and that
(06:13):
ratio is the number of jobseekers to the number of job
openings.
And it makes intuitive sense Ifthat ratio goes up in other
words there's many more jobseekers for the available job
openings it becomes pretty easyfor a company to fill these
openings.
They put a little ad onLinkedIn and they get lots of
applicants.
If that ratio shrinks, on theother hand, then when you put a
(06:35):
little ad on LinkedIn, you mightnot get that many applicants
and that's when you startlooking to outside help.
That ratio has been elevatedsignificantly over historical
levels for the last 24 months.
Now you can pose the questionwhy is that?
And that's a whole interestingdiscussion in and of itself.
But it does mean that I thinkat the high level you can say
that the job market has becomemore liquid.
(06:57):
There's more applicants outthere pursuing opportunities, or
it could be more applicantsapplying to more opportunities,
and we can talk about thestructural reasons for that, but
in part it's things like remotework.
In part it's things like payrate transparency laws that have
been passed in a number ofdifferent states that make it
easier to evaluate jobs andeasier to apply more broadly.
(07:18):
But when job markets get moreliquid, there's somewhat less of
a need for the services ofstaffing companies.
Now whether this will persist isa whole separate question.
Speaker 1 (07:29):
Right, it's just such an interesting time to be in
staffing and recruiting over thepast five years, which is also,
I'm sure it'd be veryinteresting for you because
you've been with Kelly now forabout five years, so it's like
you came in during this time ofthe economy going through so
many different cycles andunexpected shifts, so I'm sure
that's been pretty cool toexperience Cool and stressful
(07:50):
and everything in between, butat least stimulating, right.
It really has your brain working, I'm sure, thinking about these
different solutions.
So it's exciting.
But if you're like me, one ofmy companies Secure Visions, an
RPO firm and it's definitelybeen some late nights, some
stressful times trying to thinkthrough how to best service our
customers and think through abusiness strategy.
One of the most challengingobstacles that we've had to
(08:11):
overcome is really evaluatingdata our own data, market data
to drive strategy and value forcustomers.
Because back before 2020,before COVID, we had years of
data that was somewhatconsistent and we could see
potentially shifts over time,but then, essentially as soon as
COVID happened, all of ourmetrics got totally skewed and
(08:35):
the data has been a little bitharder to interpret over the
past several years.
So it's definitely beeninteresting trying to navigate
that.
Speaker 2 (08:44):
I couldn't agree more .
I think stimulating is perhapsthe most positive word you can
use to describe it.
But yeah, a lot of thehistorical I think what you
could call conventional wisdomin the staffing industry really
got upended to some extentduring COVID.
But I think everybodyunderstood that there was going
to be a tremendous contractionduring COVID because of
everything that was going on.
And then there was thepost-COVID surge, which was also
(09:06):
somewhat similar to historicalrecession or post-recession
surges.
It's since then where it's beenreally puzzling, and I think
it's because there were somestructural changes that got
accelerated through COVID andthey've just persisted.
So we're in maybe an enduringnew normal.
It doesn't mean that I'mnegative about the future of the
staffing industry, by the way.
(09:26):
I just think it means that wehave to evolve and create a
value proposition that stronglyresonates with the new needs of
our clients, which is notexactly the same as it was five
years ago.
Speaker 1 (09:37):
Oh yeah, no, it's definitely.
There's a massive opportunitybecause the reality too is a lot
of staffing companies won'tevolve right.
They're still gonna be doingthe same playbook they've been
doing for 30, 40 years.
They're not going to bethinking forward thinking.
And what you were saying aboutavailable talent on the market
and folks applying for more jobsand more readily ready to shift
to new opportunities I coulddefinitely see that impacting
per emplacement.
That makes sense.
But what puzzles me a littlebit more is on the temp side,
(10:00):
because it does seem intuitivethat, okay, if there's more
market uncertainty, you're goingto see a higher percentage of
companies leveraging essentiallymore temp workers.
So I've been trying to figureout, thinking about our
conversation today ahead of time.
I read your article and I wasstill trying to think through
what else could be driving thattype of shift and I was
(10:22):
wondering maybe companies arehiring more 1099s directly.
