This Week, In Recruiting - Issue 184

Hung Lee

More signal, less noise, with Recruiting Brainfood

Published Sep 30, 2024

Open Kitchen: The 4M Framework Applied to Talent Acquisition (Part Two) - 7 x Macro Trends on TA

So we introduced the 4M Framework in last week's issue but for some reason none of the images loaded in the post, so you might have missed this visual which I think is a great way of understanding the framework at a glance. We discussed the Mega last week in Part One, so this week we're going to zoom into the next layer of the onion and the focus on the Macro - the sector wide pressures we are experiencing across the recruiting industry.

Here goes:

1. Operational Efficiency Becomes A Forever Priority

When Mark Zuckerberg announced in November 2022 that Meta was going to be reducing workforce by 13% - letting go of more than 11,000 employees - outside observers thought that this was a necessary one-off to rebalance the organisation following the period of aggressive over hiring in the immediate aftermath of the post lockdown era. It only took a year for Zuckerberg to disabuse observers of those notions when he announced that Meta was going into a permanent mode of efficiency, effectively closing the chapter on the tech hyper scaling era where more was always better.

Now Meta is only one company. Mark Zuckerberg is one one CEO. But we shouldn't doubt that his sentiment organisations should be run with a permanent focus on operational efficiency isn't already consensus amongst CEO's, who for the past decade have grudgingly accepted the fixed costs of higher headcount so long as credit was cheap, revenue was rolling in and global market was there to be won. The changed realities at the Mega scale - End of ZIRP and the onset of hostile de-globalisation which at best fragments the world into non-trading economic blocks, reduces the total addressable market for all companies with erstwhile global ambitions. If your business plan was to sell things to 8 billion people but now can only do so to 2 billion, you're going to have to redo your plan.

The impact for the recruitment sector should be clear; operational efficiency will likewise become a forever priority for us. There is not going to be any end state where we can say 'that's it, we're efficient' and leave things for another year. If we're not there already, we're going to have to adopt the mentality of continuous improvement where every process is under continuous audit and review. Space for peripheral concerns can only be made if we first secure measurable operational efficiency.

We'll talk more about how organisations can do this in next week's Open Kitchen, when I introduce case studies at the Meso (organisational level), but suffice it to say, we have a library of examples where Talent functions have responded effectively to these pressures. I'm going to frame them in another 4 Part Framework, which I might as well introduce to you now:

Procedural - business process re-engineering (i.e divide roles into evergreen vs episodic, set regular interview days for the former to eliminate scheduling overhead)
Structural - have we set up the team for maximum efficiency? (i.e. create a new team to deal specifically with silver medallist candidates)
Behavioural - increase every stakeholders output by 20% w/o changing process. This is cultural change.
Technological - implement technology which makes a measurable difference to efficiency (i.e AI Note taker)

2. Hiring Shifts from Discovery to Assessment

The chart above is from Workday, who measured 'Applications per Offer' divided into industry categories and found that only 1 of the 20 sectors saw a decrease in the number of applications to job postings. This was data from last year, so we wait for interest to see what this years data shows us. We can be pretty sure that applicant rate has again increased - and will likely continue to do so for the foreseeable future.

Economic insecurity, cost of living crisis, actual redundancies - all produce motivated job seekers. Add in the advent of EasyApply - technology innovation designed for a previous timeline when no one had enough candidates and we now see untenable volume of applications flooding to our published jobs. Further add in Candidate use of GenAI which might exponentially increase the volume of applications every candidate can send, then we might soon start to view applicant flow as being a DDoS attack on our hiring funnels

How to resolve the challenge of high volume job applications will become an important question for recruiters going into 2025. There seem to be 3 broad methods

Programmatic job advertising - job ads which are responsive to applicant volume and can be slept if they the volume reaches a preconfigured number. Hook it up to your ATS and you might even able to configure ad visibility according to how many candidates are where in your pipeline. I was wrong to predict increased adoption of programmatic in 2024, but the prediction might come right in 2025, if the cost of integration comes down and if it can made accessible for lower volume hiring
Increase assessment filters - respond to lowered friction to apply by increasing friction in the assessment stage. This can be done by increasing the requirements on job ad, pushing the assessment downstream, using AI voice pre-screening or some kind of online assessment service. This was the topic of the conversation in Issue 181 - 7 x Techniques Employers Can Use to Reduce Applicant Flow.
Shift to non-public methods of Talent Acquisition - this is sourcing (yay!), networking, hiring at events and community - anything method which employers can use to identify candidates w/o having to be overly public about it. We might even see increase use of recruitment agencies, as a means to redirect the applicant flow to third parties.

