November 27, 2025 • 38 mins
Join host James Mackey and Steve Bartel, CEO of Gem, to explore what’s happening in today’s hiring market - inbound is up 3x, time to hire has grown by eight days, and recruiters are carrying 55% more reqs. They discuss where AI genuinely reduces workload and boosts efficiency, along with the rise in fraud and interview cheating.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (03:09):
Hey, this is James Mackey.
I'm your host on theBreakthrough Hiring Show.
I'm here today with SteveVartel, my good friend over at
Jim, Founders VEO.
Steve, thanks for joining ustoday.
SPEAKER_00 (03:19):
Great to be here.
Thanks for having me.
SPEAKER_01 (03:21):
Yes, it's been a little while since we last
connected.
So very excited about ourconversation today.
We put together, I think, someinteresting topics of
discussion, high impactinformation that will be very
valuable to customers over atJim.
Of course, like my customersover at Secure Vision and
anybody who's really tuning intoTalent Acquisition leadership
role.
Really interesting stuff.
(03:42):
I think Steve and I have accessto somewhat unique data just
from our points of impact, thegym, all-in-one recruiting
solution for a ton oforganizations.
And same with Secure Vision RPOfirm that works with hundreds of
companies.
And we'll be sharing ourinsights that we've been
collecting, some reallyinteresting data points.
We're going to start macro andthen dial in and actually at the
(04:04):
toward the end of the episodetalk about fraud right now with
Intel and acquisition that we'reseeing out there.
But let's start macro.
Right now, we're seeing someinteresting economic trends
across the United States,Fortune 500, Fortune 2000
organizations.
Say mostly Fortune 500, we'reseeing a few big players going
to some interesting trends inthat we're seeing growth, right?
(04:26):
We're seeing revenue, we'reseeing earnings increase in
large organizations, big techcompanies, amongst other
industries.
But what's interesting is thatthis growth is alongside a
stagnant job market on a macrolevel within the United States,
it's really the first time inhistory that we've beginning to
see such a large discrepancybetween growth in terms of
(04:49):
companies' earnings, uh, but notnecessarily additional headcount
being added.
Right.
So the biggest recent example iswe see Amazon, right?
Like they went through a 30,000employee layoff cut, a lot of
which are knowledge workers.
But again, this is at thehighest level of enterprise,
enterprise work.
It's interesting to see there'sa few different theories out
there.
Of course, like we had ChatGPTintroduced into the market.
(05:12):
So a lot of people are yelling,like AI, AI, that's coming to
replace all the jobs.
I think it's a little morecomplicated than that.
Steve, if you have anyhigh-level thoughts here on what
we're seeing in the market andyour thoughts on maybe even
dialing in more to AI on howmuch that might be contributing
versus potentially other factorsthat are potentially leading to
some of the layoffs this year,that would be great to hear.
SPEAKER_00 (05:35):
Yeah, totally.
So, first off, AI, I think it isreplacing some jobs, but only in
certain pockets.
I think more generally, though,AI is making folks more
efficient.
And so the place I see itplaying out more often than
replacing jobs is as we rampback up hiring, can we get more
(05:57):
out of the team we have, therecruiting team we have, by
deploying AI just to makeeverybody more efficient?
And we're seeing that in ourdata for sure.
But there are certainindustries, there are certain
roles where AI actually isreplacing jobs.
We saw from our data that yearover year hiring has actually
grown about 10%, modest increaseyear over year.
(06:21):
But the interesting thing is forcustomer support, customer
service roles, it's actuallydecreased 7%.
So most roles across the board,we've seen a slight increase in
hiring, but there's certainfunctions where folks are hiring
for less of those roles today.
And this is across thousands ofGem customers, typically growth
tech companies, largeenterprises that use GEM and all
(06:43):
of our aggregate data.
And my theory on the customersupport, customer service side
is AI is actually prettyeffective at automating ticket
resolution.
And so you can do a lot of thesame work, sometimes even a
better job with a much smallercustomer support team.
But I really think it's inpockets.
I think like AI replacing jobsis in my mind, like my personal
(07:08):
take, overblown, over-sensationsensationalized.
It definitely makes for goodheadlines that people want to
read.
I don't think it's quite aspervasive as what people think.
What do you think?
SPEAKER_01 (07:19):
Yeah, this is coming from two CEOs who run recruiting
software companies that use AIenablement, right?
We're looking at these thingsall day and every day.
And even on this show, I posteda series called AI for hiring.
I invited on the top, a lot ofthe top CEOs that are building
innovative solutions, leveragingAI enablement as well as
(07:39):
sometimes attempting other timessuccessful at truly agentic AI
that's the replacing human inthe loop at a certain step and a
workflow.
But yeah, like by and large,where I've seen it most
effective too is really in thatcustomer support motion.
When you're particularly workingon a SaaS product and you're you
have questions, like the AIresponses are becoming a lot
(08:00):
more useful and helpful.
And I think some customersuccess teams are using that as
the first line of engagementwith customers, and then
basically operating as follow-upsupport if people can't get
their question answered.
And to me, that's a wonderfuluse case that I think is
actually working better thansignificantly better than the
experience of working with achat bot years ago.
Totally.
Like way more helpful.
(08:21):
But like you have so many otherroles though, where it's just
not able to completely replace ahuman in the loop.
I think what's happening rightnow in the greater economy is
like this layoffs haveessentially, I think, to some
extent become the norm in a lotof big tech or huge corporate
environments where I wouldn'tsay they're culturally accepted,
right?
(08:41):
By people don't like layoffs,they obviously, but in a sense,
it's become a cultural norm or alittle bit more where companies
I feel like they're seeing otherfolks doing it.
It's like just becoming thismore consistent thing that we're
seeing.
Now, one thing to keep in mind,these companies don't have
hiring freezes.
They're still hiring.
It's just like we're seeing likemore fluid and faster
(09:02):
restructuring.
SPEAKER_00 (09:04):
Yeah.
SPEAKER_01 (09:05):
Even like Facebook, and that they recently cut 500
people from their AI division.
Like they're just constantlylike scaling, hiring,
restructuring.
And we're just seeing a lot moreof this.
But yeah, I think companies arereally a lot of these huge
companies are trying to figureout can they do more with less?
Like this term has been tanged,like jobless growth, right?
(09:27):
They're really trying to pushand see what they can
accomplish.
But I don't think that this isAI's taking everybody's job.
I think this is just like ashift we're seeing in the market
where companies are moreaggressively restructuring and
they're less afraid to let go offolks or lose folks that might
(09:49):
be hard to get back.
They're not really looking at itthe same way.
They're less focused onretention, they're less focused
on how it's gonna appear in thenews.
What's gonna happen to theirit's like maybe in the past
almost like they would worry, beworried about their stock prices
if they went through a round oflayoffs.
Now is every time they gothrough a round of layoffs,
their stock gets a bump.
SPEAKER_00 (10:07):
Yeah, yeah, because it reduces their their costs,
increases their profit margin.
It's interesting.
I think maybe I never reallythought about it this way, but I
think you're totally right,James.
I think maybe the last few yearshave given these large companies
the permission to be pretty coldand calculated without any blow
buck because it's become sonormalized.
(10:28):
Layoffs have become sonormalized out there, which is
that's a sad reality and placeto be.
I do hope things swing back inthe other direction, but we
remain in an employer's marketright now instead of a candidate
or employee market.
Maybe we'll just need to seethat pendulum switch back for
companies to start taking thismore seriously.
SPEAKER_01 (10:48):
Yeah, absolutely.
I I think another thing that I'mstarting to have conversations
with executives at startup andgrowth stage technology
companies about is what I'mseeing in the market.
Of course, they're asking abouthow much AI is AI really
replacing people.
We're having that kind ofconversation.
They're also like, I think somefolks are they're watching the
(11:08):
economy, they're hearing theheadlines, and they're hearing
about layoffs and they'rewondering about how that's gonna
impact people in technology.
And my my kind of my thoughts onthis are I look back to what we
experienced in 2022 and lookingat a market correction in
technology.
And if you looked at the bigheadlines, the overall economy
was doing great.
Yet tech was like, man, it was ahard time.
(11:31):
Yeah.
So tech isn't necessarily tiedto the hip.
It's not like it's not alwaysaligned with the greater
economy.
And I think what's maybeinteresting to see is like now
with interest rates coming down,we could actually see
accelerated growth in tech, eventhough in the overall job market
like on a macro level, we couldstart to see some stagnation or
(11:51):
some cooling as interest ratesare coming down.
Our industry is primarilypropped up by investment cash
flow, not profitability, right?
So money comes cheaper to loan,we could start to see even a
higher, a faster increase andmore growth at a time when
overall economy might be jobgrowth, might be slowing a
little bit.
SPEAKER_00 (12:12):
Yeah, that's been the biggest dissonance that I've
seen and felt over the last fewyears.
And I've truly come to learnthat countrywide unemployment
rates have almost no correlationto what's happening in tech.
