“Tinderization” of the Recruiting Industry with Evan Sohn

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Allison: Welcome back to the Deliberate Leaders Podcast. I am your host, Allison Dunn, executive coach. I am super excited to introduce the guests we have today. We have with us Evan Sohn. He is the chairman and CEO of recruiter.com, an on demand recruiting platform that combines artificial intelligence and video job matching technology with the world’s largest network of small and independent recruiters. He is a frequent contributor to CNBC, as well as Yahoo Finance, and demonstrates expertise in a diverse set of industries and is also the co-founder and vice president of the Sohn Conference Foundation. Evan, thank you so much for joining us here today.

Evan: Thanks so much, Allison for having me on and I know, the– You– I used to– I grew up with the word excited being enough and now all of a sudden, you had to put the word super excited. I try to stay– I try not to use that term as much as possible but it’s great to be here and thank you so much for having me on your show.

Allison: It’s absolutely my pleasure. I love to kick these off with a deliberate conversation. So what would be your number one leadership tip for our listeners?

Evan: I come from a sales background. In sales, you really learned very early on that only one thing matters and only focus on that one thing. Get your priorities in order, you can’t have 2 prior– 2 number one priority means you have 2– Number 2 priority. Focus on the one thing that actually matters and I think that’s probably the one great tip that I’ve learned over the years.

Allison: I’d love to ask you what is the one thing that you are focused on right now?

Evan: I get to focus on lots of things but I would say, CEO is building a great company. My real priority every day is how do I build a great company. Now, for different people, different stakeholders, a great company’s a different things. For clients, it’s being able to deliver great results. For shareholders, it’s value. For employees, it’s a great work environment but building a great company is my top priority every day.

Allison: OK, fantastic. Thank you for that. I truly, like giggled out loud when I saw the title that we’re giving this episode, which is the ‘“Tinderization” of the Recruiting Industry’ which I– I had not– You heard the word Tinder used in that way. I don’t know if it’s part [Phonetics].

Evan: Yes. Look, I think it’s fascinating. I’m 54 and a half, I just had my half birthday when you– I guess you count back birthdays when you’re five. When you’re 54 is when you count your half birthdays. I think that one of the things that Tinder did is sort of pre-Tinder. We started looking at the dating sites. If you’d looked at them back in the 90s and 2000s, it was lots of data and combining data into [Phonetics] here’s the profile that you want to see but looking at data and matching up data, priorities and all this other stuff and I think what Tinder did is and by they are client of ours also.

What Tinder did is really expedite that overall process and if you look at the recruiting process today– And it’s not going to– This is a long term change. Long meaning like 2 to 3 years. The process of recruiting hasn’t changed I think in 30 years or more. You post a job, you submit your resume, you collect resumes, you screen your resumes, you interview the candidates, you hire and now– 30 years ago, the job board was a classified Ad in New York Times and you printed up your resume on really cool stock paper and you mailed in a cover letter and if you sent in 30 cover– If you sent in 30 resumes, you were– Oh my god, you’re crazy. I can’t believe you applied to 30 different companies and that really– That can you imagine 30 years ago someone said, Oh, I applied to 30 companies? Like wow, that’s unbelievable how many companies you apply to it.

And think about the other side, you collect the resumes, you review them, you interview them, etc. Now, all we’ve done with last 30 years is really expedite that same process. Instead of mailing and instead of posting on a classified Ad, you post on a job board. 20 years ago, it’s called Hot jobs and Career Builder that monster and as zip recruiter. Instead of mailing the resumes you upload your resume, you review the resume, same way that you did before. You just doing it online. Maybe you’re filtering out certain criteria. We’re screening candidates. OK, maybe we’re having him do a video screen, etc. We’re interviewing the candidates, maybe we’re not flying him on and maybe we’re just doing it all on Zoom, etcetera but that is the process.

Wouldn’t it make more sense however, if we started with the video side of things? If we said, hey, look, I’m only– Let’s assume these are customer facing roles and we said, hey, look, I’m looking for someone to work the front desk of my company, whatever it is. I want someone that’s willing to work at a front desk, in person, five days a week, here are the criteria that I want. Here are the parameters. Here’s the salary. In one year, 20 people who meet that criteria submit their video of why they think it’d be great for that job and instead of me reading the same piece of paper about the same 80 people and then requesting a video, look at– Let me look at the 20 people that actually match up the qualifications that determine who do I want representing the company. 

