Radical Research 11 – Insights into Conversational AI for Talent Acquisition

Madeline 0:05
Hi, everyone. Welcome to another episode of Radical Research on the HR Happy Hour Podcast Network. My name is Madeline Laurano. I’m the founder of Aptitude Research, and your host here at Radical Research. And I’m thrilled to be here joined by Josh Secrest who is the VP of Marketing and Client Advocacy at Paradox. Paradox is a leading conversational AI provider if you’re not familiar with them, and we’re going to talk about some new research that we did together, we’re going to talk about how conversational AI is transforming talent acquisition today. And, we have a lot to cover. So Josh, welcome. Thank you so much for joining me.

Josh Secrest 0:43
Thanks for having me.

Madeline 0:44
Great. So Josh, when we first met, you were at McDonald’s, and you were really at the forefront of TA transformation and innovation. You were using conversational AI before most companies probably understood what it was and what it did. And did you know, something amazing and innovative with McHire. And we’ll kind of talk about that. But it’s been quite a year, this is all pre pandemic, and now the whole world changed on acquisitions. Maybe you could share with us a little bit about what you did at McDonald’s, and also how conversational AI, from what you’re seeing has completely changed in this past year.

Josh Secrest 1:23
Yeah, I’d love to. So I had joined McDonald’s a few years back and was met by a leadership team that was transforming kind of all parts of the restaurant you from automation for customers going through drive thru to how do you order at a kiosk to deliver through DoorDash. And what was was pretty clear was how we were doing. Recruitment was pretty archaic, relative to a lot of the modern tech and experiences that our customers are seeing elsewhere. And on top of that, there was you know, with millions of employees and millions of hires per year, we were noticing that understaffing was pretty detrimental to the business, you know, you’d have slower ticket times you’d have more turnover in a restaurant, if you weren’t properly staff that you could have lower customer satisfaction. Um, so it became a really large business issue that we were able to look at an address kind of from these couple different angles, how do we modernize this? And how do we innovate so that we almost get to generation skip, not just get 10% better, but actually, really improve our business based on how we can staff? How do we make it almost a competitive advantage relative to our competition.

Josh Secrest 2:47
So that’s kind of what set us off on a path to really transform and ultimately find conversational AI. And so we were able to partner with with Paradox within restaurants is now you know, McDonald’s has over 10,000 restaurants, within the US on Paradox, and, you know, be able to really transform that process very seamlessly. So our focus was, how do we make this as simple as possible, and as fast as possible for our candidates to be able to go through at McDonald’s and since what Paradox is really focused on. So first is that, you know, what’s the fastest process that you can send a candidate through that feels simple and easy for them. And this idea of being able to text to apply or use a QR code just felt super easy. It’s how candidates live. And it’s how people live and communicate. And so to be able to implement that within a candidate experience was really cool and just felt really seamless. What the unlock, though for us, it was carrying that throughout the entire process. So not only allowing for candidates to be able to apply, but actually go through screening through chat, schedule their interview through chat, even receive offers and onboarding. And that’s what became this platform that McDonald’s calls McHire. And for Paradox we use, you know, kind of throughout franchise populations and hourly populations to make, like hourly hiring just really simple, intuitive and in lightweight for our hiring managers.

Madeline 4:31
Yeah, I love when we first talked like when you shared how you built the business case for it, because, you know, there weren’t a lot of examples at the time of companies using this. You probably didn’t see that from a lot of your competitors, but you said like hiring managers, once they saw it and experienced it, it was really easy to to build that business case, which is very unusual for for tech.

