Welcome to Take It from the Top, a podcast brought to you by the Recruitment Innovation Exchange (also known as RIX). On Take It from the Top, we interview leaders within the recruitment industry to discuss various pressing topics within the sector.
This week Tim Pröhm, Vice President of Digital Product Development at KellyOCG, joins Jeff Neumann, Vice President of Product Marketing, Enterprise, Salesforce, and International at Bullhorn, to discuss how firms can use technology as a catalyst for success in recruitment.
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Welcome to Take It from the Top, a podcast brought to you by the Recruitment Innovation Exchange (also known as RIX). On Take It from the Top, we interview leaders within the recruitment industry to discuss various pressing topics within the sector.
RIX: Hello everyone and welcome to another episode of Take It From The Top brought to you by the Recruitment Innovation Exchange. I’m your host today, Jeff Neumann, Vice President of Product Marketing at Bullhorn and today we are really excited to be joined by Vice President of Digital Product Development at KellyOCG, Tim Pröhm. Tim, welcome and thank you for joining us.
Tim Pröhm: Hey Jeff, thanks for having me. I’m really excited to be here today.
RIX: Excellent. Tim, I’ve got a bunch of questions that I want to ask you about the industry, but before we get started, I’d love it if you could share a little bit about your background before getting into recruitment.
Tim Pröhm: Absolutely. The first thing to understand for the audience is that I am German, I live in Germany but work for a U.S. company. Just so that everybody listening is aware. I basically got into the recruitment industry by accident, as did the majority of people I know in the industry. My background is actually in business administration. I earned an MBA from a German university and then I worked in the defense industry. I wrote my master thesis on NATO Eastern Expansion, which is not the average topic a recruiter would usually do. I then went into sales, spent some time as a product manager in the telecom industry.
And then I got into staffing by accident because I was looking for a new job and I was interviewing at a staffing agency and the people apologized to me saying, “Hey, really sorry that it took so long, but our branch manager quit this morning,” and I’m like, “Hmm. I can do that.” So I applied for the job and thought, Hey, that sounded very interesting, and I got hired and worked as a branch manager. That was 17 years ago and I’ve been in recruiting and staffing ever since.
RIX: Wow, you’re right. That’s definitely not a typical background. What led you to take on your current role as VP of Digital Product Development?
Tim Pröhm: So I joined KellyOCG three years ago and the company wanted to hire somebody with a strong digital background already working in that area. Before I worked for Kelly, I worked for 13 years for a competitor. Recruiting is more tech-centric than ever and I’m always making the joke that when I started back in recruiting in 2000, we would actually wait for the mailman to deliver the paper applications because people applied via paper, CVs, or resumes at that time. You would look through it and then file them in huge filing cabinets in the office. When you think about it, just kind of like 17 to 18 years later, you have applicant tracking systems, you can target people on social media, you can do video interviews, etc. Technology has become a much stronger part of recruiting more than ever and innovation is just taking off like crazy.
So from the Kelly perspective, there was an understanding and an acknowledgment that we as an organization need to use technology more often to improve efficiencies and get better access to talent not only for us but also for the clients that we’re providing services to. I initially focused on RPO strategy when I joined Kelly. The company now realizes that we need to bundle our product development efforts and especially create more digital products that have a strong digital and technology mindset because we see that traditional offerings are not going to take us into the 2020s and 30s. From a company perspective, Kelly felt that it made sense to bundle it and put a strong focus on digital innovation.
RIX: That makes total sense and I think that’s a great lead into the first area of topics that we want to talk about, which is all around technology. Bullhorn’s recent Global Recruitment Insights & Data (GRID) research found that 84 percent of respondents think global recruitment firms must embrace digital transformation to remain competitive. What technology change “arrived” and most quickly impacted your strategy to remain competitive at KellyOCG?
Tim Pröhm: First, let’s talk about the impact of technology because what we’re seeing as an organization is the decline of ATS. I hate to say it. And ATSes will be out there for many more years, don’t get me wrong, but in the past everything was ATS-centric. You would have a job, you would post the job, people would apply, and then you would bring in people and lead them through the funnel. We realized that this was not working anymore and also the reason why there are many more pinpoint solutions out there to help you drive traffic to your career page or to interview people in a more efficient way.
We see candidates moving away from the traditional application process. I post a job, somebody sees it, and then applies. And we’re really entering what I call the “age of network recruiting” where you really need to stay in touch with your talent base. You need to connect with them. You need to understand the touchpoints that talents are having with your organization, manage them in a consistent way, while also providing a great experience. Something that nobody really thought about in the past but is definitely changing the technology landscape and how organizations are filling jobs today.
RIX: Yeah, makes sense. In a candidate market, candidates are king and that candidate experience is absolutely critical to being successful.
