AMS: Why the RPO and Technology Vendor Relationship is Critical With Jonathan Kestenbaum

Music:  00:00

This is RecruitingDaily’s recruiting live podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week, we take one overcomplicated topic and break it down so that your 3 year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup.

William:  00:33

Ladies and gentlemen, this is William Tincup and you are listening to the RecruitingDaily podcast. Today, we have Jonathan on from AMS, where we are talking about why the RPO and technology vendor relationship is critical. And I think we can underline that and bold that, and Jonathan’s going to take us under the wonderful world. So Jonathan, would you do us a favor, the audience a favor, and introduce both yourself and AMS?

Jonathan:  00:57

Yeah. Hey, really excited to be here today. Thanks for having me, William.

William:  01:00

Sure.

Jonathan:  01:01

My name’s Jon Kestenbaum. I’m the Managing Director of Technology Strategy and Partners at AMS. AMS is a RPO, global RPO. And what’s really unique about AMS is we have this awesome advisory business where we’re able to help our clients go through these digital transformations as they think about buying technology. My background, I’m a lawyer by education. I’m sure many folks in the industry have come across me as a co-founder of Tomtec Labs, which I recently exited from. And as I mentioned at the beginning, super excited to be here and get to spend some time with you.

William:  01:53

Well, we’ve known each other forever and you have such a unique take on the market, especially all things HR tech, but specifically from sourcing all the way to onboarding. You’ve just studied it and you’ve had people do demos and a massive amount of research. If you put investments out there, you love this part of the world. There’s a little corner of the world that not a lot of people love. We can probably say that there’s probably 50 people that absolutely love it and you’re one of them. So it’s a small little group of people, but you absolutely love it. And you push people to innovate and it’s something I’ve always loved about you. With the move to AMS, you’re guiding AMS, but you’re also guiding clients through this relationship.

William:  02:45

So RPOs historically have either operated under two models that I know of. One is they own the technology. It’s like they have a technology stack that they run clients through. And the other model is the opposite. They use their clients’ technologies and probably some hybrids in between. And you wake up and some of the RPOs are either building technology, investing in technology, and/or doing what you’re doing and advising their clients on that technology stack. So, first of all, let’s just go to the relationship between the RPO, the outsourced of recruiting, and the technology vendors. Why is that critical in your mind?

Jonathan:  03:36

You’re right. I’m probably one of 50 people that studies town acquisition technology. I’ve had the unfortunate privilege of demoing probably north of 2,500 town acquisition technology tools. And let me tell you, I’ve never heard a bad sales pitch before, they always sound good. But what I learned over the last 7 years of really diving deep into those technologies and facilitating north of probably half a billion dollars in transactions is that the technology is really only as good as the people and process that’s built around it. And so one of the things that I really wanted to get my hands around and in order to really achieve my personal mission, which is to elevate the city of the art in recruitment, was to see the other side, the people process side, and be able to connect the dots between that technology and the people and process, and really be able to get the best outcome for clients.

Jonathan:  04:42

And so, to your point, our RPOs definitely play in those different areas. I think that the unique challenge right now is for, not only companies to understand how to extract the most value out of these technologies, which means they likely have to change their processes and change management around these technologies, but also when you’re working with an outsourced agency or a firm like an RPO that’s going to build people on process around your technology, it’s super important to include them in that process, the thinking around what technologies you’re going to use, because it’s hard to build operational efficiencies on top of a tech stack that you purchased because the sales guys at the vendors sounded really good and over promised and ultimately under delivered. I think it’s a super important area of interest, at least for me right now, which is starting to help organizations connect those two dots together.

William:  05:59

So dumb question alert. Obviously you’ve seen a lot of technology and there’s more coming to market every day, pretty much every hour. Do you have a blueprint that you help clients with where you say, “Okay, let’s look at how we solve sourcing. We got to find the talent, we’ve got to then engage with a recruited market to the talent, then we got to get them to apply. And then once we get them to apply, then we got all these other things; assessed skills, scheduling, all these other things that are components.” Because I’ve been asked this question. Do you just have a blueprint? You just say, “Just do this.” Or is it client by client?

William:  06:47

You look at what they do, what they’re trying to achieve, how many hires they are, if it’s hourly, if it’s corporate, things that in their technology stack that either people aren’t using? How do you go about when you’re doing advice to the practitioners, all the team? Let’s say if you’re interacting with a global head of talent acquisition, it’s everyone. So it’s everyone that deals with this. It might even deal with some internal recruiting or internal mobility. So I’ve been asked this blueprint question. And of course, I won’t tell you my answer, but you’ve been asked this probably a hell of a lot more than I have. How do you guide folks through that, what they should have?

