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Are Robots Coming for My Job: The Future of Recruiting
262 Plays2 years ago
The age of artificial intelligence is here – and is set to change many aspects of the recruiter’s day-to-day role, including the way he or she sources, hires, and places talent! With all the recent buzz surrounding AI, automated talent platforms, and staffing technology, one question remains top of mind for many recruiters: Are robots coming for my job? Could artificial intelligence simply replace the "special sauce" or human element in staffing, namely the recruiter's ability to find, coach, and develop the right talent for their employer? And how is the traditional role of the recruiter going to change due to technological innovation?
Join series host and Avionte’s Chief Strategy and Marketing Officer, Christopher Ryan, as he sits down with Tom Erb, President and CEO of Tallann Resources, LLC, a consulting firm that provides strategic and tactical guidance to staffing, to discuss how the recruiters’ role will most likely evolve in the new age of AI and digital recruiting.
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Transcript
2023 Staffing Industry Growth
00:00:00
Speaker
In 2023, the staffing industry is projected to grow at an anemic 2% year over year, from only $212 billion to $216 billion.
AI's Role in Talent Platforms
00:00:11
Speaker
But one sector of staffing, Automated Talent Platforms, a business model that replaces recruiters with artificial intelligence and automation, doubled in size and is projected to grow 19% annually through 2030.
Will AI Replace Recruiters?
00:00:26
Speaker
In fact, two leaders in the automated talent platform space doubled their revenue year over year. With all the recent news around artificial intelligence, we have one key question.
Introduction: Chris Ryan & Tom Herb
00:00:38
Speaker
Are robots coming for the recruiters?
00:00:45
Speaker
Welcome to Aviante Digital Edge, a podcast series that explores the digital transformation of staffing and temporary employment. My name is Chris Ryan, and I'm the chief strategy and marketing officer for Aviante. With me today to explore the evolving role of the recruiter in the age of artificial intelligence is Tom Herb.
00:01:03
Speaker
the president and CEO of Talon, a consulting firm that provides strategic and tactical guidance to staffing firms.
Shift from Human Judgment to Tech
00:01:10
Speaker
Tom is one of the most respected subject matter experts in the field with more than 30 years of experience, and he's also a lot of fun to talk to. And Tom talks a lot about the selection, performance, and training of agency recruiters, as well as how this role has evolved over the years. Before we begin, I'd like to provide some perspective on recruiters and the role of technology in recruiting.
00:01:33
Speaker
In the beginning, staffing agencies started out with a phone, a Rolodex and a typewriter, and early attempts at staffing automation focused purely on making recruiters more efficient.
00:01:44
Speaker
Today, technology allows us to reach out, communicate, and track thousands of candidates simultaneously, and to reach talent via phone, text, email, chatbot, or mobile app. But historically, staffing agencies always prided themselves on their human judgment, their ability to find, coach, and develop the right talent to meet the needs of their employer customers.
AI vs Human Judgment in Recruiting
00:02:07
Speaker
Staffing agencies often describe this human judgment as their special sauce.
00:02:12
Speaker
Today, however, some companies argue that the recruiter's judgment, the special sauce, can be captured and replaced through artificial intelligence. The argument is it's much cheaper to match talent with employers directly without a human intermediary.
Revenue and Gig Economy Convergence
00:02:28
Speaker
SIA research suggests that staffing platforms can deliver about 30 to 40 percent more in revenue per employee than through traditional staffing. And Barry Asen, the president of SIA, has noted on multiple occasions the rapid convergence of traditional staffing, digital talent, online staffing platforms, and gig work. This kind of activity is underway today.
00:02:53
Speaker
So between the gig economy and talent platforms like Upwork, Fiverr, and Toptal, temporary staffing platforms like Indeed, Flex, Trusted Health, and Jobs and Talent, and traditional staffing, you can see a convergence.
Essential Role of Skilled Recruiters
00:03:07
Speaker
And the question becomes, what happens to the recruiter in this new environment? So Tom, if I'm a recruiter, are my days numbered? Are the robots and the chatbots coming for my job?
00:03:20
Speaker
So I asked chat GPT this question last night and she said that, no, they're fine. So chat GPT thinks they're fine. But seriously, I think that if we take a look at what recruiters do on a day to day basis right now.
