In this podcast episode, Max and Quincy Valencia of Ventana Research discuss TA tech trends and the integration of specialized tech vendors from vertical industries. Listen as they highlight the possible future trends for technology in recruitment and how the market for TA tech is continuously growing to accommodate innovation.
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Max: Hello, everybody. Welcome back to The Recruitment Hackers Podcast. And I am delighted to welcome on the show today, Quincy Valencia, formerly known as the Queen of bots. Today, the VP and Research Director for Ventana Research, and previously working at AMS, at CLO and ADP and a long, long career in recruitment and talent acquisition technology. And so I'm really happy that Quincy agreed to come to our show, to talk about some of the trends from the year that's ending now; 2022, for those listeners who are listening to this podcast in the future, and where we might be, we said we would talk about a few trends.
So expect a conversation on hyper-personalization of the candidate experience, consolidation of the tech vendors, TA tech vendors, and what it means for the market and for the candidates. And perhaps we'll talk a little bit about the bots and conversational AI from its origin, or let's say the recent history of the last five or six years, and what the near future may look like. So, Quincy, welcome to the show.
Quincy: Thank you so much for having me, Max, I really appreciate it. I love these kinds of conversations, especially with people in the industry that I respect and admire. And that would be you, you fall in that category. So thank you.
Max: Well, you're too kind. It's an honor to be in that industry. And it's great that we live in a world where you're in South Carolina, I'm in Ireland, and we can talk to our global audience about stuff that nobody cares about.
Quincy: Somebody cares about it, you and I care about it. So if nothing else, we can go back ourselves and listen to ourselves talk to each other and be very excited about it.
Max: Okay, a deal. So, well, before we get started, perhaps a word about Ventana Research. What's this organization that you joined earlier this year? And what kind of services do you deliver? Who should be coming to talk to you? In what situation?
Quincy: Yeah, so Ventana research is celebrating its 20th year in business as of this year, it's a boutique technology analyst firm, and the primary focus is tech. And we have several coverage areas including, not just HCM tech, which I own and lead that practice, but data analytics, digital innovation, CX, so we kind of span the board there with different areas of technology that we cover. And we do primary research, we do thought leadership, consulting, advisory, so on and so forth, all the things you would expect of an analyst firm. And it's an exciting place to be. It's a fun, interesting time to be in this industry as well.
Max: Are your services called upon when somebody does a big RFP? And they want somebody to write the RFP?
Quincy: No, we don't write RFP, but we do…. Yeah, sorry. We will help people evaluate those RFPs and responses. And, you know, our clientele are the vendors, certainly, but also end users that will be using products too. So we have a great mix, we just recently verticalized our entire product offerings, and now we're looking at specific verticals like healthcare, manufacturing, financial services and retail and several others that we have expertise in within our organization. So it's just another lens to look at the products and services that we deliver into the market.
Max: I think I'm gonna latch on to this as a segue to our first industry topic. What was the word? Verticalization.
Quincy: Verticalization, yeah.
Max: So verticalization of talent acquisition, I think is a real thing. It's not just a bunch of syllables. I think it's happening.
Quincy: That's an actual thing. I agree with you. Now, you never have to say the word again.
Max: We agree about the thing. So I first noticed it a few years ago, and I saw some ATSs pop up specialized in hiring drivers, of all things.
Max: But now it seems like there are ATSs for healthcare companies, for retail specialists and others. Yeah. What are you seeing in the market and how verticalized is the industry now?
Quincy: So I see the exact same things that you have. But if you look at what the issues are in recruitment for some of those industries, they're parallel. And so you don't necessarily need one TA tech for just healthcare or one just for retailer, or one just for hospitality. You look at what are the issues that arise within those industries that are the same. So if it's high volume, low barrier to entry, high volume of transaction, those are the types of things that you want to look for when you're looking for technology. And so in some cases, once you may have started out just as, hey, we're going to start in quick service restaurants, or we're going to start in retail, or we're going to start in whatever, they're quickly bringing in different industries into their organization that they're marketing to because they can support those just as well.
