The Use Case Podcast – Storytelling about LaborIQ by ThinkWhy with Claudine Zachara

William:   00:25
Ladies and gentlemen, this is William Tincup and you are listening to the Use Case podcast. Today, we have Claudine on from ThinkWhy and we’re going to be learning all about her firm. We’re going to jump right into it. Claudine, would you do us a favor and introduce both yourself and ThinkWhy.

Claudine:   00:43
Yeah, happy to William. First of all, thanks for having me. I’m Claudine Zachara everyone and I am the president and COO and co-founder of a company called ThinkWhy. We are a SaaS platform for talent intelligence software and launching a brand new product right now for our LaborIQ platform.

William:   01:03
Well, talent intelligence. First of all, it can mean a lot of different things to a lot of different people so let’s kind of break down before we get into the LaborIQ list. When you all think about talent intelligence, give us some insight into kind of the ways that you all think about it.

Claudine:   01:32
Well, that’s a really great question. When we first began thinking through this, our ThinkWhy people inspired focus was creating a new generation of AI driven SaaS solutions. And really the whole focus was on transforming the labor market solutions for employers and job seekers. And so when we talk about talent intelligence right now, it’s certainly from a B2B standpoint, it is about meeting an unprecedented period of time right now in our nation’s history. April, four million people left their jobs, they’re calling it the great resignation, but it’s a time in our history where all of us are rethinking not just how we work, but why we work. And I think this is a great thing. And so that’s how we think about talent intelligence. We’ve got compensation, retention in particular, which is huge for employers right now and then labor market solutions and analytics that foretell exactly what is transpiring in current day economics for business leaders.

William:   02:32
With the LaborIQ product, so obviously you developed this. A, how did it kind of come about? Was it things that your customers have been telling you? Or just kind of a hole in the marketplace? First of all, just talk about the product itself. What is LaborIQ?

Claudine:   02:56
Yeah. On the outset, ThinkWhy’s mission was to create a SaaS product that would transform labor market intelligence. And so in 2018, our focus was on frankly, out of the need for our ourselves but we knew we wanted a labor market for a focus. The disparate situation related to four, five, six different types of software platforms, the idea was to create something better and faster and an intelligence tool product that would inform and create solutions. The idea was to better align and help organizations drive people and growth strategies by providing answers that they need that right now are in lots of different locations and land them in one precise, proven platform that would allow this. Talent intelligence is powered by an advanced AI technology that we’ve created. It’s proprietary. It’s an intelligent learning algorithm and we cover the entire US for every city and every job title in the market, whether you’re skilled labor or hourly, salary or hourly.

Claudine:   04:04
And of course the new product that we’re launching right now is Total Compensation. And that allows every employer to customize every bit of their total comp package. All of the additional features that they allow to try to win talent and retain talent in the variable compensation category to allow a truly customizable approach to hiring and retaining talent. That’s the new feature launching now. But the LaborIQ platform was born out of necessity to answer your question, we as employers needed it but we knew that we could create something that would be faster, more streamlined and you could count on the answers.

William:   04:44
When I think of labor market, one of the things I think of is supply demand in comp. I kind of think it in those ways. I’m like, okay, what’s the office manager in Topeka, what’s the supply look like? What’s the demand look like? And then what is the comp, the relative compensation? Now that was pre-COVID that would have been my framework of thinking about things. During COVID and post-COVID supply and demand from my perspective and you’re the expert, but from my perspective, it got better because the aperture of remote work and work from home and maybe hybrid work models et cetera, has now opened the aperture of, okay well, take that position. We’ll do a software engineer, DevOps person in Topeka. Well, they don’t need to be in Topeka. They can be in Paris or wherever. It’s opened up an aperture for talent and for companies. For the sourcers and recruiters and hiring managers who hire talent, a long way of getting around to, how has that changed the way your clients look at supply, demand and comp?