And it has a lot more to do withwhere the interest rates are,
like you mentioned.
Yeah, the I think theinteresting thing is when you
look at the nationwideemployment rate, there's so many
(12:38):
jobs out there that are morelike frontline workers,
restaurant, hospitality, retail,right?
And because that volume is sohigh, global unemployment and
also US unemployment, it tendsto be a lot more correlated with
those roles.
And anything that's happeningthere can just dwarf what's
happening in tech and withknowledge worker hiring because
(13:00):
the amount of folks in thosejobs are just much smaller by at
least an order of magnitude.
And so, yeah, I've come to learnthat like unemployment rates
have almost nothing to do withwhat's happening in tech, and
it's a lot more correlated withinterest rates.
SPEAKER_01 (13:15):
Yeah, and I think we're lucky in a sense because
we have access to so muchinformation through our customer
bases and technology that we canactually get a pulse on like the
holistic tech market and thehealth they're in.
And you had actually shared somepretty interesting statistics
with me about what you're seeingfrom Jim customers that I think
our audience would love to hear.
SPEAKER_00 (13:36):
Yeah, totally.
So we we look at a few differentdata sets.
So at GEM, we've got thousandsof customers.
Every year we pull benchmarks onwhat's happening across all
those customers in aggregate.
And it gives us a pretty uniquelens into what's happening in
the industry, in the hiringmarket, especially for tech and
for knowledge worker hiring.
So think some of the largerenterprises, like the Walgreens,
(13:59):
for example, uses GEM for alltheir corporate hiring, for
their knowledge worker roles,and then tech companies, large
and small.
So that that's the insight thatwe have into, and probably like
a lot of the kinds of roles thatthe folks that are tuning in are
working on and care about.
And so what we've seen from ourdata is compared to three years
(14:19):
ago, back when there was thecraziness of 2021 leading into
halfway through 2022.
So, first off, like applicationsare up 3x compared to three
years ago.
I think that's probablyintuitive to a lot of folks
tuning in because people areseeing and feeling it.
Teams are smaller, and what thatmeans is each recruiter is
managing up to 55% more recs onaverage.
(14:41):
Two stats that might becounterintuitive, but I've got
some ideas as to why.
It's taking eight more days tohire on average versus three
years ago, and it's taking 42%more interviews per hire
compared to three.
SPEAKER_01 (14:55):
That's the one that's the hardest one for me to
understand.
That last uh that doesn't makeanother theory on that.
Yeah, yeah, yeah.
SPEAKER_00 (15:01):
And so as I think there's this interesting paradox
in terms of what's happening inthe market right now because you
you think, oh, like hiringmanagers think, executives think
there's this dissonance.
They think, oh, hiring must beeasier right now because there's
so many candidates out there.
But then you look at the dataand it's taking 42% more
interviews to make one hire.
And I think what's happening isconversion rates have gone down
(15:25):
at every step in the funnel,except for the offer accept
rate.
But what that means is you'rejust talking to a lot more
people to get to the one hire.
And I think part of the reasonis because hiring managers and
executives think, oh, it must beeasy to hire right now.
Why don't we hold out and seewhat else is available?
Who else we could get?
Could we get somebody evenbetter?
(15:47):
And folks aren't leading with asmuch conviction as they used to.
And that's just creating a lotmore work in the hiring process
or having to interview 42% morepeople to get to a hire.
And I think part of that is justlike hiring manager and
executive expectations and anincreased focus on like quality
of candidate and quality of hirein this market, especially with
(16:08):
folks not being able to add asmuch headcount.
I think a lot of folks arewondering how can we make every
single hire count?
And maybe they're willing to puta little bit more work and time
into the interview process totry to find that person.
Now, whether those expectationsactually match reality, whether
it's actually doing anyone anygood, hard to say.
But the net of it is it'sactually harder for recruiters
(16:30):
right now.
Three X more applicants managingmore recs.
Each rec is taking eight dayslonger with 42% more interviews.
That's a lot more work per rec.
And so there's it's a little bitof a perfect storm.
Yeah.
I think the other reallyinteresting data that we just
got like hot off the press,maybe like a month ago.
We ran a survey.
We surveyed a few hundredrecruiting leaders and rec ops
(16:53):
leaders just about like theirplans for the next 12 months and
how they're thinking aboutgrowth.
Get this 87% of them areplanning to grow headcount, but
39% of recruiting teams expectto stay flat or shrink.
And I think this ties back towhat we were talking about
(17:14):
earlier, where folks are tryingto grow, but they're not
necessarily looking to add asmuch headcount and jobless
growth growth.
And then recruiting teams arebearing the brunt of that.
SPEAKER_01 (17:27):
Yeah, this is the jobless aspects, like primarily
for the recruiting team.
And then but they're stillobviously growing, right?
Yeah.
So those are really interestingstats.
I think the eight days increasein time to hire correlates
really well with the fact thatrecruiters are expected to
handle more recs at once.
(17:49):
I it sounds like too this 3xmore inbound, I guess also could
be contributing more to theamount of interviews because I I
don't know if you have it onthis level of granularity, but
if it's like are most of theadditional interviews at the top
of the funnel, like the firstround screening call, because
maybe folks are just screening alot more people.
SPEAKER_00 (18:09):
It's a great question.
And I actually think that was myother theory.
And I it's so cool that youarrived at this yourself too.
I think it might be real.
I I do think with the influx ofinbound, I think a lot of folks
are just like tempted to fillthe role with all of their
applicants.
When we know we actually have alot of data, like sourced
(18:29):
candidates are five to 10x morelikely to be hired than an
inbound applicant.
And but when you have a thousandapplicants, you're like, why
don't I maybe I could fill thiswith the folks I have and like
you're interviewing the best ofwho's applying instead of the
best of who's out there.
And so I think that isdefinitely part of it.
I think companies can fall intothis trap of I've got all those
applicants, why don't I just seemore of those through the
(18:51):
process?
But then it's spending, it'staking a lot of time and it's
wasting time on both sides.
SPEAKER_01 (18:56):
Yeah, it's also it's the best.
You might have an amazingcandidate, but they're like the
800 applicant, and you reach outto them a week and a half too
late and they're already downfunnel.
So it's even if you do have thatright one.
Well, that's like with the withJune, what I'm doing with our
June software is June, by theway, has gotten pretty far, it's
pretty cool.
Like for those two, and it'sit's AI screener.
So as soon as folks apply, Junereach out to conduct like a
(19:17):
screening interview just toensure there's alignment.
But it's actually automatedscheduling now, too.
If yeah, somebody is alignedwith the role, June will
automatically screen them, setthem up with a recruiter.
Um or at least recruiters havethe option to turn that on,
where it's like just immediatelythey can have a conversation
with the folks.
So if somebody's the 800applicant, they can speak to
(19:38):
them immediately, which isgreat.
But yeah, the inbound applicantsincreasing is like that that
probably is where a lot of thepain is coming from in terms of
I would assume the additionalinterviews.
I don't know though, as yousaid.
Like I just don't I don't know,but that would make sense to me.
It's like you're doing phonescreens with a lot more people,
and you're right.
Like, you when you have all thisinbound, you might okay.
(20:00):
This outbound source candidatefits 99% of our criteria.
This inbound is right, thisperson's right there, they want
to speak to it.
He's right there, they fit 85%of our criteria.
But you know, start-up and grossstage tech is incredibly
competitive and unforgiving.
Like you need people that areincredibly dialed into the
experience you're looking for.
It just doesn't, it's reallyhard to hire somebody that's not
(20:24):
a phenomenal fit and have themwork out.
It's just too competitive in ourspace.
SPEAKER_00 (20:28):
Exactly.
And I I think that's I think itmight be a little bit of wishful
thinking going on in theindustry where it's like, ah,
this person's right in front ofme.
But then folks aren't doing themath of like, I gotta go spend
20 minutes on a call.
And then if I pass them through,like I'm spending 30, 45 minutes
of a hiring manager's time, andif then they make it through
from there.
And I think if folks aren't theright fit, I think maybe folks
(20:52):
should be having a little bit ofa higher bar at the top of the
funnel, is where I'm landing onthis.
SPEAKER_01 (20:56):
For sure.
Another step that I haven'tcalculated in a while makes me
want to go back and do this now,is the number of interviewing
hours per hire.
SPEAKER_00 (21:05):
Oh, yeah.
That's definitely gone up.
Yeah, with the number ofinterviews per hire going up.
And I don't know to your pointhow many it is.
Yeah, I don't know if it'sexactly 42% more hours per
process.
Cause like you said, like I dosuspect that some of these
interviews are happening likemore correlated with the top of
(21:26):
the funnel, where like the thescreen time might be shorter.
But uh yeah, that that'sprobably the biggest hidden cost
that nobody really thinks aboutin their hiring process is just
like the cost of all the timethat goes into interviewing.
When people think about cost perhire, it's like oftentimes a
hidden cost.