I think the only one that I would say probably deserves its own is drivers, because that's an interesting beast, the way you market to them and sell to them and contact them and the way they can come back to you and what you need, and the regulations and documentation and all of the verifications that you need is a little bit different. But, I can see why there was a need, you know, for some of the players in the market, but I think a lot of it continuing the trend is a little bit of consolidation, because, again, you can start marketing to, hey, I'm just going to do hospitality. And you see that you have the opportunity to expand your reach by bringing in other verticals into that same business that operate similarly.
Max: Yeah, I mean, from a vendor's perspective, our perspective, we knew there were some little bits and pieces missing, for us to be relevant in some industries, and you add them progressively as you go. And, of course, you know, it's a go-to-market strategy. Initially, it makes sense to keep talking to the same people over and over again, until you've established a good position in that market. But, at the same time, considering that recruitment platforms are becoming integrated with assessment vendors, and, you know, assessment vendors are more specialized. So, that makes a stronger case for saying, you need a recruitment software that just does healthcare, just does, you know, logistics, for example.
Quincy: I don't know. I mean, I think it depends on the type of assessment that they're crawling into bed with, for lack of a better term. Because if you look at the trends in the market, switching back to, you know, skills-first hiring, for example, we're not talking about skills, like, do you know Excel? Or, you know, are you a phlebotomist? Can you do that; talking about capability, and potential, and demeanour? And so in that way, their organizations are opening themselves up to be able to screen in candidates that they may not have considered previously, because really, so much of what we do until you get to a certain level, or if you're in a certain speciality, I mean, you're not going to hire a financial analyst that doesn't know Excel, right? I mean, that there are certain things you've got to do.
But if you look at what makes people really successful in a role, a lot of it, you're learning anyway. I mean, I went to school for, my Bachelor's degree in International Finance and Marketing. That has absolutely nothing to do with what I do today for a living; what I do today for living, I didn't even know existed and RPO, I don't think existed when I was in college. So there's so much of what you learned that, hey, I can do this because I've done that.
Quincy: And because I have the adaptability, and so on and so forth to do it, that type of assessment is becoming much more popular to screen in on the front end for that talent that is difficult to find. As opposed to being the skills like, can you type? You know, can you speak English, like we were just talking about, it's a different type of skill, also equally important for certain things, but the trend is to kind of start looking in the other direction.
Max: Yeah, yeah, I see your point. From a job seeker's perspective, you should be doing the bulk of your ATS integrate - interaction in the first 10 years of your career. After a while, you should be kind of on track; you've picked your industry, your picture, you've got your expertise, you've got your network, and you're going to be less dependent on proving yourself to a machine or to an assessment company or to an interviewer. And that's where most of the value of these technologies ought to be, is at the early career stage when people are more potential than, you know, achievements?
Quincy: I don't know about that. I don't know. And I think in some cases, that's totally true. But just to take a contrarian point of view for fun because that's what I do. There - if you have been in, I'm going to use parallel industries just because it makes it easier, but I've been in sales my entire life and I'm a sales professional and sales sales sales you'd like and I'm so sick of having a quota. Can I not move into Marketing potentially? Do I have the, it's a parallel sort of industry? Do I have the skills? Nobody would necessarily consider me for marketing. Because I'm a closer, right? But this isn't me, by the way, I've never worked in sales. So I've not really touched the hypothetical me.
But do I have the capability and potential and demeanour and aptitude to then transfer what I already know, into a new line of business? That doesn't happen too often when you're going company to company? Certainly, that's applicable for internal mobility. But I think we're going to see more and more of that, I think it's going to be a slow adoption because it's hard to switch what you've done for, you know, your entire career - the mindset. If I'm a hiring manager, I want somebody who's in sales. But maybe I shouldn't be in sales. Maybe I'm a mediocre salesperson. But I'd be an extraordinary sales leader because I have a propensity for leadership.
Max: And then the machine will be able to establish commonalities between candidates that would have been completely different piles before then.
Quincy: Yes, that's exactly - I never would have considered me for that role, because I was mediocre as a salesperson. And I need a sales leader, but maybe I'm fabulous at leading a team and driving consensus or, you know, whatever those things are that you need to do to be a leader in an organization.