00:03:35
Speaker
Many of them are at risk of their job being done by not even just an AI bot, but even just regular automation, just workflow automation. The average recruiter that's out there in the staffing industry is basically doing keyword searches on job boards and is processing applicants that apply to jobs. And that can be automated and it's getting better and better to be automated.
Evolving Recruitment Amidst AI
00:04:03
Speaker
Will good recruiters be replaced by AI? No, absolutely not. But if you're a recruiter, that's just processing applicants, then yeah, a lot of what you're doing is going to be automated. So what are the implications of what you're saying is that the recruiting job is going to evolve or change significantly. And it really comes down to where the value is being added by the recruiter.
00:04:26
Speaker
Yeah, I mean, it has to change. And I think just in the last six to 12 months, we've seen AI take considerable leaps. Nobody was talking about chat GPT even six months ago. So the difference now, that's everybody's talking about it and people are on it doing different things with it. And then you have all of these different iterations of it, particularly in the staffing and recruiting industry that are meant to handle some of the repetitive tasks that don't need to be done by a professional.
00:04:55
Speaker
So we have to change. And as an industry, we've always done a pretty poor job of adapting to technology. So this is the next iteration
Consumer Preferences and Self-serve Platforms
00:05:05
Speaker
of that. And we've got to adapt. The companies that adapt and the recruiters that adapt and leverage it and can scale are going to be the real winners. So let's talk a little bit about digital talent platforms for a minute. It's the fastest growing area of staffing, but it's also true that it's growing from a very small revenue base.
00:05:24
Speaker
and is only a very small portion of the total staffing revenue. From your perspective, where are digital talent platforms getting traction and why are they enjoying their current success? Well, I think it's a combination of things, but if you really think about what you do on a daily basis, just in your life, as far as a consumer, we like to do self-serve. If I'm looking for a house, I may eventually pull in a real estate agent, and I probably will,
00:05:52
Speaker
But in the beginning, I'm going to be going online and looking at realtor.com and Zillow and all that and it's kind of fun and it's easy for me to do that. If I want to do something with my cable
Value of Human Interaction
00:06:03
Speaker
or with ordering a phone or whatever it might be, I don't want to have to talk to a live person every time. I usually end up talking to a live person when I have an issue.
00:06:13
Speaker
that i can't solve via going online or doing it for my phone and i'm an extrovert so if i like doing the self-serve as opposed to going and talking to somebody then certainly you're more introverted people are going to do that but in general people just like to do self-serve and so i think that's partly what we're seeing is that
00:06:33
Speaker
as those online platforms have evolved and they've gotten more user-friendly, they've gotten more robust in the ability to search, all of these different things that have just made it more attractive, that's in line with what consumers are looking for in the rest of their lives. Are you telling me then that face-to-face interaction is stressful? I mean, if that's the case, then I can't think of a more face-to-face business than staffing.
00:06:59
Speaker
I've been doing this now for almost 29 years. I've been consulting now to the industry for 13 years. One of the things that I see over and over again is that we don't do a great job of candidate experience particularly. And so value added interactions, people welcome processing people via the phone. That's yeah, that's no different than calling into a call center and having somebody just handle your complaint or your issue. So it's not saying that.
00:07:28
Speaker
human interaction is not desired. It's saying that human interaction without value is not desired. If I can go and do something really quickly online, that is in many cases better than dealing with somebody who's basically just processing me. And so I think that's the real key is how are we interacting with people when we do have these communications that are going on? And that's the big difference.
00:07:54
Speaker
So that gets to a very interesting point when we think about human interaction. What are some of those value added interactions that you think are important to staffing?
Recruiter as Candidate Agents
00:08:04
Speaker
Because I think just as a well-designed digital talent platform can eliminate low value transactional human interactions, a high quality staffing experience delivered by a recruiter is going to have some value add that will be very challenging for a digital platform to recreate.
00:08:22
Speaker
So where do you think the recruiter has the advantage and where can they add real value going forward? I think the biggest thing that recruiters need to do is to move from job-based recruiting to candidate-based recruiting. And what I mean by that is that most recruiters in our industry have a job or multiple jobs that they're trying to fill. And then they go out and try and find people that can fill those jobs.
