Building Diverse and Flexible Workforces with AI in Tech Hiring Strategies w/ Hugo Malan

[00:00:02] [SPEAKER_01]: Well, a recurring issue on the show is always about hiring.

[00:00:06] [SPEAKER_01]: What does it look like in the talent market and how do we do a better job hiring?

[00:00:10] [SPEAKER_01]: Hugo Malan joins me today.

[00:00:12] [SPEAKER_01]: He's an expert in their area and has been focused on building those workforces that

[00:00:18] [SPEAKER_01]: are mixed type and bringing together different collections.

[00:00:21] [SPEAKER_01]: Can you use temporary workers?

[00:00:23] [SPEAKER_01]: Can you use remote workers?

[00:00:24] [SPEAKER_01]: How does that all come together on this bonus episode of the Business of Tech?

[00:00:30] [SPEAKER_01]: Today's episode is supported by Huntress.

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[00:01:22] [SPEAKER_01]: Well, Hugo, thanks for joining me today.

[00:01:25] [SPEAKER_00]: That's my pleasure.

[00:01:27] [SPEAKER_00]: Thank you for inviting.

[00:01:28] [SPEAKER_01]: Well, I want to start right at the top because I want to make sure that listeners

[00:01:32] [SPEAKER_01]: understand what the idea of a mixed labor strategy is before we even dive into

[00:01:38] [SPEAKER_01]: how to be effective with it.

[00:01:39] [SPEAKER_01]: What is a mixed labor strategy?

[00:01:44] [SPEAKER_00]: A mixed labor strategy is using different forms of labor to ultimately

[00:01:51] [SPEAKER_00]: create the optimal mix for your particular set of circumstances.

[00:01:55] [SPEAKER_00]: In other words, you will have some folks that are permanent employees.

[00:01:59] [SPEAKER_00]: You might have other people that are temporary employees and you might even

[00:02:03] [SPEAKER_00]: have firms providing various kinds of services, putting people in your

[00:02:08] [SPEAKER_00]: building or at least at your disposal under SOWs of various kinds.

[00:02:13] [SPEAKER_00]: All that together gives you your labor mix.

[00:02:16] [SPEAKER_00]: And by adjusting the various ratios between these different kinds of

[00:02:21] [SPEAKER_00]: sources of labor, you can create a more fixed or a more flexible cost structure

[00:02:27] [SPEAKER_00]: and ultimately also increase the per unit cost or decrease the per unit cost,

[00:02:32] [SPEAKER_00]: especially as you start also looking at offshore resources.

[00:02:35] [SPEAKER_00]: So that in total is a mixed labor strategy.

[00:02:38] [SPEAKER_01]: Got it.

[00:02:39] [SPEAKER_01]: OK, cool.

[00:02:39] [SPEAKER_01]: So now that we've baselined it, it feels like there's a lot of different

[00:02:43] [SPEAKER_01]: levers that you have to figure out how to get right.

[00:02:46] [SPEAKER_01]: How do you know when something should be a full time employee,

[00:02:48] [SPEAKER_01]: when it should be a part time or a contractor, when you want to be

[00:02:51] [SPEAKER_01]: comfortable with remote?

[00:02:53] [SPEAKER_01]: You've done a lot of research on what works and what doesn't.

[00:02:56] [SPEAKER_01]: Give us a little bit of sense of what is the data tell us on how to build

[00:03:01] [SPEAKER_01]: good workforces?

[00:03:04] [SPEAKER_00]: Ultimately, it really comes down to a lot of judgment in common sense.

[00:03:09] [SPEAKER_00]: The data can only tell you so much.

[00:03:11] [SPEAKER_00]: Data will tell you what is the per hour cost of different kinds of labor.

[00:03:16] [SPEAKER_00]: It might also tell you what is the attrition rate, what is the cost of

[00:03:20] [SPEAKER_00]: acquisition of different kinds of labor.

[00:03:22] [SPEAKER_00]: So those are great data points to look at.

