Peter Laughter - Talent Optimization

Speaker A: Hi there, my name is Alex Foust and you're listening to Conversations at the Edge. Each week we meet with the top business thought leader to learn what they think we should be prioritizing to build better businesses, positively impact our communities and scale up.

Speaker B: All right, good morning, good afternoon, good night. Depending what part of the world you are joining us from. I am Alex Foust, your host of Conversations at the Edge of uh, uh, today I'm interviewing Peter lafter, who in 2020 walked away from a successful 25 year entrepreneurial career in recruiting and staffing industry because he figured out that recruiting is broken. He founded a new company called True Bearing and created a better way to engage top talent called engagement based recruiting, which we'll definitely touch on and discuss today. Peter is a storyteller, a public speaker. He's delivered a TEDx talk on radical empathy. He frequently tells stories with the moth. So I'm very excited to welcome, pet the community and really learn a better way to hire. So Peter, welcome to Conversations the Edge. Welcome to Growth Institute. And uh, where are you calling in from today?

Speaker C: I'm, um, calling from downtown Brooklyn at the beautiful Bond Collective coworking spot.

Speaker B: I want to start off with a statement I've heard you make in a couple of different, uh, avenues that, you know, recruiting is broken. And you say it's broken because we're applying systems for buying things to the complicated process of dealing with people. So I'd love to just open up and have you kind of share a little bit more about what you mean by that.

Speaker C: Yeah, so I think, you know, the, the real evidence, uh, to uh, to this, uh, this concept, if you look at your job descriptions, you know, they do they read more like an invitation to join your team or do they read more like a request for a proposal? And uh, I would gather for 95% of organizations it's a request for proposal. So I think that's your first indicator. But let's think about it. We start recruiting for people after we realize that we need to hire. And much like the way we go about buying stuff, you know, we are, uh, you know, we're not, um, and we become motivated buyers and then we are only able to work with the people who are actively looking and looking for our specific job in the moment that we have an opening. Right. So yeah, we're only able to talk to motivated sellers and we're not clear on what we're looking for. And what I mean by that is I think most people who are in a hiring position spend very little time focusing on m. What they actually need. But also more importantly, they are, uh, um, yeah, they're not clear on what has people be successful and that is our match with culture. And um, and then we, when we have people in front of us, we can't tell if they're a clear match because we haven't defined our culture. And then finally we outsource the job to people who do not understand our soul. Um, so yeah, and I say outside recruiters especially, but even internal recruiters, uh, you know, face the same concept, you know, is because if they're not embedded with the team they're recruiting for, they really can't see the insights that they're looking for.

Speaker B: Yeah, I think that makes sense. Um, and you know, I've heard obviously the war for talent is like a, ah, trendy topic that's going around, um, you know, the business world today. And you've negated that. There's actually a war for talent, saying that you're just looking for people in the wrong places. And so I'm curious for your insights on that and where we should be looking instead so that we're not participating in this talent war.

Speaker C: Yeah, so that's, that's a great point. I really do believe. Um, so one, first and foremost, there will be talent shortages there. There is talent shortages right now. I mean unemployment is hovering just, uh, around 4%. Anything below 5% makes hiring impossible. And that's going to continue for the next 20 years. If you look at the demographic shifts that we're facing, with the amount of boomers who are leaving the market, there's just not enough people to replace them. And we're in a technological space that is growing exponentially. So we have exponential growth of, um, needs for skills and a decreasing population. So make m. No question about it. Recruiting is going to get a lot harder in the years to come. But that doesn't mean there's a talent shortage. There are tremendous amounts of people who are available. Uh, there are will be less and less people who are actively looking for work and particularly looking for your open job in the moment that you need to hire someone. I'll admit that. Uh, but if you think about it, in the majority of fields, 86% of the most talented candidates who are on that market are working. And uh, they're not looking at job descriptions, they're not looking at job postings, and they're not taking calls from recruiters. But that's not because they're happy and love their work. The vast majority of People are disengaged to some point, according to Gallup, you know, close to anywhere between, you know, 78 and 70. And 78% of, uh, the working population, depending on where you are, is on the spectrum of disengaged. And, you know, 90% of people would accept, would seriously consider an offer from a company that they respected. So there's plenty of people on the market. There's just a very, very small minority of people who are looking for your job in the moment you need to hire. So all we need to do is change our process to focus on that 86% of the most talented folks on the market, uh, who are not looking and look for ways to engage them because they want what your clients and what your community have to offer as long as it's positioned in the right way.