They're just looking at how muchads they're spending or how much
they're spending on tools, howmuch they're spending on certain
(21:48):
events, how much they'respending.
If they're they're moresophisticated, they're looking
at recruiter salary.
But very few organizations arelooking at like the cost of how
much like engineering time it'staking.
SPEAKER_01 (22:01):
Yeah, for sure.
And that's also it's that's whyanother reason that folks are
probably gonna fall more behindhiring plans is if they're
considering more people top offunnel, they're working with
they're considering more peopletop of funnel, they're
interviewing more people, amountof interviews are going up.
The reality is right, like a lotof times when folks are putting
(22:22):
together capacity plans, ifthey're honestly like above
average, they're looking at thecapacity of the recruiting team.
But like excellent organization,very well-run organizations are
gonna look at the capacity oftheir engineering team.
So if they a VP of engineering,they say, hey, you gotta go hire
50 people this quarter, and thenyou do the math on the
interviewing hours, and it'slike it's literally not
(22:43):
possible.
So those are conversations I'vehad to have with some of my
customers where they're like,hey, we need to hire 50, 100,
whatever engineers over X periodof time.
Look, I can give you 100recruiters, but it's not gonna
happen because there literallyisn't enough bandwidth on your
VP of engineering would need tobe interviewing people 10 hours
a day and not do anything elsefor the next two months.
(23:04):
Yeah, are you ready?
Are you ready for them to dothat?
No, so there's the that issomething that is typically not
accounted for.
But I would this is like back ofNathane, but I would say in a
lot of cases, companies areprobably doing like potentially
even north of 75 hours ofinterviewing for a hire.
Yeah, it'd be a lot.
Easily that's just a ton of uhhuge time commitment that's
(23:28):
going into it.
SPEAKER_00 (23:29):
Totally.
And that's where my perspective,at least, is like when you
factor in all those hours, whenyou also factor in how valuable
some of that time is, you've gotyour most senior engineers
interviewing people, your VP ofengineering, spending so much
time in the hiring process,right?
If you really think about thetrue cost all in of making one
hire, it's where like moreupfront time sourcing can
(23:53):
actually be pretty high ROIbecause source candidates pass
through the funnel at five to10x the rate.
And by spending more timesourcing, we can get that
interview per hire way down justbecause the quality is going to
be a lot bigger.
SPEAKER_01 (24:06):
Yeah, for sure.
And so just to give some, I havesome stats on that too.
So it's secure vision in ourcustomer base, it's like ranging
from big customers like Grubhub,a firm, AFF IRM, a fintech
company, like a large orinterwallet, down to like
earlier stage, like startupgrowth stage.
(24:26):
I think around 90% of the hireswe help our customers make are
outbound.
Yeah.
Maybe around 10% of slightlymore transactional, higher
volume roles come from inbound.
Maybe that's what's making upmore of that 10%.
Of course, like we do inbound,so like 10% is 10%.
Like it's there's still it'sstill meaningful, right?
(24:47):
If you have to hire 100 peopleand you got 10 people through
it, that is still a meaningfulchannel.
But yeah, like when we'retalking with customers, it's
this very targeted outboundapproach in which you're really
learning the ins and outs of anorganization and then targeting
the right, the exact right fitto essentially mitigate risk,
right?
It's all about risk conversionand ROI.
(25:09):
And you know, it's I thinksourcing is very important
because it's like I really lookat recruiters and recruiting
organizations.
Really, if in the day is likewe're investment managers.
And as I try to explain to ourcustomers, it's look, what's
your biggest investment you'remaking every year?
Well, payroll, right?
It's a lot of customers, it's10, 20 million.
It's a lot of freaking money.
Okay.
So you better have somebodypretty qualified managing that
(25:31):
investment, better know whatthey're doing because it's like
the now.
So it's I get our recruiters,and everybody's thinking it's
okay.
So if we're hiring a seniorengineer, let's say we're an
engineer,$150,000 base salary,wrap rate$180K, all in.
Okay.
That's a$180,000 investment thateach customer is making, not to
mention opportunity calls.
(25:52):
So we really got to make surewe're getting an ROI on this
individual.
And looking at it through thislens of they're making a
six-figure investment per hire,six-figure for one hire is a
six-figure investment.
Yeah.
They need to get a seven-figurereturn minimum out of this
individual.
So, yeah, we need to be doingout-bound sourcing, be highly
targeted.
(26:12):
We gotta make you we have tolook at it through that lens.
And then it's, I think theargument for out-bout sourcing
and having senior recruiters andleveraging the best tech and the
best services.
That's where it really matters,right?
It's it's not a place to lookfor bargain pricing or lowest
cost provider, maybe in some oldschool industries, but if you're
in tech, that's the pros.
This is the most competitivespace in the world.
(26:33):
If you want to compete, like youneed amazing senior recruiters
enabled with the best technologyto go out and source.
SPEAKER_00 (26:39):
Totally, totally.
I it's been wild to me thedisconnect there and just the
budgets that recruiting teamshave access to feel
disproportionately smallcompared to the the impact and
the opportunity cost, right?
Like of either not getting theright person into the role soon
enough and that opportunitycost, or getting the wrong
person into the role, like youcalled, can be yeah, pretty
(27:00):
catastrophic.
And when you think about, I lovethe investment manager analogy
because it's so true.
Like when you think about at theend of the day, how much you're
spending on people costs, andthen also the fact that people
are the single most importantthing that determines whether a
company succeeds or fails, yeah.
It feels short-sighted to try toskimp on the recruiting process
(27:24):
or on recruiting technology orworking with the folks on a
services side.
SPEAKER_01 (27:28):
Well, that's right.
So we come in out this securebusiness embedded recruiting RPO
model, which typically workingoff annual contracts, and these
are substantially sizedcontracts.
And not everybody gets it.
And not everybody's willing tomake that investment.
It's like, okay, you're not theright customer because we we're
working with folks that reallyunderstand the ROI of what we're
bringing to the table.
(27:48):
Like if you have 12 million inpayroll costs like annually,
right?
Like that's what I'm speakingof.
Okay, and you have uh maybe anHR manager that's really never
done this before because youscaled quickly, and a couple of
junior recruiters.
So it's like you got threepeople in their 20s that don't
have a lot of experience andbusiness yet, but like they're
(28:11):
managing like an eight-figureannual investment.
Like, come on now.
Okay, when you put it like that,they're like, oh, wait, for your
services, that's okay.
We get the price.
Yeah, we need to look.
If you're gonna be investing 10million a year in something,
let's get it right.
SPEAKER_00 (28:24):
Yeah, totally.
SPEAKER_01 (28:25):
And so it just changes the perspective, which
unfortunately we have an amazingcustomers that that really
understand that.
And turns out a lot of them arethe category leaders that what
they do.
SPEAKER_00 (28:34):
Yep, yeah, same.
So good news.
Here's like the little sliver ofhope in all this.
I mentioned that 87% ofcompanies plan to grow
headcount, but 39% of TA teamsexpect to be flat or shrink.
Budgets are going up.
Most folks anticipate havingmore budgets to deploy, even if
they're not adding additionalheadcount.
Yeah.
So there folks are gonna getmore investment there, maybe to
(28:58):
offset their own the recruitingteam growth, whether that's like
better technology and AI orworking with really great
service providers.
SPEAKER_01 (29:05):
Yeah, it's I think we are seeing a little bit more
flexibility in budgets from whatI'm seeing in the market and
just talking with companies thanI certainly was seeing a couple
of years ago.
SPEAKER_00 (29:16):
Yeah, and I forget the exact stats on it, but the
in the survey, I think mostfolks anticipated budgets
increasing, even thoughheadcounts not within TA.
Right.
That's good.
That's good.
SPEAKER_01 (29:28):
Oh my god.
I know that's awesome.
Let's dive into fraud and talentacquisition.
It sounds like this is somethingthat you're really in tune with
right now.
And actually, there's somethingthat you're thinking about
working on preventing in termsof how you're building
technology and product rightnow.
If you could take the lead onthis, I'd love to get your
thoughts on what you're seeingout there.
SPEAKER_00 (29:47):
Yeah, it's pretty wild.
It feels like there's a rise offraud, spam, scam, like just
coming from every angle here.
Candidates are dealing with ittoo, by the way.
Fake jobs, people trying totrick them into giving sensitive
data, folks tricking them intopaying for resume services they
don't need.
There's a lot of stuff happeningon both sides, but we can talk
(30:09):
about the employer side becauseI think a lot of our audience, a
lot of the folks that are tuningin, are probably more on the
recruiting side of the house.
It's wild.
And it's happening, a huge rangeof things are happening.
I just talked to a customer lastmonth, VP of recruiting, a few
thousand employees.
They deal with really sensitivedata.
They've caught 200 North Koreanactors, like state-sponsored
(30:34):
actors, uh, trying to land jobsin the last 12 months.
Have you heard of this, James?