I don't know if that would gointo your staffing metrics in
terms of temp, if that number iscalculated in there or what
might be going on it is and thatcould be playing a role.
Speaker 2 (10:38):
It could also be that some of the technology
platforms where you can sourcetalent directly are eroding the
market a little bit, but if youlook at the total penetration of
those sorts of platforms versusthe size of the staffing market
, it's still comparatively small.
And one of the things thatwe've been analyzing inside
Kelly and where I think weformed a point of view to try
(10:59):
and explain exactly what you'rereferring to, which is it's
uncertain times and yet peopleare not using temp labor.
That seems like a strangereaction, you think, at
uncertain times you want tocreate flexibility in your labor
expense, a natural way to dothat is to turn to a staffing
company and say I'm going tohire 20% of my people through
(11:20):
the staffing company so that Ican flex that up and down more
easily.
We've not been seeing that.
So what we found when we reallylooked at the data and what we
believe might be driving this iswe think there's a fundamental
shift in how companies perceiverisk.
That's relatively unusual, butit's remained in place now for
(11:41):
about two and a half years.
It's unusual in that in normaltimes and I use that normal over
a very long kind of time frame,the near-term risk is
considered less significant thanlonger-term risk, and that
makes intuitive sense.
The near-term you can predictwith a high degree of certainty.
The medium and the long-term itgets cloudier and cloudier.
So normally, if you think ofrisk lying along a curve, that
(12:05):
curve kind of slopes up as youget further out in time.
Now, if you think of whatdrives the use of temp labor,
it's frequently short-termprojects that you're going to do
in the relatively near future,whereas people that you hire
(12:26):
permanently to the company arepeople that you expect to be
around for a longer or even avery long time, and permanent
hiring, we think, is driven by aview on medium and long-term
risk.
Temp hiring, we think, is moredriven by a view on near-term
risk, what we've seen.
There are ways to measure theview on near-term risk.
The one we've been using issomething called the Anxious
(12:48):
Index, which is published by thePhiladelphia Fed, where they
literally survey a large groupof forecasters and ask them what
do you think is the risk of arecession in the next quarter or
a contraction in the nextquarter?
So, very much measuringnear-term risk.
It's called the Anxiety Index,and this Anxiety Index spiked up
in 2023 unexpectedly, eventhough the economy was growing.
(13:09):
Companies were hiring people.
This thing just shot up.
It remained pretty elevated itcame down in 24, but it's still
elevated versus historical norms.
We think that's the reason whycompanies were investing in
hiring people permanentlyinternally.
They weren't using agencies forthat either, as we talked, but
they stopped really using a lotof temp labor because they had a
(13:31):
negative perception ofnear-term risk.
They were afraid that there wasgoing to be a recession soon,
but their outlook on the mediumand longer term were pretty good
.
Interest rates are going tocome down.
We're going to get through theelection and so on.
Now, here we are today, and sowhat does that mean for the
future?
I think, even though we wereall expecting a degree of
stability and certaintypost-election, that's perhaps
(13:54):
not exactly what we're seeing.
So we still have a fairly highdegree, I think, of near-term
uncertainty, and that might meanthat we are in for a somewhat
depressed temp staffing marketfor a while.
Speaker 1 (14:08):
Well, it's interesting and I don't know
about your business, but my RPOcompany post-election actually
saw a rapid increase in demandvery quickly in terms of our
lead generation funnels,business pouring in, customers
coming back and very quickly,when news of tariffs started to
come out, which fueled a lotmore economic uncertainty, we
(14:30):
start to see those inboundfunnels start to contract again.
So it was interesting.
We saw an initial optimism inthe marketplace post-election
and then very quickly slowingdown again a month and a half
later.
It's pretty wild At this point.
There's been so many little upsand downs that I've seen over
the past couple of years.
It's whatever.
There's this uptick.
There's been so many little upsand downs that I've seen over
the past couple of years.
(14:51):
It's whatever.
There's this uptick, this swiftuptick in demand.
Let's just wait for three tosix months and see how
consistent this is going to be.
We're seeing more consistentgrowth.
Last year was certainly betterthan 2023.
But again, every once in awhile, we'll get this rapid
increase that lasts like a monthor two and then it settles down
again.
