The BARF | AI Isn’t Replacing Recruiters. It’s Exposing Bad Hiring.

[00:00:11] What is going on everybody? This is Ryan Leary and William Tinkup and you are listening to The BARF. William, it's been a minute. It's been a hot minute. It has been. It's been, it feels like six months. We just took a break, end of year, took a break, relaxed, and then one of us, not me, decided to go on a 30-day vacation. Yeah, yeah, yeah. And so, you know, how was your vacation by the way? Did you enjoy that? Well, first of all, everything that you've heard about Fiji is absolutely correct.

[00:00:42] It is as beautiful as people talk about. Yeah, the flight there, you got to go through Hawaii. They're so direct to Fiji, but yeah, Fiji's beautiful, especially this time of year. 30 days, man. 30 days. Yeah. So, oh, it's good to have you back. 100%. Yeah, yeah, yeah. No Fiji, but you are now breathing and healthy and alive. Yeah, yeah, yeah, yeah. We're good.

[00:01:11] I'm reminded of something my mother used to say all the time to me, that you never know what the other person's going through. Mm-hmm. Everyone's going through something. Right. Whether it be drama or trauma, a messy divorce, something, a car got stolen, like there's some chaos. Something, yeah. There's something going on. Yeah, I went through a health scare. I guess, thankfully, I've been through a health scare before.

[00:01:39] So, it wasn't as traumatic. It was more blocking and tackling. Right. So, wait. So, you weren't in Fiji? No. No. No. Or the Maldives. No. No. No. I didn't do that as well. No. Or Bali. But you're bad and healthy. Yeah.

[00:01:56] Bad, healthy, and caught up, which I think is the most important thing is when you have a two-person firm like we do with WRKdefined, it's not a question of whether or not the other person can do the work. We're maxed out with the work that we're already trying to do, plus trying to do other stuff and adding to it. So, when one of us is gone, it really is a stressor to an organization. I don't know. I enjoyed it.

[00:02:26] I'm not going to lie. I am. I mean. Well. Just kidding. No kidding. There's parts that are enjoyable about your job that I'd like to do for a couple days. Right? Right? And there's parts of the job that I do that are enjoyable, and there's a bunch of parts that are. A lot of technical stuff. You know, this is being recorded. And so, I'm going to play this back to you at one point and say, well, you said.

[00:02:55] You said. So. All right. Like, I like talk. Like sales? Sales? I like talking to prospects and giving them ideas. You're not allowed to talk to any of our sponsors that we work with. I've told you this. Ryan won't let me talk to you. No. I can't talk to you right now. So, for all the sponsors that don't know William, this is him. You'll never know him. You'll never talk with him.

[00:03:26] All right. He's aloof. Yeah. So, we've got a lot to talk about. But we're going to keep it short. We're not going to go back and get 30 days of content, which I probably could have done an episode or two without you and brought on a guest. It's not near as fun. It's not. It's not. I mean, I went through the prospects. I'm like, eh. We'll wait. We'll wait. We'll wait.

[00:03:47] So, something that's recently been on my mind is what in accounting is called opportunity cost. And basically how it translates to recruiting and HR is the opportunity cost of a person not being there and doing their job. So, you take a salesperson. For every day that that salesperson's seat is open, that's sales lost. Sure.

[00:04:17] But you'll never be able to recover those sales. Right. You can recover like other people can sell more, but that person's seat every day left empty. That's money that will never be back. That's true of every position. Sure. Development and product push. Everything. Everything. Everything. Marketing. Everything. You can. You can. You can. So, it's like we talk a lot about the historical metrics of recruiting.

[00:04:46] Time to fill. And even some of the newer things like response times. But I don't think there's enough discourse talking about, especially with business leaders. Because business leaders, executives, they understand, especially your CFO, they understand opportunity cost. So, if we talk about opportunity cost, instead of talking about time to fill, which is not something they understand.

[00:05:14] But inherently, they're like, I don't care or give a shit about that. But if we were to put the business case in front of them, it's like, hey, the opportunity cost for not having an ass in a chair or a butt in a bum in the seat. Here's what that looks like. Here's the math.