Speaker B: So let's dive in there and talk a little bit about engaging this 86% of people. Um, could you elaborate on how hiring managers, executives, people in organizations can engage with potential talent before we actually need to hire? Yeah.

Speaker C: So I think it's really important that people understand that, uh, what people are looking for, um, in work and how to fill their days has changed really dramatically, dramatically in the last year, I think. Uh, and I think this is happening well before, but I think the pandemic and other factors have really accelerated this change. So people, if you look at the changes in the workforce, the last three years where a great resignation, quiet quitting, m. Now it's quiet disengagement. All of this stems from two desires that are emerging amongst the workforce. One is meaning, and the second is agency. People want to feel connected to the work that they're doing, and it's becoming a demand, actually, and they want more of a say in how they go about doing it. And all both of these things have huge benefits for employers if, if we interact with it correctly. So understanding that dynamic and things have shifted, right? This, this, this idea, uh, of work, life balance, that there's my work on one side and then there's my life on the other. It's bs, right? There's just one life, you know, and if you have a, uh, crappy day at work, it impacts what happens when you get home, you have a great day at work, it impacts what you have at, um, home. You're leaving for work and you get in a fight with someone in your family, it impacts your work. So there's no separation and there never will be. And I think collectively as a society, we're starting to realize that and we want that, uh, to be integrated work life integration is something that's much more important. So I think first and foremost, employers need to understand that and they need to speak to that. And two and three, I think the, um, uh, what we use to attract candidates is the, the job description, the job opening. And that is just. It is a currency that is completely irrelevant to most people, particularly is only relevant to those people who are looking for a job in that month. Small percentage of the population and not the best. You know, the average, uh, job search takes, and this is from a fry cook to a CEO takes about 28 days. The, the average amount of time that the top candidates are on the market is 10 days. So with that method, there's no way you're going to get what you're looking for. So what is it that engages people who are working and not looking? Well, it ain't the open job, it's your culture. So developing. And that's really at the core of engagement based recruiting is how is it that you can tell stories on social media platforms like LinkedIn or whatever it is that your employee base is most frequently and tell stories that emanate from the narrative themes that come from things like purpose, values and culture. And your postings about those, uh, those stories are really designed not to sell or convince. Come join our team. No, people don't want to join your team before they know you. So you're creating, telling these stories to create engagement and then nurturing that engagement into relationships.

Speaker B: Yeah, I'd love to go into a little bit deeper. You know, we've heard the phrase, um, you know, hire for culture, trained for skill. And I think a lot of people have like bought into this idea, um, yet I heard you make an interesting comment in one of your LinkedIn posts recently that m people are saying it, but not necessarily living it. So can you talk a little bit about that? Um, how things are not adding up in the way that most organizations are recruiting?