Max: Whatever those things are.
Quincy: Whatever those things are. Right.
Max: Yeah, who knows? Well, okay. So, this trend of consolidation? Do you think we reached the apex and for the listeners, maybe go back to what's been happening over the last 12 to 18 months to the industry? And are we have we reached peak consolidation yet?
Quincy: I mean, I think we have to have. There's no one who's left to acquire almost, I mean. I mean, over the past, I don't know how many months, 24 months, maybe the level of acquisition, that's happening, consolidation in the industry has been literally unprecedented. The money from investment firms that's gone into TA and TA Tech has been literally unprecedented. And there's been just an extraordinary amount of consolidation in the market. So if you'd look back several years, the strategy of most organizations had gone to, you know, if I'm building my tech stack, as an organization, the strategy is let's get best of breed at each step of the process from, you know, candidate attraction through the end of the employee lifecycle.
And there's merit to that for certain organizations, for certain types of company. For certain complexity of organization, there's certainly merit in that strategy, I've always actually been quite a fan of it; there's also risks. And so as we looked at organizations over the past couple of years, during the pandemic era that were having to do more with less, I mean, I remember talking to one company who had gone from a recruiting team of 198 to two, and now all of a sudden, the world opens up, and you have to hire these people back, that's not scalable if you're depending upon just human beings to do it. So you have to have technology there.
And they were desperate and didn't have time to do RFPs for, you know, 77 different products in the stack. So let me go with XYZ big player because they can take care of us, kind of across that lifecycle. And meanwhile, those big players had gobbled up so many of the small players. And now you have a platform instead of a point solution. So have we reached the peak? I think so. Again, there's just so much consolidation that has already gone on. I do think that we've plateaued a bit, not that there won't be others.
Max: Definitely. Yeah, it's gonna continue. Just from - The economics are such that, you know, the valuations came down.
Quincy: We had to. I mean, how many unicorns did we see in two years? Give me a break,
Max: Fundraise - Yeah, the amount of funds being deployed to late-stage venture companies is lower so they're gonna have to find, you know, sort of acceptable exit. Anybody who's past series A is gonna find it much harder to finance series being on so. So that'll be happening. But I was thinking more in terms of the narrative. Yeah, sort of like the narrative of it's going to be an easier solution for the customer to have one vendor that does it all. Whether the market and the buyers are going to become wise to the shallowness of that promise. Because, like you said, like, it's just a bunch of things that are glued together that aren't really talking to each other.
Quincy: Right. I mean, that's the issue. Right? So you have some - I think that those who have built natively will come out shinier in the end, because if they are all built in the same architecture, it's going to be easier. Everything that's trying to bolt on their issues and struggles; you and I both know trying to bolt on this and bolt on that and bolt on this. And then somebody messes up a single line of code. And all of a sudden, these things don't talk to each other anymore, then there's a problem, that'll start coming out more and more. And then as things do, the pendulum over the next, you know, several years, eight or so years, I'm thinking of contract length terms. So 6, 7, 8 years, the pendulum will swing back to the other way, I think.
Max: By then the market will be much bigger because eight years of the market growing and automation taking on its steady course means it'll be two, three times bigger. So there'll be more room for point solutions as well like you can build a bigger company with a smaller product.
Quincy: You definitely can. And like innovation is not stopping. I mean, everybody that I know who's created product is still creating product. They still, you know, inherently see gaps; there’re always going to be gaps in the market, there's always new technology that comes along, that's going to fill that space. So it's not going to stop. To me, it's exciting and will continue to be so.
I think for now, in many cases, platform players have an advantage for now. Will that stay that way? No. Only because that's just the nature of the beast, everything is cyclical, it will go back. And while during this time, some of the best technologists are taking the opportunity to add more and become more innovative and just upgrade what their offerings are into the market. So there's room for everyone, I think.
Max: We've been chatting for almost 20 minutes, and we haven't spoken about bots much. So bad, so rude. To the Queen of bots, I must ask you; how are the bots doing in 2022? And what's exciting in the near future for the world of conversational AI? Has there been a fall from grace from the early days?