[00:05:31] I think we'd get their attention, which would help fuel investment in process and people and technology in, I think, all the kind of cool stuff that we want to do with AI. I think can be funded if we use different language with the other executives. It's a lot of – there's a lot of – I don't think hiring teams don't pay attention to this. The leadership does. Right.

[00:06:01] The leadership will pay attention. I mean line managers, probably not, right? They're just more around what's – not necessarily opportunity cost but more about production and output. Yeah, I can't get – which obviously relates to and ends up where we're talking. However, the – at least in my experience, hiring managers are really concerned with does this person have the skill to do the job that I need them to do?

[00:06:31] Are they going to fit on the team? Do they hit the right vibe? Do they have the right culture? All this stuff that we've done for decades. But they very rarely in any of the conversations I have relate it back to true opportunity cost, right? Now, leadership will. Yeah. Right? And leadership looks at that. I can remember – and this is years and years ago. This is back in – I'm going to say 2008, 2009. I was still working at Conexa at the time.

[00:07:00] And it was a Java shop and we couldn't fill enough Java – like developers. We just couldn't do it. And I don't know that these numbers are true or not but I could just remember Rudy running through the pit where all the recruiters were screaming. Not in a bad way but like he was eccentric, right? Like what are you guys doing? Like he would be that type of guy. But we couldn't fill these positions.

[00:07:28] And the numbers that he gave, which could have been bogus, was $4 million a month in bookings because we couldn't build and push the product, right? Opportunity cost. Now, I'm guessing it was a little exaggerated. It doesn't matter. But the idea – CFO will dissect the math and they'll push you on the math. But if you can back up the math – it's like back when we were in school and we had to show our work.

[00:07:57] They don't do that anymore. No, they don't do that anymore. But you had to show how you got to the expression. If we can show the math and say, listen, this is a reasonable per day, per week, per month, et cetera. So the longer these things take, why does it take so long? Because we're using outdated technology. Because our process is wrong. Because we don't have the right people in the right place. And here's why. We're missing the person that does this.

[00:08:27] Or in the world of AI, we don't have a generative – we haven't built an agentic agent that can do this piece. And we need $150,000 to have that built. Yeah. And now if we do that, we can cut the opportunity cost to this. Now I think it's – to me, it's all speaking their language.

[00:08:51] Like that's really where the thing came from is like if you're trying to get something done, if you're trying to force them to use your language, you're never going to get that done. Yeah. You got to use their language. Yeah. And finance is – basically runs the company. Yeah. We would never say that publicly to CEOs or presidents or anything like that. But really all money goes through the CFO. So you got to speak their language. And that's really where that came from. Yeah.

[00:09:24] All right, William. You know what that sound means? It is time for the I Solved Minute brought to you by our friends at I Solved, which you are wearing a beautiful shirt that looks awful on me. I mean, I love the color. It just doesn't work on this body. I'm not going to touch that. However, all right. So I Solved Minute. Let me read this off to you. I want to get your take on this.

[00:09:49] 48% of HR leaders say they are dealing with a self-inflicted skills gap often caused by not adopting quickly enough to industry shifts and technological advancements. What do you feel when I say that? So first of all, they're lying. That number is 100%. And what do you consider things that you can't avoid in life? Two things. It's very obvious.

[00:10:17] Ryan, Leary, what are you – two things that you just can't avoid. It's going to happen. Death and taxes. And skills gaps. And skills gaps. All right. So I'm in the wrong area. All right. Gotcha. You got tasks. You got tasks. And skills gaps. We've now moved to a moment in life where because of AI and because of the innovation that happens as rapid as it does, you're never going to have the skills that you need.

[00:10:44] So you hire people that are highly flexible, that can deal with ambiguity, they love change, et cetera. And you give them the skills. It's almost like just in time. I don't know if you studied manufacturing. Yeah. JIT. These are JIT's micro skills. And you give them the skills that they need that day. And then the next day or the next week or whatever the bid is or after the project, they need different skills.

[00:11:10] We need to stop thinking about skills gap and talking about skills gap in the way that we talked about it three or four years ago because you're never going – it's a destination you'll never reach.

[00:11:49] Yeah. Or learned very quickly with leveraging. I think you hire based on that person's ability to adopt new things, whatever the new things are. And so people that don't like change. So now you get back to some really interesting assessments. It's not skills assessments per se, but personality assessments and behavioral assessments. It's like do you like change? Do you thrive in a changing environment?