Speaker C: Yeah, I, so I agree with the sentiment, but when people say it, it drives me absolutely crazy when I hear it. Um, uh, because. And whenever I see someone say it online, my question is always, what are the systems you use or hiring for culture? Uh, and uh, what they talk about is only at the last step of the process do they talk about culture. So what's the beginning of the process? Well, we're looking at. Wait, uh, for it. Skill set and background. Yeah. So if it's most important that we hire for culture, why do we not start the process there? You know, why do we, why do we start with a group of people who we think have the skills and hope they have the culture. Yeah, it's broken. And even our systems, like there was one organization that was talking about how great it is that they hire for culture. And I asked, so how do you, how do you go about doing that? And they said, oh, we mention our culture in the interview process. And uh, yeah, I wanted to hit myself, my head against the wall because it's just. Let's think about the dynamic. Remember we talked about motivated buyers talking to motivated sellers. If you're desperate for a job and someone tells you about their culture and asks you if you're interested in working about that culture, how likely are you going to tell the truth? And the fact of the matter is you will lie your rear off to get that job. You will say whatever it is that you need to say to get that job. So they are, their timing of uh, the action of hiring for culture is out of whack and the methodology sucks. So I really assert that uh, people understand the importance of it. But it is there that we're so stuck in this, in this commoditization of people process of attracting folks that we just, we lose track of how to go about finding it guilty. And I think that's the thing that, you know, I mean it was, it wasn't that I came to this and I saw the recruiting process and saying, oh, there's a better way. No, we all, this is just how you go about finding people. You find, you know, we started off posting in newspaper ads and then we, you know, we started posting on online and now we post on LinkedIn. But the methodologies have not changed at all in I don't know how many years. And it was really for me in 25 years recruiting. The first 10 or 15 were great where I had relationships with my clients. But then organizations, large investment banks just commoditized their staffing efforts and it became miserable. And the quality they were experiencing just went way down. I was working with a large uh, uh, investment bank. I um, won't give the name, but it rhymes with Goldman Sachs. And uh, um, they uh, you know, I remember they called on me to fill a very, very elegant project. And then that business, you know, that high level business just went away as they commoditized it. And in 2014 I was uh, working with a management consulting firm and they called me with a very similar project. Now I was making twice the margin. I was, if I had gone, if then uh, I was with this management consulting fir, if Goldman, uh, as opposed to, if Goldman had come to me directly. And um, but they didn't because they'd become so commoditized. They didn't believe they can get the quality of people they needed. So they went to a management consulting firm which charged three times more than what I would have billed them. So it's, it's, it. And that was the first sign, like, this is very broken. Yeah, I was very happy, don't get me wrong, to charge, um, double my margin. But nevertheless, you know, uh, was. It's realized that, that all the systems they, they created aren't producing the result that they wanted.

Speaker B: So I want to stick on this, this topic of hiring for culture for a little bit longer because, I mean before today's conversation, I would say, yeah, we are hiring for culture. We have an interview that is dedicated to the culture. It does happen. The last interview. How would you recommend turning that around? Like, you know, is it just, is it just attracting people through LinkedIn posts or is there more to it?

Speaker C: Well, I think there's lots of ways to attract people, but I think first and foremost it is the currency we use to attract people needs to uh, to be looked at. And so, uh, let's take the LinkedIn example because I think that is just, yeah, it is the easiest way to build networks that I think we have available is, is social media. And particularly in a business that LinkedIn, I think has really, really good job of facilitating that process. So when you are telling stories on platforms like LinkedIn, uh, that emanate from the narrative themes that come from culture, purpose and values, what are the types of people who are going to be engaging with those posts? Well, it's people who share those cultural affiliations. Right. You know, and, um, you know, and two, why it's. And I just want to take a quick detour. It's important that we're actively building networks, um, because if we're just relying on our existing networks, then we repeat that same, you know, cultural affiliation that we have A, uh, a person I, I know does, uh, employment data analytics and a large, um, investment bank said, we want to know what are the, the criteria that our leaders have that are most indicative of success at this company so we can recruit for it. And what he determined and uh, I love this was that they played lacrosse at a, uh, Northeastern University. Right. So this is, you know, and so

Speaker B: I know those guys. Yeah, except we all.

