With the relentless coverage, comment and discussion around ChatGPT, it finally feels that there is a mainstream realization of the capability and impact of AI and automation. However, while Twitter threads, conference presentations and webinars are great for building awareness, there is no discussion on the complexities of implementing AI and the strategic foundations needed to ensure success.
My guest this week is Kyle Lagunas, Head of Strategy & Principal Analyst at Aptitude Research. Kyle has recently authored a whitepaper exploring automation’s current state and future potential in talent acquisition. TA Leaders need to think very carefully about strategy and implementation, and Kyle shares some valuable insights into the automated future.
In the interview, we discuss:
• The outlook for talent acquisition in 2023
• Automation as a catalyst to unlock high-functioning TA
• Creating richer, high-quality stakeholder experiences.
• The importance of understanding system capability
• Continuing optimization and strategic development
• Building new best practices and AI and automation
• What do the humans do, and what do the machines do?
• Augementation and anticipation
• The evolving maturity model and the current rate of adoption
• What skills will the TA team of the future need?
Listen to this podcast on Apple Podcasts.
Matt Alder (18s):
Hi there. This is Matt Alder. Welcome to Episode 492 of the Recruiting Future Podcast. With the relentless coverage, comment, and discussion around ChatGPT, it finally feels that there is a mainstream realization of the capability and impact of AI and automation. However, while Twitter threads, conference presentations, and webinars are great for building awareness, there is no discussion on the complexities of implementing AI and the strategic foundations needed to ensure success. My guest this week is Kyle Lagunas, Head of Strategy and Principal Analyst at Aptitude Research.
Matt Alder (1m 4s):
Kyle has recently authored a whitepaper exploring the current state and future potential of automation in talent acquisition. TA Leaders need to think very carefully about strategy and implementation, and Kyle shares some valuable insights into our automated future. Hi, Kyle, and welcome back to the podcast.
Kyle Lagunas (1m 26s):
Hello, Matt. Pleasure to be here.
Matt Alder (1m 28s):
An absolute pleasure to have you on the show. For people who may not have come across your work before, could you just introduce yourself and tell us what you do?
Kyle Lagunas (1m 36s):
Yeah, absolutely. I am an Analyst at Aptitude Research. We’re a boutique firm based out of Boston, and what we do is we study innovation cycles in HR and talent tech, and then emerging trends in the HR and talent space. We serve as a little bit of a mediator between the two functions of the doers and the builders. Before this, I was running a transformation project at General Motors, and before that I was the director of strategy at Beanery.
Matt Alder (2m 11s):
Fantastic stuff, which makes you the perfect person to ask this first question to. We’re recording this right at the very end of 2022 and it’s being published at the start of 2023. It’s obviously been a very interesting year in terms of the talent acquisition market. What are you expecting the market to look like as we move into 2023? What kind of outlook have we got to look forward to?
Kyle Lagunas (2m 37s):
Yeah, I think that anyone who has beenrRecruiting, working in HR, or hiring in the last three years or four years knows that it has been just going at a break neck pace. Everything’s been on fire all of the time and people are pretty burnt out. As we peak into 2023, all signs point to a recession, but the type of recessionary environment is still a little TBD because the unemployment is still pretty low. Honestly, Matt, I think that businesses are going to look at the recruiting operation and ask how many of these hires, how much of this headcount that we’ve approved in the last year do we need to make, how can we be smarter about our investments in building the organization and out, maintaining momentum, and how can we continue to accelerate our growth without adding a ton of head overhead into the function?
Kyle Lagunas (3m 44s):
I like to joke, Matt, that recruiters and TA leaders know that they’re never gonna get the headcount that they need. The businesses just often expect them to do the job with what they’ve got. I think that’s gonna be especially true in 2023. It’s no longer just survival mode. It’s gonna go into survival of the fittest where those functions that are high performing and not just high producing. That means not just getting butts in seats, but finding the right people. Those are the ones that I think you’re gonna be doing the best next year.
Matt Alder (4m 18s):
I think one of the most interesting things over the last couple of years has been automation, talent acquisition going from a niche theory that people were tinkering around with to something that’s fast becoming mainstream. Do you see automation as inevitable in 2023? Will it be a big part of shaping the high performing talent acquisition teams?
