Modern Hire – Findings From The Fourth Annual Hiring Trends Report With Mike Hudy

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William Tincup: Ladies and gentlemen, this is William Tincup, and you are listening to the RecruitingDaily Podcast. Today, we have a returning guest, Mike, from Modern Hire, and we’re going to be talking today about the findings from the fourth annual Hiring Trends Report. Can’t wait to get into the report, most importantly, the findings. And what all Mike learned in this report. Without any further ado, Mike, would you introduce both yourself and Modern Hire?

Mike Hudy: Absolutely. Thanks, William, and thanks for having me back-

William Tincup: Sure.

Mike Hudy: Glad to be here. Yeah, Mike Hudy and I’m the Chief Science Officer at Modern Hire. And lead a team of 40 industrial organizational psychologists and data scientists in doing all the fun science stuff at Modern Hire, all the innovation. In terms of Modern Hire, we are in the talent acquisition space and more specifically, we’re a talent intelligence platform that offers screening assessment and digital interview solutions to our clients.

William Tincup: Do you focus mainly on the pre-hire side?

Mike Hudy: Yes. Mainly on the pre-hire side. That’s right.

William Tincup: I could see you getting sucked into internal mobility, as well, just down the road.

Mike Hudy: We’ve already been towing the water there, for sure-

William Tincup: Yeah.

Mike Hudy: And that it’s a space that could use science like ours.

William Tincup: 100%.

Mike Hudy: It’s an area that organizations are taking increased interest in. And I think some of that kind of directly, indirectly ties to some of the trends that I’ll share today.

William Tincup: Dramatic foreshadowing.

Mike Hudy: Yes.

William Tincup: Whenever you do a trends report, you’ve done a bunch of these through your life, so you know. Whenever you start off, it’s like you go back to eighth grade and it’s a scientific theory. You start off with kind of like, “Here’s the thesis, here’s the hypothesis. Here’s what we think is going to play out.” And you go through all the questions and you’re like, “Oh, okay. You had a pretty good idea.” Then you cast it out, you get the data back. You’re like, “Huh.” Some things are validated, you’re like, “Oh, yeah, yeah. We knew that was going to be yes.” And then some of it, it comes back and you’re like, “Is the data right?” Are we sure this is accurate?

So like, when you looked at the findings initially, and even now, when you look at the findings like, what are some of the things that when you look at it, you’re like, “Yeah, yeah. That’s table stakes. That totally makes sense, tracks where we are right now.” Especially based on the first three. And what are some of the things that kind of shocked you?

Mike Hudy: I guess, the way that we did it is we had our kind of own little Petri dish with our clients as they were doing experiments and shifting during this incredible time of change in 2020, and then into 2021. We were basically learning from our clients and understanding the challenges that they were bringing to us. In terms of the data that we used, to put the trend report together. It was basically doing real live-

William Tincup: Oh, that’s cool.

Mike Hudy: Test and learn experiments with our clients and hearing from them on the way … sometimes Modern Hire wasn’t even involved and we’re hearing about ways that they’re trying to solve these new talent challenges. And specifically with us, hiring challenges in this environment.

William Tincup: Well, let’s jump into some of those hiring challenges. What’d you learn from your clients?

Mike Hudy: Yeah. So, a big one where I’ll start is just, there’s really been a shift and the shift is escalating. The speed with which it’s happening is happening faster and faster, it’s a different way of thinking about talent than we have and our clients have for a long time. And a trend that we’re calling, thinking more talent agile, talent agility versus talent rigidity. And it’s just a completely different way of thinking about the way … your jobs and the talent inside of your organization. And in our case, outside of the organization and trying to marry that talent up with jobs.

So, we’ve lived in and as long as we can all remember, kind of a requisition based world-

William Tincup: Right.

Mike Hudy: Where we have jobs. Jobs are relatively static and we kind of list out, here’s the skills you need, here’s the degrees, here’s the experiences we’re looking for. And then we go out, we try to find a match for that. Those days are quickly going away because a number of reasons. One is that jobs now are fluid, they’re dynamic, they’re changing and they’re changing faster than they ever have. And evidence being with COVID and then post COVID and return and back to COVID just what’s required in jobs has-

William Tincup: Right.

