Joshua Secrest (00:00:00):

Welcome to our next session of the conversation. I'm here with a personal idol of my Jackn, obviously industry analyst extraordinaire who's fresh off the stage at Unleash and just mind blowing keynote and always thinking about the future. And we're always so excited to hear from you. And we're going to be talking today about the frontline worker and frontline hiring trends. And no better person to be able to geek out a little bit about this with you.

Josh Bersin (00:00:27):

Thank you, Josh. And I'm thrilled to be here with you, the VP of marketing or one of the VPs of marketing at Paradox and the ex-head of talent acquisition at McDonald's and at Abercrombie and Fish and at Abercrombie and Fish and other things.

Josh Bersin (00:00:45):

And

Josh Bersin (00:00:46):

Somebody who I admire and emulate as a really deep expert in frontline hiring and frontline business. So I think I learn as much from you as maybe you do from me.

Joshua Secrest (00:00:56):

Well, I can't wait for the conversation. We're going to get to cover so much ground. You and I have gotten to have dinners and lunches and coffees where it's so neat to just see where that conversation goes. So let's see where this conversation

Josh Bersin (00:01:08):

Goes. Okay, yep,

Joshua Secrest (00:01:09):

Let's

Josh Bersin (00:01:09):

Do it.

Joshua Secrest (00:01:09):

Maybe the thing I'm pretty excited about, you were sharing with me that you've actually had some frontline work experience, I think of you in your blazer and your crisp shirt. No, I

Josh Bersin (00:01:22):

Didn't always look like this.

Joshua Secrest (00:01:25):

What was maybe your first frontline job?

Josh Bersin (00:01:29):

I was a frontline worker most of my childhood. I had a paper route. I worked in a distribution center when I was a little sort of a young man. And then I got involved in McDonald's when I was in high school. Love that. I worked there for four years in high

Joshua Secrest (00:01:46):

School. I didn't know that four years

Josh Bersin (00:01:48):

I worked there. When I came back from college over the summer, I never made it into management ranks, but at the time it was just all the jobs at McDonald's. This was the days before the Egg McMuffin. It was a very simple menu at the time. A lot of stuff was manual that's now much more automatic. But I mean, I learned a lot about management and work and business and customers and how to clean a toilet and how to wash a window and many, many important skills in life.

Joshua Secrest (00:02:17):

And walk me through. So you learn the cash wrap, you learn to flip the burger to fry certain products. I'm sure there is.

Josh Bersin (00:02:27):

You learn about security because you've got to close the store at night. You learn about cleanliness, you learn about inventory, you learn about people

Joshua Secrest (00:02:36):

Because

Josh Bersin (00:02:37):

There's all sorts of people coming and going in those stores. So it was a great experience for me.

Joshua Secrest (00:02:42):

I got to do, it was a week of training when I started at McDonald's. And so this was coming from a retail background and one of my first weeks was getting to go and be on the floor to McDonald's and really work and learn and one instant respect for how hard the job was. Some of the mental math, I'm hot, you're standing up customers, if it's not, your feet are sore, your feet are sore,

Josh Bersin (00:03:08):

It's slippery back there. And it's really,

Joshua Secrest (00:03:11):

And the people were so warm because I patient with me as I was learning all the different stations. And maybe the other observation was just how remarkable the manager was. They had 10 jobs. If you're running the business, sort of a coach and mentor to all these people when they saw customer maybe getting angry, intercepting that customer. So a teenage employee didn't have to sort of bear the brunt of it. And I left that feeling like, wow, there's this heroic quality to the work and the amount of things that they're doing as well as really they're driving multimillion dollar businesses that I think are really interesting.

Josh Bersin (00:03:51):

And I think that's why some of these frontline worker organizations are paying store managers a lot more money now because it is a very complex job. The other thing that I realized about it, if I think back out on my experiences, many of the things that I took with me later in life, I learned from managers at McDonald's when I was just a kid. This whole business of hiring and training and taking care of people and dealing with issues where an employee just goes out to their car and takes a nap and doesn't come back, and a customer that decides they're upset and throws a milkshake back at the employee or leaves a bunch of trash out in the front of the store. And I mean, I used to just admire these managers. You're dealing lot. I used to look up to them, I just learned so much from them.

Joshua Secrest (00:04:45):

And it's really at best of both worlds that they're being able to oversee, meaning driving the business and supporting the people. And both of those things, as you pointed out, can have some wild cards thrown in or some things that you're having to react to on the day-to basis. Life comes up, a school bus shows up in your drive-through and you're not expecting it.

Josh Bersin (00:05:13):

Baseball team, a

Joshua Secrest (00:05:14):

Baseball team shows up. And that's I think a key thing that you and I wanted to talk about within this series is the importance of the manager. I love that you called out some of the big headlines that have come out from some of our retail friends of really paying managers well and focusing on that position because they see them as sort the ceo.