Kyle Lagunas (4m 43s):
I really do, honestly, because it’s really difficult to manage all of the different moving pieces that come into a talent acquisition operation unless you have the right operation set up if you’re resourcing it in the right way. In the past, the best way that we could resource these functions were to put people on into these functions, right? You might be trying to get some agility with a bunch of contractors in the coordination team, or even in sourcing or recruiting. I think that we’ll continue to see some flexibility there. Automation capabilities are truly a catalyst, I think, for unlocking the highest impact of a talent acquisition function that’s possible.
Kyle Lagunas (5m 29s):
It helps to increase your operating capacity without significantly increasing the overhead. It’s just basic business economics but it goes beyond that because it’s not just how do we get more out of the heads that we have? It’s also how do we create richer, higher quality, and more consistent experiences for all of the stakeholders of talent acquisition function. TA has a lot of people that it has to keep happy. It has hiring managers. It has candidates. Also, we have to keep our recruiters happy and our coordinators from burning out.
Kyle Lagunas (6m 12s):
Then we also have to report out to the business on how things are going and how viable their plans for growth are because of our ability to attract and hire talent. All of this stuff is getting extremely complex. These stakeholders all have different needs and expectations and a lot of it comes down to the digital experience of the talent acquisition function. I think it is inevitable, but that’s a bad word. I think that it’s also exciting because this is actually the perfect environment looking into some pressures to get more out of what we have and, at the same time, to distinguish ourselves through excellent experiences.
Kyle Lagunas (6m 52s):
This is the perfect environment for us to say, “All right, well, let’s go big on Automation.” We knew that this was something that was coming for the, call it five years, but now, it’s a necessity. Now, we have to figure this out. It’s interesting because the last major disruption we had was pivoting to Covid, where we all suddenly went fully remote because we were forced to. I think we might see this play out more similarly for automation where we just have to figure this out and necessity’s gonna drive, I think, rapid adoption and maturity.
Matt Alder (7m 33s):
One of the things that really strikes me with the conversation around automation is it’s talked about in very simple terms. It’s like, “Oh, we’ll have lots of automation and we can automate this and we can automate that, and that’s how things are gonna move forward.” However, going there is very complex, isn’t it? I know that you’ve recently done some research into this area. Tell us about the complexity and also the findings of the research that you’ve done.
Kyle Lagunas (8m 1s):
Okay, so it is very interesting that we surveyed about 300 people, the HR leaders and IT leaders in medium and global enterprise so companies with a thousand to 25,000 plus employees. We found that 60% of them were increasing their investment in automation and HR in this past year, and that they were likely to continue investing next year regardless of recession. We know that we actually have quite literal buy-in on automation in HR and talent acquisition, but then when we look to see the drivers of their automation, they were looking to improve quality higher, improve retention, improve employee experience, things start to fall apart.
Kyle Lagunas (8m 50s):
I think 3% of those that we surveyed reported seeing a tangible impact in improvement in employee experience. As we probed, we’re trying to figure out where is the gap here? We’re getting resources for automation. The IT organization is prioritizing HR projects more so than any other project in enterprise. What we looked at actually the strategy behind these automation efforts, and only 41% of the companies that we surveyed were clear on in what exactly they were automating. I’m sorry, 49% were clear on what exactly they were automating.
Kyle Lagunas (9m 35s):
It’s kind of this, I don’t know, intersection of several legacy gaps in the HR and talent acquisition function. We’ve given HR a pass for not being especially tech savvy in the past. If we are implementing a new applicant tracking system as an example, as long as you had technical experts in the implementation team, that was fine. You could just translate the business needs and implement around them. Well, with something like automation and artificial intelligence, it’s actually showing to be in more important for them to understand what these systems and capabilities actually do.
Kyle Lagunas (10m 16s):
If you say you want to improve candidate experience, well that’s actually a really broad initiative. What aspects of the employee experience need improvement? Do we need to make it easier and more seamless to request leaves through FMLA, which is a US Family Medical Leave Act? Do we need to make it easier for people to add a new dependent onto their payroll or for a candidate to find out who they’re interviewing with? There’s just all kinds of different things that can be automated and I think that it’s coming to a head where TA and HR leaders who, in the past haven’t looked too closely at how exactly these tools work.
