How Has The Recruitment Technology Market Been Shaken Up By Covid-19?

By Tony Restell

I recently had the opportunity to interview Jonathan Kestenbaum of Talent Tech Labs. I really wanted to uncover what impact the Coronavirus pandemic has had on the recruitment technology landscape. How have recruiters investments in recruitment technology been impacted, what are some of the changes we've seen and what are some of the priority areas for recruitment technology investment right now?

The interview is really enlightening and you can catch it in full (~9 mins) below.

Watch the full interview

Here's the full video, a transcript of which follows underneath

Interview Transcript

Really delighted to have Jonathan Kestenbaum with us, Co-Founder of Talent Tech Labs.

Jonathan, thanks so much for joining today. Do you want to just say a couple of words about your company, so people know what it is you do?

Sure, awesome. Well, thank you for having me really excited to be here today.

I run an organization called Talent Tech Labs. We are a research and advisory firm focused on talent acquisition technology.

We advise heads of talent of large enterprise companies and CEOs of large staffing firms on what emerging technology they should leverage within their business to become a more efficient recruitment function.

Fantastic. I can imagine you've probably seen quite a few changes in recruitment since the pandemic first hit. What kinds of things have you been seeing?

Well, first of all, I live in New York, which is the centre of the pandemic here in the US and so for our organization, March 12th everyone went remote. And actually, our clients all went remote. The whole world went remote.

And so, what have we been seeing? Well, one is large organizations, even now are still walking a bit on eggshells as to what the future holds. They're unsure of, you know... is talent acquisition going to be less relevant, because the economy is going to be in a depression?

Are they going to get laid off? Are they going to have to lay off their teams? For the most part, the organizations we work with did not have major layoffs.

There are new challenges that came about, technology challenges that came about as a result of the pandemic.

So just some examples, the courts were all closed in the US. So you couldn't run background checks. Hiring interns, running virtual internships. I mean, that was something that our members were worried about. How are we going to do that?

For the most part, most folks are leveraging video interviewing in some way, shape or form within their Orgs. So, it was just about leveraging it in a more meaningful way, so that wasn't such a challenge.

Job boards, they don't have a location for remote. So you want to distribute now job ads on job boards, it errors out. You can't distribute job ads on job boards, you have to makeup locations and then write remote in the job description.

So, there's a lot of interesting things going on.

I used to own - and I sold - a job board and it hadn't even crossed my mind that that would be an issue. Now you say it, it is totally obvious!

I mean yeah and there are hundreds more issues that have come up. The larger building blocks of, how do I run a recruitment function remotely? A lot of those have been solved for the more progressive organizations.

They've been leveraging technology, like video interviewing, a new age applicant tracking system, candidate relationship management systems, which enabled them to work remotely. And many of them had remote workers already, especially on their sourcing teams. So this was just taking the training wheels off.

So I guess that brings me onto one of the key things I wanted to ask you. Which is, what kinds of investments in technology are you seeing recruiting teams prioritising now? Has that changed? What's hot right now?

Look, some of the areas I mentioned like the fact that the courts are closed for background checks. The fact that job boards can't post, a remote job today. Those are not big technology challenges that someone's going to solve, because they go away. As soon as the job board wake up to that issue. As soon as courts open, they go away.

So no one's going to go and solve those challenges in the short term. We are seeing some interesting work being done around virtual internships, virtual events, which I think is exciting. And so I anticipate you'll see some capital invested there... but things haven't changed significantly.

We're in a market where you're seeing significant consolidation around the technology vendors. I mean, this just accelerated that. So you're still going to see venture capital investors investing cash, because, frankly, let's call it a Series A / Series B company that has traction in the market and an investor can get basically a deal, because of a lower evaluation and see that there is enough runway for this organization to make it past the pandemic. Then, they're going to be deploying capital in those scenarios.

I think less in the early stage, because who knows how long it's going to take to get through this. And if you have no path to revenue, I think that'll be challenging. And new firms are still doing roll-ups because you're going to see a lot of companies run out of cash. Well funded. These awful ideas that just can't sustain themselves.

Yeah, okay. So any particular investments you're seeing standing out as things that the companies you're interacting with are prioritising right now... Anything stand out?

To think through some of the client requests we've gotten recently? No, I don't think much has changed. Look, I'm very surprised.

Really? That's very interesting.

I was nervous. We're in the business of advising large corporations on talent acquisition, in a down market where you're not hiring. The question is, is our advice still going to be relevant to organizations and what we've learned is actually even more relevant. Our existing clients are looking at how to do more with less.

And so they're trying to figure out how they could leverage technology to close the gap given they are not going to be able to hire new people on their team for the next couple of months

New clients are still focused on this digital transformation. How am I going to enable my company to not have to focus 100% on people, especially where computers can do a better job. So that's been surprising to me. But at the same time, it does make sense.

Yeah, absolutely. And, anything else? Any other surprises that you've seen in the last months in terms of how recruitment teams or candidate markets are responding to everything that's happened?

A number of organizations have come together to try to build these shared talent networks And I would argue that we've seen the model before. For the most part, the only way shared talent network works is if it's hyper-focused and hyper-local. So hyper-focus on one type of role where everyone is sharing the same kind of talent and then hyper-local in an area.

So if you need to hire talent in that area, you all can, it's easier to scale that. And so, I think the ones that survive those are going be more successful than others. I think the big challenge, though, is corralling folks into a pool where there are no jobs.

It's a challenging time, but, I myself am optimistic about the future, our organization as a whole. We believe even with everything going on with the protests in the US. And Black Lives Matter and, we hold an optimistic view that, the world will again come to a good place and change will beget opportunity. This is a positive thing for society. Generally, we'll be able to move past everything.

Yeah, absolutely. Well, Jonathan, that has been really interesting thank you ever so much. If people want to find out more about your company or get in touch with you. What is the best way for them to do that?

So yeah, we have a URL -- TalentTechLabs.com -- You can go there or you can email me. My email is [email protected]

Fantastic. Well, thanks a lot for your time and really great insights. Thank you.

Awesome. Thanks, Tony.

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