Transcript
Speaker: AI just commoditized the top of the recruiting funnel. If every agency can source candidates at the same speed and the same cost, the only question left is, why would talent choose to work with you?
Speaker: The future of recruiting may have less to do with finding talent and everything to do with keeping it. But how? Tune into my conversation with David Falwell to find out.
Speaker: Welcome back to the Aviante Digital Edge. I'm Chris Ryan, and this is episode four with David Falwell, the finale. So a quick recap. In episode one, we talked about how most agencies can't tell you what a candidate is worth.
Speaker: In episode two, we talked about how you could use talent loyalty as a buildable asset. And in episode three, we talked about how using your data might be your very best sales weapon.
Speaker: So today we're asking the question that ties it all together. What does the recruiter actually become when AI, artificial intelligence that is, he handles the grunt work? The latest Staffing Hub report gives us a pretty clear answer.
Speaker: Agencies that use AI effectively and strategically are significantly more profitable, but not because AI makes sourcing better. It's because ai makes sourcing table stakes.
Speaker: And the agencies that are pulling ahead are the ones investing in everything that happens after the candidate shows up. David, welcome back. Thanks so much. Excited to be here with you.
Speaker: So, David, let's start with the Staffing Hub findings, which came out recently. The report that was published shows a real profitability gap between the agencies that deploy AI strategically and those that don't.
Speaker: But when you dig into where those gaps show up, it's not in sourcing. Walk us through what the data actually says about where AI-driven agencies are winning. Honestly, this is the conversation I've wanted to have all series because it's the one that makes people nervous. You framed it years ago, a staffing world productivity in this business shifted from cost to acquire a new person over to lifetime value of that candidate and the lifetime margin that person actually delivers to your agency.
Speaker: And that's the whole thing in one idea. ai just made the acquiring part, something everybody can do at the same speed and the same price. So the game moved to what happens after that.
Speaker: Do they stay? Do they come back? Do they bring three friends with them? And you had a line back then. then I'll steal AI may not take your job, but somebody who uses ai will.
Speaker: And I've actually heard that so many times in the last two years that I've told people that we should have a drinking game around it, but it is true then and even more true now. AI has given a leverage to those that use it in a way that allows them to scale their capabilities and also profitability. Yeah. You know, David, it it seems to me that sometimes we put AI on a pedestal, but really it's simply another form of highly powerful automation. And like any automation, when you bring it up and you put it to work, it changes things. And the people who adopt the automation are the ones who tend to succeed.
Speaker: And I think your Staffing Hub report kind of showed that with AI. So tell us a little bit more about the actual Staffing Hub findings. yeah I mean, I think one of the things that interesting is we couldn't pin it down to saying like, all right, if you put AI on sourcing, you are better. It was ai across multiple processes up to five processes was where we saw the incremental growth.
Speaker: And i think that goes to show that if you're looking at how do you replace things that you do today? with smarter, more efficient processes, you are going to see results from AI.
Speaker: i think where the companies that are dabbling in it and saying, well, we tried it with one process, it might take two or three before you can learn how to do it profitably. So I think that's one of the findings. And another interesting piece from the state of staffing is the operational excellence was highly tied and correlated with growth as well.
Speaker: Meaning that you're tracking the KPIs, you have weekly meetings. The standard business operations that you expect from high functioning teams is something that was really important and highly correlated with success. And also ties back to it's like, well, you're doing those things well, you're probably going to operationalize AI well.
Speaker: It's interesting. So it really, it's about the holistic application of AI across your entire operation and the way you deliver value to your customers. So rather than looking for one little application that's going to move the lever, they're asking, how can AI systemically help my entire business operate better? Absolutely. And a lot of people say, well, what AI tool should I use? Which is completely the wrong question. and It's what jobs do we have at our company where there's friction that can be replaced by AI? And what is the outcome of doing that well?
Speaker: How impactful would it be if instead of having a recruiter call a hundred new job applicants a day, We applied AI to that and that process ran in 10 minutes instead of eight hours of somebody's time.