[00:03:24] [SPEAKER_00]: But you also want to ask more qualitative questions such as what are

[00:03:28] [SPEAKER_00]: the core skills that I really need to have in-house and preserve and protect

[00:03:33] [SPEAKER_00]: because they're part of my secret source, as it were?

[00:03:37] [SPEAKER_00]: And what are skills that are somewhat more transactional in nature

[00:03:40] [SPEAKER_00]: or that I might only need for a project?

[00:03:43] [SPEAKER_00]: And those are the sorts of skills you can often more effectively bring in

[00:03:47] [SPEAKER_00]: through a staffing agency or other source of temporary labor.

[00:03:51] [SPEAKER_01]: Got it.

[00:03:52] [SPEAKER_01]: Now, give me a little guidance because most of the...

[00:03:54] [SPEAKER_01]: A lot of my listeners are going to be companies that are smaller.

[00:03:58] [SPEAKER_01]: So small staff, five, 10, 20, 30 or 40.

[00:04:02] [SPEAKER_01]: How do they make sure to balance that when it feels like every

[00:04:08] [SPEAKER_01]: higher is such a critical component because it's such a significant

[00:04:12] [SPEAKER_01]: percentage of their labor force?

[00:04:14] [SPEAKER_01]: How do you assemble the right balance when it's so small?

[00:04:18] [SPEAKER_00]: I think you still ask those same questions.

[00:04:22] [SPEAKER_00]: What's particularly notable for small companies is they can be quite

[00:04:26] [SPEAKER_00]: vulnerable to fluctuations in demand.

[00:04:29] [SPEAKER_00]: A big company is somewhat more able to smooth out fluctuations

[00:04:34] [SPEAKER_00]: and demand across many different clients.

[00:04:36] [SPEAKER_00]: But if you're a small company of the sort of size that you described,

[00:04:40] [SPEAKER_00]: then one big change in client demand could radically alter your economic prospect.

[00:04:45] [SPEAKER_00]: You want to have the flexibility in your cost structure to respond to that.

[00:04:49] [SPEAKER_00]: If you've built in a lot of fixed rigid costs, makes it much harder.

[00:04:54] [SPEAKER_00]: So it's actually in some ways more advantageous for small companies

[00:04:57] [SPEAKER_00]: to use temporary labor.

[00:05:00] [SPEAKER_00]: An area where we've seen a real growth in the use of staffing

[00:05:03] [SPEAKER_00]: agencies, temporary labor and so on is actually in startup companies.

[00:05:08] [SPEAKER_00]: The startup companies are trying to grow and scale very rapidly,

[00:05:12] [SPEAKER_00]: but they also have to be really thoughtful about how they deploy their cost.

[00:05:16] [SPEAKER_00]: So for them to remain nimble and flexible, especially if they're

[00:05:20] [SPEAKER_00]: engaging with agencies that can still get in the kind of expertise they need.

[00:05:24] [SPEAKER_00]: So they're not in any way compromising on quality or on expertise,

[00:05:28] [SPEAKER_00]: but they're retaining a degree of flexibility.

[00:05:31] [SPEAKER_00]: That actually is definitely to the benefit of small startup companies.

[00:05:35] [SPEAKER_00]: And that's why we've seen significant demand from that segment.

[00:05:38] [SPEAKER_01]: Now, it's interesting.

[00:05:39] [SPEAKER_01]: I always talk about the fact that like likes to serve like so small companies

[00:05:42] [SPEAKER_01]: tend to serve other small companies, medium sized companies

[00:05:44] [SPEAKER_01]: tend to serve other medium sized companies.

[00:05:47] [SPEAKER_01]: And one of the areas that particularly we see in managed services

[00:05:50] [SPEAKER_01]: and IT services is that we are, of course, the supplier

[00:05:54] [SPEAKER_01]: of that expertise of technology to other small companies.

[00:05:58] [SPEAKER_01]: So they are, of course, outsourcing that, offloading it to companies

[00:06:03] [SPEAKER_01]: like managed services providers to do that.