What's happening, what'shappening there?
SPEAKER_01 (30:42):
I have not heard of this specifically now.
unknown (30:43):
All right.
SPEAKER_01 (30:44):
So tell me more about that.
So what does that look like?
SPEAKER_00 (30:47):
That's wild.
It's wild.
And actually, the FBI has issuedseveral statements now warning
companies of what's happeningwith North Korea.
There's these state-sponsoredattacks, basically, where
they're trying to get peoplehired so they can do various
things, including buildingsecurity backdoors or gaining
(31:07):
access to sensitive data thatthey can then steal or trying to
steal IP.
And it's scary and it's on therise, and those attacks are
getting more and moresophisticated.
I think at first they were alittle bit more basic, but now
it's to the point where they'reproxying IP addresses through
the Midwest, so you can't eventell what country they're uh
(31:30):
dialing into.
SPEAKER_01 (31:30):
So are these like is it these are just uh folks that
are based in North Korea justpretending to be based just
stealing identity of somebody inthe United States or the public
interviews?
SPEAKER_00 (31:43):
Exactly.
The stealing identity ofsomebody in the US, or maybe
they're making up a fakeidentity, perhaps they're making
up a fake LinkedIn profile andstuff like that.
But I actually just heard todaythat it's possible to buy
fraudulent identities for lessthan$100 a pop.
With real social securitynumbers and everything.
(32:04):
And so it's really hard.
You're getting supersophisticated.
And one of the hard things aboutthis is these are real people
that are really talentedengineers.
And a lot of these are forengineers' engineering roles.
But I've also heard about ithappening for like customer
service trolls just because ofthe access to sensitive data
that those folks have, whichexposes companies to a whole lot
(32:24):
of other vulnerabilities andthreats.
And they're real people that arequalified for the job.
They've got fake identities thatare hard to tell.
They're masking their IP addressto look like it's coming from
the Midwest.
And so it's becoming reallychallenging.
Some of them are even using adeep to try to be able to use
camera on.
(32:45):
Pro pro tip, by the way.
I think a lot of folks are whenthey're feeling like something's
off, they're asking, hey, canyou just put your hand in front
of your face?
Because that totally messes upthe deep.
SPEAKER_01 (32:55):
Oh, that's smart.
That's a good one.
SPEAKER_00 (32:57):
Yeah.
But it's tricky.
And that's just one example.
There's probably five, sixcommon things I keep hearing
about, ranging from at the verytop of the funnel, folks using
AI just apply to hundreds orthousands of jobs.
Jobs because the barrier toentry is really small.
Now, I don't think that's likethe end of the world.
So long as you can have greattechnology to help find the
folks that are the right fit.
(33:18):
Maybe it's not the end of theworld if like people are
applying to lots of jobs.
But then there's people that areusing AI to misrepresent their
experience and skills, to tailortheir resume to the specific
requirements of the job, butstuff in things that they don't
even have experience with orthey or that they don't have
skills in.
And so that is the piece that Ithink is causing a lot more
(33:40):
headaches for recruiting teamsbecause on paper they look
great, but then you hop on acall and their skills or
experience just very clearlydon't match what they say they
can do.
And so recruiting teams are likestruggling.
They're like, oh man, I gotta gocross-reference this person's
LinkedIn with their resume, tryto make sure that it smells like
(34:02):
they're actually they can dowhat they say they can do.
And then taking that a stepfurther, there's folks that are
mid-process either gettingsomebody else to do the
interviews for them or using AIto cheat on the interviews.
And so I don't know.
It's the it's happening from alldifferent angles here.
(34:24):
It's really start seeming likeit's starting to reach a
breaking point.
But yeah, I'm curious when youtalk to your customers, have you
heard of some of these things?
Are there other things you'veheard of, James?
Which of these things?
SPEAKER_01 (34:33):
Yeah.
No, we've definitely heard ofit.
We've um one of our largestfintech customers that we've
experienced some of this.
What one the easier solution isif there is an office or hybrid.
Yep.
Yep.
So it's just, and I actuallyalso read something in the Wall
Street Journal that fraud isaccelerating in some cases,
(34:54):
return to in-person interviews.
SPEAKER_00 (34:56):
It is.
SPEAKER_01 (34:58):
So I think that we're this is a bigger trend at
our customers, and it just seemsfrom what I'm reading, also
throughout the United States,this return to an office.
I think that there's a lot ofbenefits.
And of course, there's a lot wecan do with technology, but also
to me, this it is a benefit ofbeing in person.
Like bringing in folks, and it'snot, I know it's nuanced, but
(35:19):
people have different thoughts,perspectives, and these kind of
things.
And there's data that can proveevery direction under the sun
when it comes to this stuff.
But I do see that as anothervalue add of bringing folks in
person and having an office andthat kind of thing.
SPEAKER_00 (35:29):
Yeah, totally.
It's a lot harder to pretend tobe somebody you're not when
you're in person.
You just keep going.
I guess you can still do it.
You can do in Zoom.
SPEAKER_01 (35:38):
I guess you can still do it.
You just gotta be reallytalented.
SPEAKER_00 (35:41):
But uh yeah, so I've heard of that.
I've heard of companiesreturning their interview
process to in-person.
But then for some remotecompanies, that's pretty hard
because you might not even havethe presence.
What do you do?
I've heard of some folks saying,hey, part of onboarding will be
in person, or we get together inperson on a regular basis.
SPEAKER_01 (35:58):
That's actually likely that's a good best
practice to have, anyway.
If you do have an officesomewhere, most of our customers
do that.
If they are a remote culture,they'll fly somebody out for the
first week.
SPEAKER_00 (36:10):
Yeah.
And I think the key is if youmake that clear before the
interview process even starts,you put that in your job
description, you check withpeople.
Folks that are that think theymight be able to commit fraud
might opt out if they realizethere's going to be some sort of
in-person component that theycan't fool.
They'd rather just go spendtheir time on an easier target.
SPEAKER_01 (36:30):
A lot of the fraud we are experiencing too is
actually not quite as severe aswhat you were referring to.
But it's more of we're seeingmore people lie just about
degrees and employment dates,and it's not like it's stuff
that we you have to have a morerobust background check process.
(36:52):
But we're actually we're seeingcustomers transition to more
robust background checkprocesses and better structure
around, like really being clearwith people in the first round.
Around we do employmentverification, we will need to
speak with previous directmanagers who are still at those
previous employers.
Um we need to, we're gonna belooking at education
verification.
I just giving you a heads up.
(37:13):
This wouldn't be till offerstage, but just want to give you
a heads up that we have a reallyrobust, thorough process.
Really smart because we'reseeing people lie left and right
about college degrees now, likemore than ever.
SPEAKER_00 (37:23):
Yeah, and I think being upfront about that helps
deter folks that thinks maybethink maybe they can get away
with it and maybe they'll gofocus their efforts somewhere
else.
It's good.
SPEAKER_01 (37:32):
And that's one of the things where I think that
sometimes there's a perspectivethat high conversion rates
within your interview funnel area good thing.
But often I think the oppositecould be true.
If you if you don't hear aresponse from a candidate that
you liked, it's not necessarilyyou should look into it.
Okay, they did the screeninground, they dropped out, you
(37:53):
don't know why.
Dang, I really was interested inthat person.
But if you're really slowingdown on these types of things,
and you also very clearlyarticulate the challenges of the
role in the company, that'sanother big one.
You want people who are excitedabout solving for your
challenges, not just excitedabout the easy stuff, right?
You want the people that theyhear the worst thing about your
company, they're like, oh, I canhelp.
(38:14):
Like that's the type of person.
You want people that are excitedabout those hard challenges.
So if you articulate challengesproperly and you really slow
down on background check stuff,then some people are going to
self-select out.
Great.
So it's you always try to likethe recruiters changing in, you
always, of course, try touncover like what else can I be
doing to engage top town andkeep them in invested.
But on the flip side of it, likeyou should lose some talent
(38:38):
based on screening folks theright way, where you think that
they'd be you finished the call,maybe liking them, but there's
something you don't know.
And so because you covered yourbases, they felt select out, and
you may never know why.
SPEAKER_00 (38:51):
But yep.
Totally agree.
SPEAKER_01 (38:55):
Yeah.
SPEAKER_00 (38:57):
Yeah, it's super interesting.
I I feel like I learnedsomething the other day with
this idea around letting folksknow up front that we're gonna
go through a strict verificationprocess to talk to previous
employers, to do a backgroundcheck and stuff like that to
deter folks that maybe are lyingabout their school or their
experience.
That's super cool.
(39:17):
I'm gonna take that with me.
I know a lot of our customersare thinking about this all day.
It's yeah, it's really becomesuch a big process, such a big
problem.
SPEAKER_01 (39:25):
It has like Steve, thank you.
This is it's always like a tonof fun.
And I know our audience is gonnalove it.
Really excited to get thisepisode published.
So, yeah, everyone tuning in,thank you so much for joining us
today.