Speaker 2 (15:14):
It's funny that dynamic that you describe.
I've heard many people out ofindustry now refer to that there
was a month of optimism, yeah,and everybody was talking about
restarting deferred projects andramping up hiring and so on.
And then a lot of folks willsay let's see what the impact is
going to be of some of thesteps.
Speaker 1 (15:35):
And so I'm wondering, like, from your perspective,
just being at the enterpriselevel in our industry and having
access to so much data throughvarious customers in various
industries, what are folks thatyou're speaking to, the
executives you're speaking to,how are they thinking about
potential impacts from tariffs,even if maybe they're not in an
industry that's directlyimpacted?
(15:56):
I'm wondering how muchexecutives at larger
organizations are thinking abouttariffs in relation to their
hiring plans.
Speaker 2 (16:05):
I think folks are thinking that tariffs could be
very impactful.
It obviously depends on whereand which industry they sit in
and where in the value chain inthat industry.
But even something as simple assteel tariffs, that's an input
cost for many industries andthat input cost needs to be
offset somewhere, whether it'sin higher prices, in the
(16:29):
finished goods that they thensell on or simply reduce profits
.
But somehow that impact isgoing to be felt and that's
going to ripple through to theirsuppliers as they start cutting
back on what they purchase andwhat services they purchase,
including staffing services andso on.
So there's definitely a broadrippling effect that will happen
(16:49):
across the economy, and I thinkwe're seeing that sort of
impact play out from a number ofdifferent angles, all of which
are very difficult to predict atthis point.
On the one hand, there aresteps that could end up really
stimulating the economy, butthere are other steps that could
do the opposite.
If, right now, we are seeingsignificant steps to reduce, for
(17:11):
example, the labor force in thefederal government, if that
simultaneously affects hundredsof thousands of people, as it
might, then that's a significantamount of spending in the
market that's likely to contractin the near term.
Many of those are highlyskilled individuals, and that
could ultimately provide a boonfor the economy, as all these
(17:32):
skilled workers find ways tocontribute in the private sector
, but it's going to be awrenching, not least for the
people involved, but also forthe economy.
A wrenching few months, ormaybe even a few years.
Difficult to predict, though,because there's so many factors
mitigating in differentdirections, because there's so
many factors mitigating indifferent directions.
Precisely what the impact isgoing to be, I think, remains to
(17:53):
be seen, because, certainly,some of the steps that are being
taken are very much gearedtowards creating jobs inside the
US, and so it really dependshow these play out over time and
which are the bigger impacts.
Speaker 1 (18:08):
That's what I've been thinking a lot about is how
tariffs are going tospecifically impact staffing,
and of course, that's a complexquestion because you have the
macro impact on the economy, butthen you also have job creation
within the United States withincertain industries, which may
become high growth.
It's interesting.
Maybe they might even contracta little bit in terms of overall
revenue growth.
Possibly I don't know, but thenthey're also increasing.
(18:30):
They're going to have toincrease headcount.
So does that then mean that, ofcourse, short-term risk would
be incredibly high.
So, by that method of thinking,they would still potentially
steer away from temp staffing,but the reality is, in order to
produce, they're going to haveto ramp up staffing.
So I'm almost wondering ifwe're going to see staffing
(18:50):
companies that specialize inimpacted industries increase,
have a lot more demand as aresult of these tariffs and even
if these tariffs are delayed orfor several more months, I
think, just the threat oftariffs, even if all of them
don't go through for the nextpotentially several years, I
could still see companies in theUnited States upping their
(19:12):
manufacturing within the UnitedStates just to mitigate the
risks.
Should, even if it's not now,trump come back and implement
tariffs six months from now?
Speaker 2 (19:21):
Yeah, no there's clearly a reshoring trend and
that could, like you say, leadto increase employment levels in
the US and then the staffingindustry would benefit from that
, but I think it's reallydifficult to predict.
But my advice would be is toanybody trying to navigate this
stay nimble and agile.
It's just as important for ourclients to have flexibility in
(19:44):
their cost structure as it isfor staffing companies to have a
nimble and an agile approach toplanning their business.