Claudine:   06:09
Well, great question. Unique situation, let’s go back one year, a little over a year ago when pre-COVID, February 2020 and we were in the nation’s tightest labor market in history.

William:   06:22
Right. Well, we in the recruiting industry, what we call a candidate driven market.

Claudine:   06:27
Yeah. And so it was so tight. We could not find talent. We’re a growing tech company, we’re looking, we’re competing and we’re in Dallas, which of course is a very quickly growing [inaudible 00:06:40].

William:   06:40
Oh, I’m in Arlington. I’m familiar.

Claudine:   06:43
There you go. Well, fast forward. Then when you have the COVID crazy that occurred related to employment, so the tightness actually is as bad as it was before. Now you’re right, exactly right William, about the aperture opening because the flexibility that’s been created by remote work is certainly a component but the variables that were related to what got impacted in the labor market from a supply and demand standpoint were really driven by very specific markets. And specific industries. Industries and sub-markets were affected much differently and vastly. And so as the business sector, professional business services for example, were not impacted from a loss of talent. We’re as tight or if ever than we have been before in terms of competing for skilled labor. The difference now is, and one of the really cool features we have on our platform besides the supply and demand meter is that we can stack up six different metros at one time and allow you to understand for that role, where is it going to be most cost effective? And where’s the talent supply most robust to be able to find it?

Claudine:   07:57
If you have the flexibility of being able to hire remotely and many employers don’t, but if you do, we’ve got a really cool feature that allows you to stack rank up several metros at one time, to be able to understand where are these people in best supply? And at what cost so that I can better fill my roles that I need. Really helpful for talent acquisition professionals, recruiters and hiring managers across the country.

William:   08:23
I wrote an article for Indeed a couple of months ago and first of all, I do a lot of work with Indeed so they love me and I love them, but I wrote a relatively controversial article regarding getting rid of location based pay.

Claudine:   08:44
Yeah, I could see how that could be a little controversial.

William:   08:47
It was for them, especially because everything’s based on location. But my heart was in the right place in the sense of if it’s a director of demand gen job and the job is net new 20,000 leads to the sales team, you can work from anywhere in the world. Why are we paying someone that chooses to live in Los Angeles 30% more than somebody that lives in Wichita, Kansas? And the real, the dark part of this as an HR person, I would tell you is this is where some of the pay inequities exist. We hide them really delicately. We hide them, but this is how men sometimes are paid more than women. It’s based on their location. It’s like, well, but they’re doing the exact same job so are we paying for the job? Are we paying for location? Now, first of all, I know that that’s quote unquote controversial, but I think the more we work in a remote environment, the more I think people are going to look at comp differently. Now I’ve said all that to then talk to the expert. What are you hearing from your clients?

Claudine:   10:02
Well, you bring up a really good point. It’s a controversial point because so much of this is historically based. Pay inequity, for example. We’ve got a feature on the advisory section of our platform, in the LaborIQ analytics section, which is all about diversity and inclusion, and being able to better understand that. We’ve got all that data to be able to understand how you can better meet those metrics. That’s going to speak a lot to what you’re speaking to, but I think part of this is historical. We’re at an unprecedented time because COVID quite literally turned everything on its ear in the sense that if you have the flexibility, remote work will have an impact on exactly what you just mentioned related to pay because then people have the choice to, let’s say they want to live in El Paso or they want to live in Kansas City versus the Bay area’s cost of living and then still be paid a wage for that developer role that demands, one of the fastest growing areas and least in demand in terms of most sparse is data scientists.

Claudine:   11:07
What if you’re in that field? That’s where you want to be right now because they are hotly in demand. And so wherever they live, they could choose to live on a beach in Hawaii if they want to and still garner the same. I think if employers have that ability and that flexibility, that’s fine. But every company is going to be governed by a different set of values. For us in particular, it’s about the core culture and driving something that’s truly transformative and building a product through collaboration. My people are all here. We’re not remote. And every company is going to have a different set of core values related to how they manage.