3. Focus on Quality of Hire

Naturally, talk about reducing applicant flow leads us Quality of Hire and which in turn leads us to Talent Density. This was a term invented by Netflix (in an interview with Reid Hoffman? I forget) and it spoke about having the high percentage of high performers in your business being key to success. CoinBase, most recently reinvigorated the term, with the above post on LinkedIn being a great summary of the philosophy.

You might notice that there is tension between some popular concepts that have been bandying around our industry discourse over the past few years. If Skills Based Hiring was about opening the aperture, 'Talent Density' is code for closing the aperture for organisational entry. We can try some mental acrobatics to square this circle but having the CEO in on every hire / no hire decision is an intentional bottleneck which is going to slow down hiring rate. I totally respect it. But lets not pretend what it isn't.

What this means for recruiters is a hard shift back toward Quality of Hire. We've always cared about this metric but have managed to successfully dodge responsibility for it as we're not in control over employee performance. Got a feeling 2025 is going to be the year when this denial is no longer going to be tenable. We have to be proactive in removing the reasons why it has been problematic in the first place and connect candidate data with employee data. This means selecting technology which is going to help us do that. It also means a marriage between Talent Acquisition and Talent Management, if not a fully merger in time into a more holistic end-to-end employee lifecycle Talent function.

Incidentally, the shift of focus on Quality of Hire will likely mean end of RTO for us.

Can you imagine a CEO doing face to face interviews and us refusing to come into the office to do the same?

4. Organisations Delayer & De-silo (Leading to New Roles, New Skills)

GenAI is going to solve the 'unstructured data' problem, leading to a delayering and de-siloing effect through out organisations. Company HQ's are going to get (a lot) smaller, as AI becomes the CEO's BFF in understanding the operational health of the business. The layers of management which emerged to handle the organisational complexity of a growing business, in turn added to that organisational complexity such that the management of the bureaucracy became many people's actual work. This could be disguised by the fact that the data produced in the operation of the bureaucracy - the emails, the IMs, the meeting notes, the spreadsheets etc - couldn't be practically aggregated in a comprehensive way, and couldn't be minded for intelligence to support executive decision making. Hence, the executive reliance of management reports produced by departmental heads - piecemeal artefacts designed mainly to cover the a3rse of the department under scrutiny.

What does a company look like if we have an AI which can interrogate this unstructured data and come up with analysis and recommendations within seconds of being provided access to it? It's going to look a lot flatter and have far fewer - in any - siloes.

This shift in organisational structure will also mean the emergence of new job roles and new skills profiles required to perform in those jobs. I have no idea what these are, or how many humans will be required to do them but the transition itself will produce significant amount of work. Some promising signs that the talent function - especially a holistic one which includes OD, TM, L&D and TA - might already be doing some of this. If you're not in 2024, you better get to it in 2025.

What characteristics would we look for in new hires as the organisational structure undergoes transformation? Probably some combination of Cognitive agility, High stress tolerance, Action orientation and Self motivation, as well as perhaps Domain expertise, High network value, Fast skills acquisition. I should imagine being able to come up with valid assessments for these characteristics would likely be a premium asset for anyone involved in the talent function.

5. Offshore-Outsource-Automate Cycle

Employers have actually trying to get smaller for some time, but have increased in headcount almost in spite of themselves as the global money supply hit all time highs in the middle of the pandemic era. Having now experienced not one, but two major redundancy periods in quick succession, employers are loath to recklessly increase exposure on fixed costs by expanding payroll, so we can expect an increase of the alternative-to-FTE worker - interims, fractionals, gig workers. For those who are interested in this btw, there are two events happening this week which you might be interested in - Total Talent Strategy breakfast with YunoJuno on the Oct 2nd (email me if you want to go to this) and How to Work with UK Independent Workers with Worksome on Oct 3rd (see below).

It's also possible to reduce payroll by moving the jobs to cheaper locations. Shift to remote taught employers that it was possible to manage workers who were not the same building, a natural stepping stone to managing workers who are not in the same country. The global dispersal of jobs is a paradoxical aspect of hostile de-globalisation - increase cost of doing business, which drives focus on operational efficiency, which leads to offshoring jobs - a kind of re-globalisation. The ROI is already too obvious for any departmental head to ignore.

This is 2022 salary data from OfferZen - a supplier of tech talent based in South Africa - and you can see the differential for a software engineer, in the same time zone, with the same level of education, communication skills and technical capability is enormous. I spoke to a recruitment leader last week at IHR and she said that every role that is created in business needs to first go past a 'can we offshore this' filter before locating it in the UK.