I would shoot, I will give you the example of– If you were working for a nonprofit organization and you were hiring a comedian, right? You wouldn’t say send me all the resumes of all the comedians and now let me– Oh, wow, this person was on The Tonight Show, this person was on– This person– Everyone’s looks exactly the same and then you pick out what the 30 that looks best and then you find out, gee, send me a clip, and then you send me a clip and then I found the one who is less– The least raunchy from my crowd and then I looked at it again and then I said, Who’s– And then I said, OK, I’m down to 16 to be available, right? And who would be available for my event? The reality is, it makes much more sense. People– Sorry, I just switch gears.–Are we good?

Allison:  We pause there for a second but I think you’re good now.

Evan: Yes, OK. Send me over– Hey, I’m interested in a comedian for [Phonetics]. Right? If you wanted a comedian, you would say, OK, look, I’m running a nonprofit, I have an event, the event is May 23. My audience is this audience. Only send me people that align with– And I’m only willing to pay X dollars. Only some of the people that align with those profile requirements and now send me their 30 second clip and I’ll determine which one I want. That just makes a lot more sense, then the other process but the other process is really how we’re doing things from our– An old school fashion.

Look, right now we’re in this very candidate centric world that’s going to morph sometime this year into being back into the employer centric in many ways.

Allison: You promise?

Evan: Yes, I think so. Promise is a rough word but yes, I think that one of our predictions for 22, we did this in December was that work from anywhere was going to morph to hire from anywhere and I think we’re going to see this pendulum swing back to being far less candidate centric with obviously, certainly– Certain examples.

At the beginning, I think in October. That goes back 6 months ago, I made the statement on a podcast, that everyone in this country is now more valuable than they were 2 years earlier. Right? Or a year earlier, everyone, from the waiter willing to work in the restaurant, the factory worker to the Java developer, and everyone in between, everyone is more valuable. I think with the looming recession or the economic downturn or inflation, we’re going to start seeing some things right side. Right sizing is the right wrong word, maybe getting the ships back in line and we’ll start seeing a little bit more normalcy.

One of our– Anecdotally, one of our clients, they had a developer that worked for them, a software engineer who in one day got a 50% salary increase because they got an offer from another company. They countered it, the other people countered it, they countered again in one day, and this wasn’t the greatest software engineer on the planet. This software engineer went from making, let’s say $100,000 to $145,000 in one day. That’s just a crazy amount– Crazy.

Allison: That happened a lot. Right?

Evan: Yes. Right. I think we’re terrified. I think people are really scared of losing their talent and we started to see the numbers. The job reports numbers that come out next Friday, the first Friday of the month, really start to increase three months ago. That doesn’t really make a lot of sense. Empirically, you’re looking at companies. I can’t hire, I can’t find yet why are the job numbers going up, though? That just doesn’t align up. We’re seeing people quit at greater numbers than ever before. How are the job numbers going up? And the answer is that the companies that can are actually stocking up on employees the way that you and I stocked up on Purell and it kind of makes sense, right? You go to your manager, and you say, look, I have three headcount, I have three heads I need to fill. If I hire three people, I’ll be down to one in 6 months. If I hire five people, it’ll cost you a little bit more for the first 5 months but I’ll end up with three in six months, hey, boss, what we’d rather do? And the boss is saying, go hire 6 people for the three roles or go hire five people for the three roles. Overstock and we’re seeing that happen.

Now, that’s actually hurting the smaller guys because all of a sudden, you’re seeing the salaries go crazy because people are just stocking up on employees. One of our clients, they’re a consumer goods manufacturer. She’s– They’re a global head of talent. She said to me, we don’t have a hiring problem, we have a retention problem. Why? Because of just over hiring. If I sent you 100 candidates and you’re interviewed 20 of them and you want it to hire 8 of them, OK, go hire 10. So you end up with 8 or go hire 12 so you end up with 8.

Allison: The ultimate impact of doing that, what are the consequences of that other than, obviously, it’s hurting the small guys, what are some of the other impacts that you can foresee? And at what point does it turn to be not a candidate market?