Steve, thank you so much forcontributing, and we'll talk to
you soon.
SPEAKER_00 (39:40):
Great to be here.
Bye, y'all.
Hey, this is James Mackey.
I'm your host on theBreakthrough Hiring Show.
I'm here today with SteveVartel, my good friend over at
Jim, Founders VEO.
Steve, thanks for joining ustoday.
SPEAKER_00 (03:19):
Great to be here.
Thanks for having me.
SPEAKER_01 (03:21):
Yes, it's been a little while since we last
connected.
So very excited about ourconversation today.
We put together, I think, someinteresting topics of
discussion, high impactinformation that will be very
valuable to customers over atJim.
Of course, like my customersover at Secure Vision and
anybody who's really tuning intoTalent Acquisition leadership
role.
Really interesting stuff.
(03:42):
I think Steve and I have accessto somewhat unique data just
from our points of impact, thegym, all-in-one recruiting
solution for a ton oforganizations.
And same with Secure Vision RPOfirm that works with hundreds of
companies.
And we'll be sharing ourinsights that we've been
collecting, some reallyinteresting data points.
We're going to start macro andthen dial in and actually at the
(04:04):
toward the end of the episodetalk about fraud right now with
Intel and acquisition that we'reseeing out there.
But let's start macro.
Right now, we're seeing someinteresting economic trends
across the United States,Fortune 500, Fortune 2000
organizations.
Say mostly Fortune 500, we'reseeing a few big players going
to some interesting trends inthat we're seeing growth, right?
(04:26):
We're seeing revenue, we'reseeing earnings increase in
large organizations, big techcompanies, amongst other
industries.
But what's interesting is thatthis growth is alongside a
stagnant job market on a macrolevel within the United States,
it's really the first time inhistory that we've beginning to
see such a large discrepancybetween growth in terms of
(04:49):
companies' earnings, uh, but notnecessarily additional headcount
being added.
Right.
So the biggest recent example iswe see Amazon, right?
Like they went through a 30,000employee layoff cut, a lot of
which are knowledge workers.
But again, this is at thehighest level of enterprise,
enterprise work.
It's interesting to see there'sa few different theories out
there.
Of course, like we had ChatGPTintroduced into the market.
(05:12):
So a lot of people are yelling,like AI, AI, that's coming to
replace all the jobs.
I think it's a little morecomplicated than that.
Steve, if you have anyhigh-level thoughts here on what
we're seeing in the market andyour thoughts on maybe even
dialing in more to AI on howmuch that might be contributing
versus potentially other factorsthat are potentially leading to
some of the layoffs this year,that would be great to hear.
SPEAKER_00 (05:35):
Yeah, totally.
So, first off, AI, I think it isreplacing some jobs, but only in
certain pockets.
I think more generally, though,AI is making folks more
efficient.
And so the place I see itplaying out more often than
replacing jobs is as we rampback up hiring, can we get more
(05:57):
out of the team we have, therecruiting team we have, by
deploying AI just to makeeverybody more efficient?
And we're seeing that in ourdata for sure.
But there are certainindustries, there are certain
roles where AI actually isreplacing jobs.
We saw from our data that yearover year hiring has actually
grown about 10%, modest increaseyear over year.
(06:21):
But the interesting thing is forcustomer support, customer
service roles, it's actuallydecreased 7%.
So most roles across the board,we've seen a slight increase in
hiring, but there's certainfunctions where folks are hiring
for less of those roles today.
And this is across thousands ofGem customers, typically growth
tech companies, largeenterprises that use GEM and all
(06:43):
of our aggregate data.
And my theory on the customersupport, customer service side
is AI is actually prettyeffective at automating ticket
resolution.
And so you can do a lot of thesame work, sometimes even a
better job with a much smallercustomer support team.
But I really think it's inpockets.
I think like AI replacing jobsis in my mind, like my personal
(07:08):
take, overblown, over-sensationsensationalized.
It definitely makes for goodheadlines that people want to
read.
I don't think it's quite aspervasive as what people think.
What do you think?
SPEAKER_01 (07:19):
Yeah, this is coming from two CEOs who run recruiting
software companies that use AIenablement, right?
We're looking at these thingsall day and every day.
And even on this show, I posteda series called AI for hiring.
I invited on the top, a lot ofthe top CEOs that are building
innovative solutions, leveragingAI enablement as well as
(07:39):
sometimes attempting other timessuccessful at truly agentic AI
that's the replacing human inthe loop at a certain step and a
workflow.
But yeah, like by and large,where I've seen it most
effective too is really in thatcustomer support motion.
When you're particularly workingon a SaaS product and you're you
have questions, like the AIresponses are becoming a lot
(08:00):
more useful and helpful.
And I think some customersuccess teams are using that as
the first line of engagementwith customers, and then
basically operating as follow-upsupport if people can't get
their question answered.
And to me, that's a wonderfuluse case that I think is
actually working better thansignificantly better than the
experience of working with achat bot years ago.
Totally.
Like way more helpful.
(08:21):
But like you have so many otherroles though, where it's just
not able to completely replace ahuman in the loop.
I think what's happening rightnow in the greater economy is
like this layoffs haveessentially, I think, to some
extent become the norm in a lotof big tech or huge corporate
environments where I wouldn'tsay they're culturally accepted,
right?
(08:41):
By people don't like layoffs,they obviously, but in a sense,
it's become a cultural norm or alittle bit more where companies
I feel like they're seeing otherfolks doing it.
It's like just becoming thismore consistent thing that we're
seeing.
Now, one thing to keep in mind,these companies don't have
hiring freezes.
They're still hiring.
It's just like we're seeing likemore fluid and faster
(09:02):
restructuring.
SPEAKER_00 (09:04):
Yeah.
SPEAKER_01 (09:05):
Even like Facebook, and that they recently cut 500
people from their AI division.
Like they're just constantlylike scaling, hiring,
restructuring.
And we're just seeing a lot moreof this.
But yeah, I think companies arereally a lot of these huge
companies are trying to figureout can they do more with less?
Like this term has been tanged,like jobless growth, right?
(09:27):
They're really trying to pushand see what they can
accomplish.
But I don't think that this isAI's taking everybody's job.
I think this is just like ashift we're seeing in the market
where companies are moreaggressively restructuring and
they're less afraid to let go offolks or lose folks that might
(09:49):
be hard to get back.
They're not really looking at itthe same way.
They're less focused onretention, they're less focused
on how it's gonna appear in thenews.
What's gonna happen to theirit's like maybe in the past
almost like they would worry, beworried about their stock prices
if they went through a round oflayoffs.
Now is every time they gothrough a round of layoffs,
their stock gets a bump.
SPEAKER_00 (10:07):
Yeah, yeah, because it reduces their their costs,
increases their profit margin.
It's interesting.
I think maybe I never reallythought about it this way, but I
think you're totally right,James.
I think maybe the last few yearshave given these large companies
the permission to be pretty coldand calculated without any blow
buck because it's become sonormalized.
(10:28):
Layoffs have become sonormalized out there, which is
that's a sad reality and placeto be.
I do hope things swing back inthe other direction, but we
remain in an employer's marketright now instead of a candidate
or employee market.
Maybe we'll just need to seethat pendulum switch back for
companies to start taking thismore seriously.
SPEAKER_01 (10:48):
Yeah, absolutely.
I I think another thing that I'mstarting to have conversations
with executives at startup andgrowth stage technology
companies about is what I'mseeing in the market.
Of course, they're asking abouthow much AI is AI really
replacing people.
We're having that kind ofconversation.
They're also like, I think somefolks are they're watching the
(11:08):
economy, they're hearing theheadlines, and they're hearing
about layoffs and they'rewondering about how that's gonna
impact people in technology.
And my my kind of my thoughts onthis are I look back to what we
experienced in 2022 and lookingat a market correction in
technology.
And if you looked at the bigheadlines, the overall economy
was doing great.
Yet tech was like, man, it was ahard time.
(11:31):
Yeah.
So tech isn't necessarily tiedto the hip.
It's not like it's not alwaysaligned with the greater
economy.
And I think what's maybeinteresting to see is like now
with interest rates coming down,we could actually see
accelerated growth in tech, eventhough in the overall job market
like on a macro level, we couldstart to see some stagnation or
(11:51):
some cooling as interest ratesare coming down.
Our industry is primarilypropped up by investment cash
flow, not profitability, right?
So money comes cheaper to loan,we could start to see even a
higher, a faster increase andmore growth at a time when
overall economy might be jobgrowth, might be slowing a
little bit.
SPEAKER_00 (12:12):
Yeah, that's been the biggest dissonance that I've
seen and felt over the last fewyears.
And I've truly come to learnthat countrywide unemployment
rates have almost no correlationto what's happening in tech.
And it has a lot more to do withwhere the interest rates are,
like you mentioned.