This is will be boon for any economy which can offer lower cost of employment to a company looking for operational efficiency, drawing away jobs from those where it is too stil expensive to hire locally. This includes the UK, incidentally...anyone else seeing a rise in US companies looking to locate recruiter jobs in London?? In an era of remote work, a global pecking order is being crystallised as to who hires what and where.

For recruiters, where ever you end up being based, this means our roles will increasingly become more international as employers demand lowest cost of employment. Talent intelligence on the local labour supply, knowledge of local employment regulations, understanding of job seeker behaviours, effective hiring and assessment approaches localised to local cultures - all this might be part of the bag for a recruiter in 2025.

6. The Serendipity Equation

Efficiency is anti-innovation though, so it will not all be doom and gloom for recruiters in corporate UK HQ's 🤣. An overly efficient process optimises out the creativity which can be the difference in a commoditised marketplace. Imagine a night out with your mates (still do those, occasionally?) - a huge part of the fun is to the vagueness of the plan and the opportunity to explore what life might have to offer by going out to a new place and seeing whats what. Not overly planning is critical to having a great time!

It's also critical to creative breakthrough.

There have been many studies conducted on the nature of 'luck'. They are fun pieces of research which mainly rely on interviews and questionnaires with people who self identify as 'lucky' compared with those who self identify as 'unlucky'. The results reveal attitudinal and behavioural differences which at least explain the divergence in self identity, and probably go some way to explain outcomes also (considering yourself to be lucky actually seems to increase luck...).

There are two ideas which are most relevant to us in Talent Acquisition.

Firstly, it is that lucky people spend a lot of time in places where there is high density of other people. Simply by 'being in amongst it', increases the chances that things (good or bad) might happen. This is a fairly acceptable truth - nothing going to happen if you sit at home on your sofa watching Netflix! Secondly, it is how these people respond to those things which happen - they are sensitive to opportunity and can quickly react to them as they emerge. The really lucky ones are those who are sensitive to emergent opportunities and can cultivate them into being. Unlucky people, don't do the former and haven't learnt to do the latter.

I suspect companies - especially executives and leaders - have become keenly aware of the innovation potential that comes from having people work closely together. The argument for RTO has been led by exec, and whilst there is a strong argument to made that of ulterior motives (concern over commercial real estate value, collapse of the office economy, employees slacking off or 'overworking' etc), I do believe there is substance to the concept that working in high collaboration intensity sparks ideas which otherwise would not have emerged if the participants were working remotely and asynchronously.

The future AI-enabled organisation will recognise that a core of collocated, high value, high impact employees whose jobs are to be provide the human edge to organisational efficiency powered by AI will still be needed. Building and maintaining this team will be a persistent requirement for the future fit talent function.

7. Politics of Productivity

The best thing I've ever read on the impact of AI to the future of work was an essay by Ted Chiang, Will AI Become the Next McKinsey. For those who are not familiar with Chiang, he is a sci-fi author who writes the most incredible short stories, using the expanse of science fiction to show us truths about the human condition. I highly recommend his work, but if you read only one thing from him, read that essay.

The gist of it is this: technology innovation always makes the same promise, and always never delivers it. The promise of humans being relieved from the labour by innovation never comes to pass because the time saved - the value accrued from innovation - is not shared with the operator of the machine, but captured by the owners of the machine.

We cannot expect CEO's to care about anything other than their business. In fact, for many, it is a fiduciary duty to do nothing else other than this! Hence it is important that we - who will be closest to the value produced by technology - argue for the portion of the time saved to be returned to us, so that we can spend it in improving those peripheral concerns which are in fact fundamental concerns.

If TA can save the business 500 hours per month through procedural, structural, behavioural or technological optimisations, can we get some of the time back to say, improve candidate experience? Having our recruiters spend 10% more time per interviewed candidate might go a long way toward that. What about DEIB, which not so long ago was deemed a top priority, only to drop off the face of the earth when times get tough? Perhaps the time saved by optimisations can be reinvested in supporting a more inclusive and equitable organisational culture.

There is a movement called 'Human Centred AI', which was introduced to me by my friend Ahryun Moon of GoodTime. It's a charter with commitments towards an AI-enabled future which places the human experience at the centre of it. As we respond to these sectoral pressures outlined in today's post, I hope that this idea can help guide what those responses look like.

We'll discuss examples of this in next week's essay, Meso - Case Studies on Recruitment Efficiency.

Now out of the kitchen, onto the lounge 👇

What's Going On?

Big List of Recruiter Events to Attend in 2024

Big List of Recruiting and HR Events to Attend in 2024 - updated folks. Coming down from the outstanding IHR Live confirmed to me that importance of saying 'yes' rather than maybe! We are heading into Q4 and we need to go again on the events that you see in your vicinity. Good luck to everyone going to Unleash Paris - make sure you check out all the other events in this spreadsheet - it's the only place where all the good stuff is!

