isolved – The TA Challenges That Can Be Solved With Predictive People Analytics With Tom McKeown

This is Recruiting Daily’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 over-complicated 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 William Tincup, and you’re listening to the Recruiting Daily Podcast. Today I have Tom on from isolved, who… I should just go ahead and say, Tom is a friend. I’ve known Tom for, well I won’t even say how many years because it would embarrass both of us. So, let’s just say for a long time, in a lot of different capacities. Happy to have him on the podcast, want him on the podcast more often. But, our topic today is the TA challenges that can be solved with predictive people analytics. So Tom, do me a favor and do the audience a favor and introduce both yourself and isolved.

Sure. So, my name is Tom McEwen. I’m currently a senior product owner at isolved HCM. I’ve been in the software industry about thirty years, about twenty of them in the HR software industry. Been with a couple of mid-market companies that have gotten acquired by larger companies. HRsmart was the most recent one before I founded my own company, Trend Data, which was a predictive people analytics company. So, we basically aggregated data from across multiple HR sources, where we were able to forecast trends into the future on what might happen, and also offer suggestives through a modeling capability which you can do to improve the future. So, I’m located here in Dallas, married with two children, and that’s me in a nutshell.

So, with your own company, isolved obviously saw the value, which is really smart of them. The overlay of what they do, and the overlay of what you do, it makes their customers better, et cetera. Could you take us into, not the acquisition, but why it made sense for them and what they do, and have done historically, and where it makes sense for them and their customers?

Sure. So, isolved is a full end-to-end HR software solutions company. They’ve got everything from recruiting and onboarding in the beginning, through HR, payroll, talent management, and learning all the way through. What they were missing was an end-to-end analytics tool that could look at employees and trends, from all the way to the genesis of when they were candidates, till they became vice presidents or whatever. When we first started Trend Data, we built the solution for a mid-small to mid-market companies, and we had partnered up with a couple of companies like ADP to help service that particular market. Because, we found basically that it was still a decent sale cycle if you were taking it from an independent, but for the small to mid-size companies, they wanted to buy it with a larger vendor that had offerings like isolved did. So, actually we started out talking to isolved about partnering, where we will be their analytics provider and it quickly progressed into them saying, “Well this is something we’re really needing. Why don’t take this to the next level.”

“We really like what you’ve done here. No, no, we really, really like what you’ve done here.” “Whoa, whoa, wait a minute. This escalated quickly. I wasn’t quite ready for this conversation.” I’ve followed, obviously, what you’ve been building and love what you’ve built, and I’m so happy that they saw the value in it and that you’re happy there as well. You’re essentially running what you were running, but running it inside isolved.

Right. Essentially, they’ve got a really good approach when they acquire technologies and companies like this is. They let you exist in your pod. I’m not running a sales organization, or doing my finances anymore, or raising money, which is nice. I really just get to concentrate on building the product, and then I push it out to their great sales and marketing organization and it’s really, really caught fire within the company. We’ve probably sold about four times what we sold when we were trending HR, as far as several clients.

Well this is the thing, they’ve got a bevy of clients and it makes sense. So, you literally can just go into the client install without even going out to new. You can just go into the client install and just go, “Hey, this is what we do. It’s already in alignment and makes sense.” So, let’s talk about the challenges that TA faced you. You’ve obviously worked on the recruiting side of software side, and so you’ve seen all this. As a founder you had to recruit. So, you’ve been on the practitioner side as well, thrown into that deep end of the pool. What do you see as the challenges, and then let’s dig into the predictive people analytics. So, what challenges are they facing today that you see?

Well, we’re in this crazy economic environment. Recruiting has been tough just for the longest time because unemployment’s been so low and there’s been such a tight talent market, and even it seems right now with inflation going up, unemployment seems to be down low. So, it’s a double whammy. It’s a tight labor market and you have to pay people in order to get them to come work for you.

(06:32)
What we constantly see is, how can you look at somebody deeper into their employment so that you can get a better idea of what you’re looking for in candidates? So, a big part we’ve been able to do with the solution is, be able to track someone from their candidates status, where you got them from, source of hire is huge, what kind of experiences did they have? And, be able to not only track that through to where they’re hired, but also continue on through to what they did when they’re employed. So, you could look at someone who’s a high performer two years into their employment with a company, and be able to go back and say, “All right, these are the things we’re looking for and this was a good place where we got them.” Things like that.