Josh Secrest 4:54
Yeah, I mean, the business case was any fund to be able to create you know, again, for a lot of our clients on Paradox side, and when I was at McDonald’s, you know, you could see how much your people drove your business and not having staff, how much it could be detrimental to your business. So I think there’s one been a really great unlock over the last few years and you know, TA professionals and all of us getting a lot better at building these business cases. For us, there are a few pieces that were just like huge unlocks. One was restaurant managers time. And again, this goes across a lot of our clients where you have a manager within a location, whether that’s a retail store or a restaurant. And when they’re down headcount, you they have 10 other things on their plate. Now, this adds 11 and 12 things, you know, additional things to be able to plug holes on. And so we wanted to really be able to return time to them, not just measured in minutes, but like hours, how can we put tech in place that they want to actually use in to make their them that much it easier to do their job and better at doing their job. And so this idea of automating almost the full amount of the recruiting process pretty much up until the point of interview, and then after for onboarding and offer was really compelling.

Josh Secrest 6:16
So we’re starting to see retailers and restaurants save four to five hours a week for those managers by being able to automate all this and that time can then go back to you, helping customers training, onboarding, some really important pieces within the business. So that was a big unlock for us. And then the other side was on the candidate front where you know, and right now, I think the reason conversational AI has really come to the forefront, is, you know, everybody’s in demand for, for candidates to be able to hire and staff and what we were able to find was just how much higher our conversion rates were, by being able to make the process really simple. So the simplicity of it was, you know, going from an application that could have taken, you know, 20 minutes down to one and a half to two minutes. Taking a scheduling process that could take two to three days down to one to two minutes. And taking a hiring process that was taking us two weeks down to two days. And so that served to one keep talent in our pipeline quicker and faster. And it allowed for us to get better quality candidates. And really just kind of improve the process across the board. So we kind of got to see value from both both ends, more candidates, higher quality candidates, and then a return to time, a return of time in a significant way. Again, hours, not minutes to our restaurant managers.

Madeline 7:49
Yeah, it’s so interesting. We’ve talked so much about the high volume hiring and how conversational AI is completely transformed that. And you know, I love how you talk about, you know, both sides of the coin, like the the restaurant managers experience and the candidate experience. Where are we at today with high volume hiring. I mean, this is the topic everybody’s talking about this is, you know, the issues, we find that over 60% of companies have some high volume needs. When you think about conversational AI, and how it’s being used and the adoption of it. Are we at a place where this is what high volume companies should be using? Are they still using their traditional ETS to try to support them?

Josh Secrest 8:30
Yet, we’re at a point where even just the last two years, and I think your research really shows that it’s become the dominant way to hire talent within these high volume hourly spaces. And it’s true for a couple different reasons. I mean, one, back to this idea, it’s truly a competitive advantage, and potentially a competitive disadvantage to not have it and part of that, and I know I’m coming from Paradox and talking about getting to see it firsthand from the McDonald’s side. The piece it’s so intriguing is with limited candidates out there you have to be fast and simple. And so the fast pieces how quickly can you get a candidate in once they’ve showed some interest in your role? How fast can you interview them and get an offer in their hands. So the the companies that are gonna be able to be the fastest they’re gonna have higher quality candidates, higher show rates on day one, potentially even higher retention over their first 3060 days, because you’re getting the the in those initial candidates so to be able to move fast is is is key and provides a huge advantage.

Josh Secrest 9:37
The second piece is that ease of use, right? You having a candidate who you know as we see indeed numbers and and a lot of the different job boards say your candidates are applying to 12 1520 different jobs. Okay, so yes, it needs to be fast, but it needs to be easy for the candidate so that they don’t drop out of your interview process. And we’re seeing this so many are At least I saw so many different hurdles, that are kind of putting the candidates way, whether that’s a long application, whether that’s a disjointed interview process, meaning you’re not hearing back about an interview for two or three days, or their logins or passwords. So yeah, I mean, to answer your question, it’s, we’ve seen an influx of interest within paradox. But you’re also seeing, you know, as you’re going into retail, hospitality, transportation, restaurant, that this conversational AI is just really taken off because of its ease of use and simplicity.