But I think if staffingcompanies continue to focus on
the strong parts of our valueproposition, which is we're
really good at sourcing talent,finding great matches for our
clients, but we're also reallygood at providing that flexible
(20:07):
labor structure that allows youto more effectively navigate
turbulent times Increasingly,staffing companies and we're
very focused on this are takingthe next step, and that's
providing more comprehensivesolutions, and that can be a
solution in the form of an SOW,where we commit to providing a
(20:27):
team with a certain skillprofile on an ongoing basis.
It can be an SOW where we takeon a piece of project work and
commit to delivering, whetherit's a chunk of software code or
a piece of engineering designwork, or a piece of radio
frequency optimization work in aregion for a telecom company.
Those are the kinds ofsolutions where we see a lot of
(20:48):
demand.
In fact, if anything, there'saccelerating demand in those
areas, even as the demand fortraditional staffing services
continues to be.
You're not as strong as we'dall like it to be.
So I think by focusing on beinga solution provider to your
client and asking first, what isthe business problem you're
trying to solve, what's thetechnical problem you're trying
(21:09):
to solve?
And now let's devise a laborstrategy around that, you can
ultimately be in a strategicconversation with your client.
That's much more meaningfulthan just asking do you need
people?
Speaker 1 (21:19):
To pivot the conversation a little bit, which
is, I think it's still relevantto the SOW conversation how are
you thinking aboutincorporating technology and AI
into your solutions, whetherthat's behind the scenes, with
your internal staff to driveefficiencies, or what you're
thinking about putting togethersolutions for your customers?
(21:39):
What are your thoughts onleveraging AI?
Speaker 2 (21:44):
We're very excited about AI.
We're aggressive adopters andexperimenters at this point
because there seems to be somany different places in the
staffing value chain inparticular where AI can play a
meaningful role.
There's interesting things tobe done on the sales front in
terms of identifying clientsthat may be in need,
automatically scouring themarket for buying signals,
(22:06):
whether it's new hires, newproject starts, new capital
commitments, and so on.
Many of these you can find frompublic sources, and AI is
particularly good at scouringthrough a vast trove of
information and narrowing itdown to the things that's
relevant for you.
So we think that's a reallyinteresting opportunity.
On the recruiting side, theopportunity is at least as
(22:26):
interesting, if not more,sourcing talent again.
Scouring thousands or evenmillions of profiles to find
just the right folks for aparticular job description is a
very obvious applicationautomatically reaching out to
candidates in a personalized way, gauging their interest, doing
(22:47):
some pre-screening questions andthere's some really convincing
audio avatars these days andeven video avatars that can do
that.
So that's clearly the way thingsare going to go, and we're
excited about that for tworeasons.
One, it's going to drivesignificant jumps in
productivity in how we do ourbusiness, which is going to
create additional resources forus to reinvest and get even more
(23:09):
sophisticated on these fronts.
But two, I think from arecruiter perspective, it's
going to change their day andsome of the somewhat more
routine and maybe even somewhattedious activities are going to
be taken over by AI and they'llbe able to spend their time
doing the things that they aredistinctively good at and that
only they can do, which isreally understanding what are
(23:32):
the subtle elements that drivesuccess from the client's
perspective in a particular role.
The things that's not stated inthe job description but that
you can tease out through athoughtful conversation with the
client and, similarly, with thecandidate.
What are the aspirations thatare not showing up in their
resume or in their applicationbut that would make them really
(23:53):
gravitate towards a particularrole and ultimately be
successful in it.
And those sorts of subtle humaninteractions the moment and I
think for many years still onlyhumans can do, and if we can
spend more of our time on thoseand a little less of our time on
the tedious activities, that'sa win for everybody.
Speaker 1 (24:09):
Yeah, I think so, and I think that the staffing
companies that are really goingto thrive in the future are
going to be the early adoptersto AI technology, and I've made
a big bet on that recently,starting an AI company that is
primarily focused on servicingthe staffing industry.
I think there's a few primaryreasons.
Right, it's like, literally,your business is hiring, so it
(24:33):
makes sense to optimize there.
Also, I think it's somethingwhere it's in order to
efficiency gains are directlycorrelated to revenue, and so I
think that for that reason it's,they're going to be early
adopters.