[00:12:18] Job description says your job will change every three days. Right. Does that terrify you or does that excite you? If it terrifies you, don't apply. Because we'll never be able to fix the skills gaps with a person that can't accept change or doesn't thrive in a changing environment. There you go. The I solve minute. All right. Let me ask you a question.

[00:12:47] Are companies responsible for employee behavior? Just yes or no? Yeah. Just real quickly, at work or off work? Good point. At work. Let's start there. Yeah. 100%. Now they're at work. They clock out. They leave work and they come back into the place of business. Well, if it's in the business, they're responsible. Period. I mean that's kind of safety 101.

[00:13:16] Well, okay. So they're not clocked back in, but they're on prem. They're on prem, yeah. You're still responsible. All right. So. You're still responsible. I mean from a safety perspective. No doubt. Like your forklift operator left, clocked out. Great. Came back in and joy rode a forklift and tore down a bunch of things and killed a bunch of people. You're still responsible. So you would lose that case in court. And let me tell you.

[00:13:44] Waffle House was found not liable for worker, for a worker who stabbed a customer in the face. Nice. I think I've been, I think I've been to this Waffle House. But there, it's like every Waffle House. Every Waffle House. It's like every time I go to Waffle House, I'm like. Same bit. I'm like, I'm sitting there and I'm like. Smattered, smattered, covered and smothered, whatever. Yeah. Yeah. Smothered and covered. Yeah.

[00:14:10] I just, when I sit there, first of all, I think like, damn, these seats are small. Second, I think something is going to happen. Like at one point, something will happen at Waffle House. Well, back in the day, it would be Waffle House was a go-to after a lot of alcohol. So after the clubs or after other types of clubs and stuff like that. That was your, before you go home, I got to get some food.

[00:14:38] Well, for you, because we don't have them up here. It is very far and few. Oh, no shit. And so when you see them, it's like, oh, let's go to Waffle House. Right. But anyway. Oh, no. We haven't. You can throw a rock and hit a Waffle House in Texas. Yeah. No. So, all right. So here's the deal. So employee and a customer got into a verbal argument inside of Waffle House. Inside. Employee was working. It escalated really quickly. The employee steps away and leaves the store.

[00:15:08] He's clocked out at this point. Leaves the store, comes back in with a knife and stabs the customer in the face. So. I still think, I mean, it'll be really interesting to see that on appeal. Yeah. I don't know. I just, I think you're still responsible on some level, your employee at your place. Well, so here's how the court ruled.

[00:15:33] The court ruled that the court, the court said that the, this was a personal attack that wasn't part of his job and that there were no prior behavior that suggested something extreme like this would happen. So they ruled that it wasn't reasonably foreseeable. I don't know. This is the argument against second chance hiring. Right. Well, and the person did have a prior record. Right.

[00:16:02] So he did have a prior record. Duh. You Waffle House employee? Come now. Yeah. Straight out of prison. Yeah. So, so, so I was thinking, so they went through a background check. I'm pretty sure. And then, you know, they, they knew prior record. Check the box. Yeah. Yeah. However, you know, and, and full disclosure, Fama is a partner of ours, right? They are a sponsor of, of, of the show.

[00:16:29] And, but I wonder if they have something like a Fama and does something like a Fama change that where they can, they can see and track what employees are saying. Like if they're really super aggressive online, like, all right, some of them might boil over. All the people in Verizon should die. It's like, come on now. Back off of that. He's back, Jimmy. Yeah. I was just thinking like, like. Go flip the burgers. Yeah. So I was thinking the traditional background checks are rough. Right.

[00:16:58] And so, you know, and not making a commercial for Fama, but is this an actual use case where maybe something like this prevented this? Bad actors do bad things. News at 11. It's there's, you know, and we're human beings, Cain and Abel. You go back to the history of time and human beings do really, really fucked up shit to each other. So we don't really know what was said or what was done or how it got to that place.

[00:17:27] But the guy was working and then left and then came back. My guess is there was probably a reason. Probably. I mean, enough that he stabbed them in the face. I'm not saying he's guilty or she is guilty. Both males. Both males. Okay. But, you know, it's one of those bits. You went out to your car. That's where you went. You went out to your car. You went out to your glove box. And you came back in. Those are all choices.