00:08:48
Speaker
In a lot of cases, we're processing them to see if they qualify for this job. In many cases, we may be trying to shoehorn them into a job that they don't necessarily want, but we need filled. That may have worked when we're in a job-driven market where we had a lot more candidates than we had jobs. We could pick from different candidates and see which ones were the right ones to put into the jobs we needed filled.
00:09:13
Speaker
Well, now this is a candidate-driven market. We have a lot less talent than we have jobs. And so what we really need to do is shift it and be reaching out to candidates and saying, what is it that you're looking for? Where would you be the happiest? What is the ideal job that you'd like to find? Let's see if we can go and find that for you. Let's see if we can reach back out to certain clients that we have, to prospects that we have, and really represent you. It's almost acting more as an agent.
00:09:41
Speaker
than it is somebody who's trying to fill a job. And that's one of the biggest things we can do to change that interaction. I know you used the term early on about consumerization, and I really think that's the big thing. It's about looking at the candidate as the consumer, not as just inventory or however recruiters are typically looking at them.
Collaborative Recruiting
00:10:04
Speaker
So in certain respects, what you're saying is that for better or for worse,
00:10:08
Speaker
The fundamental operation of staffing is going to be changing. If we're not filling jobs, if instead we are trying to build a cloud, if you will, of talent, you go out and you look for high quality candidates who will come, who will show up, who will stay. You don't know which job they're going to be placed in, but you want them in your database and you want to continuously interact with them. But that implies that the recruiter is going to be doing something completely different.
00:10:36
Speaker
For one thing, it turns recruiting into a team-based activity. As I think about it now, when you're trying to fill a job, each recruiter has their own favorite people. They don't necessarily even share them with other recruiters in their own firm. They might not even put them into the system if they don't want other people to nab their talent. But now you're saying the recruiters all need to work together and get all the talent in one pool.
00:10:58
Speaker
How could a recruiter do that better than a digital talent platform? Is it the personal engagement or the exploration or is there something else?
00:11:08
Speaker
Well, first of all, I don't even like the term recruiter for the staffing industry. I think the recruiter to me for contract staffing is too limiting. It's too focused on the front end of the equation. And when we're talking about having significant talent shortages for the rest of our careers, regardless of if we're doing this for five more years or 50 more years, we're going to have these issues.
00:11:32
Speaker
Because for the last 50 years, we just haven't produced enough new people. And so the talent shortage is going to continue here. So part of the equation we really need to shift focus to is how do we maximize the relationship with the people that we do engage with? And how do we keep them on assignment for as long as we possibly can?
00:11:54
Speaker
How do we redeploy people into different assignments? How do they look at us as a career moving forward and as an employer of choice they can continue to work with rather than just in some cases a necessary evil, this bridge to employment of, well, I don't really even know the person in my staffing company that well, I'm just
00:12:15
Speaker
working with them until I can get hired on or until I get another full-time job.
Long-term Relationship Focus
00:12:19
Speaker
So by calling them a recruiter, we're really only focused on that, getting them through the door and getting them to the point of putting on assignment. And so I really look at other things like career advocates, staffing specialists, those types of things where we can say, your responsibility is not just to find, attract, and submit these candidates.
00:12:39
Speaker
It's also to be the primary relationship owner during their entire career with the company, with the staffing firm. And so that's one of the things we change, whether or not that's a team of people that do that, or if that's one staffing specialist that does that throughout, there's different ways to handle that. And that requires continuing engagement, right? It requires us reaching out to them and saying, how are things going?
00:13:04
Speaker
Most recruiters are afraid to reach out to person on contract to see how it's going for fear that it's not going well. Well, you know, if it's not going well, it's not going well, whether they talk to us or not. And if it's not going well, then we need to be proactive and figure out the way to fix it so we can keep them. Otherwise, it's just one day they quit and have another job or they just stop showing up or whatever it is.
00:13:27
Speaker
So we need to just really overall just change the way that that position interacts with people. If we do that, you can't replace all that interaction.
Automation Supporting Talent Advocacy
00:13:38
Speaker
People still want human interaction. And so we can't replace all that human interaction with a bot no matter what. What I almost hear you saying then is that the automation should be freeing the recruiter, but then to make the technology really work.