Mike Hudy: Shifted. It could shift in a matter of a week, you have a whole new set of demands that you need to do.

And like example, we have a retail client that for decades, they’re very successful business and they have these sales models that are incredible, but it’s all around a customer coming into their bricks and mortar stores. And they have sales associates, that’s their main job. And those requirements are nailed down. And all of a sudden, stores all close, we still need to sell product and we need to sell it completely differently.

William Tincup: Right.

Mike Hudy: So overnight, you’re now having salespeople that are networking, they’re reaching out virtually, they’re doing virtual demonstrations and the skillset and what they needed completely changed. And that’s a pretty dramatic example, but I think that’s true of many jobs in this environment. Jobs are changing. But then the other thing at work here is just the labor shortage is-

William Tincup: Mm-hmm (affirmative).

Mike Hudy: Gone are the days where you can go out and say, “This is exactly what I’m looking for. And here’s an endless supply and I’ll just keep plucking from this.” They’re just not out there anymore. And so what you have now is, is more of the olden days where you would have a requisition and you would expect a candidate to come to your career site. And you put all your jobs out there for them, you might have hundreds of jobs. And it’s up to them to figure out where to go and find that job. And then they apply for that one job. You have a hundred opportunities, but they’re applying for one and you’re evaluating, do they fit for that one? And most of them don’t. And if they don’t, you say, “Thanks. No, thanks.”

In the meantime, they might have been perfectly qualified for one of your other jobs. So the idea more is now supply and demand. We have all of these jobs and we have talent coming to us. We need to do a better job of matching them up, which oftentimes doesn’t mean just one to one requisition. But help find our talent coming in, where they might fit in these … like in my example, the hundred of jobs that we have to offer.

William Tincup: So, let me stop you right there real quick. Because on talent agility, as you were talking about, I was thinking about Moore’s Law. And how we could apply Moore’s Law to talent and how is, especially talent and then the needs of talent and how fast it’s changing before our eyes. But with both talent and agility and labor shortage, how has that impacted … with all the IO folks that you have, how has that impacted their kind of approach or outlook on screening and assessment? Well, most of them, if not all of them have PhDs. So, they went to school, they learned all these things. And now a lot of that stuff they’ve got to reapply, they’ve got to turned the doll a little bit. Just given these two trends, just-

Mike Hudy: Yeah.

William Tincup: Talent, agility and labor shortage.

Mike Hudy: Yeah. Well, I think you actually said it there, is it’s reapply. Like the fundamentals of what it takes to do hiring right. At the heart of what we do is we assess an individual and then we assess a job and we marry them up. And now instead of doing it one to one, you just need to say, “Okay, now I’m not doing that one to one anymore. I need to scale back and think of it much more broadly. And how do I get the type of information from an individual that allows me to marry them up with a variety of different jobs?”

William Tincup: Right.

Mike Hudy: So the fundamentals stay the same. It’s just rethinking the way that we go about applying that.

William Tincup: Right. One to one, one to many. And then-

Mike Hudy: Exactly.

William Tincup: Okay.

Mike Hudy: Yeah.

William Tincup: Okay. And then systematically, there’s ways to do that. So, that when someone comes in and applies for the one, they might not get that one, but then we’ve looked at them against whatever open … and if not even open, with some of the pipeline of things that might be open and future needs that we might have. So, okay. All right. Both these terms [crosstalk 00:09:31]-

Mike Hudy: Yeah, and-

William Tincup: For me. Go ahead.

Mike Hudy: Yeah. And along those lines, it’s changing, but it’s also, I think it’s forcing some of the things that should have changed a long time ago.

William Tincup: Right.

Mike Hudy: If you think about it, that just seems like an archaic way of thinking, that you’re going to expect a person to find that one job. Like there’s certain cases where I’m a Marine biologist and I’m looking for a Marine biology job. But most of the hiring isn’t that.