And then, thirdly, there'sservices companies that are a
little bit lower, smallermargins than software companies,
and so looking for thoseefficiency gains, not only from
(24:55):
a speed to additional revenue,but also looking at margins and
making those healthier andbigger for a staffing company, I
think is also going to driveearly adoption.
And I just think it's in orderto build a successful agency and
to compete, like I think a lotof old school agencies are
really just going to get leftbehind, and I think it's going
(25:16):
to happen at Accelerated Clip,like over the next few years.
Agreed, agreed.
Speaker 2 (25:21):
I think it is going to be kind of a shakeout in the
market.
We've already seen a prettysevere shakeout in the market
because of the challengingeconomic conditions for the
staffing industry.
Over the last two years it'sbeen a full-blown staffing
recession and that always causesa realignment and an adjustment
in the state of play.
But AI, I think, is going todrive that to a next level still
(25:43):
.
So these are interesting yearsto be in our industry.
Speaker 1 (25:46):
When you think of AI in your business, I'm wondering
do you see it because obviouslythis is my world, I'm thinking
about this stuff a lot Do yousee it as incorporating it for
more of a revenue generatingmotion or value creation motion,
or do you look at it from anearnings and profitability
perspective to optimize yourdelivery?
Speaker 2 (26:07):
I think the impact is going to be on many different
fronts.
You could think of it as it'sgoing to accelerate the
productivity of your existingsalespeople and recruiters.
So, with the same number ofpeople or the same cost base,
you're going to do a lot moregenerate more revenue, make more
placements, etc.
That's a good thing, and thatultimately means that your
bottom line is going to expandsignificantly as well.
(26:27):
That assumes that there's moredemand out there for you to go
and capture as you grow all thisproductivity.
If there isn't, you could sayI'm going to do the same that I
do today, but with fewer peoplethat are in more interesting and
meaningful roles, but in ahighly accelerated productivity
environment.
But that, too, accelerates andexpands your bottom line.
(26:49):
The impact is as you driveproductivity and you drive that
up and down the value chain.
It can drive the bottom line,it can drive the top line.
It can drive both.
Certainly, it would be ourintent to drive both pretty
aggressively.
We want to do a lot more withthe people that we have today.
Is there a specific use casewithin AI and staffing that
excites?
Speaker 1 (27:04):
you the most right now?
Lot more with the people thatwe have today.
Is there a specific use casewithin AI and staffing that
excites you the most right now?
Speaker 2 (27:11):
It's a good question.
The traditional, the holy grailof staffing automation that
everybody has chased now formany years is the perfect match
Having an AI ingest and part andinterpret a job description and
do the same with thousands ormillions of profiles, and then
pull these things apart intoskills and experiences and
(27:32):
perhaps refer to some sort of ataxonomy but eventually use that
analysis to create the perfectmatch.
I think what we've learned isthe match only gets so good
because there's always thingsthat's not in the job
description and there are alwaysthings that's not in the job
description and there are alwaysaspirations and even sometimes
skills and experiences that arenot fully captured on the resume
(27:53):
.
So we might be nearing a pointof diminishing returns there in
terms of additional investment,because so many people have run
at that and they've made somepretty good matching algorithms,
but nobody's made a perfect one.
So I think that's aninteresting use case, but I'm
not sure how much more there isto do there.
I think the use case to methat's intriguing is doing the
(28:15):
first part of the interview insome sort of an automated manner
, but doing it not as a tediousset of questions but as an
interactive experience that'sultimately fulfilling for the
candidate.
Ai seemed to be pretty good atthat initial superficial
conversation, not the ultimatelyin-depth brokering that only an
(28:37):
experienced recruiter can do,but the initial kind of survey
discussion to see if there's atleast a potential fit.
And there may be ways to gamifythat and make it a bit more
amusing and entertaining.
And of course you can have anAI engaged in a thousand of
those simultaneously withoutbreaking a sweat, whereas
traditional recruiters don'tscale quite as effectively.
Speaker 1 (28:58):
I'm really happy you said that because, literally,
the company I started Junethat's what it does and I came
to that conclusion that it'sgoing to be the most valuable
use case for staffing and,honestly, I think, hiring in
general.