00:13:53
Speaker
you want a fundamentally different kind of recruiter. It's somebody who can get into the head of the talent and actually coach them to show up, to be competent, to be reliable, to develop new skills, to come back. At the end of the day then, what I hear you saying is you don't believe that the fundamental challenge of talent advocacy is something that can be handled without a recruiter, that certain aspects of what recruiters absolutely can be replaced and will be replaced by technology.
00:14:22
Speaker
Yeah, I think there are certain things that are already being replaced, things like going out and doing candidate sourcing, which is really typically just keyword searching. But then also we're seeing AI chatbots that are reaching out to candidates going through the database.
00:14:38
Speaker
that are engaging or re-engaging candidates, having conversations, sometimes fairly in-depth conversations, offering up jobs, being able to schedule interviews with
Marketing in the Age of Automation
00:14:49
Speaker
the recruiters ultimately, being able to do all of those things.
00:14:53
Speaker
that can be done by an automated system or an AI bot, and then getting it to the point where then it's handed off to a live person that has the skills to do the final vetting, to be able to build that relationship. It's almost as if a big chunk of the recruiting process, the sourcing process, is going to be automated. And what used to be the recruiters were doing that, they're going to shift back
00:15:20
Speaker
in the process to then be the ones that take it across the finish line. And then really their responsibility starts at that point. And that's where they have the relationship. So if you kind of think about recruiters used to be focused on handling applicants, getting on job boards, getting on social media, doing all these different things, focus on that area and not so much on managing the employee relationship once they're on assignment, that automation is going to be able to handle that first part, which I think it's going to allow us
00:15:49
Speaker
to have the really good recruiter scale. And that's where the advantage is. And there's opportunity out there to do it. There's 11 million open jobs. We all know that number. And there's plenty of opportunity that's out there and will continue to be out there. And it'll allow us to scale up more.
00:16:06
Speaker
So Tom, as we think about the different trends that are occurring, what I hear you saying is there will be fewer recruiters, but they will be generating a lot more revenue and they will be doing a lot more value added work in the process.
Candidate-focused Staffing
00:16:20
Speaker
One thing that I'm curious about as I was listening to you was if recruiters are doing less sourcing, how does the staffing agency make itself more distinctive? How do they create a more distinctive brand and how do they actually market to the industry?
00:16:35
Speaker
You know, most staffing agencies are ultimately sales driven organizations. If recruiters aren't doing sourcing, then the staffing agency is going to have to invest more in marketing as well. Isn't that the case?
00:16:48
Speaker
Yeah, certainly. I think there's always more to be able to invest into marketing and into sales. And I think you got to take a look at the value problem. I would say a couple of things. One is that I mentioned it early on our industry tends to be slow to adopt technology. So you've got staffing companies that still aren't using texting platforms and some of the technology that's been around for years and years. So this isn't going to be a wholesale change in the way that
00:17:15
Speaker
the entire industry does it. I just see that the more progressive staffing companies are going ahead in this direction that we're talking about. So I think that by itself is going to be a differentiator. I think the whole value prop is going to shift from we go out and get you this talent to we're able to attract and retain the best talent because we use technology to allow us to scale
00:17:42
Speaker
and have our staffing specialists focus on the areas that are really the most important, which is finding the right person and keeping them as long as possible. Building those relationships, being an employer of choice, being a destination employer, as opposed to just a processor that most staffing companies are. So I think it's just really about shifting the value prop from the front end talent hunter to relationship builder and what all that entails.
00:18:09
Speaker
Recently, I was talking with a young woman who was looking for work in marketing, and I learned that she was currently driving for Amazon. And one of the questions I asked her was, why didn't you call up a staffing agency? Why did you go straight to Amazon? And I'd like you to opine a little bit on what staffing agencies need to do to better compete with alternate forms of income, like being part of the gig economy.
00:18:35
Speaker
I think Amazon does a great job of having an employee value prop and showing the benefits. And I just think that most staffing companies, we do a pretty poor job of truly marketing to candidates. Go on Indeed and take a look at all the job postings. And there are almost all read-like job descriptions. I've been talking for years about having candidate-centric job postings and candidate-centric language as opposed to employer-centric.
00:19:01
Speaker
And you still go on to indeed and other job sites and ninety nine point nine percent of the jobs still read like they're a job description. It's a list of what the employer wants, not of what the opportunity is for the candidate. And so the companies that do a better job marketing to candidates are going to win.