Yeah, the I think theinteresting thing is when you
look at the nationwideemployment rate, there's so many
(12:38):
jobs out there that are morelike frontline workers,
restaurant, hospitality, retail,right?
And because that volume is sohigh, global unemployment and
also US unemployment, it tendsto be a lot more correlated with
those roles.
And anything that's happeningthere can just dwarf what's
happening in tech and withknowledge worker hiring because
(13:00):
the amount of folks in thosejobs are just much smaller by at
least an order of magnitude.
And so, yeah, I've come to learnthat like unemployment rates
have almost nothing to do withwhat's happening in tech, and
it's a lot more correlated withinterest rates.
SPEAKER_01 (13:15):
Yeah, and I think we're lucky in a sense because
we have access to so muchinformation through our customer
bases and technology that we canactually get a pulse on like the
holistic tech market and thehealth they're in.
And you had actually shared somepretty interesting statistics
with me about what you're seeingfrom Jim customers that I think
our audience would love to hear.
SPEAKER_00 (13:36):
Yeah, totally.
So we we look at a few differentdata sets.
So at GEM, we've got thousandsof customers.
Every year we pull benchmarks onwhat's happening across all
those customers in aggregate.
And it gives us a pretty uniquelens into what's happening in
the industry, in the hiringmarket, especially for tech and
for knowledge worker hiring.
So think some of the largerenterprises, like the Walgreens,
(13:59):
for example, uses GEM for alltheir corporate hiring, for
their knowledge worker roles,and then tech companies, large
and small.
So that that's the insight thatwe have into, and probably like
a lot of the kinds of roles thatthe folks that are tuning in are
working on and care about.
And so what we've seen from ourdata is compared to three years
(14:19):
ago, back when there was thecraziness of 2021 leading into
halfway through 2022.
So, first off, like applicationsare up 3x compared to three
years ago.
I think that's probablyintuitive to a lot of folks
tuning in because people areseeing and feeling it.
Teams are smaller, and what thatmeans is each recruiter is
managing up to 55% more recs onaverage.
(14:41):
Two stats that might becounterintuitive, but I've got
some ideas as to why.
It's taking eight more days tohire on average versus three
years ago, and it's taking 42%more interviews per hire
compared to three.
SPEAKER_01 (14:55):
That's the one that's the hardest one for me to
understand.
That last uh that doesn't makeanother theory on that.
Yeah, yeah, yeah.
SPEAKER_00 (15:01):
And so as I think there's this interesting paradox
in terms of what's happening inthe market right now because you
you think, oh, like hiringmanagers think, executives think
there's this dissonance.
They think, oh, hiring must beeasier right now because there's
so many candidates out there.
But then you look at the dataand it's taking 42% more
interviews to make one hire.
And I think what's happening isconversion rates have gone down
(15:25):
at every step in the funnel,except for the offer accept
rate.
But what that means is you'rejust talking to a lot more
people to get to the one hire.
And I think part of the reasonis because hiring managers and
executives think, oh, it must beeasy to hire right now.
Why don't we hold out and seewhat else is available?
Who else we could get?
Could we get somebody evenbetter?
(15:47):
And folks aren't leading with asmuch conviction as they used to.
And that's just creating a lotmore work in the hiring process
or having to interview 42% morepeople to get to a hire.
And I think part of that is justlike hiring manager and
executive expectations and anincreased focus on like quality
of candidate and quality of hirein this market, especially with
(16:08):
folks not being able to add asmuch headcount.
I think a lot of folks arewondering how can we make every
single hire count?
And maybe they're willing to puta little bit more work and time
into the interview process totry to find that person.
Now, whether those expectationsactually match reality, whether
it's actually doing anyone anygood, hard to say.
But the net of it is it'sactually harder for recruiters
(16:30):
right now.
Three X more applicants managingmore recs.
Each rec is taking eight dayslonger with 42% more interviews.
That's a lot more work per rec.
And so there's it's a little bitof a perfect storm.
Yeah.
I think the other reallyinteresting data that we just
got like hot off the press,maybe like a month ago.
We ran a survey.
We surveyed a few hundredrecruiting leaders and rec ops
(16:53):
leaders just about like theirplans for the next 12 months and
how they're thinking aboutgrowth.
Get this 87% of them areplanning to grow headcount, but
39% of recruiting teams expectto stay flat or shrink.
And I think this ties back towhat we were talking about
(17:14):
earlier, where folks are tryingto grow, but they're not
necessarily looking to add asmuch headcount and jobless
growth growth.
And then recruiting teams arebearing the brunt of that.
SPEAKER_01 (17:27):
Yeah, this is the jobless aspects, like primarily
for the recruiting team.
And then but they're stillobviously growing, right?
Yeah.
So those are really interestingstats.
I think the eight days increasein time to hire correlates
really well with the fact thatrecruiters are expected to
handle more recs at once.
(17:49):
I it sounds like too this 3xmore inbound, I guess also could
be contributing more to theamount of interviews because I I
don't know if you have it onthis level of granularity, but
if it's like are most of theadditional interviews at the top
of the funnel, like the firstround screening call, because
maybe folks are just screening alot more people.
SPEAKER_00 (18:09):
It's a great question.
And I actually think that was myother theory.
And I it's so cool that youarrived at this yourself too.
I think it might be real.
I I do think with the influx ofinbound, I think a lot of folks
are just like tempted to fillthe role with all of their
applicants.
When we know we actually have alot of data, like sourced
(18:29):
candidates are five to 10x morelikely to be hired than an
inbound applicant.
And but when you have a thousandapplicants, you're like, why
don't I maybe I could fill thiswith the folks I have and like
you're interviewing the best ofwho's applying instead of the
best of who's out there.
And so I think that isdefinitely part of it.
I think companies can fall intothis trap of I've got all those
applicants, why don't I just seemore of those through the
(18:51):
process?
But then it's spending, it'staking a lot of time and it's
wasting time on both sides.
SPEAKER_01 (18:56):
Yeah, it's also it's the best.
You might have an amazingcandidate, but they're like the
800 applicant, and you reach outto them a week and a half too
late and they're already downfunnel.
So it's even if you do have thatright one.
Well, that's like with the withJune, what I'm doing with our
June software is June, by theway, has gotten pretty far, it's
pretty cool.
Like for those two, and it'sit's AI screener.
So as soon as folks apply, Junereach out to conduct like a
(19:17):
screening interview just toensure there's alignment.
But it's actually automatedscheduling now, too.
If yeah, somebody is alignedwith the role, June will
automatically screen them, setthem up with a recruiter.
Um or at least recruiters havethe option to turn that on,
where it's like just immediatelythey can have a conversation
with the folks.
So if somebody's the 800applicant, they can speak to
(19:38):
them immediately, which isgreat.
But yeah, the inbound applicantsincreasing is like that that
probably is where a lot of thepain is coming from in terms of
I would assume the additionalinterviews.
I don't know though, as yousaid.
Like I just don't I don't know,but that would make sense to me.
It's like you're doing phonescreens with a lot more people,
and you're right.
Like, you when you have all thisinbound, you might okay.
(20:00):
This outbound source candidatefits 99% of our criteria.
This inbound is right, thisperson's right there, they want
to speak to it.
He's right there, they fit 85%of our criteria.
But you know, start-up and grossstage tech is incredibly
competitive and unforgiving.
Like you need people that areincredibly dialed into the
experience you're looking for.
It just doesn't, it's reallyhard to hire somebody that's not
(20:24):
a phenomenal fit and have themwork out.
It's just too competitive in ourspace.
SPEAKER_00 (20:28):
Exactly.
And I I think that's I think itmight be a little bit of wishful
thinking going on in theindustry where it's like, ah,
this person's right in front ofme.
But then folks aren't doing themath of like, I gotta go spend
20 minutes on a call.
And then if I pass them through,like I'm spending 30, 45 minutes
of a hiring manager's time, andif then they make it through
from there.
And I think if folks aren't theright fit, I think maybe folks
(20:52):
should be having a little bit ofa higher bar at the top of the
funnel, is where I'm landing onthis.
SPEAKER_01 (20:56):
For sure.
Another step that I haven'tcalculated in a while makes me
want to go back and do this now,is the number of interviewing
hours per hire.
SPEAKER_00 (21:05):
Oh, yeah.
That's definitely gone up.
Yeah, with the number ofinterviews per hire going up.
And I don't know to your pointhow many it is.
Yeah, I don't know if it'sexactly 42% more hours per
process.
Cause like you said, like I dosuspect that some of these
interviews are happening likemore correlated with the top of
(21:26):
the funnel, where like the thescreen time might be shorter.
But uh yeah, that that'sprobably the biggest hidden cost
that nobody really thinks aboutin their hiring process is just
like the cost of all the timethat goes into interviewing.
When people think about cost perhire, it's like oftentimes a
hidden cost.
They're just looking at how muchads they're spending or how much
they're spending on tools, howmuch they're spending on certain
(21:48):
events, how much they'respending.