[00:17:57] Now, they're individual choices. I just think the mess is made when it's on prem. That's the mess. Even if he never worked that day, like just was off the week or that day or whatever, but it happened at their location and he was an employee. There's got to be some culpability there for me. I don't know. I don't mean we we did. Was it two years ago? We did the misconduct deal. Oh, yeah. Yeah. Yeah. We have some stories.

[00:18:27] We should probably pull those out and see see see what those are. Those are evergreen. Like a mystery science 3000. Let's play those back and actually just react to them. We haven't. There was a there's a couple of them. I believe there was a couple we couldn't publish. They were so wheels off. There there's one that we still have. And at one point in life, we might publish it and drop that MP3. Yeah. Well, we'll see. We'll see if he's if he's if he's not good to us. Wink, wink.

[00:18:58] We might have to post it. So what do you got? We'll go to a bunch of conferences this year. And last year we went to a bunch of conferences as well. What I like about AI and the marketing by vendors and the conversation of the level of discourse about AI is we're much further along than we were with SAS by talking about adoption and consumption and usage and things like that.

[00:19:27] It took 20 something years to get people to really engage in an adoption story. How do you get people to adopt your software, etc. Bell rings. You sold it. That's fantastic. With on-prem, you didn't really care because you got paid either way. You sent them the disk or you installed it on their, you know. Send them the book of this. Send them the book of this. Install.

[00:19:56] You invoiced every month. If they used it, great. If they didn't, have a nice day. SAS a little bit different in that it was a little bit easier to switch out. It is a little bit easier to switch out. But I like the level of discourse that's happening at conference where vendors and practitioners are engaging in like how do we actually get people to use.

[00:20:22] Now, I think the next thing that I'm going to be looking for is, okay, when we say adoption of AI, what's the definition? So from a practitioner's perspective, global head of talent acquisition, you know, our employees are using AI. What does that actually mean? So I think there needs to be more of it. We need to go deeper into that discussion to then start talking about what do you mean?

[00:20:51] Are they using AI six hours a day? Are they using 25 tools? Like what are the definitions that you're using? And then kind of on a meta level, as a leader in both HR and recruiting, how do you know that they're using AI? Right. How do you know that they're actually using, whether or not they're using your tools or other tools, bring your own AI to work tools? How do you know? Yeah.

[00:21:20] And again, I think that's going to be a conversation that I think it's every three months that we're going to be in a cycle very soon, if not now, where every three months you have to reinvent what your AI tech stack looks like. And I think that's daunting for practitioners to hear.

[00:21:43] It's easy for me to say, but it's daunting for practitioners to hear because they grew up, buy it, install it, adopt it, and then set it and forget it. AI is not that way. If you're using an AI tool now, there might be a better application of that tool or other tools two weeks from now. Yeah. And I think some of that's going to depend on the policy of the company and what they're using.

[00:22:13] If it's bring your own AI to work, sure. You're going to have 40 different tools in 40 different days. But if a company is using specific software, the company, the software company is going to have to iterate all the time in order to maintain it. But they'll still use the same tool set. Now, I think where the challenge is going to be, for me anyway, when I hear adoption now, I think what's different is not necessarily using it just to use it.

[00:22:43] Right. I think adoption in what we maybe looked at as what adoption was years ago is I think most everyone wants to use it now. I can tell you back then the number one metric was hours in. And so if it was a, if it was a ATS, you could look at a recruiter and say, how long were they logged in? And that, which is not a great statistic. No, no, it's not.

[00:23:10] But I, and I think now it's going to be, it's, it's going to be, I think some of this is slightly different because AI is fun to use in most cases. It looks good. It's fun. It makes you feel as if you're being creative and doing something. Even if you're not doing something, it actually feels like you're doing something productive, right? And so you walk away feeling better about that. And I think, so the employee is going to leverage this, this tech a lot more.

[00:23:36] I think where adoption, and this is really more, we talked about this outcomes and stuff like this, how successful is the actual usage of the tool? So if it's, you know, for example, on the sales side, let's say a sales team is using, you know, a sales AI for something, enhancing data and cold reach outs. And then follow-ups and converting them into a scheduled call.

