Founders' Playbook: Revolutionizing Recruitment Technology

This week, I had the pleasure of connecting with 5 early-stage Founders in the HR Tech and Talent Acquisition SaaS space. Others reach out almost daily to ask questions, pitch their product, or connect with decision-makers I know in the tech sector.

What do they all have in common?

💻 Each has been a candidate, manager, and/or interviewer throughout their careers, and has first-hand experience with friction in the hiring process.

Why Recruiting Tech?

Answer: Opportunity and Necessity.

• Gallup's 2023 State of the Global Workplace: Global Insights reports, that 51% of employees globally are passively or actively seeking new jobs (based on ~122,000 global respondents)
• Techcrunch published SignalFire's State of Talent report 2023 (written by: Heather Doshay) highlighting the heartbreaking fact that nearly 1/3 of a million (327,245) tech professionals have been laid off between Q1 2022 and Q3 2023.

⚡️This means literally millions of employed and unemployed professionals are looking for work (scope/scale, opportunity) with fewer jobs available. Recruiting technology is both ripe for innovation in the age of AI and a necessity for smooth, efficient, and effective hiring practices.

📈 These Founders products (below) aim to reduce friction and improve human efficiency and experience:

➡ Candidate experience

➡ 'Smart' Applicant Tracking System (ATS)

➡ Interviewer tools with Large Language Model AI algorithms (i.e. Generative AI)

➡ Reducing cycle time and increasing candidate experience (i.e. Time to Fill) with AI automation

➡ Creating 'Diagnostics' tool packages for Recruiters that assess systems and process efficiency opportunities in real-time

🔑 What they asked:

❓ Based on your expertise how do you see this product improving current Recruiting best practices?

❓As a Recruiting Leader, does this tool touch on friction areas you care about?

❓Any thoughts and/or ideas you can share to help improve the product?

🚀 Tips I shared:

1️⃣ Know your audience: Recruiters want to reduce manual 'mouse clicks', processing, and the number of systems they use; Recruiting Leaders want fewer systems and less manual work, which in turn increase the KPIs of their teams. Bonus points: We also need to see real-time analytics that measures: NPS, Diversity pipeline, funnel metrics, Time to fill, Source of Hire, time in stage, offer acceptance, interview to offer, dropout rates; HR focused - Quality of hire, cost per hire...to name a few)

🖋 How the product will integrate (i.e. sit on top of the ATS, extension, replacement) is very important. Security teams want to know whether your product is seamlessly compliant and secure; Operations, Procurement, and TA Leadership want to know how much will it cost, what problem/s it solves, ease of integration, after-launch support, Enablement training, adaptability of the tool and general ROI expectancy.

🖋 Be able to clearly answer each of these before setting up any RFP calls. Leaders (like myself) are pitched constantly on the next shiny tool. We have as little time as you do to spend doing our own research about the product features.

2️⃣ Value Proposition: Ensure your value proposition is clear and backed by data (even if the sample size is small because you're just getting started). Recruiting and Operations functions live in data and make decisions daily based on it being accurate. Without it, the investment isn't sound and investors may see risk and no reward.

3️⃣ Demos: Potential clients want to speak to the Engineer, Product, Operations, and Support leaders (not as much the Salesperson)...each of these (or as many are possible) should be on any demo you do. I've been on too many demo calls to count where questions that are core to the value proposition for Recruiting go unanswered because the Engineer couldn't speak to it or the Product person wasn't familiar with how the backend system was built.

4️⃣ Internal Mobility: Does your product focus exclusively on external hiring? If so, consider digging into how it could benefit internal hiring processes with prospective clients. 2023 has been a tough year for the tech sector and TA in particular. Companies want to do more with less, which includes who they hire or don't for the few roles they have available. Internal hiring and ATSs are notoriously bad at handling candidate experience, ease of process and generally marketing jobs across the company. Solve this for both external AND internal hiring processes and your product value just went up 2x or more.

4️⃣ Inch deep mile wide or inch wide, mile deep: Once you understand the tech landscape you're attempting to disrupt, then you need to decide if you want to specialize in one particular area or take on the 🌎. My advice would be to start with the most common customer pain points and build a service that can be seamlessly expanded upon once you've landed your first round of clients. Don't bite off more than you can chew in a highly competitive vertical.

🔍 Final Thoughts:

In the 15 years I have been in Recruiting, the ATS and Recruiting tech generally have left something to be desired. Data capture/recall, search, process flow, reporting, and privacy are all gaps and no one ATS does it all, well. If your product solves any or all of those challenges make sure potential VC and PE firms have your # because this space needs more innovation.

Widely used ATSs out there: Greenhouse (medium to large scale & simple UX; integrates with most new tools), iCIMS (large enterprise scale; Good Search capability); Lever (flexible with company size; Resume parsing; decent database search capability)

Also Notable: Taleo, BambooHR, SmartRecruiters, SuccessFactors, Workable

1️⃣ Each Founder I talked to and their products have a niche, some smaller, some larger but they all touch on areas of Recruiting that need improvement.

2️⃣ There are hundreds of other companies building tools and founders trying to crack the code in Recruiting tech. Being clear on what sets your company/product apart and having the tech to back it up will be the difference between landing investors, RFP, and demo meetings or not.

3️⃣ Study the leading disruptors in this space to understand what they offer, why it's caught on, and learn what areas you can further iterate.

🚀 Disruptors to follow: Findem.Ai (full suite of AI tools, analytics, search, planning, and more); Brighthire (streamlining end-to-end hiring processes with AI); Karat (connecting humans and predictive analytics to save companies time in interviewing and hire the right talent); Seekout (specialize in AI-powered intelligence for Talent Acquisition and Talent Management); Paradox.ai (Conversational AI-built ATS, scheduling, Mobile integration, interview scheduling and more)

To the Founders I spoke with and the many others diving into the deep end, I applaud you! Recruiting as a profession needs automation, faster cycle time, and better analytics. You all have a chance to improve the experience for millions of people each day. Pretty cool!

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