Evan: Yes, so I think sooner or later, a company will say, Gee, I’ve over hired faster than I needed. I was expecting people to quit. They’re not quitting. Therefore, I have too much supply and let me right size the company. Let me lay someone off who– Look, it’s– I recruit– I scouted 12 people from my football team. They’re all good players but I only need 10. So I’m going to get rid of the bottom 2 but I can’t start the season with 12 players, I can only start with 10 players. I’m going to get rid of 2 of them. You’re going to see that happen.

Now, the good news is that I think there’s some trends that are going on today that are very illuminating. I grew up in a world where money can solve all problems and now you’re seeing a world where, hey, I want to be happy. Right? Happy was– Make Buck, make money was the goal, not be happy. If you can be happy while making money, fantastic. I grew up in a more meat– Bigger cave sort of world and I think the new generation, they want work life balance. They want experience and I think there’s something very refreshing about that. There’s something very refreshing about someone saying, hey, look, I’ll take less pay but I don’t want to come into the office every day.

I think there’s a lot of things going on there. I grew up in a world that was a very either or world, Sony or Betamax, Microsoft or Apple and now we’re really in this and both worlds you– You’re going to have lots of things but I think the exciting thing is that companies are getting to decide what sort of business they want to have. I think that pre pandemic, we ought to be all things to all people and now we don’t have to be. We could say, hey, look, if you don’t want to come work for us, we’re 100% in the office. Don’t work for us then. Go find a job where you going to be happy, or hey, we’re 100% remote. If you want to come into an office, you’re not going to do that here and I think there’s something very enlightening about that, that companies can decide what they want to be like.

Hey, we’re not going to pay really well but we’re going to give unbelievable vacation time. Go do whatever you want to do. Be happy, all these other things and I don’t have to be all things to all people. Gee, I had 20% of the people that wanted great work life balance but I had another 40%, who are completely focused on money. If that’s true, how do I balance that? How do I create this fun culture environment and at the same time, very financially rewarding?

Now I get to decide what do I want to be. I heard this great podcast of the CEO goes, look, I’m an engineer and I surrounded myself with engineers that want to get great work done and then go home and hang out their family. No beer nights, no pizza parties. Get your work done and go home and there’s something very refreshing about being able to create an organization, whatever that organization is, where you get to do whatever– You get to define the people you attract and you get to define how you want to realign your company to your priorities and then your employees priorities as well.

Allison: I recognize that just in our small market that we’re in here in Idaho that companies that were very office heavy have just completely let them all go and they are completely redefining the type of cultures that they want to have instead and then retaining better people because of the shift in the culture, which I think it’s pretty cool.

Evan: Yes, look, you know, if you took a company, we’re 70 people– About 70 people, we don’t have an office, where– We do not physically– We’re located in Manhattan. I’m in a wheat work. My office is the size of a double sized phone booth. We get together as a management team like once a month. We get a conference room and there are different people around the country.

Now, hey, if we’re saving, let’s assume that we’re saving $10,000 a month on rent, I’m making that up but what are we doing with that? Are we spending that on other things that are creating culture? What are we doing with that money? We’re trying to figure out what we’re going to do to bring everyone together sometime later on in the year. Is that part of that budget? What are you doing? How are you allocating your jellybeans accordingly? 

Allison: Yes, good analogy. I like that and then how did you come to join recruiter.com? And what were the first steps you took when you became the CEO?

Evan: Great question. I– My background is really– I started my first company at the age of 21. Right out of NYU business school in mobile computing. Early– Let’s call it I started in 89. Think of mobile in the 90s does not look like mobile today, I grew, that company got acquired by Dun and Bradstreet in 98 and I’ve done that thing a few times. I was in the payment space, I was in security space, a bunch of different acquisitions, etc. and I really wanted to get involved in a small cap company on the public side, start off on the public side and see is that more exciting, etc.? And I was brought in by one of the original investors of the company to see what I can do with the company itself.

The company really was and I started in April of 2019. I just had my 3 year anniversary, first as the chairman of the board, and then I became CEO in June of 2020, really, at the height of the pandemic, recruiter.com was a media company, like a digital media online media company, it’s sold advertisements to companies to market their stuff to the audience of recruiter.com. Recruiter.com, 3, 4 articles a day. 4 of the 10 largest LinkedIn groups, 3 and a half million social media touchpoints, 40,000 Twitter followers, a monthly magazine, all this other stuff and my thought really was, gee, you have all this, you have this giant network of recruiters, instead of them being– Instead of you marketing to them, right? Instead of marketing to them as the consumer of why don’t we make them the– Why don’t we turn them into the product? Why don’t we dignify and platform ties this audience to really help recruit talent faster?

