Welcome to Take It from the Top, a podcast brought to you by the Recruitment Innovation Exchange (also known as RIX). On Take It from the Top, we interview leaders within the recruitment industry to discuss various pressing topics within the sector.
This week, Andrew Karpie, Research Director of Workforce & Services Procurement Technology at Spend Matters, joins Vinda Souza, Vice President of Global Communications at Bullhorn, to discuss that while many firms are increasingly using technology to streamline processes, the most successful firms will be the ones that can leverage it to innovate and drive new business models and services.
Click on the image to Tweet it.
Welcome to Take It from the Top, a podcast brought to you by the Recruitment Innovation Exchange (also known as RIX). On Take It from the Top, we interview leaders within the recruitment industry to discuss various pressing topics within the sector.
Vinda Souza (RIX): Could you share a bit about your career and how you got into this space and explain to us what it means to be the research director of services and labor procurements? I’ve known you for almost a decade and you’ve been covering this space pretty intensely, so I’d love to hear about your trajectory.
Andrew Karpie: Absolutely. I’m a relative newcomer to the space and have just recently gotten more involved after having had a career in technology and services businesses in varying capacities over quite a long period of time. About eight years ago, I decided I wanted to have less to do with management and more to do with research and analysis, so I joined Staffing Industry Analysts (SIA) and became involved in looking at technology and changes in the staffing industry that were occurring and became focused on online platforms. I was probably one of the first analysts to do that at the time and have been covering that area since.
About five years ago, I joined Spend Matters and I’ve been working as the research director of a contingent workforce and services procurement solutions. Spend Matters is a research and advisory firm that focuses on technology and innovation in the procurement area, which is broad and extends beyond the contingent workforce, but it does include it and that’s the area that I’ve been covering mainly from the enterprise buyer perspective.
RIX: Love it. Andrew, obviously knowing you through your experience with SIA and now at Spend Matters, you never pull any punches, which I respect. One of our core themes for next year is around future-proofing your business in a changing macroeconomic landscape. And you’ve said in previous research reports that staffing firms have been increasingly using technology for process streamlining but have not yet been innovating in terms of business model products and services. I’d love to hear more about that and what you think firms need to do in order to get ahead of the competition.
AK: We’ve discussed that staffing firms first began automating not too long ago, maybe about 20 to 25 years ago with ATS solutions. And from my standpoint, basically, everything technology-wise that has been done from that time to today has been in support of the standard conventional temporary staffing model. There have been technologies that obviously have been applied in the recruitment area–ATS solutions have expanded to full staffing solution suites such as Bullhorn, and overall, there’s been very little use of technology to drive new business models and new services.
RIX: It’s interesting you say that. You talk about not necessarily evolving beyond the standard issue of ATS centric mindsets and then within temp staffing, but what about the expansion of the temp staffing industry itself? We’re seeing new labor models, new ways of engaging with talent, statement of work, the onset of digital staffing platforms, candidates, self-service portals, talent aggregators, and of course, the ever nascent but always on the horizon operationalization of artificial intelligence. Are we actually sort of stagnating in this respect or has there been more progress than maybe we’re seeing on the surface?
AK: There’s definitely been an ongoing acceleration of the use of technology and investment in technology, something of which Bullhorn has probably seen. What I was really referring to was using technology to innovate in terms of new business models and services. But to your point, there’s certainly been a significant consumption of technology and I think that where we’ve seen a lot of that is in the area of recruitment–talent acquisition and also the use of big data and analytics at the same time. That’s still in a relatively early stage.
RIX: What was the last disruptive technology according to you? I know each of us has a different opinion on this.
AK: I think the last disruptive technology was the ATS. But beyond that, it seems to me that most everything has been fairly incremental. I wouldn’t say disruptive because disruptive really would imply that firms that are using these types of technologies or solutions are going to become visible for their breakout performance. And we just haven’t been seeing that.
RIX: We have a tendency to herald the next big thing and sometimes it’s just a whole lot of nothing. It’s interesting to see that in ATS as you mentioned, has been around for about 25 years and that’s still the biggest show in town. Do you think we’re ever going to get past that in the near future?
AK: Yeah, I think so. At the end of last year, a company called Shiftgig, which was an online marketplace platform for the hospitality industry, made an interesting pivot and kind of shed its staffing operations and pivoted from being a marketplace type of business in 12 different markets into a pure-play technology solution aimed at staffing firms. And a part of the deal in that pivot, there were two staffing firms involved, LGC Hospitality and Headway Workforce Solutions, and they had been users or were otherwise connected with the Shiftgig software.
And when Headway Workforce Solutions acquired the staffing operations of Shiftgig, they also continued to use the Shiftgig online platform and have since gone into providing that platform to other staffing businesses. What I find interesting about it is that staffing businesses are not so much using it as an external marketplace. They’re using it within their own staffing businesses as a way to accomplish a number of different things, but mainly to compress time by allowing their clients to have more upfront access to the workers that the firm is able to offer. So rather than doing a job rec, the clients are able to look into the staffing firm’s database and identify workers that they would like to hire and press a button in effect and get that worker engaged through a mobile application.