00:19:20
Speaker
And the other piece to it too is that a lot of these different organizations, they spend a lot of time marketing. But I think one of the things that makes a huge difference for staff and companies is to look at those candidates or potential candidates as consumers. We should be marketing out to them as opposed to just putting a job out there saying the ideal candidate must possess the following, which is how a lot of them read. Who wants to apply to that job?
00:19:47
Speaker
Right? We're acting like we're in 2008 when we had a bunch of unemployment and people had no other options. Now they have all sorts of options. So one of the biggest things that we can do is just really change our mindset and our focus to being candidate centric.
Diverse Roles in Future Recruiting
00:20:01
Speaker
What is it that's going to attract the candidate?
00:20:04
Speaker
It's the other reason why I don't like the term recruiter because I don't think the industry does recruiting. I think we post jobs and process people for the most part. So we need to get out and recruit people. Recruit people means we need to market to them. We need to sell to them that, Hey, this is a good opportunity that we're a good employer. Your life is going to be better off coming and working for us. And we don't, we rarely ever do that. If you're listening to this podcast and you're going, we do that, you are in the overwhelming minority and it is a real competitive advantage for you.
00:20:34
Speaker
As I think about what the recruiting role might look like in 20 years, I've heard you say a couple of different things. I can imagine one recruiter who is an expert coach to talent. I can imagine a recruiter who is an expert around a particular kind of job or capability.
00:20:53
Speaker
I'm guessing that we're going to need recruiting experts who know how to program AI properly so that you can actually select talent or know when to offer. What do you think the role is going to look like in 20 years, or is it going to be a bunch of different roles that we haven't even really described before?
00:21:10
Speaker
A lot of people ask me, do I feel that the staffing profession is going to go the way of the travel agent, right? There aren't nearly as many travel agents. I equate it to a different profession, which is real estate. And I mentioned it earlier that you go onto realtor.com and Zillow and these different websites and you look at different things, but at the end of the day, you're probably going to need to engage a realtor. The difference is the realtors being engaged later in the process than they used to be.
00:21:39
Speaker
It used to be if somebody was looking to sell a house or to buy a house or both, that they would immediately reach out to a realtor and would go through the whole process with them. That's how I bought my first house. My second house was very much different. We found a house on my phone. I texted a friend of mine that was a realtor and said, hey, can you show us this house?
00:21:59
Speaker
And we went and we looked at that house. We looked at a couple other houses. Every single house we went and looked at were houses that we actually found on the different websites. But then we turned over to him and let him help us with all of the different highly skilled things. That's where I see the recruiting going, is that the stuff that is easier to do, that can be done pretty easily online, can be pretty easily done self-service, that's going to be done through automation and through bots and all of that stuff.
00:22:29
Speaker
But the more difficult stuff, the more nuanced, skilled stuff is going to be done by highly skilled recruiters. And that's where the difference is. And I think that's what we're going to see more and more.
Growth and Efficiency in Staffing Industry
00:22:41
Speaker
I think that the recruiting side, the direct hire search side, is going to be more similar to today than the contract staffing side.
00:22:49
Speaker
The contract staffing side, I think, is going to have a lot more automation in the front, whereas the skilled direct hire recruiters, there will still continue to be a need for them, especially as the talent shortage continues and is likely to get worse. So I don't see the search side changing. There will still be changes due to automation and different things, but I think the contract staffing side is really going to move what people are doing.
00:23:13
Speaker
I still think the staffing industry is going to keep growing, though. I think that it'll grow both by revenue, but also by internal headcount. We're just going to keep scaling is what's going to happen. So we may be a much larger industry, but we may have the same number of people in the recruiting function as we do today. We're just a lot more efficient at what we do and generating a lot more value from our time.
00:23:39
Speaker
So Tom, thank you so much. This has been very informative. I really appreciate your taking your time and sharing your experiences. I have to say, I think you have some of the most interesting perspectives around the future of the recruiting function. I always enjoy talking to you and I really look forward to having you back. I also want to thank our audience for joining us. We look forward to having you back soon. If you'd like to learn more about Aviante, please visit our website at aviante.com. Until next time.
00:24:09
Speaker
This is Chris Ryan and thank you for joining us on Aviante Digital Edge.