March 17, 2023
Recruiting in financial services in 2023
December 7, 2020
At last month’s Summit, Gem was honored to welcome Reid Hoffman—Co-founder of LinkedIn, and a name you know well if you’re in talent acquisition—to speak to attendees about the current, and future, state of the industry. Reid was joined by Gem's COO, Prathap Dendi; and the conversation was so insightful that we decided to publish the transcript nearly in full. You can read part I—in which Reid discusses the surprising delights he's discovered during COVID, blitzscaling, and the opportunities for talent acquisition in this moment—here. The second part of their conversation is below:
Prathap: One thing that I've been thinking about is that in your book The Alliance, you predicted a change in employer-employee relationships as we moved into this hyper-network age. You wrote this a few years ago; and the book outlined the need for the right language and framework for building these high-trust relationships, including instruments such as the tour-of-duty. Now, for the first time ever in human history, the majority of knowledge workers are working remotely and looking for ways to connect with each other. It feels like that need for the trust element The Alliance talks about has only gotten deeper. Do you have some thoughts to share about how employees and employers can navigate these new work-relationships better—specifically around this kind of remote connectivity?
Reid: The Alliance was trying to address a piece of the trust relationship that was failing in almost every company, because companies were not adjusting to the new world. They were still using the language of, Hey, you're going to work here forever. The problem, of course, is that when you look at the modern world, that’s not what’s happening in the U.S; it’s not what’s happening in most countries. Talent is using jobs as stepping stones in which to build their skill sets, prove themselves, add value to their current company, and move on to their next experience. And so the problem is that the conversation about the transitory nature of the role doesn't happen. And that's the elephant in the room.
And if we're not talking about the elephant in the room, what else are we not talking about? Because not only might the prospective employee go on to another job, but so might the manager, and so might the CEO. So how do you navigate that? Essentially the advice of The Alliance boiled down to this: have trust-building conversations; address the elephant in the room. Be like, Hey look, we expect you to do great things here. We're hopeful that you might be here your entire career. That'd be great for the company, and it’d be great for you; but also, we know that things change.
So the implicit contract in the tours-of-duty framework is one in which the company says, Okay, you’re coming here to transform the company. You will accomplish something heroic, amazing, and wonderful while here—something that really moves us forward. And at the same time, we help you.That project that you accomplish with us will take your career, your capabilities, your opportunity set to the next level.
That's what the tour-of-duty framework is now. But the thing that's important to remember is that that framework demands trust. Trust isn't just: I love the mission and I love the product and I love the service. Trust is also: I love that I have connectivity with the people I'm working with. When people have taken surveys of soldiers—we’re talking the most extreme stress-environment—they’ve found that ultimately, soldiers fight for the person next to them, whoever that person is. And so one of the things that's really important, both in recruiting and in talent management, is to make sure that you’re strengthening those relationships.
Now, new companies can live for a while off the connections that have already been made; but at some point, you need to onboard new people. You need to bring them into this trust circle. We’re all learning to say, Hey, we can have much broader, more remote talent in different places. And that's a skill set we're going to add to the organization because there’s talent that has it that’s in Kansas City or in Atlanta, and they can work for us from there. So you’re building these capabilities you wouldn’t otherwise have because geography has been democratized... but now you need to build trust among the very people who are bringing you those capabilities.
Prior to COVID, distributed companies would have teams convene once a quarter, once every six months, once a year in some location for brainstorming and ideation, but the real work happening there was connectivity. We need to find parallel rituals now; you have to build the environment. Is it a virtual happy hour? Do you take a lightweight lecture or a course together and talk about it? Do you play an online board game together? These are the kinds of things that create social juice. Of course it's going to be a bit more awkward; it doesn't happen as organically as it does in an office. But it’s crucial.
Prathap: The next question is core to our work as talent acquisition professionals: where is talent acquisition going? When LinkedIn brought every knowledge worker online into this global network, that powered a big shift in how people went about finding their next role and how talent acquisition teams looked for top talent. Teams are now relying less and less on traditional inbound applications and job postings and are spending more time nurturing proactive relationships, no matter whether the candidate is actively looking or not. What's behind a shift like that? Why are companies adopting this new approach of looking at passive talent? Where do you see the future of talent networking going in the next 10 years or so?
