On this edition of The RecruitingDaily Podcast, William Tincup speaks with Adam Robinson about the state of hiring in decentralized industries.
Adam is co-founder and CEO at Hireology and an expert in all things company culture. This is a great convo! Listen in and let us know your thoughts in the comments.
Listening Time: 29 minutes
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Adam Robinson is Co-Founder and CEO of Hireology, where he’s on a mission to help business owners succeed by building exceptional teams and workplace culture. He's a nationally recognized keynote speaker, author of The Best Team Wins: Build Your Business Through Predictive Hiring, host of The Best Team Wins Podcast, and a columnist for Inc. Magazine.Follow Follow
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 three 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.
Ladies and gentlemen this is William Tincup. You’re listening to the RecruitingDaily Podcast. Today we have Adam Robinson from Hireology, and we’re going to talk about the state of hiring in decentralized industries. So Adam and I have known each other for more years than we care to admit publicly. And I can’t wait to actually get into this with him. So why don’t we just get started. Adam, do us a favor and introduce both yourself and Hireology.
Yeah. Thanks William. Great to be here. My name’s Adam Robinson, I’m the co-founder and CEO of Hireology. We have been in business, this is year 11. So we launched out of the last batch of craziness in 2009, and we’re having a great time now. You and I met back in the early to mid 2000s I want to say, when I was running an RPO business and it was a very different world back then.
We’ve both gotten some gray hair since then.
Yeah. You could say that. But yeah. Hireology is focused on helping decentralized enterprises with the technology they need to build their best team. So it’s everything from hosting the employment brand via our career site platform through to a full featured ATS. And hiring process automation, along with the selection tools these businesses need to run their process successfully from drug and background screens, to onboarding, to testing everything in between. And then increasingly we’re involved in post-hire functionality with these organizations, needs to be a payroll partnership we’ve got in place. More and more we’re finding that we’re doing more for customers in this segment which maybe we take a minute and define decentralized. So decentralized enterprise is a network of businesses that are unified by a common brand manufacturer or business affiliation.
The most obvious example of that would be franchise systems. You can also look to dealer networks like automotive dealerships, truck dealerships, hotels, anywhere that an ownership group is operating a number of locations and those locations have affiliations with brands or manufacturers. And so today we serve about 7,000 customers give or take across a variety of industries. Most concentration in automotive retail, where we work with one out of every four new card dealerships in the United States. And the senior care space, notably home healthcare, home care, hospice, long-term care and skilled nursing facilities.
So first of all, when folks are listening to this and they’re either on the staffing’s side or on the corporate side and things are generally centralized either for the staffing side that their clients are centralized and on the corporate side they’re centralized. And even though everyone’s remote there’s just centralized kind of one ATS and everyone kind of goes through the exact same process. In a decentralized world you might have a local person at the dealership in Chicago that’s doing hiring for that dealership versus a dealership that’s in Aurora just a scant drive away that’s doing the hiring there. So how much more complicated, give us some insight into kind of how different that is for your customers?
Yeah. And William, that’s really key to our product market fit in go-to-market strategy. It’s that when customers or when companies have centralized HR generally what that means is their centralized talent acquisition in human resources functions, and they’re running out of a system purpose built for that central use case. There are plenty of ATSs or payroll platforms out there that have ATS capability, but is serviced by a central or core HR team. They could have regional resources in talent acquisition or in recruiting, but the most important difference is that all of the locations that they may be serving are part of that one corporate entity. But in a decentralized environment, there could very well be centralized corporate HR and talent acquisition, but importantly the locations tend to almost always be separate legal entities.
And so the co-employment liability risk associated with that means that these locations can’t run off a central stack because they’re different FEINs, they’re completely different entities. So in your example, ABC Automotive in Chicago might own two different dealerships. They might own a Ford dealership and a Toyota dealership out in Aurora. Those dealerships are separate LLCs, almost always. And more importantly they’re part of different franchiser dealer agreements, different manufacturers and so if ABC Automotive at the central office wants to run a unified platform, the purpose-built systems for central HR just don’t work because almost all of the HR happens at the local level.
Furthermore, the manufacturers themselves, Toyota and Ford this example, want their dealers to be good at hiring, but they can’t tell them what to do, or give them systems to use, or support them really because they’d be worried that the department of labor would deem them a co-employer and that the employees of the dealership would be employees of Ford or Toyota corporate, which would be a death sentence for the franchise business model. So we built this platform, purpose built it for this use case where you’ve got, you may have an ownership group that owns 20 locations. There are 20 different installations of Hireology on 20 separate contracts that all roll up, but then report out to different manufacturers and it gets fairly complex if you’re not built to do it. And so we saw an opportunity 10 years ago to go at this market and that’s what we’ve been doing ever since.