[00:06:05] [SPEAKER_01]: So they can't then further outsource it down the road

[00:06:09] [SPEAKER_01]: because that is a core competency of doing that.

[00:06:12] [SPEAKER_01]: How do you look at keeping techniques to balance retention

[00:06:18] [SPEAKER_01]: and scale up in companies that really do need to focus

[00:06:22] [SPEAKER_01]: on keeping these highly skilled people engaged over time?

[00:06:30] [SPEAKER_00]: So one way to do that is to look at sourcing your labor through an SOW.

[00:06:36] [SPEAKER_00]: If you are looking to use a third party provider,

[00:06:39] [SPEAKER_00]: typically if you're social labor through an SOW,

[00:06:42] [SPEAKER_00]: you can tap into a talent pool that really resembles the talent pool

[00:06:46] [SPEAKER_00]: you draw on if you make permanent hires because it's typically

[00:06:50] [SPEAKER_00]: a longer term assignment.

[00:06:52] [SPEAKER_00]: It's also more often including full benefits,

[00:06:56] [SPEAKER_00]: vacation benefits and other healthcare benefits and so forth.

[00:07:00] [SPEAKER_00]: So it actually resembles from the candidate point of view

[00:07:03] [SPEAKER_00]: very closely a permanent position.

[00:07:06] [SPEAKER_00]: You just happen to have a different employer sending you your W2,

[00:07:10] [SPEAKER_00]: but to all intents and purposes, you're working long term

[00:07:13] [SPEAKER_00]: at the small company and the small company gets still

[00:07:17] [SPEAKER_00]: the benefit of having a more flexible labor arrangement.

[00:07:20] [SPEAKER_01]: Now I would be remiss these particularly now as we're talking about

[00:07:24] [SPEAKER_01]: an AI is starting to be something that we're all talking about.

[00:07:27] [SPEAKER_01]: Whether or not that's automation or that's doing better with data analytics,

[00:07:31] [SPEAKER_01]: how are you finding that AI is actually impacting

[00:07:36] [SPEAKER_01]: both the hiring process as well as the makeup of these workforces?

[00:07:42] [SPEAKER_00]: That's a really interesting question.

[00:07:43] [SPEAKER_00]: I think the answer is changing almost daily.

[00:07:47] [SPEAKER_00]: In some ways, the impact is very mundane,

[00:07:50] [SPEAKER_00]: but still a significant time saving if you're involved in large scale hiring.

[00:07:55] [SPEAKER_00]: So for example, reaching out to people with customized emails,

[00:07:59] [SPEAKER_00]: well, the AI is great at taking the first cut at that email.

[00:08:02] [SPEAKER_00]: Emerging that with a contact list and then reaching out

[00:08:05] [SPEAKER_00]: in a very personalized way, AI can be very good at that.

[00:08:09] [SPEAKER_00]: If you then incorporate some kind of a chatbot as your first line

[00:08:12] [SPEAKER_00]: of interface as long as it's a thoughtful sophisticated chatbot,

[00:08:15] [SPEAKER_00]: that can help screen out candidates and screen in candidates

[00:08:19] [SPEAKER_00]: that have the right skills through a handful of simple questions,

[00:08:23] [SPEAKER_00]: but it can feel very personal and conversational.

[00:08:27] [SPEAKER_00]: The holy grail of AI application in general,

[00:08:32] [SPEAKER_00]: in recruiting spaces for a long time,

[00:08:34] [SPEAKER_00]: been the AI would ingest a job description

[00:08:36] [SPEAKER_00]: and thoughtfully partured into skills and experiences

[00:08:39] [SPEAKER_00]: and other requirements.

[00:08:41] [SPEAKER_00]: At the same time, we would ingest a whole bunch of candidate profiles

[00:08:45] [SPEAKER_00]: and then it would start matching.

[00:08:47] [SPEAKER_00]: You could even conceive of watching recruiters making the match

[00:08:50] [SPEAKER_00]: and learning from how recruiters make matches

[00:08:52] [SPEAKER_00]: and eventually taking that over.