I love expert networks. I’m a big fan of sort of the crowd. We have a crowd of people, how do you help that crowd better, perform better at the same time really? Saw Upwork and Fiverr and Uber really capitalize on the gig economy and so the question then was, well, how do you transform talent acquisition into a gig is that does that really make sense? At the same time, I really saw an industry that really just hasn’t changed and there are 2 ways to hire today. That’s it, right? There’s only 2 ways you either do it yourself or you hire someone to do it for you. That’s it and you did it yourself.

You use zip recruiter, indeed and LinkedIn and if you hired someone else, you paid them 30% of a fee or whatever your placement fee and those things made a lot of sense when you were working at a company for life. Right? It made sense when you’re working there for 20 years. It makes sense when you work in it for 10 years, probably makes sense when you work in there for 5 years but do you really want to pay a 30% of a salary to someone who might last 6 months or 12 months or 18 months, it just doesn’t make a lot of sense and doing it yourself.

You and I grew up in the world where 5 years ago, the expression finding a job is a full time job, right? That was the expression 5 years ago. You would never say that today, finding a job today is not a full time job, finding people is a full time job and so if that’s true, then how do we help everybody– Everybody’s going to need to spend money. Everyone with a company of 20 people or more is going to have to spend money on talent acquisition. It’s just too complicated now.

Now some people– I’ll use the example. I’ll use 2 examples and I’ll say, your tax return. I would just finish tax season, you could do your own taxes, right? You can actually subscribe to tools and do your own taxes but either,

1. You don’t have the time, or
2. It’s just too complicated for you to do it on your own or see. You’re worried that you’re going to make a mistake and do something incorrect.

So we hire someone to do it. We might not have a full time bookkeeper managing our personal lives but we’ve outsourced that function to a professional talent acquisition, the same thing. Talent Acquisition is– It’s going to be a regular thing that you need to use and you want to have someone that you could call up and say, hey, Fred, I need some help. A friend, I’m paying you for your services, you don’t pay your accountant. If you get a good tax with her and you pay your accountant to get the services done.

I think the other example, I would probably say is security. In the 90s, security really was the security guard that check your ID badge and now every company pays money to security whether it’s built into your email system, your firewall, your VPN, or you’re a chief security officer for your company and I think that talent acquisition and retention is going to have it’s going to march down very similar road where every company is going to be spending money on talent acquisition and retention.

Allison: In what recruiter is doing to help assist with the challenges that businesses are having? You’re saying like there’s 2 ways to do it. Have you introduced a new way to do this index on one of those?

Evan: Yes, no, great. We have AI software, you mentioned that before. We have really phenomenal artificial intelligence software that helps us find candidates. We– I– The tool is really an engagement tool and we could target an audience of people and say, Hey, are you interested in working for Allison, raise your hand if you’re interested, here’s Allison’s opportunity, here’s the offer, etc. and that helps you build these qualified and interested candidates in the absolute role itself.

But the thing that we learned is that recruiting, no matter what, is a human interaction. No one’s working for your company, whether it’s the waiter, the dishwasher, or the chief product officer without actually speaking to somebody. The question is, when does that discussion actually take place? And so recruiting is a human interaction. We actually pair our software with an on demand recruiter. We provide on demand recruiters to our clients. These are fractions, these can be anything from 10 hours a week, to 40 hours a week. Just like getting a driver from Uber, do you want me to take me from point A to point B or do you want a driver taking you all day long, etc.? And that’s what we do. We do it completely on demand. These recruiters are paid through our platform, either by the hour, the week or the month.

You’re a financial services company and you need to make a hire every 5 weeks, great. We have a– My recruiter on demand for that you’re looking just to build a pipeline of some candidates, we have my recruiter Pro, or if you really need someone to actually- You don’t know how to hire someone. You want you need someone actually take the entire process from start to finish, we do a hybrid view and it’s like 2500 hours a month plus an 8% success fee. So far, far less of a success fee than anyone else is charging and we’re doing this all with, you know, our on demand network of over 40,000 recruiters on a global basis.