William Tincup: Right.

Mike Hudy: And then everything being so focused on experiences and skills and educational background. We’ve just done that because those are the easy things to match to write out, then to look at a resume and say, “Does this person fit?” Where actually, that doesn’t work really well. Like our research shows that like your experience, like similar experience in a job is not a great predictor of ultimate success.

William Tincup: They’ve been saying this in finance for Years-

Mike Hudy: Yeah, they don’t guarantee it. Yeah.

William Tincup: Morgan Stanley has been saying this for years. Fidelity has been saying this for years-

Mike Hudy: Right.

William Tincup: But past performance does not.

Mike Hudy: I get the disclaimers-

William Tincup: It’s not an indicator of future success. With talent agility, with your clients, are you seeing in a market like potentiality becoming unearthing kind of talents potential? Skills and experiences and things like that. We can assess for personality and cognitive ability and all that other stuff we can assess for. But it’s been rumored that a lot of hiring folks are looking more at that and adding potentiality to the mix.

Mike Hudy: Yeah.

William Tincup: Have you seen that, as well?

Mike Hudy: Yeah, absolutely. That is one of the trends and it’s the second trend and it’s tied to that. It goes hand in hand with talent agility, you made the same link there. That’s what it is about. It’s assessing things that aren’t necessarily skills, educational background. It’s their potential, it’s also kind of their ability to learn and assimilates new skills and competencies. And it’s true for not only the job you’re considering them for, but you mentioned right when we started, talent mobility and thinking about talent that way, too. Is I’m hiring this person, they’re going to do this job today and this job is going to morph. But I have now an expectation that we’re going to move them throughout the organization. So like, if I over index on this one specific thing for this one specific job, I’d rather look at their potential, I’d rather look at their ability to continue to learn and they become a much more valuable, long term asset for our organization.

William Tincup: Fantastic. So, I’m glad that I’m seeing some of the same stuff. NextGen, what else do you see?

Mike Hudy: Just one more. We had a company kickoff just this past week and I facilitated a client panel. And I just heard just such a great example of … and a powerful one of this hiring for potential, not necessarily skill or requirement. And it comes from a logistics company, one of the biggest logistics companies in the world. And that one of their … where they’re feeling pain, labor shortage wise is finding drivers. And the model for hiring drivers of course has been, well, first requirement, you got to have a commercial driver’s license, CDL. There’s not enough of them out there.

William Tincup: Right.

Mike Hudy: So out a necessity, they changed their thinking and said, “We’ll just hire for potential. We’ll bring people in-”

William Tincup: Yeah, we can train them.

Mike Hudy: “And we’ll train them.” Yeah, it will help them get their CDL. And you know what happened? Well, yeah, it took longer for them to kind of be productive. But what they’re seeing now is those that they trained and helped get their CDL, are now staying longer with the company. So it solves another problem that everybody’s dealing with, the great resignation is turnover. Is that if you have this grow from within, and I will help you grow. That’s what gets people to stay. So there’s like all of these trends kind of fit together like a puzzle to counteract some of these macroeconomic conditions that we’re all facing.

William Tincup: So, on the opposite side of potentiality, you’ve got folks that either don’t do well with ambiguity or don’t do well with change. Or aren’t really great with agility and that’s both candidates and employees and employers, hiring managers, recruiters, everybody above. So on the front end, when you’re doing the pre-hire work, how does one assess for another person’s ability to consume change or ambiguity?

Mike Hudy: Yeah, that’s a great question. And there’s a number of ways of doing it. And like the way that we always do things is that there’s not one silver bullet-

William Tincup: Right.

Mike Hudy: Of doing it, that actually you want to get multiple pieces of data, you want confirmatory evidence. Typically, we’re going to come at it with kind of a multi-pronged approach. Is first, we have kind of what we call work style questions. Like what’s your preferred approach? And you get at that kind of change versus not. And you phrase it in a way where it’s not obvious that, “Oh, we’re looking for change.” Change orientation or learning agility, but kind of, do I prefer a stable environment where things stay the same versus something … those kind of questions. So, you come at it that way.