Kyle Lagunas (11m 2s):
When it comes to time to start working with IT and the vendor to design these solutions, we’re finding we really don’t know what to do. We’re looking around the room to see who has the answer.
Matt Alder (11m 13s):
I guess, also, the thing about automation and personalization that you might build on top of that to improve experience,, this isn’t a one-time technology purchase and implementation, is it? This is something that is ongoing, that needs continual optimization, management, and continual strategic development.
Kyle Lagunas (11m 34s):
I love to hear you put it that way because it’s true. Even with an applicant tracking system, let’s stay with this example. With an applicant tracking system, you go through the implementation workbook and you go through UAT. You typically know how these things are going to be designed, implemented, and delivered. You are shooting for your go-live date. You’re not really driving a lot of transformation of process typically with an implementation of these tools, but even after you’ve gone live with an ATS, you will still have maintenance and ongoing iteration on certain features that need to be enhanced or workflows that might need to be revisited.
Kyle Lagunas (12m 22s):
It’s a program. Any sort of major piece of technology in TA and HR should be program managed, not just implemented and then you’re done, but we find that change management after the implementation of new tech is really limited. People just have spent a lot of their energy on the procurement, the evaluation, purchase, and implementation of these tools that, by the time it’s delivered in phase one, people have lost a lot of steam. This is especially true with automation. Maybe your CHRO has said, “We need to get AI into anywhere in HR that we can.
Kyle Lagunas (13m 6s):
We need to automate as much as we can.” “Okay, great.. Let’s see if we can get, I hear that getting a chat bot on our career site is a really great way to enhance our candidate experience. Okay, cool.” You get approval for this project, and then when it comes time to start developing and delivering some of this tech, you actually realize you don’t have any best practice of your own that you are modeling with this tool. You’re actually introducing new practices and you are having to answer questions about how this tool processes language to see what the question is. If you’re using any sort of automation or AI for evaluating applicants as an example, you’re gonna get a lot of questions about any potential for bias in the product.
Kyle Lagunas (13m 54s):
You’re like, “I never had to answer these questions before. I honestly don’t have an answer.” I think that we are quickly finding that with automation projects, people just treat them as they would tech projects in the past. You get the budget for it, you get the approval for it, you buy it, and you implement it. With these, it’s actually a strategy. Where is automation and AI going to enhance? What stakeholder experience are we gonna prioritize? What systems are these tools going to interface with? How are we gonna govern to ensure we are not introducing bias at any point against protected parties?
Kyle Lagunas (14m 35s):
How are we going to to report out on ROI? There’s just so many questions that come out from these things because automation is pervasive. I think that people are quickly getting inundated and overwhelmed with what they thought was just a new tool, but it really needs to be part of an overarching strategy.
Matt Alder (14m 59s):
Picking up on that strategy piece, you mentioned IT, you mentioned HR, who should own the strategy for automation? How should it sit within an organization?
Kyle Lagunas (15m 13s):
Oh gosh, this is really a difficult one. Honestly, it will depend on how technology is governed in the, in the company. Sometimes TA doesn’t even have ownership of their ATS. That’s actually managed by HR IT. It depends on how an HR IT organization and the IT organization itself are partnered. I think that we should continue to see TA and HR getting deeper technical expertise in their core ops functions, whether it’s talent ops or HR ops, whichever, or if they have a systems program, that’s even better.
Kyle Lagunas (15m 55s):
I think though that your leadership needs to be really plugged in to how AI and automation works, how it doesn’t, what opportunities there are that these capabilities bring. I think that they need to be way more plugged into the ins and outs of these programs than they have been in the past. It’s like a shared effort. TA and HR leaders need to lead the way on what they’re trying to solve for and what excellence looks like from their perspective. They need to then work closely with talent HR operations, HR IT to design solutions with automation and AI.