Speaker: And when you think about it from a holistic perspective about the outcome and the ah ROI that you could have and measure that as well, which goes back to that operational excellence, it's much more impactful than saying, well, we're trying this thing because it's the new AI tool to try.
Speaker: As you talk about outcome, the thing that strikes me is where and how can AI actually create value for an employer that they would want to work with your firm? And also, where and how can AI create value for the talent that you want to attract and retain?
Speaker: How do we actually use AI to create value? And it's not about just finding a panacea that's going to make our business a little better. It's about continuing to focus on what matters most, which is delivering employers the talent that they want and keeping the talent that employers want.
Speaker: So with that in mind, that leads us to our next question. And it's a question I think a lot of agency owners haven't really sat with, which is, why would talent choose you and your staffing agency? And the reason I ask it that way is, if AI is commoditizing sourcing and every agency can find and reach the same candidates, they can go to the same job boards at roughly the same speed, then the differentiator flips to the talent side of the equation.
Speaker: So a warehouse worker with a forklift certification, a travel nurse, an electrician, these are people with options. So why would they choose your agency over the one down the street or over going direct to an employer?
Speaker: And what makes an agency the employer of choice for talent? Well, talent chooses you because as you offer something of real value. You're focused on career development. You offer real choices. When we've surveyed talent in the past, as years ago, we were doing travel nurses and a lot of travel nurses selected agencies just based off of the number of options that they had.
Speaker: The key thing here is that you are offering real meaningful value to the talent in a differentiated way. i think your brand and the market comes from the experience that you create for the candidates and the agencies that I see growing vast right now.
Speaker: They're doing a few things. They create value for the talent. As I mentioned in a very clear and differentiated value proposition. We have customers that are focused on delivering additional benefits or they're offering things that you just can't get from other agencies. Sometimes it's the relationships. Sometimes it's more options.
Speaker: I like to think of it as how can you segment the population you're talking to? and align those value props to the population you want to serve. They're also very reliable and they're offering consistent work.
Speaker: They know that if I come back to this agency, they're going to have something for me again. i'm not going to have to think about it. i think one thing that's very undervalued in our industry is how easy it is to work with you.
Speaker: And I think the career coaching and development resume workshops, lot of those elements are really, really impactful for building loyalty and showing people that you care about them.
Speaker: And again, keeping on in your talent community. And then lastly, I think a mobile experience is really important. There is expectations that candidates have for years. We've been talking the consumerization of staffing.
Speaker: And I think it's fair to say it's here and then some and accelerating even further. So, boy, there's a lot to unpack in that answer. I want to explore this a little bit more. One thing which is clear, when you talk about delivering value to talent, it's pretty hard to do if you're working with a lot of different kinds of talent. I mean, what a traveling nurse needs and what an electrician need in terms of support are very different.
Speaker: So is one aspect of this that in the future, staffing agencies are likely going to be increasingly vertically specialized in order to cultivate the talent that they need to attract?
Speaker: Absolutely. And I would even go further than that. i think that a lot of agencies will say, I'm specialized because I do travel nursing. And I am seeing agencies that say,
Speaker: We're a travel nursing staff agency. And within that we have a group of travel nurse recruiters that focus on the ER. r We have a group of travel nurse recruiters that focus on the ICU, but basically like, how do you go a step further in that specialization and actually have it down to the individual skills beyond just the concept of travel nursing? I think that that hyper specialization down to specific role-based specialization, where, you know,
Speaker: the language, you know, how they talk about their jobs as well as they talk about them. And you can talk about challenges in that way. That's where I think you can create even more value. And some of the companies that are growing through these harder times are focused on training people at that level.
Speaker: It's funny, it reminds me a lot about a development in the retail space years ago. There was a time when there were stores like Sears where you could go in and you could buy a TV, you could get a craftsman saw, and then you could go up to the children's clothing section and buy clothing for your kids.
Speaker: And it was essentially a general purpose store, but then retail evolved to category killers. So what was once Sears' hardware store is now Lowe's or a Home Depot's where it's a complete category killer.