If they're they're moresophisticated, they're looking
at recruiter salary.
But very few organizations arelooking at like the cost of how
much like engineering time it'staking.
SPEAKER_01 (22:01):
Yeah, for sure.
And that's also it's that's whyanother reason that folks are
probably gonna fall more behindhiring plans is if they're
considering more people top offunnel, they're working with
they're considering more peopletop of funnel, they're
interviewing more people, amountof interviews are going up.
The reality is right, like a lotof times when folks are putting
(22:22):
together capacity plans, ifthey're honestly like above
average, they're looking at thecapacity of the recruiting team.
But like excellent organization,very well-run organizations are
gonna look at the capacity oftheir engineering team.
So if they a VP of engineering,they say, hey, you gotta go hire
50 people this quarter, and thenyou do the math on the
interviewing hours, and it'slike it's literally not
(22:43):
possible.
So those are conversations I'vehad to have with some of my
customers where they're like,hey, we need to hire 50, 100,
whatever engineers over X periodof time.
Look, I can give you 100recruiters, but it's not gonna
happen because there literallyisn't enough bandwidth on your
VP of engineering would need tobe interviewing people 10 hours
a day and not do anything elsefor the next two months.
(23:04):
Yeah, are you ready?
Are you ready for them to dothat?
No, so there's the that issomething that is typically not
accounted for.
But I would this is like back ofNathane, but I would say in a
lot of cases, companies areprobably doing like potentially
even north of 75 hours ofinterviewing for a hire.
Yeah, it'd be a lot.
Easily that's just a ton of uhhuge time commitment that's
(23:28):
going into it.
SPEAKER_00 (23:29):
Totally.
And that's where my perspective,at least, is like when you
factor in all those hours, whenyou also factor in how valuable
some of that time is, you've gotyour most senior engineers
interviewing people, your VP ofengineering, spending so much
time in the hiring process,right?
If you really think about thetrue cost all in of making one
hire, it's where like moreupfront time sourcing can
(23:53):
actually be pretty high ROIbecause source candidates pass
through the funnel at five to10x the rate.
And by spending more timesourcing, we can get that
interview per hire way down justbecause the quality is going to
be a lot bigger.
SPEAKER_01 (24:06):
Yeah, for sure.
And so just to give some, I havesome stats on that too.
So it's secure vision in ourcustomer base, it's like ranging
from big customers like Grubhub,a firm, AFF IRM, a fintech
company, like a large orinterwallet, down to like
earlier stage, like startupgrowth stage.
(24:26):
I think around 90% of the hireswe help our customers make are
outbound.
Yeah.
Maybe around 10% of slightlymore transactional, higher
volume roles come from inbound.
Maybe that's what's making upmore of that 10%.
Of course, like we do inbound,so like 10% is 10%.
Like it's there's still it'sstill meaningful, right?
(24:47):
If you have to hire 100 peopleand you got 10 people through
it, that is still a meaningfulchannel.
But yeah, like when we'retalking with customers, it's
this very targeted outboundapproach in which you're really
learning the ins and outs of anorganization and then targeting
the right, the exact right fitto essentially mitigate risk,
right?
It's all about risk conversionand ROI.
(25:09):
And you know, it's I thinksourcing is very important
because it's like I really lookat recruiters and recruiting
organizations.
Really, if in the day is likewe're investment managers.
And as I try to explain to ourcustomers, it's look, what's
your biggest investment you'remaking every year?
Well, payroll, right?
It's a lot of customers, it's10, 20 million.
It's a lot of freaking money.
Okay.
So you better have somebodypretty qualified managing that
(25:31):
investment, better know whatthey're doing because it's like
the now.
So it's I get our recruiters,and everybody's thinking it's
okay.
So if we're hiring a seniorengineer, let's say we're an
engineer,$150,000 base salary,wrap rate$180K, all in.
Okay.
That's a$180,000 investment thateach customer is making, not to
mention opportunity calls.
(25:52):
So we really got to make surewe're getting an ROI on this
individual.
And looking at it through thislens of they're making a
six-figure investment per hire,six-figure for one hire is a
six-figure investment.
Yeah.
They need to get a seven-figurereturn minimum out of this
individual.
So, yeah, we need to be doingout-bound sourcing, be highly
targeted.
(26:12):
We gotta make you we have tolook at it through that lens.
And then it's, I think theargument for out-bout sourcing
and having senior recruiters andleveraging the best tech and the
best services.
That's where it really matters,right?
It's it's not a place to lookfor bargain pricing or lowest
cost provider, maybe in some oldschool industries, but if you're
in tech, that's the pros.
This is the most competitivespace in the world.
(26:33):
If you want to compete, like youneed amazing senior recruiters
enabled with the best technologyto go out and source.
SPEAKER_00 (26:39):
Totally, totally.
I it's been wild to me thedisconnect there and just the
budgets that recruiting teamshave access to feel
disproportionately smallcompared to the the impact and
the opportunity cost, right?
Like of either not getting theright person into the role soon
enough and that opportunitycost, or getting the wrong
person into the role, like youcalled, can be yeah, pretty
(27:00):
catastrophic.
And when you think about, I lovethe investment manager analogy
because it's so true.
Like when you think about at theend of the day, how much you're
spending on people costs, andthen also the fact that people
are the single most importantthing that determines whether a
company succeeds or fails, yeah.
It feels short-sighted to try toskimp on the recruiting process
(27:24):
or on recruiting technology orworking with the folks on a
services side.
SPEAKER_01 (27:28):
Well, that's right.
So we come in out this securebusiness embedded recruiting RPO
model, which typically workingoff annual contracts, and these
are substantially sizedcontracts.
And not everybody gets it.
And not everybody's willing tomake that investment.
It's like, okay, you're not theright customer because we we're
working with folks that reallyunderstand the ROI of what we're
bringing to the table.
(27:48):
Like if you have 12 million inpayroll costs like annually,
right?
Like that's what I'm speakingof.
Okay, and you have uh maybe anHR manager that's really never
done this before because youscaled quickly, and a couple of
junior recruiters.
So it's like you got threepeople in their 20s that don't
have a lot of experience andbusiness yet, but like they're
(28:11):
managing like an eight-figureannual investment.
Like, come on now.
Okay, when you put it like that,they're like, oh, wait, for your
services, that's okay.
We get the price.
Yeah, we need to look.
If you're gonna be investing 10million a year in something,
let's get it right.
SPEAKER_00 (28:24):
Yeah, totally.
SPEAKER_01 (28:25):
And so it just changes the perspective, which
unfortunately we have an amazingcustomers that that really
understand that.
And turns out a lot of them arethe category leaders that what
they do.
SPEAKER_00 (28:34):
Yep, yeah, same.
So good news.
Here's like the little sliver ofhope in all this.
I mentioned that 87% ofcompanies plan to grow
headcount, but 39% of TA teamsexpect to be flat or shrink.
Budgets are going up.
Most folks anticipate havingmore budgets to deploy, even if
they're not adding additionalheadcount.
Yeah.
So there folks are gonna getmore investment there, maybe to
(28:58):
offset their own the recruitingteam growth, whether that's like
better technology and AI orworking with really great
service providers.
SPEAKER_01 (29:05):
Yeah, it's I think we are seeing a little bit more
flexibility in budgets from whatI'm seeing in the market and
just talking with companies thanI certainly was seeing a couple
of years ago.
SPEAKER_00 (29:16):
Yeah, and I forget the exact stats on it, but the
in the survey, I think mostfolks anticipated budgets
increasing, even thoughheadcounts not within TA.
Right.
That's good.
That's good.
SPEAKER_01 (29:28):
Oh my god.
I know that's awesome.
Let's dive into fraud and talentacquisition.
It sounds like this is somethingthat you're really in tune with
right now.
And actually, there's somethingthat you're thinking about
working on preventing in termsof how you're building
technology and product rightnow.
If you could take the lead onthis, I'd love to get your
thoughts on what you're seeingout there.
SPEAKER_00 (29:47):
Yeah, it's pretty wild.
It feels like there's a rise offraud, spam, scam, like just
coming from every angle here.
Candidates are dealing with ittoo, by the way.
Fake jobs, people trying totrick them into giving sensitive
data, folks tricking them intopaying for resume services they
don't need.
There's a lot of stuff happeningon both sides, but we can talk
(30:09):
about the employer side becauseI think a lot of our audience, a
lot of the folks that are tuningin, are probably more on the
recruiting side of the house.
It's wild.
And it's happening, a huge rangeof things are happening.
I just talked to a customer lastmonth, VP of recruiting, a few
thousand employees.
They deal with really sensitivedata.
They've caught 200 North Koreanactors, like state-sponsored
(30:34):
actors, uh, trying to land jobsin the last 12 months.
Have you heard of this, James?
What's happening, what'shappening there?
SPEAKER_01 (30:42):
I have not heard of this specifically now.
unknown (30:43):
All right.
SPEAKER_01 (30:44):
So tell me more about that.
