Mike Fitzsimmons
CEO Crosschq Follow

Welcome to the Use Case Podcast, episode 192. Today we have Mike from Crosschq to talk about the business case or use case about why his prospects become customers and why customers stay customers of Crosschq.

Mike is a 3X CEO of venture-backed technology companies. He started Crosschq purely out of frustration with legacy recruiting processes which he found to be bias-ridden and fundamentally broken.

Crosschq is a technology platform that helps companies make better hiring decisions by using human intelligence and predictive data. Their mission is to help the world build diverse, winning teams.

Show length: 26 minutes

Clinch A Modern Tailored Experience

 

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Music:   Welcome to RecruitingDaily’s Use Case Podcast, a show dedicated to the storytelling that happens or should happen when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better. As we speak with the brightest minds in recruitment and HR tech, that’s what we do. Here’s your host, William Tincup.

William Tincup:   Ladies and gentlemen, this is William Tincup. And you are listening to the Use Case Podcast. Today we have Mike on from Crosschq. And we’re going to be learning all about Crosschq, the business case, use case, cost benefit analysis, essentially why his prospects become customers, why customers stay customers of Crosschq. So let’s just jump right into it. Mike, would you do us a favor, the audience a favor, and introduce both yourself and Crosschq?

Mike Fitzsimmons:   Yeah, for sure, William. And thank you so much for having me today. So Crosschq is a venture backed company in the HR tech space, trying to bring more data and visibility into metrics around talent acquisition. And ultimately, kind of near term retention for new hires. Our core focus is to help companies ensure they’re making the right quality hire and to make sure that that hire stays with them for the long term.

William Tincup:   Let’s start there, so how do we define quality of hire?

Mike Fitzsimmons:   Yeah, I thought it was interesting listening to some of your prior podcasts, just trying to make complicated things simple. And I’ll tell you like this is a complicated thing.

William Tincup:   Right.

Mike Fitzsimmons:   As we kind of dove into this space and set on our journey to help address this quality of hire topic, of course, as table stakes, we had to come to a foundation of measurement on how we actually measure and articulate this concept of quality of hire. So, historically it’s been a quite controversial topic, frankly. You can ask different CHROs or people leaders, how they think about it and you’ll get 10 different answers.

So the simple historical definition of quality of hire has been a combination of tenure and performance. I think the data tells us that, 46% of new hires don’t make it 18 months. And that’s typically kind of been a line in the sand where that means it was a mis-hire and ultimately they never got to productivity. But anyway, the simplest way to think about quality of hire is some post-hire data around tenure and performance with an algorithm and some other fancy math around it that helps us get sort of a baseline for measurement.

William Tincup:   Right. So you need to actually … tenure is going to be relatively easy to track, how long someone’s been somewhere. Performance, you need to pull that out of other systems, I’m assuming.

Mike Fitzsimmons:   Yeah. And that’s where this gets complex and fun, frankly. And why a platform like ours is so valuable. The average, at least of our customers, has 13 different technology vendors, technology solutions, in their stack. In their kind of HRTA stack. And so yeah, this data can be in a bunch of different places based on who the company is.

The other thing I would say is, definitionally, how we measure performance is obviously controversial. I think we know that historically, performance reviews, one to 10 scale have bias, there’s gender bias, there’s all kinds of bias, there’s relationship bias. And some of those … excuse me, simple are ratings. And so what we’ve tried to do is really get a whole bunch more data into the machine that answers the question around performance. So performance could also be, are you additive to the culture? How engaged are you with the organization? There’s other things that could matter from a diversity perspective, is there some complimentary value there, as well? So what we tried to do is suck that data in from as many different data sources as we can get our hands on, to compliment that baseline tenure metric to really understand how much value are you adding to the company?

William Tincup:   And again, people are going to define that differently. The systems are … especially API, the API, you can pull the data out and then there’s context. So from one company to another, they might have different rating scales, they might look at it differently. So they might view it differently. When you start off with a customer, you’re explaining quality of hire, obviously kind of your view and your vision of it. Do you find yourself kind of teaching and training them as to what is, and should be considered quality of hire? Like, are you bringing them over to a place where they can kind of understand it from your perspective?