Reid: I think there will always be a channel for job postings, in which people actively apply and we sort through those inbound applications. Because you can always be surprised. That knock on our front door will always be there—though obviously with some challenges if there are too many people knocking. But I think, more and more, the industry is moving toward outbound recruiting. Otherwise you’re just hoping that people are going to discover for themselves the magic of your company, the mission, the product or service that you're building, the reason this could be the right kind of meaningful place for them to do their work.
Sure, compensation is important, success is important; but very little trumps meaning right now. Talent is asking: What is it that I'm bringing to the world? Why is this the best use of me? And when recruiters who know their respective companies well are proactively seeking out talent, they can reach out and say, Hey, we looked at you; we found out a little bit about you. We read a blog post or a LinkedIn post or something, and we wanted to talk to you about this opportunity, because we actually see a match.
And what we have right now—thanks to tools like LinkedIn and Gem—is a way of searching to make those meaningful connections between companies and talent. But we are only now at the beginning of that—of taking the data that a person would present about themselves, the footprints they leave online, and using that to predict a good fit.
So for example, one of the problems we still have today is credentialism—recruiters looking only for credentials when there's a lot of talent without formal training that could fill their open roles very skillfully. In part, we’ll improve that as we make data about talent electronically more discoverable, as we make search functions powered by modern artificial intelligence. Then you can see, Oh, this person really is the right person. This is how to knock on a door and share your vision with them and say, Hey, this is why it's worth a bit of your time for us to have the conversation. And the rewards of that are huge.
It's commonplace to know that your stars have 10x, 100x, 1000x impact on your mission, whether that star is an individual employee or a manager. And so finding that talent and that talent edge, what makes it work, is essential. Talent always matters, and that’s why outbound is only going to become more important.
Really it's only laziness and unfamiliarity with the tools that are the impediments right now. So what everyone needs to do is say, For me to be a killer at my job, I have to be great at outbound. I'm going to know the tools; I'm going to be inventive. I'm going to be thinking about things that other people haven't thought of, and that will be part of my differential edge. This way of thinking is super important to the future of talent recruiting, the future of talent management, the future of talent improvement. To use a baseball metaphor, we’re only in the first inning here. There are a lot of innings to go, an incredible journey ahead of us.
Prathap: It’s so inspiring to hear about the vision you have. Final question, Reid—this one asks you to put your investor hat on. In a recent interview on Bloomberg TV, you said—and this is a paraphrase—that an asteroid has hit the economy. COVID’s impact varies across segments, across verticals; but innovators and entrepreneurs have already started pivoting and building new businesses that are growing from the fumes and minerals of that asteroid. So what are some of the most exciting areas in tech where we can expect to see dramatic innovation, growth, and scale?
Reid: Satya Nadella, the CEO of Microsoft, said that in the first two months of COVID we saw two years’ worth of digital transformation. And the continued impact of COVID has meant an ongoing increase in the speed of digital transformation. So there are a bunch of obvious areas. There’s going to be a lot more telemedicine, a lot more tele-education. There’ll be tons more collaborative work tools for teams that are partially or completely distributed. There’ll be a lot more virtual events. There’ll be a lot more meeting tools.
And then of course, a lot of things to enable the physical infrastructure. Think about the progress toward autonomous vehicles, for example, because these things are part of the digital transformation. And even things like artificial intelligence, which is mostly driven by massive data, massive compute. All of this falls within the acceleration of stuff that I predicted in 2019, but some of it—like telehealth offerings—have happened decisively much faster. All of it falls under the categories of mobile-first, internet-first, software-first. I also think we'll see a lot of new patterns of work where people will say, Hey, I had to rethink productivity when I couldn't wait for everyone to get in a room to talk about it; what are the tools that can accelerate that productivity? By the way, for recruiting, I think people will have gotten familiar with Gem and the use of your product will increase exponentially.
Prathap: That's a lot of excitement and a lot of infectious energy coming from you. Thank you for sharing those, Reid. You are a deeply inspiring figure. On behalf of everyone at Summit and in the Gem family, I thank you.
Reid: I’m so delighted and honored to be part of the Gem journey. You guys are amazing. You build great products, and you’re playing an important role in where the recruiting and talent worlds are going. So thank you.
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