Tim Pröhm: Absolutely.
RIX: One of the technology trends that we hear from time to time, both inside and probably more prevalent outside of staffing is blockchain. Do you feel like blockchain has a role in recruitment?
Tim Pröhm: Don’t get me wrong, I believe in the blockchain and I think it makes a lot of sense. The major issue today is that people don’t understand blockchain. I talk to people in client organizations and they talk about the blockchain. The blockchain is not like the Internet, it’s blockchain technology that you can use to achieve a certain outcome. There’s a lot of people that are not educated enough and don’t understand it, then they take a look at Bitcoin and saw how it basically was rising to the top and then dropping again, so there’s a lot of fear going on with it.
I think blockchain technology is great. It makes a lot of sense to look into it, but you really need to understand that, today, there are only limited use cases for blockchain technology in HR and in talent acquisition or recruiting, and that’s mainly document validation–making sure that a certificate is real and legitimate. And it also makes sense for transaction management–if you are a staffing company and you employ a worker across multiple assignments making sure that each individual gig is sufficiently recorded and that client’s feedback is tracked. This is where blockchain is good. The downside from my point of view is that it’s still in its infancy. There’s literally zero interoperability with standard HR systems. If you want to work with a blockchain provider and say, “Hey, I want to integrate that in my SAP or Oracle,” you’re going to have problems. There’s literally no industry standards today. Everybody can develop a kind of blockchain technology like they want. There is market fragmentation.
But then the last thing, which is also an interesting thing that I discussed with our legal team, there is also a GDPR impact because under GDPR there is the right to be forgotten. The blockchain never forgets and that’s just something to think about.
RIX: By design, right?
Tim Pröhm: Exactly. That’s just something to think about.
RIX: That’s a great point. That’s really interesting. You talked a lot about candidate experience. Are there any other areas where KellyOCG is embracing this concept of digital transformation?
Tim Pröhm: It’s all over the place and as an organization, in general, we understand that we need to change. Kelly is a 73-year-old organization that has operated the same way for many, many years being very successful, but over the last few years, we’ve put a lot of additional focus on digital transformation. The first thing is we set up what we call the digital innovation team. They’re part of the IT department and they constantly scan the market for new technologies. The reason for that is that you need to be able to understand what is out there, what the latest trends are, new vendors, and new startups that are coming to the market and really understand how their specific solution can help us gain a competitive advantage.
There’s a lot of movement, a lot of venture capital moving into the HR tech space. We’re really trying to build out a digital-first mindset as an organization where we think of utilizing technology instead of adding a couple more people to the delivery teams, but really utilize technology in a smart way. I think that’s just the point that we’re trying to try to achieve here.
RIX: If you had to put your personal money behind kind of one category or point solution that you see gaining traction in the industry, what would it be?
Tim Pröhm: There are a couple of things, but the thing that will extremely change the industry, and some people don’t really understand the full potential, is bought automation. And this is obviously the chatbot that you can see on career pages today where candidates interact with a chatbot or the artificial chatbot that then provides answers and goes back to the candidate. But the bigger thing from my point of view is RPA, recruitment process or robotic process automation where basically you can take tasks that usually human would do, put it in through an interface and then combine multiple technologies so that it’s basically automated. That’s just the key point from my point of view. We haven’t really started to understand the potential of bot automation, in general. This is where I would spend money, to be honest.
RIX: It’s funny you mentioned that. Our GRID research found that 55 percent of respondents believed that artificial intelligence would have a positive impact on candidate and customer engagement. And just in general there’s a lot of hype about artificial intelligence and its role in recruitment. There are also some myths that are floating around about the actual value that it delivers and some of the use cases that it could support. From your perspective, what do you think are some of the myths that need to be debunked?
Tim Pröhm: It’s always tricky because there is the danger that AI becomes the other big buzzword and when you think back a couple of years when you went to HR tech, every vendor was listing “cloud” as the buzzword on their desks or in their booth and it wasn’t always cloud-related. The issue with AI is that people always have that romantic feeling, “Oh there’s that artificial conscious that is doing work for us.” And that’s not the case. Artificial intelligence is nothing else than machine learning. You basically train an algorithm to predict a certain outcome. I know that’s a very technical explanation, but at the end of the day you set up a set of rules and the technology is then following this rule. And if you can use it for sourcing, for matching, for all sorts of things, the question I always ask vendors when they come in–and there are a lot of startups that approach us and want to talk about it–I always say, “Okay, how did you train your algorithm? How do you refine the way you’re utilizing that? What’s the data set that you can put against it?” Because if I just design an algorithm and say, “Okay, if these things are met, this is the good candidate,” just as an example, I need to have validation. I need to have a lot of data. The majority of startups simply don’t have access to the data and really can’t train it appropriately. From an organization perspective, we’re always a bit skeptical.