And I love what you’ve been doing all the way since day one. Unique hiring characteristics of decentralized hiring, and I’m thinking about the pros and cons. So when it’s centralized, okay. We can go through that, but really when it’s decentralized and it’s done at the local level. It’s done at the local dealership. What do you see and what do you see in your clients where you see some pros that it works there and maybe even some cons or some things are well, a little bit more difficult?
Yeah. First and foremost is that control is localized and you know this better than anyone. Today sourcing applicants is the zip code game, right? So all the systems that exist in the world to help create a talent funnel are based on location. So if I’m an organization, let’s say I’m a hotel ownership group and I’ve got properties in eight states, and I’m trying to support these individual properties which they are independent businesses in and of themselves. If I was trying to run eight different locations worth of talent acquisition I would need to manage sourcing budget and effectiveness across all of those locations. And that gets pretty complex in these businesses where they tend to run really lean at the corporate office. And so they push all the responsibility down necessarily to the local level, but at the local level you don’t have talent acquisition all stars in these organizations.
The HR leaders are effective and great at what they do, but they do 900 things. Talent acquisition is a sales and marketing function. And so the biggest pro is that we enable really effective recruitment at the location level. And then the hiring process is all done with human beings who work in that location or in that property. Everything they need to be successful to run a hiring process they can do it on their phone, they can do it on a desktop or laptop. It’s all right there. And you’re just not going to get that if you’re running a big iron tech stack like a Workday or an ISEMS, which are great products, but it just doesn’t work when you’ve got 20, hundred location businesses that are truly small businesses.
But when you aggregate them and look at a revenue number they’re all part of an affiliated business it’s a pretty big business. And so you’re essentially trying to serve the needs of multiple small businesses that have the characteristics of an enterprise. So you’ve got to navigate that pretty carefully, but the pro is that it makes that work in that model. On the downside it’s really a limitation of the multi-site business model where if you wanted to centralize HR and get economies of scope and scale out of a central function you have to staff the corporate office in excess of what would be considered a reasonable amount of budget or investment.
You just can’t do it all for the dollars that you’ve got available. And so it’s really a choice these companies have to make. It’s are we going to try and run it centrally with all the trade offs that that’s implies, but you have 100% control, or do you push it into the locations with software that’s usable by mortals out in the field and give up some control, but gain a whole lot of effectiveness. And that’s the landscape we’re in every day.
I love that because you brought it into both making it local, hiring local. People are going to come into the dealership. They’re going to apply to the place that’s a little close to them, et cetera. We’re not talking about remote work and thought leader, not thought leadership, but knowledge working jobs. We’re talking about jobs where people are going to go into a place and what I love is having a great technology stack that basically kind of switches sourcing, recruiting, and the hiring manager altogether as one. And if you have great tech that drives that then they can do that. Now, they’re not hiring, and most of these folks I’m assuming that’s not the only thing that they’re doing. They’ve probably got five other responsibilities. And so they can log in and again, it prompts them and helps them go through a process which I think again it helps people that don’t do it every day. If a recruiter, they’re doing it every day well, they probably wouldn’t need a lot of that stuff, but for most of these folks they do.
Yes. That’s correct. Importantly the local control really drives success and so the worst case scenario when it doesn’t work is when the location signs onto the platform as part of the relationship and then they go back to the way it’s always been done, which for them is email, spreadsheets, and favorite job board which just, that just not getting it done right now. With the imbalance in the market it’s just not effective anymore.
Well, you’ve always been kind of a candidate expert or a candidate experience supporter somebody that’s cared about it. What are the candidates of decentralized hiring? What are they like these days?
Well, importantly these businesses tend to hire at each location the same six to 10 profiles or job descriptions because they’re very similar businesses. And the other thing that’s important to note is that the headcount at these locations is either directly tied to revenue production or it’s tied to supporting revenue production in a very, very direct way. So salespeople at a dealership times units sold per head equals profitability or lost opportunity depending on if the job is open. In healthcare field I have to staff caregivers against shifts. If I’m under staffed that’s a revenue issue, in the retail environment, in the restaurant environment, the hotel environment it’s all about guest service.
The context here is that these businesses, you don’t have to come up with a huge ROI justification to make this work. They’re owned and operated locally for the most part and they understand it, that staffing equals top and bottom line success. And so what they also understand to your question is that the candidate experience is the differentiator between them and the other five million companies trying to pick off these applicants. Some interesting statistics, across our customer base in the last year over 90% of all hires made through our platform were people whose resume or application was reviewed and responded to within 24 hours.