Kyle Lagunas (16m 44s):
Then, honestly, they also need to work really closely with IT and with their own governance and compliance programs and their legal teams to make sure that these efforts comply with the overarching automation and AI strategy. These things really are far reaching. If you’re introducing AI into your HR or talent acquisition process, there are a lot more people that are gonna lean in with questions than there are if you just have a new sourcing tool. I don’t think that one person owns it. I think that’s what makes it so complex.
Kyle Lagunas (17m 25s):
You can’t rule by committee. You do need to have leadership, but I think ownership is shared across a number of different stakeholder groups.
Matt Alder (17m 36s):
I suppose one of the biggest complications within all of that is getting the right balance between what the humans do and what the machines do. Any thoughts on that?
Kyle Lagunas (17m 49s):
I don’t know if you know Tyler Weeks. He’s now the VP of talent analytics at Marriott Bonvoy. When he was at Intel, I had talked to him a little bit about some of the work that they were doing there. He was looking at trying to get the team to look at AI and automation as an extension of the workforce and not just as a piece of technology. I think that philosophically, that makes a lot of sense. If you are looking at implementing some sort of automation bot, say it’s an automating workflow, it’s gonna com create an offer letter for you.
Kyle Lagunas (18m 29s):
“All right, we’re gonna send this off to offer letter bot.” Getting people to talk more about that tool as just a core part of the workflow gets them to recognize that it’s not magic. Something’s happening. “All right, well offer creator bot is gonna go and do this and pull this together,, and then it’s gonna come back to me and gonna ask me this.” I think that it’s important for people to understand where in the operation these tools are actually working. No one in HR or TA, and certainly no one in legal, wants to buy just an AI voodoo thing, right? This isn’t magic. This is working in a technical way.
Kyle Lagunas (19m 11s):
Honestly Matt, some of some of these new automations that I’m seeing coming out of vendors like Paradox and Hired Score, they’re actually deeply embedded in the talent acquisition process or in the HR process. It might not be super visible. For example, I’m seeing some of these new use cases from Hired Score where they are automatically beginning to kick off the sourcing process when a new requisition has been assigned. Typically, that would not be the case. A recruiter would get the requisition and then they would have an intake meeting with the hiring manager to calibrate on what a success profile looks like.
Kyle Lagunas (19m 55s):
They might get some sample profiles pulled from Hired Score tool and see if those fit. Well, that adds a lot of time to just the typical recruiting process. At the end of the day, Hired Score is gonna already fetch candidates for a recruiter to bring to the hiring manager, why not just automatically fetch those candidates and bring them to the in first intake meeting? It’s like jumping several steps ahead, and without direction, without actually the recruiter querying and requesting that, it’s just automated. These are starting to get more deeply embedded and I think that we feel these tools augmenting us in anticipating our needs, I think it helps to accelerate adoption because it doesn’t rely on over adoption.
Kyle Lagunas (20m 42s):
It actually is embedded in the way that we recruit and so it gets utilized regardless of whether the recruiter logs in and and searches for candidates or not. I think that’s a good thing, especially for those of us who have worked really hard to get budget and buy-in for an AI or automation tool and has worked really hard to design and implement those solutions. I think these advanced automations are actually really beneficial in closing some of that automation gap that exists with other tools. I think it’s almost seeing the adoption aspect starting to wane.
Kyle Lagunas (21m 25s):
It’s not as much of a direct impact on ROI for these programs. Instead, it’s just an assumption. This is just automation. We’re automating this no matter what, instead of, “Hey, we have this tool that you can use to automate.”
Matt Alder (21m 42s):
No, absolutely. That’s certainly come across in quite a lot of the conversations that I’ve had about automation in the last 18 months. It’s very clear that things are moving very quickly. The technology’s moving quickly. The whole economic environment is driving people to move quicker. As you say, the the adoption aspect is supercharged here. With things going this quickly, What does the maturity model look like for all of this?
Kyle Lagunas (22m 12s):
That’s what I’m working on right now, to be honest. What we’ve gathered data on so far is just the current state of adoption, like where adoption of these capabilities are today. What we’ve found is a significant number of companies now have actually taken the leap towards adopting automation tools. Let me add this up here. That’s 75% of companies already are doing some sort of automation now, whether they are in a pilot program, whether they expanding beyond that pilot, or whether they’re pioneering new levels of automation and utilization of AI.