[00:08:55] [SPEAKER_00]: Frankly, we've not really seen that done successfully,

[00:08:57] [SPEAKER_00]: except in very specialized instances

[00:09:00] [SPEAKER_00]: where either the skills are extremely simplistic

[00:09:04] [SPEAKER_00]: or where the skills are extremely precisely structured.

[00:09:08] [SPEAKER_00]: If you're only looking for a set of very specific qualifications

[00:09:12] [SPEAKER_00]: that are very precise

[00:09:14] [SPEAKER_00]: and you don't care about things like long term career aspirations,

[00:09:18] [SPEAKER_00]: cultural fit or anything of that kind,

[00:09:20] [SPEAKER_00]: then the AI can do the job.

[00:09:22] [SPEAKER_00]: But for anything beyond that,

[00:09:24] [SPEAKER_00]: and that would be probably 98% of the roles

[00:09:27] [SPEAKER_00]: that are placed out there,

[00:09:29] [SPEAKER_00]: you still need a human to take that shortlist

[00:09:31] [SPEAKER_00]: and start having conversations in both directions

[00:09:34] [SPEAKER_00]: to really understand is this the right fit?

[00:09:36] [SPEAKER_00]: Is it the right next step for the candidate?

[00:09:38] [SPEAKER_00]: Does this truly meet the client's needs?

[00:09:41] [SPEAKER_00]: Which are typically well beyond what they wrote in the job description.

[00:09:44] [SPEAKER_01]: Well, especially because I would think in a services organization,

[00:09:47] [SPEAKER_01]: career aspirations, long term engagement,

[00:09:50] [SPEAKER_01]: those are such critical components about success

[00:09:53] [SPEAKER_01]: to building a team and building a culture

[00:09:55] [SPEAKER_01]: that if it can't really do that,

[00:09:57] [SPEAKER_01]: then it's probably not a great fit in a way that's encouraging

[00:10:00] [SPEAKER_01]: because one of my basic working promises has been

[00:10:03] [SPEAKER_01]: that I don't think we're going to be replaced by AI.

[00:10:05] [SPEAKER_01]: We're more likely to be replaced by humans

[00:10:08] [SPEAKER_01]: that know how to leverage AI.

[00:10:10] [SPEAKER_01]: So in a way, that's a little bit of an encouraging thought.

[00:10:14] [SPEAKER_01]: But I want to switch gears a little bit here.

[00:10:16] [SPEAKER_01]: And I want to actually talk about something

[00:10:18] [SPEAKER_01]: about under, talk about under representation.

[00:10:21] [SPEAKER_01]: Because I mean, and by the way,

[00:10:22] [SPEAKER_01]: I want to acknowledge two white guys talking to one another

[00:10:25] [SPEAKER_01]: about tech hiring is kind of endemic

[00:10:28] [SPEAKER_01]: of what we see in the technology field in large.

[00:10:33] [SPEAKER_01]: My show, we do a survey of tech leadership every quarter.

[00:10:36] [SPEAKER_01]: And what we find is this is heavily a white male dominated space.

[00:10:42] [SPEAKER_01]: And what I want to get your sort of insight into,

[00:10:44] [SPEAKER_01]: particularly as you think about workforce creation,

[00:10:47] [SPEAKER_01]: it feels for many owners very difficult for them

[00:10:52] [SPEAKER_01]: to widen the gap and to do a better job of hiring

[00:10:57] [SPEAKER_01]: to fill to create a much more diverse workforce.

[00:11:01] [SPEAKER_01]: How do you recommend that be done

[00:11:05] [SPEAKER_01]: in a thoughtful way that focuses on, you know,

[00:11:08] [SPEAKER_01]: kind of building the right team makeup

[00:11:10] [SPEAKER_01]: and at the same time making sure that we're getting

[00:11:12] [SPEAKER_01]: that diversity of the ideas that will create high performance teams?

[00:11:17] [SPEAKER_00]: It's a great question.

[00:11:18] [SPEAKER_00]: It's something that we really care passionately about at Kelly

[00:11:23] [SPEAKER_00]: because we are a large participant in the US labor force.