Quincy: No, I don't think it's a fall from grace at all. I think it's just become more of a standard. I think that, you know, a few years ago, everybody was looking to try one of these new bot things and how could it help. And then organisations started adopting them and they would use them in a very limited way. So let's just use it to answer benefits questions for existing employees, or let's just use it in the very front end of the recruiting process. And now, you know, technologists being technologists have continued to develop capability and deepen the capability.
And so now, you know, a lot of the organizations already have it. And it's just a matter of extending the use and how do we use it in more points of the process and extend it along the entire, you know, candidate to employee journey, because it's an interface that our candidates and employees are comfortable with and know and understand. And so they just continue deepening and bringing in more use cases. So I don’t think there's a fall from anything, I just think it's just what people do now. I don't know. Do you disagree with that?
Max: Yes, I disagree with that in the sense that I still think that the main use case is at the front of the funnel. I think that's still 90% of the value because that's where there are just too many candidates to talk to.
Quincy: Well, depending on the industry. So it's certainly the industries that you focus on. I think that's 100% true. Absolutely.
Max: So we agree after pretending to disagree. And then I think that to go from the 90, you know, to eliminate 90% of the candidates and then continue the conversation, then you would need to have - then you're going to need to really level up the technology because the front of the funnel is hard enough to build, then you've got to think about all those scenarios for candidates that have gone past the first level screen and decide what are the follow-up questions you want to ask them. And some of them are obvious, like, I don't know, how much money do you want to make or stuff like that, but then some of them are not so obvious.
It's like, well, we're like 60, 70% sure that this person is good at you know, sales. How do we solidify that confidence? How do we go from 60% confidence to 90% confidence? Am I going to ask him a couple of follow-up questions or then do an assessment? These are not decisions that are automated today. And to be able to automate the follow-up intelligently, and automatically. Well, that's not a bot anymore, right? So that's why I was telling you earlier - where I think that for conversational AI to get to the next stage, it needs to have an incredibly powerful back end that kind of recommends, where do you dig? How is the conversation, moving organically towards where it needs to go to get to the answer
Quincy: Which is why I'm so excited about GPT3 technology that will soon be 4. I mean, the level I was in - I've been in there, I've been in OpenAI system. I don't know if you've taken the opportunity, but you can go there now and play around.
Max: I spoke to the bot.
Quincy: The level of, depth of complexity that the system can handle is pretty remarkable to me. And it's only a couple of years old, it's gotten better since it started, and it will continue to develop. But to me, it's just taking the functionality of a bot on the front, which I think is extremely valuable for many things. It's speeding up productivity and automation and efficiency and so many things that I think is great for candidates and for recruiters or candidates and any back-end user. But this I think will be the next big evolution as organizations look to build their bots, or evolve their bots using different tech.
Max: Yeah. Do you think this is going to be applied next year? And what will be the first application by a major industry player of this technology? If you had to bet.
Quincy: That's great. I think the first step, maybe writing job ads. I mean, I think that could be a good one. I just, it was funny. I asked it to write a job ad for a podcast host. And it was pretty cool. I asked it I said, write, all I said was write a job ad for a technology industry analyst. And I was like, that's pretty good. It'll have to be tweaked. But I think that's one that could be good. I mean, there's always a starting spot, and then you start to take that application somewhere else; that's probably a good place to start.
Max: Awesome. That's a good idea. And there was a company, of course, that was specialized in writing job ads automatically. I think it's still around. X two
Quincy: Well, perhaps. Yeah,
Quincy: Yeah. But again, it's different tech. So are the results different? I don't know. Yeah. I mean, to me, that's the possibility. So no, I don't think there's been a downfall of the bot. I think it's not all the chat and all the rage anymore. Because it's been widely - people just recognize they're beneficial. That doesn't mean everyone's bought it. That doesn't mean everybody's using it. But I think people know. I think the second reason that if there's been any negativity about it, it's been the way that they've been configured and deployed in ways that worker and candidate expectations are not being met,
meaning the shift has been to just mass personalization of the process, all processes of all engagement and all interaction. And perhaps the way that some bots have been again, configured and deployed, it feels very bot-ty feels very impersonal. And so that's not good, either. So I think that it may behove some companies to look at those, how they're deploying them and where they're deploying them, and does it enhance the experience. Or does it detract from it?