[00:24:06] Okay. Well, if, if historically I was able to send 20 messages a day, now I'm sending 50 or a hundred messages a day. And it's, but what's the conversion, right? Right. So now it gets into a productivity conversation real fast. Yeah. I don't need volume. And we all know, we don't need volume and quantity. We, we need the quality out of this.

[00:24:30] And so if I'm converting, you know, whatever, 10% of outreach into appointments, or let's just say 50%, you know, let's go crazy. 50% is, is converting into an actual call, but only 3% are quality calls. Is it, is it, is it worth using? Right. So I think, so that's not adoption, but it's, I think how we're going to start to, to really look at, look at things. Oh yeah.

[00:24:58] So it's the graph, the ground with AI generative, agentic, whatever the ground beneath us is, is shifting, but it's shifting faster than it did with SAS. So SAS, you could get your quarterly updates or your annual updates, you know, whatever. This isn't that. And so I think it's a new mentality for practitioners that it's again, unsettling. It's also exciting to your point. Yeah. I think it's reviving. It can be.

[00:25:28] It actually revives the workplace a bit right now. I like that. Yeah. It takes the, honestly, I can see it taking those people who were on the way out because they were tired of doing the same old BS. Right. Right. And now like, oh, okay. I've got five more years in me now because I can actually do this stuff I've been complaining about. Um, all right. So you ever hear of lovable? I mean the company lovable. I mean, I'm lovable. A company. Yeah. Yeah. So I'm not.

[00:25:57] So. All right. So you're going to love this story. Um, and I'll probably say it, then I won't get to talk about it anymore because you're just going to take over. I'll let you do that because this is your, this is your, your lane. So lovable is a company. So it's a, it's a tech that lets you build apps and software just by telling it what to do. So it's a no code, no engineering team type thing, but tell it what you want. Like I want a customer portal that tracks orders and sends alerts for whatever.

[00:26:27] Like it'll then go and build that app. I'm sure there's a lot of, you know, iteration you've got to do and all that stuff. However, they've added, I forget where I found, I found this on tech currents, but I found it somewhere, um, on LinkedIn. Then they've added a hundred million dollars in ARR in one month without adding any employees.

[00:26:51] So they have 147, I believe it's 147 employees. So I, I, I graciously bring this to you, humbly bring this to you, uh, because they're doing about $2.7 million per employee in revenue. Yeah.

[00:27:12] I, I think this is, should, uh, terrify everyone, uh, in, in the right way to motivate them to be excited about the change that's, that's happening in our, in our world. Josh Akers, uh, posted on LinkedIn. Um, I think it was last week and you know, he's, he's in the compliance, you know, you know, Josh, uh, he's in the compliance, the job world, world, et cetera.

[00:27:36] And his post was, there's a job board that was just created for AI agents, meaning you can't apply as a human being. It only wants AI agent, agentic AI to apply to jobs. So, uh, again, not trying to scare anyone, but this is, there's one part of your story is what wall street and money people are going to love.

[00:28:07] It's, it's the revenue to employee ratio, which they've always wanted it to be higher. And now they found a way. Okay. The other part is, um, finding a way to distinguish yourself from AI or leverage AI in such a way that makes you different. Right. Yeah. Good story. What, if you had to guess, what's the average revenue per employee for a regular SaaS company?

[00:28:36] For a regular SaaS company, probably 50,000. No, it's more than that. More than that. Two to three hundred thousand. Yeah. That tracks. Because. Yeah. Yeah. Yeah. Yeah. Yeah. So, so now. I wasn't thinking about salary and cost. Yeah. So the, the projected by 20, there was 20, 30 or 35, somewhere within there was $2 million per employee. Hey. These guys. Think about what you're doing already.

[00:29:05] That employee is managing a hundred agents. Maybe. But. They're doing the work that was, you know, they're not inputting into Salesforce. No. They're not importing into Monday. They're not doing like the things that humans do now. They're not doing it. Yeah. And a genetic agent is doing that for them, which means that they can manage more cross-functionally or within the function. Yeah. And so you need less people. Yeah.