Claudine:   11:42
I think your point, that remote impact is going to see changes in pay equality, diversity, choices. We’re talking about the great resignation right now. People are choosing different things that make them happy. More people will be doing work they love at companies they feel passionate about, leading to greater successes for organizations and frankly that’ll engage their employees with accountability, caring, and trust. It’s a win win. We’re at a very unusual time in our history and it’s exciting to be part of it with a platform that helps create answers for employers to better get that fit right between employee and employer.

William:   12:27
Because we could talk for hours about ThinkWhy, but let’s focus on the LaborIQ product in particular. Where in the workflow do you want TA and HR to work with the LaborIQ product? Where does it, when they’re creating job descriptions and they’re putting in comp, things like that, but where? And but I just pulled that out of thin air.

Claudine:   12:52
You got it. You nailed it. It is exactly at that point. It’s really, when you’re creating a job description, we have a custom feature that allows you to create hard skills and soft skills directly for the role that you need. You find the role, you understand what the demand for that role is and then you customize education, experience, whatever your driving force is at your company. If it’s skills based only, which is a very hot buzzword right now where it’s a skills based talent acquisition, you set that up in a job profile, understand exactly what the compensation is and then you customize it for your needs but it’s at that stage when you’re creating the job and you need to understand the compensation for it at that stage. And then it allows you to migrate into the retention of your employees from an entire company to teams and individuals.

Claudine:   13:42
The LaborIQ platform allows total compensation answers so you can know what to make the offer and win the talent. It has a retention tool to allow you to upload full teams, create full teams from scratch to understand what it will cost you. But most importantly, in a budget setting season, to understand the cost of equality. For example, what if your top people are not being paid to market demands? You have to know what your risk is. It’s a retention tool that allows you to benchmark your overall compensation strategy and understand what the gap analysis is.

Claudine:   14:13
And then of course, the market analytics side, which is the third component that nobody else has in terms of in this space, which allows you to understand labor market forecasts. What’s happening in your metro versus every metro you do business in or where you have multiple satellite offices. Understand the forecast for your specific industry versus other industries that you sell into so that you can better drive your overall business strategy and so that’s what LaborIQ is, it’s compensation, retention and market analytics related to the job market so that you can really better strategically plan and grow.

William:   14:49
When we think about labor, we’ve been talking about this for a number of years, but we’re starting to think about labor differently, in terms of fractional, gig workers, freelance, offshore, near shore. The classic ways that we’ve thought about talent, of full-time, part time, seasonal, et cetera. When you’re looking at at labor, more importantly, when your customers are looking at labor, they’re looking at all the different types of labor?

Claudine:   15:25
Well, yeah. One size doesn’t fit all. And that’s the beautiful thing about US, we’re all so unique. There’s no one flavor. And so the benefit of having the custom feature capabilities of you get to drive the business the way you’re constructed and what your needs are and we forecast the supply, not only the supply and demand currently, but out six years so then employers can better understand what is the going rate?

William:   15:48
Oh that’s cool.

Claudine:   15:48
What am I going to have to brace myself for next year related to the tightness of the market in any particular occupation?

William:   15:56
Apologies for me interrupting, but that also gets into workforce planning and succession planning if done well.

Claudine:   16:02
Exactly right.

William:   16:05
When you and your team demo LaborIQ, what do people fall in love with?

Claudine:   16:12
For sure, the UI initially. The first response is, wow. It’s a 100% cloud based platform. It’s very fast and answers are at your fingertips. With only two data inputs essentially from the compensation standpoint, your metro and the role, you get information rapidly and it transforms in front of your eyes with a 10 to 90 percentile bell curve to understand what the rates are in the entire aggregate market for that role but then also refining it down to what you can afford and what you need to anticipate affordability is based on how rapidly the market is adjusting. That’s the first reaction is, wow. It’s fast. It gets answers instantaneously. And then it’s, I got so much more information at my fingertips. I used to have to go to four different locations in different software platforms to get all of this in one.