[00:11:28] [SPEAKER_00]: We feel it's very much the right thing for us to do to focus on these issues.

[00:11:32] [SPEAKER_00]: But we focus on it partly because we believe in it,

[00:11:36] [SPEAKER_00]: but also because we think it makes good business sense.

[00:11:40] [SPEAKER_00]: If you speak to the business leaders in very

[00:11:42] [SPEAKER_00]: they will tell you that one of their main challenges

[00:11:44] [SPEAKER_00]: is finding the talent to do what they need to do.

[00:11:48] [SPEAKER_00]: And often it is because they're overlooking large pools of talent.

[00:11:53] [SPEAKER_00]: So there's two or three obvious ones.

[00:11:56] [SPEAKER_00]: One is simply women.

[00:11:58] [SPEAKER_00]: If you're looking in science, for example,

[00:12:01] [SPEAKER_00]: there are more female life sciences graduates than men every year.

[00:12:05] [SPEAKER_00]: And if your hiring practices are not sufficiently inclusive

[00:12:09] [SPEAKER_00]: so that you're adequately accessing that talent pool,

[00:12:12] [SPEAKER_00]: you're really not doing your business any favor.

[00:12:16] [SPEAKER_00]: Veterans is another obvious talent pool to go after.

[00:12:19] [SPEAKER_00]: These are folks who have demonstrated, you know,

[00:12:22] [SPEAKER_00]: obviously all the great skills you learn in the military,

[00:12:25] [SPEAKER_00]: but from a technical perspective, very often also the ability

[00:12:28] [SPEAKER_00]: to execute very specific protocols very precisely,

[00:12:32] [SPEAKER_00]: sometimes under difficult circumstances.

[00:12:35] [SPEAKER_00]: So for example, in the telecom space where you might be working

[00:12:38] [SPEAKER_00]: in a very remote location addressing some cell phone tower issue

[00:12:42] [SPEAKER_00]: and you might be some feet off the ground even,

[00:12:45] [SPEAKER_00]: finding folks who can do that and still be technically precise

[00:12:49] [SPEAKER_00]: and meticulous is quite difficult.

[00:12:51] [SPEAKER_00]: Veterans are proven to be exceptionally well trained

[00:12:54] [SPEAKER_00]: and qualified for that sort of role.

[00:12:57] [SPEAKER_00]: So there are many instances like this where if you think about it

[00:13:01] [SPEAKER_00]: from a business perspective and what you're trying to achieve

[00:13:04] [SPEAKER_00]: and then you start thinking more broadly about the talent pools

[00:13:06] [SPEAKER_00]: that might help you get there, suddenly a world opens up

[00:13:10] [SPEAKER_00]: that previously were not accessing sufficiently thought from.

[00:13:14] [SPEAKER_01]: So let's make this really tactical.

[00:13:16] [SPEAKER_01]: We were talking to a lot of business owners,

[00:13:18] [SPEAKER_01]: particularly small businesses.

[00:13:20] [SPEAKER_01]: What are some of the things that they can do

[00:13:23] [SPEAKER_01]: to make sure that they are widening to address that pool

[00:13:26] [SPEAKER_01]: or strategically approaching those labor pools?

[00:13:29] [SPEAKER_01]: Give us some sort of tactical insights on the things that they can do

[00:13:33] [SPEAKER_01]: to do a better job of reaching out there.

[00:13:35] [SPEAKER_00]: The often a good place to start is with the folks who already work for you

[00:13:40] [SPEAKER_00]: who represent certain talent pools that you'd like to have more well represented

[00:13:45] [SPEAKER_00]: and start an affinity group for that particular group

[00:13:47] [SPEAKER_00]: of people inside your organization and ask them,

[00:13:49] [SPEAKER_00]: what can we do to make this a more friendly and inclusive environment for you?

[00:13:55] [SPEAKER_00]: And you'd be surprised at how much you learn

[00:13:57] [SPEAKER_00]: by just asking the folks who are already on your staff about that.