Speaker: but You go to Best Buy and it's a complete category killer for all things electronics. And it sounds to me like what you're saying is that staffing is going to move that way too, that you can't just be into travel nurses. You have to be into every facet of that experience. You have to live it, eat it, breathe it, be able to speak to it, be able to market to it. Is that fair?
Speaker: Yeah. And align your recruiting groups to the specialties. You know, if it's light industrial, maybe you have somebody that's working on a specific role that they're like, oh, we only do data centers, for example, that I am data center specialist and that is the type of work I'm doing. So i think it's that hyper specialization. And then I would go one layer up from a marketing segmentation and behavioral segmentation perspective.
Speaker: And I think that a lot of agencies are trying to find the one thing or the one approach. I think it's really important to understand, like, are you trying to be the lowest cost provider? Are you trying to be the highest touch provider? What is the experience you want to deliver? And have you defined that well? and align your experience to that. And I think there are companies out there, and this is fine, who are saying we're gonna offer as many jobs as possible. We're gonna do as low touch as possible. And that's what you get.
Speaker: And there's a segment of candidates that are going to enjoy that experience, but then there's also gonna be ones who want handholding. And and I think it's important to align yourself to the segment of the population you are trying to serve.
Speaker: That makes a lot of sense. Now, that actually suggests something else. And you had talked about that or hinted at that earlier when you talked about brand. Historically, staffing agencies are not really big in marketing their brand in many cases, just except for the enterprise staffing agencies. But going forward, if you want to be known as the company that has all the skilled trades necessary to build a data center, then you probably would want to have a strong and memorable marketing brand and constantly be blasting out to the employers in that marketplace, as well as the talent in that marketplace, so that they would come and find you and want to work with you. Is that where we're going? I'm kind of doubling down on this, but I think the level of specialization is critical. And I think focusing on the areas you want to serve, maybe looking at where the fastest growing segments of the industry are, aligning your team to specialize in that, making sure they have expertise and delivering on it.
Speaker: So for example, if you're looking at data centers, I'll use that example again, I would have a section on your website that talks about it. Have a section on your website where you have testimonials and quotes from the people that you work with at data centers to show that you know data center staffing. And while it might seem like most of the job is the same, there's always nuances. There's always little things that actually matter. And there's ways that you talk about it that matter.
Speaker: And I think that the areas of focus and having that be part of your brand is going to be something that we're going to see more and more agencies move towards. Dan Moriart bring them up like all the times I learned so much from him, but he always talks about the importance of specialization. And i think it's just.
Speaker: where the industry has been heading. And I think it's going to go there even faster with AI commoditizing the entire top level of sourcing. And the thing I think is so crazy is that I hired somebody a couple months ago and put a job on Indeed.
Speaker: You have 200 resumes in an hour. i have AI sourcing and matching. i can go find resumes and have matching done for me. So now it's like, why am I talking to an agency? And that comes down to what additional value do you create?
Speaker: What expertise do you bring and what can you bring them to the table? Yeah, that makes sense. Just as an aside, why do you think some staffing agencies are so reluctant to be all in or to commit to a specialized approach and a strong brand identity?
Speaker: Having run a marketing agency for 15 different, 20 different companies, the experience that I've had with so many CEOs is that, well, if we say we do that, then our other customers might think that we're not for them.
Speaker: And so from what I've seen, it's the fear of excluding a customer segment by having those on there. And the reality is the customers that work with you because they like working with you are still going to work with you, but the focus is going to help your team and you move into a more profitable and faster growth path.
Speaker: And so I think it's a critical step, can be challenging. It's important that you spend time thinking about the focus, but from my experience, it's been the, we don't want to push any of our current customers away or think we're not for them.
Speaker: I think that really talks to the insecurity of making a commitment to a specific market or segment because you might be losing opportunities elsewhere. And that makes so much sense.
Speaker: So we've talked about the importance of specialization. We've talked about the importance of a marketing and brand identity. We've talked about the importance of being able to engage and retain talent over a long period of time.