You can also ask about their work history and look for evidence of them moving around and change. You can put them into simulated scenarios and get it at that way. And then of course, we offer interviewing, as well. So get the kind of the traditional, tell me about a time, kind of the competency base-

William Tincup: Right.

Mike Hudy: And pull all of those things together to kind of get a profile of the person’s change orientation or learning agility or comfort, as you said, comfort with ambiguity. Slotting them against roles where there is going to be change. And that’s not to say if you don’t have that profile, well, then you’re no good to organizations anymore. They still-

William Tincup: Right.

Mike Hudy: Have lots of jobs. And they have ones where those jobs don’t change very much and they might be a better fit for that type of job. And that’s going back to what I said about like, you have talent, assess them, and then look at your catalog of jobs and point them in the direction where they’re best suited.

William Tincup: So talent, agility, and labor shortage, do you feel like there’s correlation? When you look at, like, if we took away talent shortage, let’s say we’re in … or labor shortage. Let’s say we’re in labor surplus, would we still be thinking about talent agility in the way that we think of it?

Mike Hudy: I don’t think so. I don’t think we would’ve gotten there or wouldn’t have gotten there fast-

William Tincup: Right.

Mike Hudy: Gotten there as fast. I think this was kind of the match that was lit out of necessity-

William Tincup: Right.

Mike Hudy: And it’s a supply and demand thing. There was demand, there wasn’t enough supply and I can’t invent more supply, so I need to rethink it. And that’s been true of a lot in these last few years, in terms of advances that have happened in talent acquisition. If it’s been problem solving under dire straits that have led to breakthrough thinking. Now, will we go back when there’s surplus? I mean, once you kind of advance, you really never kind of step back.

William Tincup: And how much do you think that the talented agility part, especially now, and let’s just kind of look into the future a little bit, is driven by the candidate and employee? Meaning they want to do a job for nine months and then do something different. Like, okay-

Mike Hudy: Yeah.

William Tincup: Now that we all know that we can work from home. So, that’s cat is out of the bag. So they want to work from home, that we have to be agile around that. Okay, got that. And once COVID is over, let’s just say there is a point in which COVID is over. Then will they return to an office? And so, I wonder about like … we were forced into the agility, like at gun point. Okay, everybody’s going to be working from home on Friday, have fun. Good luck with that. And we’re all forced. But that it was the mother of invention and a lot of these things, like you said, eloquently at the beginning, a lot of these things were already tracked. It was just going to take us 20 years to get there.

Mike Hudy: Right.

William Tincup: We had remote employees.

Mike Hudy: Yeah.

William Tincup: This isn’t new. The entire company being remote, yep, that was actually pretty new, fair enough. But okay, once there’s some normalcy that returns, do you think that employees and candidates that have grown up and grown through this, do you think that they want to go back to offices? And go back to the way it was?

Mike Hudy: I don’t think so. The way that I look at it is that the model we were operating under was an organization centric model. It wasn’t a candidate or an employee centric model.

William Tincup: Right.

Mike Hudy: And what happened is with all of these conditions, what it did is it flip the power to the individual, to the employee and to the candidate. And so companies were forced to adapt, but candidates always wanted … they didn’t want to say, “Hey, give me a rats maze that I can go through and try to find that cheese at the end of the rainbow. That’s my job.”

William Tincup: Yeah. I love [inaudible 00:19:29].

Mike Hudy: Of course.

William Tincup: Yeah, just give me a cue form, yeah. It doesn’t matter which one. Yeah, they’re all the same. Yeah. Give me a-

Mike Hudy: Right, of course they would want to come. I mean, the process is now being set up to be candidate centric, “Hey, job seeker, please, please come to us and we’ll help you find.” Instead of like, “Okay, fill out this form, then do this and then we’re going to ask you to take this and then you’re going to interview. And then we’re going to let you know if you’re good enough.” I mean, like no candidate wanted that.

William Tincup: Right.