Speaker C: And they're great guys. But when, when that makes up the majority of your leadership, you've got a huge problem, particularly in this world. So if we are just focusing on our existing metric, uh, networks, we're going to get more of the same. So it's very important that we target networks that are comprised of people who have the same beliefs, not necessarily the same experience. Very important that they actually be different experiences. So we get a diversity of thought. I don't think any organization really cares that much that we have a, uh, variety of people of different colors. If we all think the same, we're going to produce the same results. We really need that tension of diversity, uh, of thought to be able to come up with the best solutions. And so, but when you're, when you're targeting different groups and you're telling the stories online of people who share those cultural affiliations, then those people are likely to share your culture. So you're starting with a group of people who share your culture, which is the great place to be, and then looking at that engagement and identifying who from that engagement is, uh, has likely to have the skills, and then nurturing that engagement into relationships where you have conversations with people where you're not looking to sell them on your company or recruit them, but really find out, hey, is this person likely a match for my culture? Are they likely to have the skills we're looking for? But more importantly, what do they want to accomplish in their career? And so when it's time to hire, rather than take four to six weeks and get an appropriate pool of candidates who, who the only thing they have in common is they just happen to be looking for a job or your job in that exact moment. Start and get about 100 or 150 candidates and do a really bad job of, uh, sifting through their resumes. And trust me, we do a really bad job of doing it. And we can talk more about that later if there's time. Start with a smaller group of people, 10 to 15, 20 people who, you know, share your culture, who you know are likely to have the skills you're looking and reach out to them and say conversations like, hey, Alex, you and I have been talking for a while. We like each other, we have a similar understanding of the world, and we want similar things out of the world. But more importantly, I know you want to do this cool thing with your career. It just so happens we've got an opening and it'll help you. I think it'll help you get to that place a lot faster. I don't know, should you and I have a chat that's going to have a very, very different result and you'll move much faster through the process and you'll have much better results. I mean, if you look at the results of our hiring practices, they are abysmal. I can't remember the specifics, but, uh, both voluntary and voluntary turnover within the first year of employment have been about 25%. According to Gallup. I've heard that 30% of people leave jobs within the first year because of culture, uh, lack of culture, fit. And in the CEOs and the CEOs that I've been speaking to in the last year, they admit that 20% of the people they let go or quit, and there's another 20% who they really should let go, uh, who are just doing the bare minimum. But it's so hard to find people who can do just the bare minimum that they hold on to them even though they know they shouldn't. So, like, what we're doing isn't working. It takes a long time. It takes, I, um, mean, you know, and it's not producing good results. But if you start with a group of people, you'll have very, very different, different response and much faster they have time to hire, which is really what we're looking for.

Speaker B: You mentioned, uh, you're a student of generative AI, so I'm curious what you are seeing in terms of, um, the recruiting process and where these, you know, exponential technologies can play a role and help us be more successful. What are you seeing? What are you recommending, um, to the folks you're working with?

Speaker C: Yeah, so I'm very, very excited about, uh, generative AI and particularly to uh, eliminate a lot of the detail work so we can spend more time engaging with other human beings. What I think we were really designed to do, you know, we did not evolve to fill out Excel spreadsheets.

Speaker B: Right?

Speaker C: That is not. Yeah, but we are social animals and being social is a huge part of our evolution. Um, so I, I think using technology to enable those interactions is something we need to be focusing on. Now. That being said, I think the majority of the recruiting systems out there are, ah, built on this real broken system. Right. You know, so they will produce, they will have you produce the same results faster, but they're not going to transform your recruiting effort. So we need to start understanding that, um, they'll create faster caterpillars. But if you want butterflies, the existing tools just aren't going to get you. Um, I think that's the brilliance of uh, ah, generative AI is we can use it to build new systems very, very easily. And so the systems that we need are one, how do we use generative AI to think differently about our requirements and where else might they come from? This is a, uh, great compendium of human, uh, knowledge. So just being able to ask generative AI, hey, these are the things we need to accomplish. What are the industries where people might have this skill? You will be surprised at the answer. Uh, you will come up with things that you never thought of. And then also what I really see as a great possibility is using, um, social media data and generative AI to determine cultural profiles. Who are people who are likely to share your cultural affiliations, who believe in your purpose and values? Uh, these are things that are easily achievable with generative AI and the analytic tools we have. And we'll give you a huge leg up. And then also being able to come up with what is the messaging that these people will need, uh, to engage with our organization. Organization.

Speaker B: Awesome. Uh, any final thoughts before we, uh, say goodbye for today?

Speaker C: Yeah, I think. Well, I think from a mindset standpoint, I think it's really important that entrepreneurs recognize that recruiting is culture. Right? Yeah. How we engage with people is so much about our culture, but yet we tend to think about it, uh, like, oh, I need to fill slots. And if we start to think about recruiting as an opportunity to really strengthen and build our culture will have very, very different results.

Speaker A: Thanks for listening to Conversations at the Edge. I hope you enjoyed this episode and if you did, please share it with a friend or a teammate who you

Speaker B: think would benefit from what we covered.

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