Jonathan:  07:33

Yes, there’s definitely a blueprint. I think the good thing is that that blueprint evolves as the market evolves. There are obvious operational efficiencies that an RPO can gain when we bring a tech stack that we’ve built the optimal people process structure around. But we do assess things on a client by client basis because many clients today buy their own technology. And actually just uniquely, you mentioned some of the different personas, whether it be the type of labor, hourly versus full time, or even just the persona of contract versus full-time. These things, these dynamics and the strength of the organization’s brand and those kinds of things determine what types of technologies do we use when and where the people in process layer on top of that. So there’s definitely, no matter what, a unique case by case analysis that has to happen, which is what excited me personally about AMS’s abilities with the advisory practice they have and their ability to deeply and intimately understand that.

William:  09:02

So let’s look at the failure points. Failure points is a little bit harsh, but the idea is that you’ve decided to outsource either part or all of your recruitment function, and in doing so you’ve got a technology stack. And again, I like the way that you’ve positioned it. You’re going to look at it and you’re going to make the best decisions and help them make the best decisions that fit them, at that particular time. If they’re looking through an ATS, there’s a lot of options. And so it’s, “Okay, what fits you right now with what you are trying to achieve?” But there are points in breakdowns. And some of those are a process, and some of those are just inflection points in where the relationship, we need to get better at melding these two together.

William:  09:59

Where do you think folks start, like for conversationally when you’re first interacting with a client and either they’re a new client or they’re an existing client, just talking to them about, “Listen, all these things are hard. Outsource recruiting is difficult. Getting your technology out is correct, getting it right, it’s difficult. And doing the two together is difficult.” The level of difficulty is high. Period. End of story. And know, by the way, it’s hard. So, where do you feel like folks should focus your clients when you advise them on, “Let’s get this right to start with, and then let’s move from there and then let’s get this other place. Let’s make sure that this is working effectively and efficiently for you. And then let’s get this other place.” Where do you take them after you bake the stack? They feel comfortable you feel comfortable. Okay, done. Now it’s those workflows and processes and communications and things like that.

Jonathan:  11:04

So what’s interesting is, we’re the conversation, it depends on the market we’re in, right? We’re now in a market where it’s really hard to find, and especially certain parts of the market, really hard to find candidates. There’s a lot of attrition. And so, folks are desperate for an RPO to come in and help them spool up with talent really quickly. And especially companies that potentially laid off a bunch of folks last year and now are growing or just are having a growth spurt. But I would argue that most of the time, the first thing that companies think about when they think about going through a digital transformation or solving a challenge as technology, and the answer is that technology’s not always the answer, right?

Jonathan:  12:03

It’s this concept of wrapping people and process around that technology as we were discussing earlier. It uniquely depends on the client where the challenges lie, whether it’s a sourcing challenge or whether it’s a conversion talent. I’ll give you a stupid example. Hourly hiring is obviously challenging now for various reasons, the rise of remote work and all the subsidies that the government’s giving. But at the same time, it’s also a different experience that candidates need to have through the hiring process. It’s more transactional. They’re not going to sit through a 20 minute application process where you ask them 10,000 questions like you would if you were having a professional job, it’s not shift based. And so, understanding that AMS has a product called hourly that really is a combination of other products together with some unique IP, of course, but that optimizes the workflow for retail hourly workers and so we’re able to solve that pain point which organizations have today in retail where in another company it might be a recruitment marketing challenge, or it might be an onboarding challenge.

Jonathan:  13:29

But so I hate to be a consultant here and tell you, it depends on the clients. It really does depend on the clients. I think one of the things that I’m super excited about, I’m still very much out there building deep and meaningful relationships with the technology vendors. I’m still very much trying to stay on top of innovation, taking those demos. I mean, it’s the only way to keep my ear to the ground and understand where innovation is coming from. And as an RPO, we want to understand what our clients are leveraging, how those features, functionality and revenue models are working in the market. But also it allows us to optimize our ability to focus on being better at what we do and bringing the best of technology to our clients. So that’s something that we’re being very thoughtful about, and it’s very much a goal of mine to continue to build those relationships.

William:  14:38

Okay. So the most innovative thing that you’ve seen in recruiting in the last two weeks, and you don’t have to name names or anything like that, but just because you’ve got your finger on the pulse and you do a bunch of demos, and you’ve seen a lot of things. You talk to a lot of folks as well, both sides, talk to practitioners as well as vendors. What’s the most innovative thing you’ve seen lately?