The AI-enabled Candidate One Year On: How and Why TA Teams MUST Adapt, Tuesday 1st October, 12pm GMT

Our friends Arctic Shores broke new ground last year with their research on GenZ use of AI. We're now well into the era of the AI-enabled job candidate and it's clear that our hiring funnels were never designed to handle it. What is the state of the AI usage today and what must employers do now? We're with Robert Newry, CEO (Arctic Shores), Martyn Redstone, Founder, (PPL Bots) and Samantha Hope, Emerging Talent Manager, (Shoosmiths). Must attend folks. Register here

How to Hire for AI Skills, Tuesday 1st Oct, 5pm GMT

Delighted to join the panel for this X-Team event on How to Hire for AI Skills. We're living in the AI-enabled era and there is no employer in the world who is not interested in increasing capacity with AI. And yet we have a massive global shortfall of expert AI talent. How do hire elite skills against elite competition? We're going to debate this out on Tuesday. Register here

Worksome Meetup: Operating with independent talent in the UK, Wed 3rd Oct, 830am - 10.45am, Lantana London Bridge | 44-46 Southwark St

In a VUCA world, it is essential for employers to create an agile and flexible workforce. Whilst the core component of any business will always be FTE, the non-FTE component will continue to increase as workers and organisations figure out new ways of working. What are the best ways to work with 'independent talent' in the UK? Join Worksome in this in-person meet up in London Bridge on the 3rd Oct. Register here

Brainfood Live On Air - Ep275 - Hiring in Thailand in 2024 & Beyond, Friday 8am GMT, 2pm ICT

The tour begins folks - excited to be broadcasting this show live from Bangkok, where I will be speaking to local recruiters who work the Thai market - what are the hiring challenges in the country, what are the techniques and technologies used, what do recruiters who are entirely new the country need to know about hiring here? We're at 2pm ICT, which makes it 8am BST. Register here

ERE Recruiting Conference, November 12-14, Anaheim, CA, USA

As I mentioned, I'm stealing Peter Hinssen's term, 'human premium'. I suspect that it, along with access to collective intelligence, is going to be the decisive component of human work in era of generative AI. How does this translate for us in TA? I'm going to be presenting a discussion on how recruiters can future proof in the era of AI. I would welcome any comments or contributions from the community in advance of this talk. See you in Anaheim: register here

NB: if you want a discount code, comment "ERE" below and I will DM you

Tec Rec 2024, TITANIC Chaussee Hotel, Berlin, November 24th–26th, 2024

I am back in Berlin folks, first time at Rec Tec since before Covid. Looking forward to sharing thoughts on the state of tech hiring, learning from local employers as to how the changing circumstances have impacted hiring posture, diversity and inclusion, state of remote, state of outsourcing. I have a 50% discount on tickets so make sure you get them here rather than elsewhere!

If you have an event, webinar or podcast going on next week and want it featured on next week's newsletter, comment below with the link and event details. Don't forget to at mention me so that I see it

Whose Story?

Wendy King, Talent Acquisition Leader.

One of the real pleasures of doing recruiting brainfood are the amazing people I get to meet. I connect with Wendy a few weeks ago and we got talk about her life and career. It was obvious that I had to ask her to contribute to the Brainfood Tribune. I asked Wendy 20 Questions - here are her fabulous answers.

If you are interested in doing 20 Questions, comment below 'TRIBUNE' and I will be in touch to do a profile.

What Are You Doing?

Plenty going on folks!

Amit Parmar, CEO of Cliquify is running a survey on EB priorities. This is well worthwhile getting involved in folks - where are we for next year? Spend 5 minutes on 2025 Employer Brand Priorities & Budget Survey Now Open!

Doeke Geertsma has a new podcast series and I have a feeling it will be a great one. Not saying this because I am first one up (!) but because it is a unique take, getting into the person behind the personal brand. Find out who the people in the industry are by tuning into to Unplugged With Us. Follow it here on Spotify

Eva Zils has a new podcast Is AI Your New Boss? which I believe may be the first AI-infused podcast of its type in our sector - give it a listen and let me know what you think!

If you have any personal news or projects you want promoting in This Week, In Recruiting, comment below and let me know

End Notes

Winter has ensued! I am still resisting the temptation of sticking the heating on as I refuse to do this in September. Anyhoo - off on a month long sojourn to APAC so will report back to you from there.

Have a great week everybody.

Hung

Hung Lee is the curator of Recruiting Brainfood, and now This Week In Recruiting. Subscribe to both if you are into recruiting or HR or just interested in world of work.