Mike Fitzsimmons:   Yeah. That’s a great question. It’s definitely part of it. And we’re learning, too. Part of what we built into the platform is the ability to be dynamic based on what the organization’s definitions are, too. So you could [inaudible 00:   05:   23] it up, let’s just keep it simple with a tenure and a performance review. If you decided that tenure was more important than performance-

William Tincup:   Right.

Mike Fitzsimmons:   Which you may well determine that for like an hourly type of role.

William Tincup:   Right.

Mike Fitzsimmons:   That you may have a different point of view than if it’s a doctor. So, that is a piece of it. But we are learning every day from our customers. And I think we’re teaching every day. I’ll tell you, the talk track usually goes like this. You can ask anybody in this space. How do you think about quality of hire? It’s all about quality of hire, will be the first response. Well, how do you measure it? Well, maybe once a year we have one of our people analysts pull data here and it’s like a static thing, it’s not an ongoing perpetual measurement.

William Tincup:   Right.

Mike Fitzsimmons:   And then when you start to say, “Well, how do you correlate quality of hire back to any of your hiring decisions or any of the tools that you use?” Then it just starts to get into an abyss.

William Tincup:   Right.

Mike Fitzsimmons:   So if we can get through that first piece of the conversation of let’s lock arms on how we define it. And we’ve created it to be flexible enough to shape to however the organization defines it, within some parameters. Then all the other stuff starts to get really fun. And that’s where the innovation I think, and where the real impact is going to come from.

William Tincup:   I love that. Okay, so you’re obviously connecting with other parts of their TA tech stack. So where is it important when you’re talking to a prospect that they understand, “Okay, for us to be successful and for you to get the insight that you want to get out of Crosschq, here’s what we need to be able to connect to.”

Mike Fitzsimmons:   Yeah. So table stakes are the ATS and the HRIS.

William Tincup:   Right.

Mike Fitzsimmons:   So we have a partnership with Workday, as an example, which covers a lot of the enterprise, thankfully, and SAP and integrations with some of those larger HRIS platforms. And then I think we’re live now with, call it 10 ATS platforms, where we’re sucking in all the pre-hire data we can get out of those machines. Those are kind of table stakes.

I will tell you, you mentioned earlier [Checked 00:   07:   20] who you used to work with. We’re getting data from all those third party pre-hire assessment platforms, as well. We’re getting Wonderlic data, as an example, for cognition.

William Tincup:   Yep.

Mike Fitzsimmons:   We’re getting interview scores, which is unbelievable now that we’re able to correlate interview scores to quality of hire. And oh, by the way, we have found, you can probably guess, there’s no correlation.

William Tincup:   None whatsoever.

Mike Fitzsimmons:   None whatsoever.

William Tincup:   None whatsoever.

Mike Fitzsimmons:   Right. So, we don’t know how to interview, I will tell you that. Or at least we don’t know how to score our interviews and we think we’re all so great at it. So anyway, the base level is ATS, HRIS and then complimenting that on both sides could be any other tools you’re using to gather data. Where there’s APIs available that we can plug into our machine.

On the post-hire side, I’ll just give you some examples of some innovative new data sources that we’re working on, just to show you where this can go. So if you think about things like Zoom and we’re all doing remote, all hands meetings. And there’s belief that we can get signal data on engagement based upon if you’re coming to our all hands meeting on time, or if you’re coming late and leaving early, things of that nature. There’s some just really interesting data sources out there. We know that one of the things that is an early detector of attrition is a lack of community building within your organization. So our ability to understand, you’ve been here for 90 days, how many people have you touched? Up level, down level, side level, that sort of thing, how engaged are you? There’s all this really cool other data that we’re starting to suck in.