Jonathan:  14:59

Are you trying to get me killed?

William:  15:01

No, no, no. I don’t want you to name names. No, no, I don’t want you to name names. Just like the bit, what was the bit?

Jonathan:  15:10

So I’m starting to see a bunch of really interesting stuff within Blockchain. I would argue it’s way too early to be leveraged with our clients at scale, like enterprise clients at scale today. But there’s, and actually Tomtec Labs just published a trend report on it, but there’s three areas within Blockchain where there’s some real disruption that can happen. Area of one is this concept of a DAO, a Decentralized Autonomous Organization. And, so I sit on the board of a company called Opolis, which essentially is a DAO that provides benefits to independent contractors. So they get a bunch of independent contractors together. They’re able to group their benefits, get discounts together that benefits are portable, because they get work on a number of different contracts and still get benefits through the Opolis relationship.

Jonathan:  16:11

But they’re all owners of the entity and are able to benefit when the company makes money they get distributions of the profit. So that’s one area where these Decentralized Autonomous Organizations I think could take and create healthier business models, where you have basically not only are your investors owners, but your customers and your employees are owners of the asset and get to benefit from the success.

William:  16:47

I love that.

Jonathan:  16:47

Yeah. Super cool. The second area within Blockchain that I’m super excited about is the idea of, so we’re basically saying, “Hey, let’s get control of our data again.” Right? And so, if we control our data and whether it lives on the Blockchain, on our device, through a encrypted wherever it lives, we don’t necessarily need software as a service systems to have, and this is probably a too broad of a term, but to have like databases to store that information. So if you think about these Blockchain, if you think about an Apple contracting system that stores all of these candidate information or CRM that stores all this candidate information that has significant market share today, as Blockchain based systems scale, you’re going to be able to have new database list SAS platforms which will create a whole new suite of systems that could disrupt and gain market share from existing players. Because they won’t have security risk. They won’t have to pull down the data, easier to sell, stuff like that. So there’s a whole new opportunity for potential disruption as that scales. And then there’s…

William:  18:01

And that cuts out fraud too. One of the things that [crosstalk 00:18:04].

Jonathan:  18:04

Takes out fraud. Correct. And the third area is around and it kind of has to do with that data, but it’s the candidate version of it is, just the identity piece, right? That data, so there’s background check vendors like Veramark and there are others that are thinking about decentralized identity management platforms.

William:  18:28

Right. So, one of the things, the technology for RPOs, the technology works in a one to many environment and the technology that works in a corporate environment, are you giving advice on both? Technology if they want basically you to run the technology stack? And so then you need basically technology where you can run multiple clients off of the same instance of whatever platform that you’re using, or is it more right now that you’re helping them just make the best decisions for them and their technology stack? And the difference between the two because what works in generally speaking, what works for corporate hiring might not work in staffing or RPO hiring.

Jonathan:  19:22

Yeah. I mean all of the above, yes, we’re doing it. They’re different buyers of those different scenarios. So someone who bought technology and uses their own team to support and manage that technology, we can support them to our advisory business and help them optimize that experience. It’s not necessarily the same kind of person that’s looking for an RPO.

Jonathan:  19:53

Where someone who has an RPO relationship with us, we can, again, optimize our people and process around their technology or bring our own optimized workflow engine on top of that, where we’re able to have built already the, stupid example would be, yes, we know that you have a fold scheduling tool, but we actually have a scheduling tool that we’ve built the ideal people process structure around with live person support if scheduling goes wrong. So we’re able to bring tools to the party also that we’ve optimized our ability to deliver against. So we are playing in all those scenarios and we’re looking at the technologies that folks are ability that can enable our ability to deliver successful outcomes in all those scenarios. We’re not necessarily trying to go and build the same thing. We’re trying to optimize the experience with people in process and technology together.

William:  21:01

When you’re optimizing, you’re obviously you’re optimizing for everybody. So you’re optimizing on the front end for sources and recruiters and hiring managers and the RPO, everybody that’s behind the scenes and behind the veil, but also for candidates.

Jonathan:  21:15

100%.

William:  21:15

Yeah.

Jonathan:  21:15

100%.

William:  21:15

Go ahead. Go ahead, Jon.

Jonathan:  21:22

No, I was just going to say, and I think part of the story here is we can make technology vendors look good. We, as an organization, AMS can come in, whether it be through the advisory practice, whether it be through the RPO, there’s great stories that we can tell about how we make those technologies look really good.

William:  21:39

So you mentioned digital transformation a few times. And so I want to make sure, as we think about it from a recruitment perspective, how do folks, if they haven’t gotten their heads around this, where do you help them start? How do you audit where they’re at and how do you help them with the mindset of change?