I like that. What I like, especially on the funnel side, is the conversion rates. Again, you were doing with source of hire. So, if you found them on Indeed, great, fantastic. Then they make it through whatever the gauntlet is of assessments or screening or whatever. But, they make it through until they’re interviewed and then they make it through that process. So, at each point, just like in sales, there’s a conversion, right? So, I always find it fascinating when I talk to global heads of talent acquisition. They know their conversion rates, in general for all of their hires, but they can even drill into the conversion rates by job. So, I love that. I also love that you’re getting, with the experiences, that’s the candidate experience. Are you thinking of that mostly in surveys and asking the candidates where they are?

Yeah, we’ve done most of it from, once they’ve become employees, but finding the right phase when they’re in the candidate experience and trying to, if possible, get why did someone get all the way to actively getting an offer and then decide not to go? Was it the company? Was it a better offer? What could you have done as far as reading people’s minds and such? But, those are things you can pick up through the process and you’ve seen… It’s a good analogy like a sales funnel, it’s usually gigantic before it squeezes into the very end, and how many deals or candidates come out of it. If you think of it from the standpoint of a recruiter, if you’re interviewing a hundred people to get down to five candidates, it’s a big manpower push. If you could eliminate as many of the people who not only are not qualified, but also who don’t have a big likelihood of coming with you. You’re probably four times as effective or at least cut the burden down on people four times.

I love this. So, predictive people analytics. So, when we’re talking about predictive, you’re basing this off data that you’re already sitting on top of. I want to ask this question first to start off, is there reticence for people to trust the predictive part of data?

Yes, absolutely. But, you have to look at it more in the terms of trends than the individuals. So, whether it’s candidates to be hired, employees be performed, terminations, why did they terminate. It’s more along the lines of, are things going in the right direction and what can I do to get the arrow going the other direction? I always make the analogy that we’re not trying to figure out when Joe is going to quit. Is it going to be November 11th, 2023? But, we’re trying to say I’ve got twenty guys like Joe, what’s the likelihood I’m going to be able to keep eighteen of them the next year? Or, what’s the projection of how many I’m going to keep or I’m going to lose. You look at it from that side and that’s where you get the aggregating the data, and the retention scores, and the hiring scores and everything where you can at least predict in the future the trends. But, not so much the individuals.

With the accommodation, with isolved data, you’ve got more data that you can sit on to actually help with predictive, right? Because some of the, I guess, mistrust is they don’t trust… It’s like in recruiting, they don’t trust their ATS data. So, I can see there being a okay, “I don’t really trust it, it’s a mess. It’s too easy to cast new and I don’t really trust it.” I actually get that argument. But, y’all are sitting on much more than just an ATS data, y’all are sitting on great. It’s accurate data because the one thing in HR you cannot mess up is payroll. You’re sitting on…

You’ll hear about it pretty quickly.

You’re sitting on great data. So, what other ways are you thinking about the predictive and using not just the data that we’re using in recruiting, but also the other forms of data that you have at isolved?

Yeah, so when you think about it, you’re really looking at the whole end-to-end experience. We talked about the beginning, but how someone gets into the company, what’s their experience like in the company, what are the things that make them perform? Isolved’s got that whole end-to-end with all of their solutions. It was funny, I used to have a diagram which I would talk about, “These are the places where we pull data from”, and I was able just to put our logo on that one spot because they had all of those different solutions from end-to-end. So, being able to pull from more than just candidate data is, like you say, the payroll data, which is key. I mean, why do most people leave? Someone offers them a higher salary. Or, what’s the thing that you [inaudible 00:12:58] about most quickly is that payroll’s not performing correctly.

(13:02)
So, that data’s got to be accurate. My dream, which I never quite got to there at Trend Data, was to be producing our own benchmarks with a really large volume of data. That’s something we’re definitely going to be offering through isolved in the future, is basically taking their data, throwing it into an instance of our analytics and being able to produce really good granular… Not only what’s your turnover rate for your company, but with the likely turnover rate for the industry, but down to, this person, in this job, at this location, with this many years of experience.