From 10 years of experiencerunning an RPO and then honestly
, on the podcast I invited onall of the CEOs of every
recruiting tech company that'sincorporating AI into their
(29:21):
solution and we've been havingconversations about this for a
long time and so I got to learnfrom literally all of the CEOs
building these products and thenmy own experience like in-house
and building an agency and whatI really came down to is that
like high level evaluationturning like large applicant
pools into qualified candidateshortlists, where that's a very
(29:42):
compelling use case.
Very compelling use case andit's a way that we're thinking
about.
It is essentially optimizinginbound recruiting for a more
significant ROI and contributionfor hiring and essentially,
when somebody applies to aninbound job, june automatically
reaches out to conduct all thepre-screening questions.
So it's like as soon assomebody hits apply, they're
(30:02):
getting outreach and follow-upto essentially answer what we
would consider knockoutquestions.
Right, like those questionswhere a recruiter is on the
phone for five minutes and theyknow whether or not the person
is a fit, and so they can avoidlike going through all the
resumes, all that kind of stuff.
They can avoid doing all thescheduling right and they can be
scheduling with folks thataren't necessarily going to be
(30:23):
the right fit and they can justessentially evaluate a short
list of people.
So that's a really, I think,one of the most exciting use
cases right now, and what we'redoing is we are like signing
folks in different industries,but our primary focus is dialing
into staffing and recruitingand for people tuning in Huga
and I did not discuss thisbefore, so when he was giving
like, when he was talking aboutthis use case, that was totally
(30:45):
random.
But I'm really happy that'swhat you said, because it makes
me feel even better and feellike we're on track to build the
right solution for the market.
So that's pretty cool.
Speaker 2 (30:55):
Yeah, I think if you guys can create a better
mousetrap there, then certainlythe world, the staffing, will be
the path to your Peter.
Pass your door.
Speaker 1 (31:03):
Yeah, we'll just have to see Any final thoughts.
We're wrapping up on our timehere, but if there's anything
else you want to share with theaudience about what you're doing
or what Kelly's doing, we havea few minutes to discuss that.
Speaker 2 (31:14):
The final words.
I think, in terms of speakingto our potential clients
listening out there at Kelly, weare very focused on being able
to provide a solution thatsolves your business problem,
and we're able to operate acrossthe full spectrum of potential
solutions.
So if you just need a permanentplacement, we can help you with
(31:35):
that.
If you need traditionalstaffing, we can help you with
that.
But if you need a solution thatencompasses a team of people
that's being supervised, we cando that or deliver a project.
Or if you want to outsource anentire piece of your business,
and we can do that for you,onshore or offshore, with mixed
bill rates, whatever isoptimized.
So that's really the approachthat we are taking and it seems
(31:57):
to be working quite well for us.
So I'd offer that as freeadvice to my staffing
competitors even out there.
But I think if we're going tobe successful as an industry
going forward, we have to startthinking in terms of how we're
solving the business problems ofour clients and not just how we
provide 10-blamer.
Speaker 1 (32:14):
Yeah, and I'm really excited for you and for Kelly.
I think it's been great gettingto know you a little bit and I
think what makes you differentin your background as well,
versus a lot of executives andstaffing, is you're actually you
have an engineering background,right Cambridge, so it's I
think, when you're thinkingabout SOW work and creating
custom solutions, you'reprobably you and your team are
(32:35):
probably much better positionedin order to do that most
effectively versus, I think,probably a lot of staffing execs
that have more of a businessops go-to-market background.
Speaker 2 (32:45):
I will say it does take an investment going down
this path.
You need folks that are good atidentifying solutions,
designing solutions, pricingsolutions and then running the
projects.
It's all well and good to sellan SOW project.
The challenge is delivering anSOW project.
So it does take a bit of adifferent skill set.
It's not easy to step from justthe traditional staffing world
(33:10):
into that space, but it's veryrewarding and I think that is
where our future lies.
Speaker 1 (33:15):
I love it.
I love it, Hugo.
Thank you so much for joiningus today.
I know our audience is going tolove this episode, so I
appreciate you coming on theshow.
Speaker 2 (33:23):
My pleasure.
Thanks for the invitation,James.
Speaker 1 (33:25):
All right and for everybody tuning in.
Thank you so much for joiningus, Take.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.