Jonathan:  22:00

Yeah, that’s a really good question. So there are several different maturity levels that companies approach digital transformation from. Some it’s, I heard the word digital transformation, can you explain to me what it means? Others, it’s, I’m going through a digital transformation. Some it’s, I went through one, tell me how I did. Ultimately you have to be able to address all those different folks where they are. And so it’s everything from helping them understand the market, what’s out there, to helping them understand what they have, using of what they have, what they’re not using, how good it is, helping them optimize the process for diversity, helping to optimize the brand and their ability to target, folks to recruiting marketing exercises, all the way through how do you build the ideal operating model, et cetera. So these are all experiences that could be provided to clients.

William:  23:24

I love that. You mentioned optimize a number of times. And so one of the question, inevitably, you and I will both get after this is, how do they measure that? A and B is how do they know when we say optimize? How do they know that they’ve reached the goal?

Jonathan:  23:46

Well, I think that the elephant in the room really is that as of right this second, technology vendors are sewing into a budget that, and they’re not actually being measured based on outcomes. Some are, it’s not binary. Recruitment marketing agencies, recruitment firms, RPOs are measured on outcomes, for the most part, again, not binary, but for the most part. And so when as an RPO being measured on outcomes, it’s pretty obvious when you hitting your target or you’re not. As a technology company, sometimes they are able to build a great case study around success. Sometimes they point to the internal TA team and say, “Hey, you didn’t optimize your process around our technology meaningfully enough to find success. So it’s your fault.” Sometimes they point to the RPO and say it’s the RPOs fault that’s operating the technology.

Jonathan:  24:53

And so that’s where I come in and say as AMS, right? We’re a great partner to these technology vendors, a great partner to town acquisition teams, because we can make that technology shine, right? We can help you get the most out of it, whether it be through the advisory practice or through our ability to build the optimized people process structure around it with our RPO. So I think that, and those outcomes vary depending on what technology you’re bringing to the party and where you sit in the process, whether it be you need to have 20% less folks on your sourcing team or you can get rid of your whole scheduling team. When we build informal workflow tools connecting technology together with the ideal people process, built on top of it, we measure success that way, outcome based success. We got 40% more efficiency. We’re operating 12 more hours than we used to. We’re able to increase your hire rate, we’re able to decrease your recruitment marketing spend. And we’re going through this exercise now with hourly, looking at exactly what those success metrics look like.

William:  26:21

I love it. Last question is someone that’s either new to RPO and outsourcing or are new to this relationship. What questions would you tell them that they should ask RPOs about the relationship with technology and technology vendors?

Jonathan:  26:44

So I think that the market has evolved to this place, unfortunately, where RPOs are measured based on capability, in some cases, when you’re looking to purchase RPO. They measure it based on capability and say, “Okay, let me look under the hood. Let me see what your sources are able to do. Let me see what kind of training you have.” When you should really trust our ability to optimize the outcomes and measure us based on our success, on the outcomes that we align or what we agree to be success at the beginning of the deal, whatever that is. And so, obviously technology needs to play a meaningful role, whether it’s us bringing technology to the party, you bringing technology to the party, and us building unique experiences around that for us to be able to deliver competitive, scalable talent experiences. But I think that the answer is not just about capability.

William:  28:03

It absolutely makes sense. And again, if you’re going to outsource, it’s trust. I mean, that’s where it starts. So the question should be around, how do you build a good trusting relationship? I love that.

Jonathan:  28:17

I would just say two other things. One is, being on the of the fence I’m on now doesn’t mean that we believe that every organization needs RPO, it’s the only way to do things. I would argue that as technology makes its way more meaningfully into organizations, not just in TA, but more meaningfully into organizations where the skills needed within those organizations are going to change so quickly, that RPOs will be more important because we’ll be able to spool up those resources you need quicker. And AMS actually has this whole tech skilling group where we’re able to upskill internal employees and also train new employees with skills through partnerships with organizations like Revature and WayUp. And so these are all things we’re thinking about. So I definitely think that it doesn’t necessarily – and this is also why we do work on advising companies and helping them optimize their own team and process.

William:  29:33

Love it. Drops mic. Walks off stage. Jonathan, I could talk to you all day. Of course. Thank you so much for coming on the RecruitingDaily podcast.

Jonathan:  29:43

Thanks for having me. Super excited to be here and looking forward to continuing the conversation at some point in the future.

William:  29:49

100%. And thanks for everyone listening to the RecruitingDaily podcast. Until next time.

Music:  29:55

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