Another example of that is like Salesforce. So if you think about sales hires, which has one of the highest failed hire rates out there. And think about a world where we’re actually able to programmatically suck in how quick did it take you to achieve quota, as an example. And get that into the whole quality of hire machine. So we’re in this kind of unprecedented world now where there’s so much awesome data out there that can feed the beast. And that’s, I think, where this thing again, continues to get just more and more complex, but also more and more powerful and interesting.

William Tincup:   Do you want to go further back into source of hire?

Mike Fitzsimmons:   For sure.

William Tincup:   I could see that being very powerful once you kind of could do the connective tissue. So if you can start to actually tell people the interview and scoring and be able to predict quality of hire. But, there’s still this gray area of like, “Okay, where do these people come from?”

Mike Fitzsimmons:   You know what’s amazing about that? So I’ll tell you, in terms of myth destruction, one of the theories we all have is how efficient internal referrals are.

William Tincup:   Mm-hmm (affirmative).

Mike Fitzsimmons:   And we have data to show now that maybe in many organizations, they’re not necessarily as high quality.

William Tincup:   Right, right.

Mike Fitzsimmons:   So believe it or not. And there’s a whole bunch of reasons as to why. But yeah, so we absolutely have [inaudible 00:   10:   12] another one that was fascinating for a client that just wrapped up their deployment. Where they had never thought of Indeed as a great channel, just there’s bias at LinkedIn versus Indeed. There’s all kinds of bias around the source, but what the data said that Indeed was far and away their number one quality channel, from a source perspective. And we’re like, “What?” Those kind of things. So we’re learning every day and it’s fascinating. But that is the goal here is just get data so you can react to it. And kind of, let’s shatter some of the myths that we’ve grown to love.

William Tincup:   Well, we focus a lot on quality of hire. But you did start the discussion around kind of key TA metrics and things that we should be looking at and kind of creating a dashboard. And understanding kind of in real time, finger on the pulse type of these metrics. What are TA leaders, what are outside of quality of hire, what are other metrics that they should be thinking about, that maybe they’re not thinking about? Or what are your customers pushing you to explore more or innovate around?

Mike Fitzsimmons:   Yeah. I think we’ve done a disservice to a lot of our TA leaders in terms of KPIs and what expectation setting is. And we put so much pressure on filling open [crosstalk 00:   11:   38]-

William Tincup:   Mm-hmm (affirmative).

Mike Fitzsimmons:   Quickly.

William Tincup:   Yeah.

Mike Fitzsimmons:   Like that’s the game-

William Tincup:   Time to fill-

Mike Fitzsimmons:   In this labor market, it just is. And it’s at all levels, I think we’ve always understood that dynamic, the sort of hourly kind of type. But in the enterprise and kind of knowledge worker, and those kind of works, we’ve seen the same thing now. So that still remains the most important metric for most of the TA leaders, at least that we work with. I think there’s also-

William Tincup:   Sorry to interrupt, Mike. Especially when it’s married with quality. Like, time to fill by itself, you can go sideways on that very quickly. Because you’re just filling seats, with the Brits called bums in seats. If you’re marrying it with quality, then now it’s not just about, how fast did you do something? Now you’re actually saying how fast and at what quality?

Mike Fitzsimmons:   And that’s our hope. That’s the end state we want to get to.

William Tincup:   Yeah.

Mike Fitzsimmons:   I will tell you the reality check is-

William Tincup:   Oh yeah.

Mike Fitzsimmons:   Most TA organizations aren’t incentivized, they’re not compensated based upon quality. Some cases-

William Tincup:   That’s right.

Mike Fitzsimmons:   But in most cases, it’s about time to fill in and cost. I think that would be the other answer to your question in terms of what-

William Tincup:   Right.

Mike Fitzsimmons:   Are the core metrics? Right now you’re seeing costs inflate, you’re seeing folks just have to use more sourcing options that are more expensive than they maybe have historically and things of that nature.

William Tincup:   Yeah. And/or pay more. I mean, you’re getting right down to that other part is, if you want to attract the talent, you’re going to have to actually reach into your wallet and attract the talent. So yeah, the programmatic and sourcing and all of that stuff’s going to cost you more money. But also, just your base salary and comp is going to be more, as well. Do you have analytics around … I say comp. But do you have analytics around those things where you can give people insight into what should or shouldn’t be done there?