What I love about that is, you can even separate turnover into turnover/turnover, and regrettable turnover.

All of that. Yeah.

Yeah. I love that. With quality of hire, what type of questions were you being asked, and are you being asked now as it relates to quality of hire?

Yeah, a lot of good questions along that. First of all, is the first thing you try and track is, how long are they going to stay? Every time I look at a statistic, it’s somewhere between twenty-five and a third of people quit within six months. You know from your business, if someone leaves really inside of a year, you’ve lost money on them. Because you spend most of time that training, getting them up to speed, and they haven’t really been productive. So, the first one is hiring people who are going to stay there for a while.

(14:45)
Then also, moving from that is once you’re into a year plus you’re looking at, how well do they perform, having measurements for that. Then the third leg is, are these people who are also people, who are going to be leaders someday? It doesn’t have to be a leader of people, but just be a leader of technology, or a leader of marketing prowess, or something. Or, just a really high performing, always reliable salesperson. Then looking at it from those three phases, first of all, are they going to stay there? Second of all, are they going to perform? Third, what’s the next step to helping you lead the whole company into better success?

Do you see now or do you see it as something you do in the future, where you connect, as you said, source of where we found these folks all the way to, we placed these folks, all the way to, they performed and then we want to internal mobility-wise or otherwise, we want to move them into other roles in the form we want to grow them, retain them. Looking at that, the DNA of who works well here. Maybe by position, maybe by geography, or whatever that may be. But, I’ve heard this in the past, people talking about we’re trying to solve for the DNA of who will thrive here. I think it was your second statement, you said, “We want to get to source of hire and connect the dots all the way into performance.” But, do you find yourself wanting to go deeper into that, to solve for your clients the actual DNA of who will thrive?

Yeah, and that’s more along the lines of what kind of data you can collect. Because you and I probably both experienced great high performers who are the biggest jerks in the world. So, you can get someone blowing their quota out every day, but nobody wants to talk to them. So, other aspects, a lot of tools, for example, inside of isolved, inside their share and perform tool, they track a lot of things like how often are you socially posting about the company, or actively communicating with one another and things. Those are a lot of good data points you can pick up, is someone conditioned to being a performer, a positive corporate citizen.

Oh, that’s nice. That’s nice. Yeah. So, you’re not even looking at just performance/performance, you’re looking at also… I won’t to say, more of the values fit and are they a good person, which is kind of…

Yeah. That’s something as an independent, like we were at Trend Data, and even before when I was at Hrsmart, we had a full talent management suite. Our performance was really modeled just around rating people and giving them performance scores. The offering we have here is a lot more expanded, where you can get a little bit more beneath that as to, like I say, what kind of a coworker they are, representative of the company just in their daily activities and stuff. So, you can get a little bit more to that, like you’re saying, the DNA beyond just doing their job well and being a producer.

So, I should have probably done this at the very beginning, but let’s do it now. So, starting with a client and a talent acquisition, a leader, where do you start with them in terms of data? Because, I know in the few folks that I deal with, it’s not embarrassment or guilt, but it’s just they’re not data wizards, they’re not trying to be data wizards. So, where do you tend to start with them and say, “Okay, so here’s what we’re going to do. We’re going to connect A to B to C to D, and here’s the data that we need and here’s what we’re going to then be able to give back to you.” Of which you can talk about, things that aren’t proprietary of course.

Oh yeah, sure. [inaudible 00:19:17].

What’s the process?

Well very basically, you start with how many requisitions do you have and how are you attracting candidates? Just even getting that basic information into the system as to tracking those two flows. You’ve got open requisitions and you got candidates in the process. Then it’s really along the line of the candidate, which you can tag onto that source of hire is something you control, you know where you got people from. But, as far as bringing the candidate and filtering out what their experiences were, what they’ve done prior, different roles they might have had, even things that they do outside of the company. As much as you can bring that forward.