Kyle Lagunas (22m 58s):
75%. I would say we’re probably in the early majority of adoption. We do still have about 25% of companies that are either still considering what they’re going to do, or we have just 2%, which is a statistical irrelevant number that are not planning to do any automation. The maturity curve, I think, will start to come out this year. This next year is really going to help us understand, now that we’re in that early majority, what’s possible, what great looks like versus what okay looks like. I had said that only 49% of companies are clear on what exactly they are automating.
Kyle Lagunas (23m 44s):
I think that that 49% is, and our research is showing this, they’re gonna make the biggest strides this year. They’re the ones that are seeing the greatest impact on some of the KPIs that we’re driving investment and automation to start. I think, also, they’ve built deeper partnerships with their IT colleagues so that their IT colleagues are actually bringing them along for new opportunities to partner new levels of automation and AI because they’ve proven that they’re savvy enough to reach new heights together. Whereas those who are those HR and TA organizations that are still like a little on the fence and not quite clear on what they’re trying to get done.
Kyle Lagunas (24m 32s):
I think that it is still looking at them, giving them a little bit of that side eye to be like, “All right, well I really hope that your new pilot program works out okay.” In fact, if I’m looking at this data here, we found that those companies that were clear on what exactly they’re automating, 71% actually are increased investment in automations next year compared to 52% of those who weren’t clear on what they’re automating. We’re seeing like a significant number or a significant impact in these automation strategies because the teams that are plugged in and have really worked hard to figure this out, they’re accelerating the growth of these programs, and I think accelerating the impact of automation for their stakeholders too.
Matt Alder (25m 22s):
As a final question, obviously, we’ve got this big evolution going on that’s going to dramatically pick up pace in the next 12 months or so. If we look out beyond that to a time when the economy’s re recovered a little bit and we’re moving into the next phase, what will have the impact been on TA teams? What do you think the TA teams of the future are gonna look like in terms of the skills they have, the specialists that they have within the team? Well, what are your views?
Kyle Lagunas (25m 55s):
I used to be very, very idealistic and aspirational about some of these questions. When I was at General Motors, they asked us a similar question. “What happens after we implement all these tools that are gonna help us to just reduce some of these bottlenecks and maybe improve some of these cycle times? What next? Are we gonna start laying people off?” I said, “No. Maybe, we’ll just stop working 65 hours every week. Maybe, we’ll actually get back to a life where we’re delivering consistently higher quality candidates and making better hires without all of the blood, sweat, and tears that have been absolutely drained from us over the last five years.
Kyle Lagunas (26m 43s):
I think it’s important to remember that going into this Covid pandemic, burnout was at a record high already among employees. burnout has actually only gotten worse over the constant daily disruptions of what we experienced in the last three years. If I look at this acceleration of automation and AI in talent and HR, I think it’s gonna just help us get back to out of survival mode and focus on how do we really make the greatest impact with these functions?
Kyle Lagunas (27m 24s):
A lot of it is, I think, should be focused on stakeholder experiences. It shouldn’t take me two weeks to start really recruiting. Once a recruiter has a requisition in a job description, that recruiting process should be able to start right there. We shouldn’t have to wade through a million applicants every year just to find the 100 that we’re gonna hire. AI and automation should help us to go right to those applicants that are the most obvious fit so we can use the rest of our time maybe doing some candidate care. It’s not as predictive and cool sounding, Matt, as you might want.
Kyle Lagunas (28m 8s):
I honestly just hope it gets us back to being better human play players in the operation. I don’t think it’s gonna unlock this whole new era of HR and talent. I think it’s just gonna help us to stop burning out all the time.
Matt Alder (28m 27s):
Well, who doesn’t want that? Kyle, thank you very much for talking to me.
Kyle Lagunas (28m 32s):
It’s been an absolute pleasure. Thanks for the thoughtful conversation.
Matt Alder (28m 35s):
My thanks to Kyle. You can subscribe to this podcast in Apple Podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to the mailing list to get the inside track about everything that’s coming up on the show. Thanks so much for listening. I’ll be back next time and I hope you’ll join me.
The post Ep 492: AI & Automation Strategies appeared first on The Recruiting Future Podcast.