Mike Fitzsimmons:   I mean, we’re getting there. I mean, I’m so excited about that, frankly, that’s in our next kind of big push is-

William Tincup:   Oh, cool.

Mike Fitzsimmons:   When you start to connect compensation to quality-

William Tincup:   Yeah.

Mike Fitzsimmons:   And either demystify that theory. But let me give you an example of that, it’s a little tangential, but it’ll get back to the same thing. We have a client who went through a reduction in force in COVID. And it was fairly substantial. And when we went back in and laid over the quality of hire metrics against the folks that they reduced, against the mean for the rest of the organization. The folks that they reduced had a 18% hire quality. And so if you’ve ever been through one of those exercises on the company side-

William Tincup:   Mm-hmm (affirmative).

Mike Fitzsimmons:   Which they’re miserable, but when you-

William Tincup:   Oh, yeah.

Mike Fitzsimmons:   Have to go through them, you know what that exercise looks like usually. You’re stat ranking people based on their compensation, you’re just trying to get to a number in most cases. That’s just the reality of how those go down. But that was a great case in point where, gosh, we let go of a bunch of people that maybe were paid more, but they were significantly greater producers for us. So, we made some bad calls there in that scenario. So there is correlation in that, and it’s exciting as we get more intelligent about it and get the machines doing more work to help us analyze it. But it’s definitely a lever in all of this.

William Tincup:   Oh, that’s going to be beautiful. I didn’t ask you industry or size of company, or is there anything where y’all like to … you’ve got some clusters around customers and healthcare or companies above a certain size. You mentioned your partnership with Workday, they tend to kind of play up market. Like, is there a sweet spot for Crosschq?

Mike Fitzsimmons:   Yeah. We’re learning that. I mean, like any kind of early stage venture, especially based in Silicon Valley, I don’t even know if I can say based anymore because we’re all over the globe. But I should say, network-

William Tincup:   It’s okay, there’s a PO box there, no worries.

Mike Fitzsimmons:   There’s a PO box. But network in Silicon Valley, I should say. That was definitely our go to market and our initially early adopters were sort of the unicorn set and the kind of valley hot tech companies. So I think we had of the … there’s the cloud 100 list of all the top large kind of cloud tech companies. And I think we had five of the top last year as an example as clients. So that was definitely the early adopters, we’re high growth tech.

We have since expanded that, you brought up healthcare, that’s our second largest segment today, in terms of customers. But I think we now have customers in every single vertical. So from retail and hospitality to manufacturing to, I think we have the largest Kiwi company in New Zealand now active on the platform. So, these are universal problems we’re solving. In terms of size of company, similarly, we started more kind of mid-market, SMB mid-market, so called up to 5,000 employees. And now we’re certainly moving beyond that into what I would consider more the enterprise. As the system and the technology is getting smarter and our brand is getting built and we’re getting more access to those opportunities.

William Tincup:   I know practitioners listening will wonder, okay, so where does Crosschq, like what category … I’ll just say it politely. I hate software categories.

Mike Fitzsimmons:   Yeah.

William Tincup:   Despise them. Because no one really fits nicely in it, but we’ve also worked on the other side with HR and TA. They have budgets that are built in Excel and there’s rows and columns.

Mike Fitzsimmons:   I know.

William Tincup:   So while I hate it, at one point or another, someone’s going to put this on a row. And so, what category do y’all fit into or have you created your own category?

Mike Fitzsimmons:   Yeah, so I think … and I’ll tell you, I love the question and I appreciate your perspective because I share it. And I remember looking, when we came into the space, I was looking at a market share, TA market share sort of vendor thing. And it was the talent intelligence … or excuse me, candidate intelligence bucket-

William Tincup:   Mm-hmm (affirmative).