Madeline 10:37
Yeah, and if you think about, like, what the alternative is, if somebody is not hearing back from an interview for a week, and they don’t really know, when the interview scheduled, they’re gonna find another job. And it’s that rare, it’s that situation that companies just can’t they can’t risk that anymore. I mean, I think, you know, if I just think about the experience, like if I’m going into McDonald’s, and I, you know, am interested in applying for a job, and I understand that they’re hiring, then to be able to do that right on my my mobile device in the parking lot, or sitting at the restaurant is such a better experience than what I have to wait till I go home, you know, experienced through an ETS system, and, you know, get super frustrated and just forget about it. Go somewhere else. I mean, yeah, one? Yeah. I’m sorry. No, it just doesn’t make sense that we’ve kind of been putting these high volume candidates through the same experience that we would expect, you know, an executive to go through.

Josh Secrest 11:33
Yeah, it is one of my favorite stories from from one of our clients, and in quick service is the drive thru test, which is you they have a some signage right at the point where you place an order, like just pass that. And then they like being able to see that the applicant safely can actually order and be able to fill out their application by the time they actually pick up their food. Yeah, so I mean, when you think about that, it’s that easy and seamless. And that’s really what it needs to be. It’s how do you capture the candidate, right when it’s top of mind, and then make it simple and fast enough where they don’t just initiate their application, but they follow through with it, because then it just gives you a leg up to to be able to get to that candidate really fast. So on top of that, what we’re starting to see, when that happens is then restaurant managers being able to schedule, same day interviews as someone who’s applied and you know, again, is you start to see, show rates, show rates go way up, if you’re able to move that fast, because you’ve, you’ve caught them at their point of interest. So I totally agree. I mean, it’s just, once you see that type of conversational AI, it’s so intuitive. It’s easy, there are fewer points where someone can drop off between the efficiency and follow through rate. You know, it just it adds a lot. You know, I think it It adds a lot of applicants to your pool, and it makes you a lot more competitive with those applicants.

Madeline 13:02
Absolutely. So, we know within high volume, this is the competitive advantage. But what about for corporate hiring and those recruiter lead experiences when you have recruiters, you have a team of recruiters, you know, where are we at today? I mean, I see tremendous benefits. We’ve done this research, and I know companies that use conversational AI, on the corporate side, are you seeing an increase there? And is this the same type of transformation that we see in high volume?

Josh Secrest 13:29
Yeah, it’s massive. And it’s the same type of transformation? You know, I think there are a couple pieces that I think are leading to pretty high growth within this professional market to one is some teams reduced in size from a recruiter count during COVID, or had been slow to be able to ramp up and in pretty consistently, you’re trying to do more with less and across like an increasingly competitive talent set that you’re trying to recruit again. So again, how do you get a competitive advantage for those recruiters. And yeah, I think this idea of every recruiter being able to have an assistant to be able to move fast with candidates and most importantly, kind of spend your time in the most high value places with those those those candidates is really critical. And I think that’s where conversational AI comes in. So one of the my favorite use cases for conversational AI is scheduling within within professional I think it it can run the whole whole path that scheduling you, the back and forth of scheduling screens of scheduling complex interview schedules, you can just be a drain either on your coordination team or on recruiters themselves. And it’s taking sometimes a day, sometimes multiple days to get that set up.

Josh Secrest 14:51
And it’s taking away some precious hours that I would have rather had my recruiters spend on sourcing strategy partnership with our hiring. managers, you know, really digging in deep with our candidates, either from a selection standpoint or kind of the wooing, and selling to make sure that we we, we get that candidate to become an employee and being able to spend more time in those those areas. So that’s where we’re seeing a ton is, is being able to automate portions of the process, really heavy hitting within this the scheduling piece, and then being able to carry on the columns to answer questions or get someone on boarded. That’s just really supplementing the recruiter a lot more in the professional space, I think that’s probably the biggest difference between hourly and the professional space is the assistant or this conversational AI really being a support to the recruiter in this recruiter lead environment. Whereas an hourly, you can pretty much automate probably 95% of the process, you in some locations, take a distribution center, you can even see 99 to 100% of the process be automated. Whereas that professional environment, you usually typically you’re gonna use it more as that supplement that assistant to make the process go faster, smoother, and take a lot of those like, we caught almost like that, that bs or boring stuff off their plate to be able to allocate their time to more high value items or initiatives within the recruiting process.