Speaker: We've talked about the fact that recruiting, at least at the top of the funnel, some of that is going to be commoditized by artificial intelligence, but also, frankly, by the existence of job boards that were already in place and were beginning to commoditize recruiting.
Speaker: So now, as we imagine the staffing agency of the future, let's talk about what this means for core recruiting function and core recruiting operations. A couple of years ago at Staffing World, I had laid out a thesis. It was more of a thought experiment at the time, but I laid out a thesis that the general recruiter role was going to split into a number of specialized functions.
Speaker: And I had come up with five. One of them was the talent coach. the person who is able to take talent and constantly reskill and retrain them so that they can continuously be redeployed.
Speaker: And that would be something that would be very attractive to talent. It also ensures that you as a firm are staying on top of the things that are most important. Another was the talent marketer.
Speaker: And as I was thinking about this, If I have a specific skill or trade, I don't want to just work for anybody. I want somebody who understands my role and my job as well as I do and who speaks my language.
Speaker: So having somebody who can speak to talent, an electrician who can speak to other electricians, a nurse who can speak to other nurses, tool and die maker who can talk to other people who work in the auto industry, that's going to be really important to me. So that was a second one.
Speaker: A third was the digital recruiter, because with all this artificial intelligence, you still have to direct the AI technology to what you want it to accomplish and what you want it to do.
Speaker: And somebody has to translate the knowledge of the job into what it is that AI needs to do in order to deliver value to the company and to the talent. And then you might need somebody, an operations manager or somebody who makes sure that you're actually delivering to the customer and ensure that people are being paid in the appropriate way.
Speaker: And finally, you're going to need people who are workforce planning consultants. It's kind of a dual sales and recruiting role. Somebody who understands things. So the idea is and you had asked me this earlier, David, does one recruiter have to be all of these things?
Speaker: And my thought was, there is no single person who can do all of it well, but you could come up with a team-based delivery approach that might be able to pull all of those skills together into a pod.
Speaker: So I know that's a long preamble. And so David, I'm going to ask you based on what you're seeing in the data and across the agencies you work with, is that happening or what is happening? Are you seeing an evolution in the way we are organizing and deploying recruiters?
Speaker: And what do you think the team structure is going to look like in the agencies that are actually pulling ahead? I kind of mentioned it earlier in terms of the shift I'm seeing, which is the, we're going to break our recruiter pods into very tight verticals around specific job titles.
Speaker: I think the way you're thinking about it with the different roles, these are all critical. I think that the idea of the digital recruiter, the talent coach, the talent marketer. think all of those are key.
Speaker: The interesting part that I'll be excited to see is do those all line up into a cohesive pod or is the talent coach something that we layer AI on top of a staffing agency and the AI becomes a career coaching component.
Speaker: And you have a recruiter who has different capabilities that they use AI with to kind of support these roles. But I do think that the underlying kind of operational side of an agency These are the roles you need to have to build loyalty and build retention.
Speaker: How it plays out in terms of the individuals and the recruiting team, I'm not exactly sure yet. I think AI is changing my mindset on that very rapidly. Say more about that. What are you thinking? The coaching component of it, AI-based, interview coaching, resume assistance, ringovers doing sales and recruiting coaching right now at an unbelievable level. And I use AI on a personal basis for weekly coaching recaps of all of my Zoom calls. Like what did I do well? What did I not do well? Where should I improve? So I think the coaching side of it, the digital recruiter
Speaker: I've been thinking more about the idea of the recruiter in the loop. and We talk about the human in the loop and the recruiter is a human, but I think that a recruiter potentially with a handful of agents that could do these things for them in different ways to facilitate a higher scale could be a path towards a significantly more productive recruiter in terms of placements for recruiter, which is something that we look at quite a bit. Yeah.
Speaker: Yeah. and It's interesting because you think of the old fashioned boiler room where you have 20 recruiters in a room, 50, 100 recruiters in a room, and every one of them has an individual quota.