Claudine:   17:04
And that’s really been our mission from the beginning was to create something smarter and faster and more intelligent in the talent category. And so that’s been great to hear and we continue to innovate again for this most recent launch, which is the total compensation feature. It goes beyond just salary and hourly comp now it’s total comp to allow you the variable compensation. But I think initially it’s, wow, this is so much faster and easier to use than anything I’ve seen before. I think that’s the initial reaction we get.

William:   17:34
I’ve dealt with and worked with a lot of comp professionals and I’ll say this, and I’ve said it publicly to their faces so I don’t mind this. They’re a little wonky. They’re very comfortable in Excel, and with Excel, very complicated Excel spreadsheets. They’re staring at a comp data all the time so they’re comfortable with this. It’s the people that are around them that might not be as comfortable with comp data that I find is kind of fascinating. When you deal with performance, you’re doing with hiring managers, dealing with people that aren’t staring at this stuff all the time. I know people are going to ask me post show, your comp data and not getting into any secret sauce or stuff, but where does your comp data come from?

Claudine:   18:28
Well, that’s a great question. We’ve got essentially eight different sources of compensation data.

William:   18:33
Oh cool.

Claudine:   18:34
But I’ll explain what that means. We use something we call the ATILA technology that we’ve trademarked and is proprietary to us. We start with the most trusted, longest lasting survey data on the planet, which is the local markets. Every employer has to report their compensation to the government every single month. We have a regular routine process that’s gone on for 30 years. It’s the most tried and true systematized process on the planet. All the government reporting entities in the labor market. We also take US Census Data Bureau. We take the VEA, IPEDS data, O*NET data. We take all of those sources of data, we compile it into our system from a data intake standpoint and then we add in our data science methodology. We have a large team of data scientists and data engineers. Then we bring in the augmentation of the proprietary research and a five step data intake process that then cleanses and adds to, to get to over 20,000 occupations.

Claudine:   19:34
It’s really 18 trillion data points for over 20,000 jobs, 1,600 industries in 388 US metros in the country and then to make sure that all of our algorithms, our proprietary algorithm system is accurate, then we validate it against an external source, the validation source and that’s over eight million pay stubs of US companies across the country to ensure that we are on the mark. In terms of accuracy, you could find no better solution but the proprietary data selection and the data science, the proprietary research and then the validation method, I think in our opinion, there’s nothing more accurate to allow it to be a trusted source because you’re making very valuable decisions, not only for hiring but also retaining. And that’s part of our secret sauce. And we’re very open about that. We share that ATILA method and what that looks like and how we do what we do in that secret sauce you mentioned, William.

William:   20:34
I love that. First of all, I love that. And trillion, that was with a T in case those.

Claudine:   20:40
It’s with a T, 18 trillion data points.

William:   20:42
Yeah. The advice, and I know you get this from your customers, especially on the job posting side. Talent shortage got it. Especially in certain markets in certain job.

Claudine:   20:55
Industries.

William:   20:57
Industries. One of the things is a debate that’s going on for a while now about putting comp data into the post itself. What’s your advice when customers ask you about this?

Claudine:   21:14
Into the post? Oh, you mean in terms of the job posting?

William:   21:16
Into the job posting, yeah.

Claudine:   21:18
Yeah, that’s one of those things, it’s easy for me to say, but running a company myself, it really comes down to, you certainly can give ranges but I know that there’s, I believe you’re probably referring to the most recent news out of the Denver area, is that right? Colorado?

William:   21:35
Yes.

Claudine:   21:35
Yeah, it’s certainly controversial.

William:   21:36
A bit.