So what does that look like?
SPEAKER_00 (30:47):
That's wild.
It's wild.
And actually, the FBI has issuedseveral statements now warning
companies of what's happeningwith North Korea.
There's these state-sponsoredattacks, basically, where
they're trying to get peoplehired so they can do various
things, including buildingsecurity backdoors or gaining
(31:07):
access to sensitive data thatthey can then steal or trying to
steal IP.
And it's scary and it's on therise, and those attacks are
getting more and moresophisticated.
I think at first they were alittle bit more basic, but now
it's to the point where they'reproxying IP addresses through
the Midwest, so you can't eventell what country they're uh
(31:30):
dialing into.
SPEAKER_01 (31:30):
So are these like is it these are just uh folks that
are based in North Korea justpretending to be based just
stealing identity of somebody inthe United States or the public
interviews?
SPEAKER_00 (31:43):
Exactly.
The stealing identity ofsomebody in the US, or maybe
they're making up a fakeidentity, perhaps they're making
up a fake LinkedIn profile andstuff like that.
But I actually just heard todaythat it's possible to buy
fraudulent identities for lessthan$100 a pop.
With real social securitynumbers and everything.
(32:04):
And so it's really hard.
You're getting supersophisticated.
And one of the hard things aboutthis is these are real people
that are really talentedengineers.
And a lot of these are forengineers' engineering roles.
But I've also heard about ithappening for like customer
service trolls just because ofthe access to sensitive data
that those folks have, whichexposes companies to a whole lot
(32:24):
of other vulnerabilities andthreats.
And they're real people that arequalified for the job.
They've got fake identities thatare hard to tell.
They're masking their IP addressto look like it's coming from
the Midwest.
And so it's becoming reallychallenging.
Some of them are even using adeep to try to be able to use
camera on.
(32:45):
Pro pro tip, by the way.
I think a lot of folks are whenthey're feeling like something's
off, they're asking, hey, canyou just put your hand in front
of your face?
Because that totally messes upthe deep.
SPEAKER_01 (32:55):
Oh, that's smart.
That's a good one.
SPEAKER_00 (32:57):
Yeah.
But it's tricky.
And that's just one example.
There's probably five, sixcommon things I keep hearing
about, ranging from at the verytop of the funnel, folks using
AI just apply to hundreds orthousands of jobs.
Jobs because the barrier toentry is really small.
Now, I don't think that's likethe end of the world.
So long as you can have greattechnology to help find the
folks that are the right fit.
(33:18):
Maybe it's not the end of theworld if like people are
applying to lots of jobs.
But then there's people that areusing AI to misrepresent their
experience and skills, to tailortheir resume to the specific
requirements of the job, butstuff in things that they don't
even have experience with orthey or that they don't have
skills in.
And so that is the piece that Ithink is causing a lot more
(33:40):
headaches for recruiting teamsbecause on paper they look
great, but then you hop on acall and their skills or
experience just very clearlydon't match what they say they
can do.
And so recruiting teams are likestruggling.
They're like, oh man, I gotta gocross-reference this person's
LinkedIn with their resume, tryto make sure that it smells like
(34:02):
they're actually they can dowhat they say they can do.
And then taking that a stepfurther, there's folks that are
mid-process either gettingsomebody else to do the
interviews for them or using AIto cheat on the interviews.
And so I don't know.
It's the it's happening from alldifferent angles here.
(34:24):
It's really start seeming likeit's starting to reach a
breaking point.
But yeah, I'm curious when youtalk to your customers, have you
heard of some of these things?
Are there other things you'veheard of, James?
Which of these things?
SPEAKER_01 (34:33):
Yeah.
No, we've definitely heard ofit.
We've um one of our largestfintech customers that we've
experienced some of this.
What one the easier solution isif there is an office or hybrid.
Yep.
Yep.
So it's just, and I actuallyalso read something in the Wall
Street Journal that fraud isaccelerating in some cases,
(34:54):
return to in-person interviews.
SPEAKER_00 (34:56):
It is.
SPEAKER_01 (34:58):
So I think that we're this is a bigger trend at
our customers, and it just seemsfrom what I'm reading, also
throughout the United States,this return to an office.
I think that there's a lot ofbenefits.
And of course, there's a lot wecan do with technology, but also
to me, this it is a benefit ofbeing in person.
Like bringing in folks, and it'snot, I know it's nuanced, but
(35:19):
people have different thoughts,perspectives, and these kind of
things.
And there's data that can proveevery direction under the sun
when it comes to this stuff.
But I do see that as anothervalue add of bringing folks in
person and having an office andthat kind of thing.
SPEAKER_00 (35:29):
Yeah, totally.
It's a lot harder to pretend tobe somebody you're not when
you're in person.
You just keep going.
I guess you can still do it.
You can do in Zoom.
SPEAKER_01 (35:38):
I guess you can still do it.
You just gotta be reallytalented.
SPEAKER_00 (35:41):
But uh yeah, so I've heard of that.
I've heard of companiesreturning their interview
process to in-person.
But then for some remotecompanies, that's pretty hard
because you might not even havethe presence.
What do you do?
I've heard of some folks saying,hey, part of onboarding will be
in person, or we get together inperson on a regular basis.
SPEAKER_01 (35:58):
That's actually likely that's a good best
practice to have, anyway.
If you do have an officesomewhere, most of our customers
do that.
If they are a remote culture,they'll fly somebody out for the
first week.
SPEAKER_00 (36:10):
Yeah.
And I think the key is if youmake that clear before the
interview process even starts,you put that in your job
description, you check withpeople.
Folks that are that think theymight be able to commit fraud
might opt out if they realizethere's going to be some sort of
in-person component that theycan't fool.
They'd rather just go spendtheir time on an easier target.
SPEAKER_01 (36:30):
A lot of the fraud we are experiencing too is
actually not quite as severe aswhat you were referring to.
But it's more of we're seeingmore people lie just about
degrees and employment dates,and it's not like it's stuff
that we you have to have a morerobust background check process.
(36:52):
But we're actually we're seeingcustomers transition to more
robust background checkprocesses and better structure
around, like really being clearwith people in the first round.
Around we do employmentverification, we will need to
speak with previous directmanagers who are still at those
previous employers.
Um we need to, we're gonna belooking at education
verification.
I just giving you a heads up.
(37:13):
This wouldn't be till offerstage, but just want to give you
a heads up that we have a reallyrobust, thorough process.
Really smart because we'reseeing people lie left and right
about college degrees now, likemore than ever.
SPEAKER_00 (37:23):
Yeah, and I think being upfront about that helps
deter folks that thinks maybethink maybe they can get away
with it and maybe they'll gofocus their efforts somewhere
else.
It's good.
SPEAKER_01 (37:32):
And that's one of the things where I think that
sometimes there's a perspectivethat high conversion rates
within your interview funnel area good thing.
But often I think the oppositecould be true.
If you if you don't hear aresponse from a candidate that
you liked, it's not necessarilyyou should look into it.
Okay, they did the screeninground, they dropped out, you
(37:53):
don't know why.
Dang, I really was interested inthat person.
But if you're really slowingdown on these types of things,
and you also very clearlyarticulate the challenges of the
role in the company, that'sanother big one.
You want people who are excitedabout solving for your
challenges, not just excitedabout the easy stuff, right?
You want the people that theyhear the worst thing about your
company, they're like, oh, I canhelp.
(38:14):
Like that's the type of person.
You want people that are excitedabout those hard challenges.
So if you articulate challengesproperly and you really slow
down on background check stuff,then some people are going to
self-select out.
Great.
So it's you always try to likethe recruiters changing in, you
always, of course, try touncover like what else can I be
doing to engage top town andkeep them in invested.
But on the flip side of it, likeyou should lose some talent
(38:38):
based on screening folks theright way, where you think that
they'd be you finished the call,maybe liking them, but there's
something you don't know.
And so because you covered yourbases, they felt select out, and
you may never know why.
SPEAKER_00 (38:51):
But yep.
Totally agree.
SPEAKER_01 (38:55):
Yeah.
SPEAKER_00 (38:57):
Yeah, it's super interesting.
I I feel like I learnedsomething the other day with
this idea around letting folksknow up front that we're gonna
go through a strict verificationprocess to talk to previous
employers, to do a backgroundcheck and stuff like that to
deter folks that maybe are lyingabout their school or their
experience.
That's super cool.
(39:17):
I'm gonna take that with me.
I know a lot of our customersare thinking about this all day.
It's yeah, it's really becomesuch a big process, such a big
problem.
SPEAKER_01 (39:25):
It has like Steve, thank you.
This is it's always like a tonof fun.
And I know our audience is gonnalove it.
Really excited to get thisepisode published.
So, yeah, everyone tuning in,thank you so much for joining us
today.
Steve, thank you so much forcontributing, and we'll talk to
you soon.
SPEAKER_00 (39:40):
Great to be here.
Bye, y'all.
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