Just as an example, Kelly has about 500,000 applicants a month, which equals 6 million a year. That’s a good set of resume data that you can use to train the AI algorithm. But the small organizations don’t really have access like that and this is why I believe that when it comes to AI, the big companies that are out there in Silicon Valley, the Facebooks, the SAPs, the Googles of the world, they have the huge advantage to develop something and they will eventually move into HR and recruiting. That’s just my perception.
RIX: I think you’re right. It’s kind of AI’s dirty little secret, right? It’s not something you just turn on and it magically starts making predictions and inferring results based on data. It has to have a really strong dataset. I hear a lot of customers kind of fall into the same trap where they don’t have a widespread usage of the CRM across the organization and their perspective is, “Well let’s just invest in AI, turn it on and it’s going to change the world for us.” And they don’t really see the fruits of that investment because they don’t have the data set for it to actually work. Their people are not putting in the right notes, they don’t have all of the application information, they don’t have a large candidate database. And so for them, they’re just not seeing the results. And people very often overlook that aspect of it.
Tim Pröhm: Absolutely. Let me give you one small example because you touched on a great point. One of the hottest things right now is automated matching or automated sourcing. A lot of AI vendors try to sell their solution and very often when you talk to them they say, “Yeah, the technology is observing your recruiter’s behavior and who they pick. And by that they can then refine actually the algorithm and make better recommendations going forward.” And then what I usually say in order to counter that as like, “Okay, if I’m a recruiter and I have a preference for middle-aged German males with unpronounceable last names–like the one I have–then the technology is going to observe that and return more candidates of the same.” So that’s what I would call bias. How do you counter that? And then usually the discussion is ending then. But again, I believe this is going to be a huge thing. AI will change the industry and the world. But if you don’t have access to the right amount of data to train it appropriately, it’s just not going to do the trick. That’s just my opinion.
RIX: Absolutely and one of the other challenges that we face as an industry is that the term AI is thrown around quite often to represent a multitude of different technologies and areas. There’s machine learning, there’s robotic process automation, there are chatbots, etc. In your mind, if we just allow for a minute AI to be that broad term that represents just investments where systems are starting to make decisions or help us make decisions on our day to day, where do you think the first wave of AI hits and how would it impact recruitment? What would you say an organization should look at first?
Tim Pröhm: The best use case from my point of view, and this is where I see a lot of traction right now, obviously automated sourcing. I mean a lot of organizations, they struggle to get talent in the door. If you have low unemployment, there’s a lower chance that people actually see your job ad on the job board and actively apply. You really need to go out and you need to screen the CV databases, you need to go to LinkedIn, you need to engage people in a conversation and really start to interest them in your job opportunities. From a sourcing perspective this is something that you can do today. The technology will get more robust over time, but automated sourcing is something that is a robust use case and this will grow.
The other piece, matching. I know everybody talks about matching like it’s solved. This is like the big frontier still in our industry. The matching engine topic will remain here for a long time, but the next thing is really understanding what are the traits of a candidate outside of the keywords that you see in a job description. How do you match that together? And the last thing–and this is also where we’re putting a lot of investment in–is what we call cognitive agents, the chatbots, because we truly believe that you can add a lot of value when you utilize chatbots for candidates because of the real-time interaction. You don’t have to wait until the office is back open next morning. But at the same time, it’s also is a great use case tool to gain efficiencies. Just to give you an example, we have a chatbot on our Kelly Services career page in the U.S. On average we have between 20,000 and 30,000 interactions per month with candidates on the career page. If we think about it, each interaction might take two to three minutes. When you multiply that, all of a sudden you realize that there’s a lot of people that are doing nothing else than answering responses or answering inquiries from candidates. But there are ways to optimize and streamline the processes. And our numbers taught us that candidates actually want to use the technology and it’s not just a gimmick. That’s just what we see.
RIX: Especially if it’s for just questions that they’re looking to get answered that are fairly remedial and don’t require a lot of intuition and knowledge, right? If it’s, “How do I submit my timesheet,” or, “Where do I go for this,” or, “Who can I contact for that?” There’s definitely a really important role that chatbots can play in helping to offset those non-revenue, non-value driving discussions that are happening and allow the systems to take that over so that your sales and delivery teams can focus on higher value activities.
Tim Pröhm: Exactly.
RIX: Yeah, makes a ton of sense. I want to shift topics for a minute Tim, because you mentioned something really interesting when you were introducing your background and that’s really around RPO. RPO has been around for more than a decade but we’re actually seeing somewhat of a resurgence in the interest in RPO and companies are starting to gravitate toward it. Why do you think that is? Are there any trends or things that are happening out in the market that you think are driving organizations to either reinvest or reevaluate that type of business model?