Claudine:   21:36
I’ve been reading about that too. I think that it distills the competitive advantage that every employer wants to have related to finding the right talent that fits their needs. And so I’m not going to be in a position to govern that or even to advise on it other than to say, I think you remove an element of competition, which is what this US market is all about. Both the labor market and the free enterprise market and I think it does us a disservice as employers but also for the employee who could possibly better, who could get more money, who can earn more money rather than having something posted as the compensation metric. And so my advice would be, let’s keep it as open of a market as possible to allow the best competitive edge and the win for both the employee and the employer.

William:   22:30
First of all, great answer. I’ve struggled with this in the past. And you’re the expert so I really want to get your take on this. We have a company, we have 10 software engineers. And so we know based on experience, we know based on what they do, et cetera, we know what they make. We know precisely what they make. Why is there a negotiation in terms of salary? And I’ll do just salary. I’ll separate that from comp for just a second. And the reason I’m asking this particular question is I also think that this is where bias and also some inequities exist.

William:   23:18
If we know the software engineer too, that has 10 years of experience, had this school and does these things we, that we pay on average, we’ve got three people in the firm that do this, they’re all paid $185,000 period. Why is it left to recruiting and recruiters in particular to negotiate? Because I’ve looked at it at least historically is if I can get, and I’ll just say it the way I think it, if Sally comes on and Sally says, “165,” Sally starts $20,000 below what everyone else is being paid. And we’ll make it a worst-case scenario, all the other three guys, they’re all men. She’s $20,000 behind doing the exact same job, just because she poorly negotiated her salary. When, why was that even a negotiation? Based on, you’re a data person, based on if we know what the data is, here’s what the job pays.

Claudine:   24:29
Exactly. Well, you nailed it. Look, I don’t think every employer creates a negotiation with employees but I will say this.

William:   24:36
Right. Truth.

Claudine:   24:37
The LaborIQ platform, LaborIQ by ThinkWhy removes that because now you’ve got the demand and it’s removed all bias. It’s removed gender, it’s removed even the historical aspect of education or experience. If you want to remove that and you want to baseline it, it allows you to understand what the demand for that role is regardless of who’s applying for that role. But I will say this from a competitive standpoint, this particular product allows small and medium size organizations to not only compete but win against the big giant behemoth companies. Because what we’ve seen, especially in talking to several of the CEOs that are on our platform but also all of the talent acquisition HR experts that are on our platform. What they say is that this now helps me understand exactly what I’m up against. Where I didn’t have that visibility before. I need to know exactly what people in a tech space that might be a Google size, what I’m competing with at my size organization, at ThinkWhy, for example.

Claudine:   25:35
And now they’ve got a competitive edge. They can remove the bias as their own DI initiative, they remove the bias, you don’t have to have a negotiation but they’ll know what’s in demand. They’ll know what that demand, and then pay that person what they’re worth based on their skills that they bring to the table and what that company can afford. As long as that is the factor, because not every company is going to be able to afford the same amount, but now if you can compete with the biggest industries out there, you even the playing field and allow better growth opportunity. And that’s really what this platform is all about.

William:   26:08
I love that. Last question and just curious more than anything else is, are your customers dealing with any of the pay compression issues?

Claudine:   26:19
Oh yeah, absolutely. We’re hearing about everything from DNI initiatives, pay compression. Everything right now is a sensitivity because of the talent supply. People making choices.

William:   26:31
Good point.

Claudine:   26:32
And so yes, we hear about it. Actually we take that feedback on a regular basis related to how we inform the product and what features get added to better inform new product roadmap solutions. But yes, we are hearing about that from our customers, as well as the people that we poll on a regular basis who are already using our product to understand how to optimize and leverage.

William:   26:54
I love this. Well, we could talk forever but we both have things to do today. Claudine, thank you so much for coming on the show and explaining both ThinkWhy in general, but also more specifically the LaborIQ product that you are launching.

Claudine:   27:11
Well William, thank you. Recruiting Daily’s terrific. I love listening to your podcast and I appreciate the opportunity.

William:   27:18
Well, done deal and thanks for everyone listening to the Use Case podcast. Until next time.