Mike Fitzsimmons:   Was sort of a bucket … I was like, “Okay, this makes sense. This is sort of where this generally fits.” And 85% of the candidate intelligence spend and multi billion dollars was in background screening.

William Tincup:   Right.

Mike Fitzsimmons:   I’m like, this no longer makes sense-

William Tincup:   Yeah.

Mike Fitzsimmons:   I will tell you what has emerged though, is this concept of talent intelligence. We have trademarked the term, the talent intelligence cloud. That’s what we call the engine that powers all of this. So think about the thing that we’re building that sucks in all the pre-hire data and the post hire data into one consolidated cloud, if you will. So the talent intelligence space, which I’m with you, there’s not necessarily a direct line item on the P&L today. The other thing is, in terms of who the champion is internally, and I’m just kind of telling you the truth of what a day in the life is like for us. This is a metric that at the C-suite, it’s an easy one. You can talk to the CEO of any company and they’re going to tell you that I care about quality of hire.

William Tincup:   Yeah.

Mike Fitzsimmons:   They’re going to say that. But then when you [crosstalk 00:   19:   00]-

William Tincup:   No, they’ll even be even more nuanced or more specific quality hire of my high performers or high potentials. So, the 80, 20. That 20% of the workforce that creates 80% of the value again, could be a myth, might not be a myth. Most VCs that I talk to make it more of a 90, 10. So, when you talk to the board in a C-suite, they’re zeroed in on that talent.

Mike Fitzsimmons:   You’re right. And I think to that end, in terms of your question, what line item is it on the P&L versus what you call it? I have CFOs that are our buyers now.

William Tincup:   Oh, that’s cool.

Mike Fitzsimmons:   It’s cool. And CROs, we’re finding buying centers in organizations. CROs, it’s kind of an easy pitch. It’s like, if I can increase your quality of hiring sales by 5% done and done, let’s go.

So anyway, that’s a work in progress. So I would say we’re kind of part of a group of companies that are creating this new talent intelligence category. There’s companies like eightfold that have been … and [inaudible 00:   20:   07] did a good piece on the rise of the talent intelligence category, if you will. If I were to put us somewhere today, that’s where I’d put us. I know we still have to build demand and awareness of the solution-

William Tincup:   Right, right.

Mike Fitzsimmons:   Before we become a line item, but that’s where we are.

William Tincup:   Yeah, but that’s okay. Because you’re talking about things that actually matter. It’s when you see Vaporware or people kind of talking about stuff that doesn’t matter, this is actually something that keeps people up at night. Two things that I’d like to cover last is one is the demo. When people see Crosschq for the first time, like what do they fall in love with?

Mike Fitzsimmons:   The data, yeah, for sure. Even some of the things we’ve talked about, imagine being able to look in your own organization on demand and evaluate things like you brought up source of hire. Just put yourself in the shoes where you can literally with one click, load the Crosschq machine and view what your quality of hire is by source, for the last time period. It’s just, that’s it. They’ve had not had visibility, they haven’t been armed properly. This is our big thing. For TA, we think that they just haven’t been given the tools to own this and frankly manage towards it. So I think it’s the access and visibility to the data, for sure.

William Tincup:   So, not to be nuanced, but data, I’m assuming when you say data, you mean insight or actionable insight. Like data can be one thing, but is there a context to the data? Like what do they do with the data? Is that what I’m trying to infer when you say data?

Mike Fitzsimmons:   Yeah. And I think to your point, look, we struggle with this, too, which is, what’s our role here? Is our role to also help guide our customers into how to act against it? Or is our-

William Tincup:   Right.

Mike Fitzsimmons:   Role here to help them visualize and empower them to go take action? So let me give you an example of visualization that one of our enterprise customers is pushing really hard on, which was looking at quality of hire by recruiter.

William Tincup:   Oh, that’s cool.

Mike Fitzsimmons:   Now I can … it’s cool, right? And what are you going to do with it? Well, is it a carrot or a stick? And they’re using it as a carrot where they want to incentivize at an additional financial incentive for their recruiters based upon quality, as well. Which is cool. And that’s a really neat, actionable way to use the data. Is to help and then ultimately use that for training and that sort of thing for the recruiters that maybe are not hitting that quality mark. So I thought that was really neat innovation.