Max: When it really goes to the next level, too, which is after pre-screening, you know, to the sort of follow-up digging, and the next step, that's when you might want to interact, you're a little bit more careful about your interaction, because then as a candidate, you don't think of this as just a gatekeeper. You get past this thing. And then you can talk to a human, which is how bots normally are thought of. But really, this is it. This is what's going to decide whether I'm going to get hired or not. So I better bring in my A game.
Max: Yeah. I think we're a couple of years away from that.
Quincy: Oh, yeah, it's not gonna happen tomorrow. But time flies, so you don't know. We'll see.
Max: I mean, I'll still be around. I hope.
Quincy: You and me both. I’ve been around for 107 years. I think another two isn't going to...
Quincy: I look great for being 127 years.
Max: You've got some great nanobots looking after your skin. We could go on for a while but I like to stick to my timelines. So I'm gonna ask you my final interview question, which is always the same one. I asked people to think back about a mistake they made in hiring and to walk us through that mistake. You know, what was the origin of it without giving any names and so that our listeners can, you know, can reflect on how to avoid that mistake in their own job.
Quincy: Yeah. So some time ago, I was hiring for a team. And I was down to two finalists, candidates. And at the time, I was relatively new to my role. And so it was really important to me to bring someone in who could sort of hit the ground running and maybe wouldn't need as much of my time and training because I was trying to learn my own jobs, too. And so I selected the person who had what I thought was relevant, similar experience, instead of the person who didn't, who was also an excellent candidate who ended up being hired somewhere else on that organization. And then fast forward. Well, fast forward, that was the wrong decision because I did not consider interest, I did not consider desire of the candidates, I did not properly consider what their potential was, what the capability was, how much ability they had to develop and execute on their own thoughts and ideas versus you know, what I would have to sit there and handhold through because they didn't want to do it wrong, based on how they used to do it. It was the wrong choice.
Max: If you could go back in time, probably, you'd be like, sit on that decision for a little while, if you’re unsure. You seem - you come off as somebody who's like prone to action; you came in, and you wanted to show I can hire fast.
Quincy: It wasn't that I needed to hire, you know, I needed -- you know, you're building a team, you've got to get your people on board. And I was like, yeah, so you wanted to make the decision, I would have sat on the decision, I would have considered it and really considered one of the benefits to having someone who's fresh and maybe non-jaded and not afraid of making mistakes. As much as somebody who you think has the exact work history experience that you need. Just why I'm kind of a fan of assessment now at the higher level and not just the lower because I believe that had they been assessed, that would have come out pretty clearly in the beginning. So I think looking at potential and capability is really important. More so than just the exact job titles people have had.
Max: Okay, word of warning from Quincy Valencia, if you're stepping into a new industry, don't default to hiring the old hands just to make up for your weaknesses because that's always going to be a secondary factor towards whether someone is a good fit, long run and is excited about the job and so on. And so a mistake to avoid. Thanks, Quincy for sharing that moment in any recruiter's life where, you know, you make an oopsie.
Quincy: Yeah, it happens. Live and learn.
Max: Great. Thanks for joining, and where can people get a hold of you?
Quincy: Thanks. I really appreciate it. Well, certainly at www.ventanaresearch.com. Or if you just want to contact me directly, connect on LinkedIn, or shoot me an email at email@example.com.
Max: Those will be in the cliff notes and thanks for listening. Bye bye
Max: That was Quincy Valencia, who on top of her 107 years of industry experience that she says, was able to give me a little bit of perspective on the fact that while the buzz may go up and down on certain technology, technology marches forward, the market gets bigger. And if you have a vision for what you want to build, whether you're a practitioner or a vendor, like me, you know, time will work for you and you will eventually get there. It's only just a matter of time. So a good lesson to take the big view and the long view on how technology transforms the industry. Hope you enjoyed it as much as I did and that you'll be back for more. Remember to share, and to subscribe.
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