The differences in a knowledge worker kind of hiring environment you submit the application and you’ve got a couple of days, generally speaking. In these industries if you’re not getting back to them in the first day or two they’re gone. They’re just gone. And so the first to respond to an application makes the higher about 66% of the time. And so what candidates want to answer your question directly is that they want speed of response. They want to be respected in the process. And they’re really shopping for the employer they think that’s going to be more than just a paycheck. And so when we survey applicants in these markets they tell us number one is career path, right? I can go to work anywhere if I come to work for you what’s in it beyond just the paycheck?
And then second is this an environment where my pay is going to be stable and at market price? And these things have to be communicated on the employment site, on the career site as part of the brand. And then the third thing candidates look for is flexibility which back 20 years ago you and I called that work life balance, but today it’s just life. They’re asking the question, or is this an employer that’s going to allow me the flexibility in this day and age to live the life that I need to live, take care of my family in my personal time, or are they going to lock me down with owners rules and regulations about shift management, whether I work from home or not? And so that flexibility career path, stable pay, these are the things that these candidates are shopping for.
And we teach our customers to treat these jobs as digital products, right? A job is a product. You’re retailing this product online just like any other product. You have to think about the job as a product. You’re marketing it to a prospect base. They’re looking for certain features and functions of that job, and I just named the most important three. And you got to speak to it. You can’t just list bullet points of what someone’s expected to do. It’s really got to be tailored to the market. And it requires a level of sales games, games shift that it just you have to be on it today. You can’t just post and pray. You’ve really got to have a communication strategy and treat applicants like customers and retail these jobs like products
With a decentralized candidate, and you might have already touched that nice, but I want to make sure flexibility I got that. And again, I think the pandemic has really kind of heightened that, but I think we’re on that path. Salary requirements is the candidates, are they proponents to your customers? Are they proponents for disclosing that and just kind of being transparent around what compensation looks like on their careers page and job descriptions. And the last thing is diversity and inclusion, do you see kind of a push there as well in the end or kind of transparency around that stuff?
Yeah. On the pay disclosure we certainly advocate putting it all out there. And I know Google treats you nice if you talk about comp on the job description which is really critical, but more importantly than that the perspective job seeker wants to know what they’re getting, right? They don’t want to be in the third meeting with you to find out that this pay is $4 less than they’re making in their current job, right? So we encourage employers to put not just the pay, but the total rewards. What are the benefits, the flex time, all of the things. The charity work, the local give back. And most of these businesses are heavily involved in their communities. And so we want to see all that right up front, because the conversion rate on applicants for those kinds of career sites, about three times what it is if you’re just listing jobs, right?
So you’re getting a better return on your recruitment marketing spend. You’re seeing candidates who are hand raisers versus spamming apply all to an email they may have received. And it just changes the game there. On the DEI side, we are in these industries seeing a push to speak to that. And what it looks like in these industries is really a form of content marketing, right? So it’s stating who they are and what they stand for as it relates to DEI, and then it’s the language that’s used. It’s the imagery that’s used, it’s just being mindful of what you’re putting out there in the market and who you’re trying to attract. And five years ago not so much in today’s acute talent shortage employers know that they’ve got to be doing this. It’s the right thing to do. It’s also the necessary thing to do.
Well, what’s interesting is, especially let’s deal with the dealerships they have customers. So their customers are going to be kind of a tapestry of folks in their community or America. So all the folks serving them either on the service side or on the sales side. They also need to be a part of that tapestry. Kind of makes sense from a B2C perspective that they have customers and they need to be respectful of that. Mindful of that I think is a great word that you used. Let me ask you a little bit about change management because you did mention the largest HR tech vendor in the world, which is Microsoft Excel.
Yes. Exactly. Right.
And Word. You’ve got folks and customer success obviously, how do you all deal with kind of just the change management of Ted or Molly that wants to do it kind of the way that they’ve always been doing it?
Well, here’s the thing. They don’t want to do it that way because it sucks. They don’t want to do it that way.
Well, it’s good to know.
But they don’t don’t know what is the alternative. And so these companies, you’ll get your top five or 10 percenters who go out and do the research, and will find a solution like ours and bring us in, and be a champion, and raise us up to the ownership group. We love people that do that. They are advocates for the process in their company and that’s great, but that’s not most. Most of the time a customer is spending through the nose on job boards generally, the one or two of the biggest they’re using email.