And I think that’s what you’re going to see. Whereas we’re able to give visualization, give access to these insights. And then, these companies are all plenty smart to figure out how to take action against them.

William Tincup:   Right.

Mike Fitzsimmons:   I’ll bring up the interviewer one again, too, because that’s been fascinating where I mentioned earlier, there’s low correlation between interview scores and quality. But what I will tell you, there are certain individuals who are really good. And conversely, there are certain individuals who maybe are not as-

William Tincup:   Right.

Mike Fitzsimmons:   Talent scouts.

William Tincup:   And it’s not who you think.

Mike Fitzsimmons:   And it’s not who you think. And by the way, so to that end, what’s actionable about that. Well, it means that I need to … I should put if Mike’s a really good predictor quality, frankly, he should be on more interview panels. And if Frank is not, we got to train Frank better.

William Tincup:   Right.

Mike Fitzsimmons:   We can invest in getting Frank. There is real stuff, but like I said, I trust that the companies will take these insights and run with them. But to some level, we’re going to need to have sort of recommendations for action. And we’ll work on that in our next generation, for sure.

William Tincup:   I love it. Okay. So last thing, favorite buying question or buying signal from a prospect? Like what do you love to hear? Like you automatically, you just know, okay, they get it. All right. You still got to go through the proposal process, you still got to do all the other stuff. But like, okay, they get it. Like what is that for you?

Mike Fitzsimmons:   Oh, it’s so dead obvious. And it’s literally either the board or the C-suite has been pushing me on this, your timing is perfect. Because it’s happening, it’s happening, for sure. I’ll tell you, conversely, what’s my least favorite. What’s my-

William Tincup:   Yes.

Mike Fitzsimmons:   Corresponding statement, which is who the hell owns this?

William Tincup:   Mm-hmm (affirmative).

Mike Fitzsimmons:   Like what I kind of said earlier, I’m in recruiting and I’m trying to fill butts in seats. What I don’t need is another metric to be managing to. So that’s the reality of a day in our life of what-

William Tincup:   That’s right.

Mike Fitzsimmons:   We’re working through.

William Tincup:   That’s right. That’s right. Well, how do you answer that? When you ask that question, who owns this?

Mike Fitzsimmons:   Yeah. I think, as I mentioned earlier, the buying centers that we found are all across the board.

William Tincup:   Yeah.

Mike Fitzsimmons:   What I love is when that same person says, “Well, I’m going to own it.”

William Tincup:   Yeah.

Mike Fitzsimmons:   I’m going to be the champion within this organization and I’m going to be the one that brought quality of hire as a key KPI and make it visible. And I’m going to change the paradigm. Because the other thing I’ll tell you too, we put our recruiters in such a tough spot where they’re … I’ll say one enterprise client of ours that has 28,000 employees, 35% year one attrition rate. And so these recruiters are running in circles-

William Tincup:   Right.

Mike Fitzsimmons:   They’re filling seats. And I’m like, part of that is, let’s do better. And if we can optimize that, you’re going to not be running in circles as much. It takes a little bit of a longer term view on it. But if we’re right and that this can ultimately optimize the output, it’s going to make your life more efficient in the long term. And so I think that’s also part from a vision perspective, you got to get them to buy in on that. And that’s just absolutely critical in my opinion.

William Tincup:   Well they buy in or not at their apparel. Mike, I love what you built, I love Crosschq. Thank you so much for carving out time and coming onto Use Case Podcast.

Mike Fitzsimmons:   All right. This was awesome. Thanks for hosting me.

William Tincup:   Absolutely. And thanks everyone for listening to the Use Case Podcast. Until next time.

Music:   You’ve been listening to RecruitingDaily’s Use Case Podcast. Be sure to subscribe on your favorite platform and hit us up at recruitingdaily.com.

The Use Case Podcast

Authors
William Tincup

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.


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