We take a small fee relative to the actual fee itself. We make a lot of money for the recruiters and we combine these together along with our current communities to really find — Help find both the active candidate and the passive candidate and then provide the recruiters to make those relationships happen to make that hiring actually happen. We have a service specifically for small businesses, called myrecruiter.com. You can go to start.recruiter.com and we have a series of offerings. 3 actual offerings around my recruiter. All designed for the small business to be very simple to get started, no long term contract, etc. and depending what you’re interested in.

Allison: And how many placements are you making on a daily basis?

Evan: We don’t actually track placements, but we do a lot. We have about 80% of our revenue is recurring monthly. We have lots of repeat clients. That’s telling us that we’re doing something right. We track a little bit of it but like, aren’t the recruiters when we place a recruiter on on assignment, they actually work,, they can get an email for that company but actually, many of the recruiters that we place on assignment end up getting hired by our clients.

Allison: Sure.

Evan: We do it all the time, we actually liked it a lot. They become part of that process. They become part of that family. It’s not part of the– It’s not the intention, although some clients use it as a try and buy sort of thing but in the myrecruiter, it’s working out incredibly well, far better than I had expected.

Allison: Very interesting. Can you expand on like The Job Hopper and gig economy? How has that affected your business that you’re in?

Evan: Yes, The Job Hopper economy was actually starting before the pandemic. If you went to Silicon Valley and you saw someone who had 3 or 4 jobs and 12 years, you would actually say, wow, that must be a superstar software engineer. In fact, the opposite was true. If you saw someone who had been at the same company for 12 years, you will say, wow, they’re probably really stale. Let’s ask you that question, if you saw a resume, 5 years ago, you saw a resume of a 30 year old who had been at the same company for a decade.

Not Goldman Sachs, or Morgan Stanley, or McKinsey or Google. 5 years ago, 30 year old same company, 10 years. You’d probably describe this individual as a loyal, steadfast, climbing the ropes, committed. If you actually saw it’s now April– It’s 22, right? Spring up, 22, you saw 30 year old event at the same company for 10 years, not McKinsey, or Google, or Goldman Sachs, how would you describe that person now?

Allison: In all fairness, I think I’m of the generation that I feel like everyone should have a job change by a year 10, like I feel [Inaudible].

Evan: OK, I get it, right? I would probably use the expression. I would probably describe this person as stay as risk-averse, not interested in trying new things, etc and the reason is that we have so many opportunities now. We’re not bound by distances anymore. Think about all the opportunities that you didn’t even look at because they were geographically undesirable. Like that just doesn’t exist anymore.

By the way, mailing 30 resumes, taking off for work to go fly to accompany interview. That’s all gone. It’s so easy to apply for a job now. Applying for a job is click, click. It’s unbelievable how easy it is. In fact, if you have kids that went through the college application process, it is– Applying for a job is like applying for college now. You do one essay, use it across the board, and you click, click. It’s unbelievable and you can imagine now the size of admission departments at these big universities because they’re getting– The number of applicants they’re getting in 22 versus what they got in 1982 is just geometrically different. All around the world applying another– Well, the job markets the same, it is so easy to apply for a job now. It’s just so simple to do and so what you’re seeing happen is if it’s easy to apply for job, if interviewing is now a zoom or video interview. Right? And when you’ve eliminated the stigma, there’s no longer a stigma of leaving a company within 3 years or 2 years.

Mr. Wonderful Kevin O’Leary wrote an article back in November, begging employees, please stay with the company for at least 6 months. 6 months, there was a survey done that millennials– Some 50% had no problem leaving a company within 6 months. We have anecdotal clients that say, company, a person starts there and quits after 3 days. Why? I don’t know, who cares.

By the way, there was another article a week ago, 2 weeks ago that came out that said that millennials, they’re a survey done, I’d rather quit and be unhappy. I’d rather have no job than a job I don’t like. Now, these are all indicative of the fact that we just don’t– The notion of leaving a job for a better job is totally fine now. What this means is that the job hopper economy is here to stay. While the talent shortage is going to get resolved, the great resignation is going to slow up, The Job Hopper economy is not going backwards, we are not going back to her someone’s going to be working at a company. Again, I’m speaking in generalizations and obviously it will be edge cases but working at a company for the next 25 years, it’s just not going to happen as much as it used to happen. It’s just not going to.