(20:08)
A lot of times what I see is companies will actually gather a lot of that in the ATS process, but then it doesn’t move over into the employee record later on. So, you’ve got all this great information on what created this person and brought them into your livelihood, but you put their employee record into the HRS system and you have no idea where else they worked, or what languages they spoke, or where else they might have lived. So, really once you get the clarity of the candidate process, it’s what more you can collect in there. It doesn’t have to be five hundred fields in a survey, but just a basket of key things that you may have pulled backwards from successful employees as to what you’d be looking for in candidates.

I love that. Are we solving it on any level? Because, candidate satisfaction, obviously a candidate experience and candidate satisfaction is super important, but you’re also seeing a growing importance around employee satisfaction, right? So, are we at any point looking at recruiter satisfaction or hiring manager satisfaction in the way that we look analytics? I don’t want to lead you, but I’m thinking about if we’re over-indexing on the candidate, which is great, but if recruiters are unhappy, hiring majors are unhappy, then how much are we really moving the needle?

Yeah, no, a lot of my experience in my early career was in sales, and that was a tough job because it’s always, “What have you done for me lately?” It’s the same in recruiting. They’re just meeting a quota of people, both to the point where you don’t want to burn them out and have them leave, but you also want to concentrate on more than just filling seats. Yeah, talked about that. How do you get them to spend the time to get that extra special candidate without saying, “Well you talked to that person ten minutes longer and you could have talked to five other people or something.” So yeah, I think that’s a good point you bring up. If you talk about a profession that probably has, particularly in the last couple of years with the hiring just being what it is, is a burnout profession. That would be one to really, as a detailed survey, to talk to those people about what they’re experiencing.

I’d also think about the opposite side, especially with hiring managers. I see a lot of frustration, or hear about a lot of frustration from recruiters and sources, that pass over a slate of candidates and then hiring managers don’t follow up with them or there’s just some hiring managers, it’s not their job. I mean they’re managers, that just so happen to hire. So, some of them are better than others. I think that having some type of insight into that would also be helpful for recruiters and sourcers to understand, okay, with this hiring manager they’re just not as responsive as another hiring manager. Okay. Well knowing that, having that insight and knowing that, lessens the anxiety. I know what I’m walking into if I know that.

It’s tough for different types of personalities. Again, since my basic training, my career was sales. Whenever I was managing people, regardless of the area they were in, with sales it’s, “Always be closing”, and as a manager it’s ABR, you should always be recruiting. I mean, you might not have an opening, but if you meet a dazzling candidate at a trade show who maybe [inaudible 00:24:19], make sure you make a note of that and keep that in the file when you have an opening, You start looking at these people because having to always start from zero is really tough, but not necessarily… If you have a sales manager, they might think like that, but does an engineering manager or a product manager necessarily think like that. That’s kind of a mindset you should try from a top down level at a corporation with your management, your leaders. Just always be thinking about that open position even when you don’t have one.

Love it. Okay, last question Tom, why don’t you put on your predictive hat. What is the future of predictive people analytics for TA Pros? We’re not going to go out to flying cars, but what should they be looking at next year and the year after? What type of data and analytics metrics should they be thinking about already now, so that they build towards that over the next eighteen months, two years?

Well the biggest thing is, one of the factors that you eliminate in that early process to get you down to a funnel that’s good people, that you can start with… Again, to go back to the sales comparison. The guy next door could be a lead, but you have to call on him, qualify him, find out what he’s got and everything. The predictive part could be something that could eliminate all of that and get you down to a point, “All right, this person is definitely in the business.” His sentiment is, he’s looking. I’ve seen some tools out there, that they scrape industry job boards and stuff and they can give a grade to someone even if they’re in their job, whether they’re someone who might be looking based on, how often they scan the internet, or visit job boards, or log on to LinkedIn.

(26:28)
So, I think from a predictive standpoint, being able to identify people, particularly people in positions who are successful, who are on the ready so that you’re reaching out to someone who was thinking about leaving but wasn’t, at least, at the point where they were going to start putting their resume out there, and then you get to them before everybody else. It’s like buying that house before it goes on the market.

I love it. I could talk to you forever. Tom, thank you so much for your time and wisdom today. I absolutely appreciate you, brother.

No problem. Always a pleasure, Bill, and I look forward to our conversations as well.

Absolutely. Thanks everyone for listening to Recruiting Daily podcast. Until next time

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