Madeline 16:31
Yeah, it’s so interesting. And I think recruiters like there have been layoffs that are in a lot of different companies on the recruiting team and the talent acquisition team, and they need more support than than they’ve ever needed before. So I think it’s, you know, tremendously valuable in that aspect. But I think that candidate side is so interesting, too, because I heard a couple of these examples recently about onboarding, and even the hiring process for, you know, kind of the more corporate hires where somebody you know, internationally, in some countries, they don’t share salary. So it’s an uncomfortable situation, if you’re at a certain level to ask, at a stage, you know, what is the salary for this job, when you’ve kind of been along and the assumption is, you’re going to take it. So to be able to do that through conversational AI is a much better experience. There’s no judgement. And then even the onboarding, like one thing I heard is lunch. Lunch is really important for a lot of people like we’ve done surveys to, to, to find out what, you know, new hires care about. And one of the top things is should I bring my lunch on the first day? Or if you’re going to take me out to lunch? Is there a cafeteria where I can buy food, and it’s, it sounds so little, but it’s very big for individuals that are scared about starting a new job and what this is going to look like, and maybe haven’t even been to the office in this this COVID world? So to be able to ask that question, which might feel embarrassing, you know, without conversational AI to call your manager and say, Do I need to bring lunch? But to do it through conversational AI and an assistant where there’s no judgment? And you can get that question answered in 24. Seven? To me, it’s just it’s such a great example of just that. Both sides of the coin, right, the the recruiter and then the candidate.

Josh Secrest 18:13
Yeah, it’s really well said, I was head of global ta for Abercrombie and Fitch prior to McDonald’s and what I mean, Abercrombie did so many things well, but really focuses a lot on the experience part and delivering kind of this white glove experience. And it was fun thinking about that in the realm of, you know, multiple millions of hires within McDonald’s, and how do you do that at scale? And I think that was another reason where we focus so much on conversational AI was like that flow that you’re talking about where it takes away from, like, these few key touch points, and trying to cram everything into your screening conversation or your interview conversation. And it allowed for candidates to answer questions throughout the process for us to actually send videos or content to them throughout the process that kept them warm and getting excited, and ultimately allowed for us to answer the questions that were most important to them, which from an inclusivity standpoint was just so critical and important, both for Abercrombie and both and McDonald’s and we’re hearing across our clients is, you know, we want to give this goldstar White Glove experience, but it’s hard to be able to do that at scale. And you know, what conversational AI is able to do is almost cater personalized to lots of different, you know, profiles and interests, to make sure that you’re getting exactly what you need as a candidate to help you prep. To help you get excited to help you answer the questions that maybe you might not have either the time to get answered or maybe they feel sensitive to ask to a recruiter but safer to ask within this format. We just saw a lot of really warm benefits that, you know, I thought was really the interesting piece for for, for this type of technology is it actually made the experience more human and warmer? Then what we were trying to do previously, and so I thought that was just a really unique, you know, amplification of this this type of technology. And that’s something I would have expected.

Madeline 20:29
Right? Is this more human, which I think most people have this perception that it’s the opposite, right? It’s gonna take away. And, you know, not all conversational AI providers are the same. You know, we’ve talked about this to Paradox has done so well. Every company I speak to loves Paradox. I mean, you’re truly committed to being this intelligent assistant, and supporting companies throughout many different areas of talent acquisition and employee experience. But not every provider is is that way, there’s, you know, certainly some concerns that companies should have, like, what are some that you see, you know, both in your role now, and then when you were at McDonald’s and Abercrombie about what to be concerned with, when you’re looking at a conversational AI? And chatbots?