Tim Pröhm: Yeah, recruiting has become so much more complex. When I think back also in my own history and how it was 10 years ago, RPO was mainly focused on the individual trends, the action. As an organization you would outsource. You’d say, “Okay, I have an RPO provider that’s going to do the job better and ideally also cheaper and I’m going to focus on other things.” But in general, there was not a lot of innovation. You would have your applicant tracking system, you would post jobs, you would coordinate an interview with a hiring manager, and it was basically like HR had done it before. It’s just focused on transactional activities. Recruiting has become so much more complex. It’s not transactional anymore.
Today, if you want to be successful in attracting and hiring talent, you need to understand active sourcing. You need to be able to understand the social networks that are out there, find people on LinkedIn, and be able to articulate a compelling message because talent gets bombarded with messages on LinkedIn. How can you really stick out from the crowd? Things like understanding technologies and tools that are usually only utilized in the consumer space. For example, targeting candidates via programmatic advertising on social media is something that a lot of organizations simply don’t understand. The need analyze data and really understand, “Okay, what’s happening on their career page? What are the conversion rates? Where do candidates and visitors come from?” This is very hard. I talk to a lot of organizations and big corporations where the talent acquisition function doesn’t have access to Google AdWords. “Oh, that’s something that marketing is doing.” So they’re basically flying blind and don’t know what’s happening on their career page, which is like one of the most important hubs. As an RPO provider, obviously we can bring technologies and tools in there to help them analyze that better.
Other things factor in as well, like the need to articulate your employer value proposition to really have a consistent employer branding, or utilizing technology tools as we discussed earlier. All of these things make it more complex than ever and you need to be very focused in order to be successful. And a lot of companies don’t really have the relevant talent because we need to have that hunter mindset instead of the farmer mindset. Other companies don’t find it hard to utilize shared services models for recruiting, something the RPO provider usually can do. And they also find it hard to keep up with technology. A lot of times when we go and talk to customers about RPO, we reserve an hour and the customer asks us to reserve an hour or 90 minutes for technology demos. And that hasn’t happened five years ago. Nobody really was looking at that. It has become more complex and an RPO provider can keep up with it, but customers feel overwhelmed.
RIX: Do you think that there are any aspects of the RPO model that are kind of built for future endurance and do you see this trend of gravitation towards RPO sustaining in the future?
Tim Pröhm: I think so and the reason is that from an RPO perspective, you can never stall. If you’re a provider, you constantly need to invest in innovation. You constantly need to invest in your own capabilities because you need to be flexible and you also need to be scalable. You need to be able to upscale, but you also need to be able to downscale and have a continuous improvement approach. Just having a certain process and then just letting it run forever doesn’t really work out. There is a need and also an appetite from RPO providers to constantly evolve the program to always make it better, bring new technology. And that is something that RPO providers have to do because that constantly creates value for clients that go beyond the typical year one savings that you have. You need to evolve year over year and then there’s a space for RPO.
RIX: Makes total sense. You mentioned a couple of really important distinctions there and some great insights in best practices around innovation and technology. Would you say that’s the single biggest challenge for the RPO model in the next five years or do you see a new challenge on the horizon that agencies need to be aware of and thinking about?
Tim Pröhm: Technology is one thing as we discussed. It will remain important. But the biggest challenge for RPOs that I see is with customers. We see a massive shift from hiring full-time talent to hiring contingent or temporary talent. There’s a lot of data points out there that suggest that 40 percent of the workforce in the U.S. will be freelance by 2023. But it shows a very significant shift because today the majority of organizations, they focus on full-time talent and talent acquisition and they let procurement manage the contingent workforce and gig workers.
And going forward everything will merge. And it has to merge because from the RPO perspective. Just to give you an example, we get a requisition, we go out to market, we try to find the person, the best candidate for the job. At no point in time, does anybody even ask, “Does it make sense to hire somebody full time?” And this is a discussion that we’re starting to have with many more clients today who realize that certain talent segments simply can’t hire these people full time. They want to work as freelancers. They don’t want to be employed full-time. How do you weave that in? I know total talent is one of the biggest buzzwords out there in the industry, but I truly believe that it’s going to merge and that we need to be able to manage the workforce holistically. And this is why RPO needs to evolve to also have an understanding of how the gig marketplaces work and how the contingent marketplace is working in order to generate value for clients going forward.
RIX: Excellent. Thank you for that. Tim, this has been fantastic. I sincerely appreciate you sharing all these insights with us today. Thank you. And for all of those of you who are listening, we hope you enjoyed this session of Take It From The Top and hope you have a great day. Thank you.
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