[00:29:32] We, we, we talked about this in, in, in terms of outcomes, right? How are we going to, we'll measure success in terms of outcomes, et cetera, et cetera. Right. Last year was this. This year is how to, you know, what is the outcome? And I, and I think this is, this is one of those situations where I, I've really now start, I'm really starting to believe we're, we're not historically, we scaled people. Now we're scaling output. Right. And that's, I think, going to be the difference. It's a huge. Which we're just saying. It's a huge change.

[00:30:03] Like importers, importers strategic model. This is a major change. Yeah. Because you don't need the bodies. You don't need, you don't need the brains. And again, you know, like I was thinking about like some industries where this isn't going to be as much of a factor. Well, there, it's going to be a factor in every industry. You know, like I, I, I watched a bit on tequila harvesting. The other night.

[00:30:32] And it's, it's fascinating, but it's all manual. It ain't going to be all manual. Right. You know, just fast forward. That's going to be a machine that does that. Yeah. Yeah. And, and, and, you know, people are out of jobs. Yeah. And that, that's terrifying. But it's also exciting getting back to the, your kind of point that you made before. You can, you can look at that and get terrified. You get scared. It's like watching the news and going, I'm going to get scared.

[00:31:00] Or you can look at it and say, Hey man, this creates new opportunities. New opportunity. Look, we've, this is, I saw a thing, a meme the other day. It was school teachers. I think it was in the sixties and it was school teachers protesting calculators in the classroom. Right. Yeah. They're protesting and they were outside picketing with signs and how show your work and don't do this and yada, yada. And I'm thinking like same shit, different, different decades.

[00:31:30] It might've been gone by the time you were, when you came along in school, but we diagrammed sentences. Did y'all diagram sentences where you, you went through, here's the pronoun, here's the adjective, here's the, you drew it out. Like you with lines and stuff like that. Yeah. My kids, I brought that up to Henry and van. Then they're like, what the hell are you talking about? I'm like, and I pulled up an image of it and they're like, Oh yeah, we don't. Like we just write. Yeah.

[00:32:00] No. And the writing is awful today. I'm not going to lie. Like, I'm just like, yeah. Like, like some of these kids that take creative writing and I'm reading their, I'm like, this is, this is bad. Like I'm not a great writer. You need to go back. Yeah. Repeat, repeat. You know how I repeated for the fourth grade. Yeah. Cause I came out of parochial school and went into public school. And ironically at that time in that school or those two, those schools, parochial school, my parochial school was behind.

[00:32:29] And so when I got to fourth grade, I'm like, what? And you know, they're speaking Latin. I have no idea what they're talking about. And I loved my teacher, Ms. Sanford. Got to the end of, of the deal. My mom and dad took me to the Dallas zoo. And, uh, they're like, Hey, um, the teachers are telling us that you're probably not prepared to go to the fifth grade. And like, we're walking around looking at the elephants and rhinos and I got cotton candy. Like, I don't give a shit.

[00:32:57] And so they're like, Hey, you know, you're going to repeat the fourth grade. So next year, you're just going to go back to the same grade. You'll have a different teacher. Yeah. You didn't fail, but. Yeah. You didn't fail. They were very keen. And even though my mother and father would have said that to me, but you know, that, that, uh, they didn't, they were just like, Hey, listen, it's just came out of school system. And we didn't do a different school system. And then, you know, they're all different. Yeah.

[00:33:22] I think, I think the, the challenge I was, you were just so bright overlooking the physics. That actually happened more in middle school. Cause I got, I got suspended a lot in middle school. So six, seventh and eighth grade, I was, I had to do summer schools for four years in a row because I just got to a point where I, I would instigate fights with teachers. Arguments, not fights, but arguments. I'd say something.

[00:33:52] I'd be like, yeah, no. And then like that just started a bit and you know, other types of things, drugs and, you know, guns and other types of things. So like, I got in trouble for a lot of shit, but by the time I got to high school, I knew how the game was played and I didn't get in trouble. It's not that I didn't do anything. You just, I got, I did far more worse shit in high school. Never got caught. All right. So we're going to wrap this up. This is dude. First day back in 30 days.

[00:34:22] Good. PG. Ready to knock out your throat now and get moving. Yeah. Thank you all for listening. We will see you next time.