[00:14:00] [SPEAKER_00]: And then you start presenting those sorts of activities outside,

[00:14:05] [SPEAKER_00]: say, well, we do have affinity groups and they actually don't just talk.

[00:14:09] [SPEAKER_00]: They do practical things.

[00:14:11] [SPEAKER_00]: And there's a, for example,

[00:14:13] [SPEAKER_00]: there might be a buddy system for somebody that we hire from a particular group.

[00:14:16] [SPEAKER_00]: There might be networking opportunities across an organization.

[00:14:19] [SPEAKER_00]: So you do these sorts of very practical things that make you a more attractive employer.

[00:14:25] [SPEAKER_00]: And then, of course, during your recruiting process, you talk about that.

[00:14:29] [SPEAKER_00]: You advertise it and you put it in your job descriptions.

[00:14:32] [SPEAKER_00]: And before you know it,

[00:14:33] [SPEAKER_00]: there'll be significant increase in applicants from that particular pool.

[00:14:36] [SPEAKER_01]: So how does this strategy like that scale down?

[00:14:38] [SPEAKER_01]: So say we're talking about an organization that has, say, 25 people.

[00:14:42] [SPEAKER_01]: Is it still appropriate to do affinity groups or are there other techniques

[00:14:45] [SPEAKER_01]: you want to use as teams are smaller?

[00:14:50] [SPEAKER_00]: As teams are smaller, you may have to think a little bit more creatively.

[00:14:54] [SPEAKER_00]: If you're, let's take that specific example, if you're 25 people

[00:14:57] [SPEAKER_00]: and you start an affinity group, but you only have one or two people in the affinity group,

[00:15:03] [SPEAKER_00]: you might not get the kind of benefit that you'd normally have

[00:15:06] [SPEAKER_00]: if you have a larger population.

[00:15:08] [SPEAKER_00]: So at that scale, it's better to pick one or two areas and say,

[00:15:13] [SPEAKER_00]: for example, we are going to make ourselves particularly attractive

[00:15:16] [SPEAKER_00]: as an employer for women.

[00:15:19] [SPEAKER_00]: And we're going to take all the steps to do that.

[00:15:21] [SPEAKER_00]: So rather than try and cover the waterfront,

[00:15:24] [SPEAKER_00]: pick an area where you feel you could both get business benefit,

[00:15:28] [SPEAKER_00]: but also where you feel you could make an impact.

[00:15:30] [SPEAKER_00]: You could pick to be a employer of choice for African Americans.

[00:15:35] [SPEAKER_00]: And so then be very thoughtful about how you present yourself in that way.

[00:15:39] [SPEAKER_00]: If you think that makes business sense for you.

[00:15:41] [SPEAKER_00]: Often that's tied to the location that you're in.

[00:15:45] [SPEAKER_00]: And if you happen to be in a location where the demographic

[00:15:48] [SPEAKER_00]: leans in a certain direction, well, positioning yourself well

[00:15:52] [SPEAKER_00]: for that particular demographic is a great place to start.

[00:15:55] [SPEAKER_00]: But I wouldn't start by trying to create 20 affinity groups

[00:15:58] [SPEAKER_00]: if you have 25 employees.

[00:16:00] [SPEAKER_01]: Right. Makes sense.

[00:16:02] [SPEAKER_01]: So Hugo Milan is president of Kelly Science, Engineering, Technology

[00:16:05] [SPEAKER_01]: and Telcom, which is an operating segment of Kelly

[00:16:08] [SPEAKER_01]: that powers tomorrow's innovations with today's brightest talent.

[00:16:12] [SPEAKER_01]: He leads a team of workforce solution specialists

[00:16:14] [SPEAKER_01]: who partner with leading organizations to position them ahead

[00:16:17] [SPEAKER_01]: of industry trends that are shaping their talent needs.

[00:16:20] [SPEAKER_01]: Hugo, I really appreciate you joining me today.

[00:16:23] [SPEAKER_00]: My pleasure, Dave. Thanks for the conversation.

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