Mike Hudy: Like the desire’s always been there, it’s just that now, as I said, the power has shifted. Now, could you argue that it shifts back? And we’ve seen this, candidate scarcity versus candidate abundance, you mentioned fidelity, we know what the stock market does, we know what the talent market’s going to do. It’s going to eventually flip, we don’t know how long. And the question is, how much will it flip back to an organization centric versus candidate centric?

But I don’t think kind of the desires of the individual, like I want the flexibility to work from home. And that’s actually one of our trends too, is this kind of candidate experience, employer experience is that, again with these conditions of agility, labor shortage, all of this, that’s become increasingly important is to be able to … as candidates, come through the process is to be able to engage them and to be able to sell them on your organization. And selling them isn’t just selling them, it’s actually living those values too. So being able to offer up the flexibility, the organizations that are saying, “Hey, we don’t care where you work. You can work from home.” That’s a huge advantage, you have to have that employee experience first before you can actually share that in the application process. So that’s the other kind of related trend is this kind of indexing on both candidate experience, as well as employee experience.

William Tincup: With the trends that we’ve seen, with this report, with talent agility and labor shortage, et cetera. How have you seen your clients kind of … how has it impacted culture? Or the way that they kind of present and market culture? Because culture was really simple pre-COVID, it was a box, it was a place. You went to the box and there was culture. And now we don’t go to the box. And now you’re dealing with talent agility, which I think a lot of people get behind really easily. They understand talent shortage, I think everyone listening to the podcast, they’re going to understand that. They’re feeling that pain on many levels.

Mike Hudy: Yeah.

William Tincup: But how has it impacted culture, the way that you’ve seen culture kind of rendered?

Mike Hudy: Yeah. And it’s hugely important in terms of candidates, they want to know about the culture. But you’re right, how culture comes to life looks different, feels different than when we all used to come to an office and we would all get together. And we would … the water cooler, if you will.

So I mean, at the heart of culture for everyone, I think is that what they really want to know is, does this organization care for its people? What’s going to be in it for me? And the way that that shows up now is different in this environment. And it’s some of the things that we’ve talked about.

William Tincup: Yeah.

Mike Hudy: It’s some of the flexibility, the work from home. It’s the going to an unlimited PTO to allow people to have kind of that work life balance. It’s those things that you’re seeing being publicized, it’s these massive pay increases that you’re seeing companies announce. It’s those ways that they’re showing up that are ways kind of with the modern candidate, kind of what they’re looking for in an organization is like, at the heart of it all. Is like, me as an individual, what are you going to do for me? Career-

William Tincup: Right.

Mike Hudy: Right. Career movement, career pathing, that’s another one. Like, okay, yeah, I’m applying for this job, but help me understand where I go next or how that works and how I’m going to grow with the organization. It’s those things. And those things, you don’t have to come out of office for those things, but those things are important.

William Tincup: I love it. Last question really quickly, we’re here a year from now. And we’re looking at the fifth annual Hiring Trends Report. What’s one thing, do you think they’ll be there?

Mike Hudy: Well, I think one that’s there now, but I think, when I look out a year or two, maybe it’s the fifth and then again in the sixth, is the changing landscape with artificial intelligence. I mean, that’s a big part of what we’re doing now. But when you see the legislation and the bills that are coming out and the New York City bill that was passed, and that’s going to start in 2023. There is going to be a movement. And we would argue, this is a good movement.

For us, this is like, let’s make sure we’re doing AI right. And it’s going to take a while for these regulations to be done right. But I think things are going to look a lot different in a good way in the next couple of years, in terms of when it’s not the Wild Wild West of artificial intelligence anymore. It becomes more of the good practice. And that the scale and the speed with which we can hire and driving diversity initiatives so much more gets opened up with AI and AI done right. And that’s what looking forward to as a trend in a year or two out from now.

William Tincup:   Awesome. As always, Mike, thank you so much for carving out time for us and the audience.

Mike Hudy: Absolutely. It was fun. Always glad to be here. Thanks, William.

William Tincup: And thanks for everyone listening to the RecruitingDaily Podcast. Until next time.

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