RIX: So it’s like talent à la carte?
AK: I guess you could call it that. Talent or workers on-demand in an industry that really does need to have timely placements. And in any case, there’s a whole lot that goes along with that, but it’s really a hybrid of the traditional staffing model–staffing companies remain in control of their workforce and are responsible for talent acquisition, but it’s a much more evolved model that has many benefits for all of the parties involved. We don’t know where that’s going to go, but I think that would be a case of using technology to innovate and change the standard model.
RIX: That’s interesting. And it’s kind of on the subject of differentiating between incremental improvements and then potentially just sort of large scale disruption. I’m thinking of artificial intelligence. I know that it’s nascent, but I would argue that that’s the most recent disruptive technology, both in staffing and pretty much in every application one could imagine. We do annual research every year, a Global Recruitment Insights and Data (GRID), And that research found that 55 percent of staffing professionals feel that artificial intelligence will have a positive impact on candidate and customer engagement. Do you find that plausible or perhaps a little bit optimistic?
AK: Yeah, I definitely find it plausible. Of course, applications of technology don’t always work the way they’re intended, but it’s certainly plausible. My view of the use of AI and machine learning in the recruitment and workforce management space is that it’s been largely applied to matching and being able to identify candidates and create shortlists of candidates, and that has been valuable. And one of the key outcomes that we’re looking for is being able to reduce the time the recruiters are using or spending on dead-weight tasks. And to that extent, I think that has helped. But I think that the full power of AI has yet to be realized.
I think what AI is good at and is being able to look at data and find new patterns and arrive at new insights. Going back a bit, I think about what the company Entelo was doing quite early in terms of being able to identify passive candidates by keeping track of data in the market. Basically, its AI was looking for certain characteristics in their profiles for workers that might indicate a higher probability of them being passive candidates.
There’s a whole lot that AI will be able to do. There’s also the use of chatbots, which are still in a pretty early stage, which I think the jury is still out on how that will work. But we’re also going through a generational change and I think new demographics may be more prone to view chatbots or any interactive form of AI as normal.
RIX: That’s fair. As an expert in the area of procurement, can you talk a little bit about some of the technologies that you see firms hedging their bets on?
AK: In terms of contingent workforce and procurement, that’s another area where frankly I don’t see a lot of innovation going on in most companies. Contingent workforce in procurement and technology still generally means VMS solutions. But there are some outlier companies that are going beyond that.
RIX: And you wouldn’t define VMS as disruptive?
AK: It was disruptive, certainly. And maybe it’s still being disruptive, but it’s a 20- to 25-year-old solution. I think there are a number of interesting things going on in the enterprise area of contingent workforce that I would mention and one of those is the question of what part of the organization is going to be more involved in managing contingent workforce and the sourcing of it and engagement of it? Whether it’s going to be procurement or HR, or if it’s going to be both. And I think that’s where we’re at a point where depending upon whom you talk to among larger enterprises, apparently, some of the data reflect that it’s about a 50/50 split today in terms of which organization has the most influence over the sourcing and management of contingent workforce.
But I think that issue seems to be becoming a more prominent one and more topical one. In a number of indications, we’re seeing some of the major VMS solutions being acquired and becoming a part of procurement solutions, which reflects one shift and may be appealing to many companies. And then at the same time, we’ve been seeing HR organizations in many companies, particularly in tech companies which tend to have a people organization and a chief people officer, are definitely seeing the importance of the contingent workforce and being able to manage contingent and permanent workforce into talent. This is something that’s not so much technology-driven, but it’s something that I think is going to impact the technology and how it’s used and how it’s invested in on the enterprise side.
Another thing I would point out is that a number of years ago a new type of solution appeared on the scene called FMS (freelancer management system). And that concept has evolved a bit, but it’s a platform that it enables direct sourcing of contingent workers, independent workers, and the organization and management of them within talent pools. And if there’s one area in terms of technology and process innovation or a different type of model for procuring contingent talent, it would be in that area. There are a good number of solution providers that have cropped up and an increasing number of companies and organizations that are really focusing on this. And I’ve talked to some providers and we’ve been seeing an acceleration of interest in adoption. That’s been occurring really just in the past year and a half or so.
RIX: Interesting, Andrew. I’m going to give you another opportunity for heartache. Do you see the market expanding or contracting next year? There’s been a lot of talk about a potential recession already happening in Germany.
AK: Yes. So you’re talking about the staffing market within the staffing industry. There seem to be some indications of some cooling off in terms of just looking at the staffing industry itself, although the picture has been mixed. But I think the probability of a severe slowdown or even a recession is becoming pretty high. And if I were a betting person then I would probably bet that we’re looking at a global recession in 2020 and I expect some of the typical impacts on the staffing industry, although it seems that over time the cyclical nature of the staffing industry and the extent to which it moves with the business cycle may be changing. So it’s hard to predict what we’ll see in the staffing industry in 2020.
RIX: Either way, I’m sure it’s going to be an interesting ride.
AK: I think it’s going to be interesting.