There’s no way to access SMS communication and do that the way that you really need to these days. And they know there’s a problem, but they’re too busy to do the research. They really don’t know what to look for because they don’t know what this stuff is called. So it makes search engine marketing really interesting when you’re trying to market to someone who doesn’t know generally what HR tech people like you and I call this stuff. They know they need a better way to do it. And when we connect with them they see it and they get it, right?
So there’s not a whole lot of education because the process is so borked now, people are really struggling on main street to fill open positions that you read about every single day. We’ve tailored our implementation process to ease them into using software to run most of their hiring process. And what we find is in today’s world everybody’s comfortable with that, just about. We rarely find people who say, “You know what? I’m going to stick to my Google Sheet email and indeed accountant this is really working for me.” And if it ever comes up there’s really, we’re not going to try to argue religion with someone. We’re just going to say, “Call us when you’re ready to try to do something a little bit different.”
Yeah. Again, you don’t want to try. Again, if they feel like that’s working for them fantastic. We didn’t touch on employer referrals or customer referrals. What do you see kind of from your customers and your experience, what do you see in that world from a decentralized industry’s perspective?
Employee referrals are the single biggest untapped ROI for companies trying to fill a talent pipeline. In fact, we believe so strongly in that thesis that we acquired a company called EmployUs in July that specializes in referral campaign management. Most companies have some sort of a program that pays a bonus for referrals, but they’ve got no way to actively push and campaign that program. So what that looks like is most companies say, “Hey, play our referral bonuses. $500 if they’re here six months.” And then they never come back to it.
And what we thought was if companies had a way to automate campaigning for certain jobs or remind people about it and make it really easy, do it through mobile, but they should be getting 30% to 40% of their hires through this channel and it’s running well that’s what our data shows. And we just saw it as a huge opportunity. And so we’ve made a big bet on employee referral management because there’s really nothing else someone can be doing. You could spend all the money you have on job boards and still get a huge gap between what you need and where you are. Referrals, they convert, they stay longer. It’s a great return on investment. That’s a big growth area we think for us in these industries.
All right. I want you to put your futurous hat on just for a second and give us a glimpse of what you think the next 18 months, two years looks like for these decentralized industries and hiring in particular?
The biggest trend, William I see is a convergence between pre-hire and post-hire technology in these decentralized markets. So what the folks at the central, ownership office want is unified payroll in HRIS. So the CFO wants to buy all in one post-hire, because that’s the world they live in. But out in the field they don’t care about any of that stuff, really. What they care about is all the pre-hire capability. And right now in the market we’ve got the public payroll company and regional players that are good at what they do. Post-hire and have generally glued on some kind of solution on the front end on the pre-hire side, that doesn’t work real well.
And you’ve got a whole lot of pre-hire tech out there doing well, but not feeding into these post-hire systems. And so two years from now I believe the companies in these segments will want to buy everything from one vendor lagging the broader market by about five years, but that consolidation of functionality is being driven by the employers in these markets. And there is no shortage of options out there. They just haven’t come together. And so we’re doing our part to bring those together for these markets, because we think that’s where the big growth happens.
Well, and what’s interesting about that is consolidation on if we go that route, but it’s also just deep integrations. So you could have Hireology in this particular instance could be just deeply integrated with several different HRIS and payroll companies, and just the integration means that you get both best of breed of both of those things, but it’s in one place.
Yeah. And the thing that makes this really work and unlocks value is you’ve got pre-hire technology let’s just call it the ATS. You’ve got post-hire technology let’s call that payroll and HRIS. And having those integrated or on one platform is important, but what really matters in these industries there is a system that’s been around for 10, 15, 30 years that’s the system they use to run their business. So in the senior care space that’s the scheduling platform. In dealerships that’s the dealer management system. In hotels generally, that’s the shift management and resourcing platform. And when you’ve got your talent act, payroll, HRIS, and core operating system all integrated that’s when it really makes a difference, and that’s what we’ve been doing in these industries. So it’s part of the strategy we have vertically is to really deeply integrate as you say into the systems that matter, because when you give people time back in their day they tend to like what you’re doing.
I love it.
It’s just all about it. It’s a time back strategy, make it easier. And there’s a whole lot of runway in these markets to do that well.
And it’s better for everybody, right? So the people that do the hiring, the candidates, everybody wins here, CFOs, et cetera. Adam, thanks for taking us into this world because this isn’t a world that we get to talk about a whole lot. So I appreciate your time. I appreciate you coming on the podcast.
Yeah. Thanks for having me. Anytime.
Absolutely. And thanks for everyone listening to the RecruitingDaily Podcast until next time.
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William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.