And if you look at macro events in this country, we’ve never gone back to the way things were posed a macro event. I’ll give you some statistics. In the early 90s, we had a recession, we started outsourcing call centers. Now, we have call centers here in the US but so much of our call centers went to the Philippines and India and Malaysia and outside the US. Y2k, right? 19998. Oh, we have to like get all the software updated. We started outsourcing IT overseas. Have we taken that back? Did we say, hey, thanks, guys for all your y2k work, now we’re done? Or do we find other things for them to be doing? When was the last time you saw someone interview to go work inside of a data center? We outsourced to Amazon and Zohr, and all these other things.

I think they’re all these business process automation, all these things that have happened, we haven’t returned back. The new normal is not going to be, OK, now that we’re done, I’m going to go work at a company for the next 10 years. I just don’t think that’s happening and I think The Job Hopper economy is really here to stay.

Now, you mentioned the gig economy and there was some crazy statistic that I saw that like 35% of all adults in the US have a side hustle. Now, some of them might be a podcast but there is a side hustle economy now and if you’re not working– If you’re not in the office 5 days a week, you certainly have more time available. I think 50% of all Millennials had a side hustle, just incredible numbers and I think that as an economy goes being able to tap into that is really essential and by the way, I think talent acquisition is really one of those industries that would really benefit from a gig economy. 

I could be a full time recruiter for company A, doing different stuff during the day and at night, I could be doing a gig, doing talent acquisition on demand for another company, there’s nothing that stops that as long as they’re not competitive, etc. I think there’s a lot of opportunity there to really capitalize on the gig economy as it relates to talent acquisition.

Allison: I agree. I do see that trend as well. Is– Do you have any exciting new projects or advancements that you see in the near future for recruiter.com?

Evan: We’re– The answer is yes. We have really 3– The best way to think about our business from a revenue perspective is we have self service revenue, we have Enterprise offerings, and then we’ve SMB’ed the offerings as well, right?

We have my recruiter Pro, my recruiter on demand, my recruiter platinum, and then we have self service revenue. We’re going to be doing more and more self service revenue. As our tools get better and easier to use, we’re going to move them over into being self-service as well so you can self-service yourself to build your own campaigns and find your own candidates.

We’re rolling out more career communities. I’m a firm believer in the return of the niche career community. A career community is a community of like-minded or not just like minded individuals but around a certain career. If you’re trying to get into crypto, we just launched a crypto career community. Gee I want to be a crypto, I want to go to where the jobs are in crypto on. I want to be– I want to have my resume there. I want to be looking at articles on crypto. I want to be part of that community because I want my name to be there when people are looking for opportunities because the first thing I play, if I’m hiring someone in crypto, I want to see someone that actually is interested in crypto and not just interested because I’m paying a good amount of money or they want a career in something.

I think the return of the career communities is going to be very strong and we’re doing a lot more of that and I’m really super excited about all the stuff that we’re doing in the career community side as well.

Allison: I love that idea and I don’t know if I can point to anything else that has done that. So that’s pretty cool. Yes.

Evan: The good news is, I’m not from the talent acquisition space, so I’m not bound by, oh, we don’t do things like that. All right. Sure. There you go. I hear that all the time but I’ve heard that my whole career, I’ve always been involved in like new environments and new areas where just new– New for me but not for everyone else and it’s– You have this unbridled energy and passion to help do something different and better and you’re not bound by yes, we tried that, it didn’t work and you can always learn from everyone else’s mistakes but you want to create your own along the way,

Allison: For sure and then what is the best way for people to connect with you if they choose to?

Evan: Yes, so Evan, E-V-A-N@recruiter.com, it’s the best way. For your audience, I would go to start.recruiter.com. Check it out. You could look for more information there. We have all the information associated there or you could– I’m LinkedIn also. If you want to, LinkedIn to me. It’s again, it’s like LinkedIn Evan Sohn. I’m pretty earlier– Early on LinkedIn user. I remember when they launched. Feel free to connect with you that way.

Allison: OK, fantastic. Evan, thanks so much for your insights today and continue with your good work you’re doing.

Evan: You bet. Thanks so much.