Speaker: They have to do so many calls. They have to do so many searches. They have to be working on so many assignments and have to demonstrate a certain amount of production. And My sense is that in the future, we're going to have a lot fewer recruiters, but those recruiters are going to be highly trained and likely working in teams and working with group incentives rather than having everybody for themselves.
Speaker: You get to eat what you kill. What's your thought on that, David? David Pyshawka think the future is where crews are going to be like Iron Man. Instead of handling 25 travelers on assignment or 50 placements a month or a hundred placements a month, they're going to be doing double that, triple that. And they're to be doing it because they have AI surrounding and supporting them in roles that simply you couldn't have done from a financial perspective previously.
Speaker: And so I think the future of this is going to be interesting and exciting. And when we rolled out automation and we all talked about automation, it was like, going automate the non-human parts away, the parts that are mundane.
Speaker: And we started doing that and it did some of it, but static automation didn't have the capabilities that AI does to be conversational. And I think this is going to truly get rid of a lot of the parts of the job that people just don't like doing. And it's going to be able to do it at a scale we've never seen.
Speaker: so it's exciting. So one final thing I want to talk about regarding the future of the recruiter, but it goes a little bit beyond. What we're seeing right now, at least a trend that I'm seeing in the employer community, is that they don't just necessarily want traditional W-2 staffing anymore. I mean, sure, they still want it for some roles, but in many cases, they're asking for statement of work-based project delivery.
Speaker: Sometimes they want a captive contingent workforce and they want an employer of record for a compliance heavy solution, or maybe they want RPO support for high volume internal hiring.
Speaker: And I guess my thought here is if your agency only has one delivery model, you might be leaving money on the table and making it easier for a competitor to take the client.
Speaker: Is it possible for recruiters to support more than one mode of delivery? I mean, historically, you always had w two staffing, employer of record, statement of work.
Speaker: They were often handled as separate divisions. Is it possible to have the same common pot of recruiters with different delivery modes depending on what the customer needs? I believe so. If you roll it out correctly, i think recruiting excellence is recruiting excellence. And if you have trusted networks and relationships that you can bring good people in, i don't necessarily think it's going to matter if you're in a statement of work role or if you're in a traditional high volume role, i think we're gonna be able to apply across different modalities.
Speaker: That's what I believe today anyways. Yeah. So last question. And we've covered a lot of ground across four episodes. And if you had to distill it to one message for a recruiter listening to this right now, or someone mid-career good at their job, or for that matter, the agency owner who's hired them, what would you tell them?
Speaker: Start growing your skillset around AI and and start building your network today. Focus on relationships that drive long-term commitment and referrals to talent that isn't sitting on the job boards. Your future as a recruiter comes down to doing three things well, and investing in yourself, learning the industry, reading up on relationship building, getting excellent at your craft and how you communicate about it.
Speaker: Fostering relationships that are going to drive that community and redeployment. And then lastly, building your trust through consistency, reliability, and integrity.
Speaker: I don't think the role is shrinking right now. I think it's getting more strategic, more specialized, harder to replace. And the harder to replace means it's also harder to become recruiter. So I think the bar is actually going up and the recruiters that are wanting to be told what to do are going to be automated out.
Speaker: I think the ones that build those three things become the portfolio manager of a talent pool and will be the winners in long run. You know what's funny, David, is i think what you've described would have made an excellent recruiter 30 or 40 years ago. Yes. yes I mean, it's back to the fundamentals. It's back to how we create value in the role. So I think it's great that we start with artificial intelligence, but we end back at the beginning what recruiting excellence really is.
Speaker: So David, great conversation for great conversation. So thank you. And for everyone listening, you can go back and catch episodes one through three if you haven't. Check out the Staffing Hub Report.
Speaker: And if you enjoyed this episode, please like and subscribe on all major podcasting platforms. And if you'd like to learn more about Aviante and how our all-in-one staffing platform can help your business grow, visit aviante.com.
Speaker: I'm Chris Ryan, and this has been Aviante Digital Edge.