Josh Secrest 21:14
Yeah, I mean, maybe a few things, one, I would, you know, take them for a test drive, I mean, now you’ve got enough companies that are out there, where you can actually see them in the wild and, and get to, to see their experience potentially through other competitors or through other some of their clients. So I think that’s, that’s a piece is like, actually see how it’s being used and see what that experience is, like, to your point on, you know, chatbots are very different than conversational AI, there’s, there’s a ping pong component to a chatbot, that can lead to pretty heavy frustration within a candidate population, and have dropout rates as a result. And so one of the key pieces, as I was sourcing technology was, you know, sort of what is that natural language processing? How good as it is it at identifying what my candidates are trying to ask in serve up the right answers and and connect them to the right information? That idea that it’s truly smart, and it’s learning and continuing to grow. So I’d want providers to be able to provide me with that. In a pretty clear way that I could understand. So I think one testing it and to being able that you ask how it’s learning, ask and see how that conversation is, occurring, I think are really key key pieces to it.

Madeline 22:40
Yeah, and I think it becomes pretty clear when you tested the difference between just a chatbot that’s loaded questions that stops being able to assist you at a certain point. Yep. Or even at all versus what truly is learning. And so this is this is great. I mean, I think we could probably that’s between the two of us. We could go on for another two hours. But I’m gonna ask you about the future. I mean, I think everybody’s figuring out where are we at today? What what comes next, you know, what does the future look like? And what does it look like for conversational AI?

Josh Secrest 23:14
Yeah, oh, it’s like my favorite questions. So one of the pieces where I you know, I’ve committed my career to you going in and supporting Paradox and the mission here, one of the unlocks for me was seeing in this kind of ties to your last question to seeing Paradox be able to leverage conversational AI across the entire year talent acquisition cycle. And so to be able to see how conversationally, I can make it easier to engage as a candidate to make it a one quick process for manager and restaurant to post their job to screening quickly in under two minutes to being able to actually schedule them you quickly to onboarding. So I mean, to me, it’s, that natural progression of conversational AI, this idea that you can have a conversation through voice or through text to get question your your questions answered, or to get things done. I think it’s just really exciting. And so, you know, I think that’s just where I see it going. I think it has the momentum to really transform kind of all HR practices and all people practices for corporations out there. Why stop within just TA I think it gets really exciting for me to be able to ask questions as an employee, and to be able to do some things where right now it feels like I have to log into a lot of different systems to get worked on. You can conversational AI, sort of be this year transformative technology that sort of is this assistant for work, not just in within hiring that I think is really exciting.

Madeline 25:03
I agree. And I think, you know, it’s exciting for me as an analyst to, to look at this market. And there’s so many different areas of technology where there isn’t potential, right? It’s just solving one business challenge, if anything, and you know, and we kind of have to look at so many different categories. I mean, I think the potential for conversational AI, through HR tech, is, you know, it’s really going to transform it. And I think it’s going to be an exciting few years, and it just takes a couple companies doing it for others to see, oh, this is the competitive advantage. This is what we should be doing. And our employees love it. We can’t once you start using it, you can’t take it away. If you right expectation.

Josh Secrest 25:44
Yeah, it’s, I think it goes to that in the intuitive piece of it. You know, it’s, how we all live, you and I at home, we’re talking to our Google or Alexa, we’re texting with our friends, we’re used to Tik Tok and Instagram and in how all of that works. And it’s time for the workplace to be able to catch up to all that. And I think a key piece of it is this eliminating like all these different silos of tech and being able to just communicate how you live your life. And that shouldn’t change from home life to work life. And I think that’s why conversational AI is just catching on so much is because it’s it doesn’t feel like heavy tech, it just feels like what I’m already living with and used to and feel comfortable with.

Madeline 26:32
Yeah, absolutely. Well, Josh, this was great. I probably could stay on for another two hours and talk to you. But thank you, everyone, for listening. Josh, thank you so much for joining me. Anyone that’s listening. Please follow Josh, connect with Josh. He’s brilliant. Check out Paradox. Every case study that we’ve done at Aptitude, companies just love Paradox. I mean this is the provider to watch and talent acquisition right now. So check them out. And we are happy to share the new research that we did that with anyone that’s interested. So thank you all and I hope everyone has a great week. Thanks.

Transcribed by https://otter.ai