Josh Bersin (00:05:36):

Well, funny thing, Josh, I'll tell you something funny that happened to me. I was so young, I had not gone to college yet, and so I wasn't aspiring to be a McDonald's owner or anything, but I found out later that the guy who owned our McDonald's was a very, very wealthy guy. And when I grew up a little bit later and I realized I needed to find a career, I thought, wow, maybe I should have stuck there. I might've had an interesting career, obviously I went in another direction. But

Joshua Secrest (00:06:02):

I mean, it is fantastic. I am heavily involved with the National Restaurant Association, and so within that, I get to hear and talk to a lot of leadership members of large restaurant organizations, but also those who've done really well on the franchise side. And so being able to see, one, they're business savvy and success, but two, how they're helping their community. And one of the taglines, but we really believed it at McDonald's is this is America's best first job. And you talk to some of these franchise owners, not just McDonald's, but broadly, and there's a lot of pride in bringing great people in and training them so that they have the experiences that you and I can kind of talk about in terms of, ah, I learned this. And so it is been really neat to be able to have that. But my first experience was I worked at Red Lobster. And Red Lobster was fascinating because you really understand and appreciate the importance of a dollar and experience because you're working for tips. But at the end of the night, you could walk out with dollars in hand and you could point to like, oh, I am learning this thing about service and making sure that I'm fast and listening to them and predicting their needs. And so

(00:07:15):

Those things really carried through with me. You and I have been talking for four years at least on the importance of frontline, frontline hiring. You've heard me get really excited about it and I'm now equally excited. You all have done a lot of research on frontline, not only hiring, but the frontline experience and its impact to business and revenue. Can you tell us a little bit about the report and maybe why now?

Josh Bersin (00:07:50):

Well, we're really starting this research campaign for probably a period of years, and I know we'll be doing a lot of work with you guys.

(00:07:58):

I'll tell you one of the things that went through my mind was in the last 12 months, the white collar workforce has been flat to declining in size. I don't know if that's AI or the economy. I mean there's a whole bunch of contributing factors to that. But if you talk to the US Department of Labor, and we've just talked to the secretary and the assistant secretary about it, the manufacturing workforce, the healthcare workforce, the retail workforce, the transportation workforce, the repair and service, all of those jobs are in very short supply. Those are in the US at least. Those are the jobs that are constraining the growth of this economy and this world that we live in. And of course the immigration policy has a lot to do with this. So we felt in all of the CHRO conversations we've been having over many, many years, we're not talking about this enough for some reason. And we want to make sure that the executives that we have access to really know what they can and should do and how much attention they should play. Because in a lot of organizations, the management issues of the frontline workforce are really mostly managed by the managers of the retail operations or the manufacturing plants or whatever it may or the hospitals or whatever. So this is the beginning,

(00:09:21):

I would say. The first finding is that, and I don't know if everybody knows this, 70% of the jobs in the United States are frontline and around the world it's almost 80%. So this is a much bigger population of people than the rarefied sales marketing, software engineering types we keep worrying about all the time. The second thing is the frontline workforce is the face of the company to the customer. So every single person has a massive amount of impact on the customer brand, on the customer's potential interest in doing more business and coming back on the revenue of the company. Whereas most of us working in corporate, maybe we're somehow influential on the revenue, but not that influential on the quality of the product and the service frontline workers know what's broken and what's working. They know what's wrong with the company because they see it every day

Joshua Secrest (00:10:20):

To be our eyes.

Josh Bersin (00:10:20):

Understand we don't listen to them that much. We don't have time, we don't always have the tools. A lot of research shows that frontline workers are very disconnected from the company's strategy. They don't know what it is, they're not hearing about it. They're not included in a lot of the company communications. So they're a little bit disconnected from the culture in a lot of organizations. And even though they may be a high turnover group of people, and maybe they're a little bit lower pay because they might be younger, they need a tremendous amount of development and skills and operational training, and they have careers and they become consumers of the company that they're working for.

(00:10:59):

So if they have a poor experience in the frontline job in a company, they may not ever do business with that company again. So there's all sorts of really big dynamics of frontline. And then of course, if you're a nurse, this is a life or death situation if you're in manufacturing, similarly important. So we want to really make sure that people in HR understand the complexities and the opportunity and the benefits of investing in this part of the workforce. And I think the feds, they don't believe, and I don't know if this is true, they don't believe that the American employers are paying enough attention to this market. So it's everything from the education pipeline of how people get into these jobs to how they're taken care of during the time that they're working and so forth. So we're just going to spend a lot of time working on all these things.

Joshua Secrest (00:11:51):

That's great. And as you talk about the 70% frontline workforce within that, I mean some of the biggest is healthcare is right up there at the top hospitality. So hotels and restaurants, transportation, logistics, manufacturing, warehousing, the list goes on and on. And we will try to go through our conversation and maybe pull out different industries because you and I talked a little bit about even just the difference of part-time workforce turnover versus maybe a full-time turnover and some of the dynamics there or some of the dynamics of a part-time workforce that requires certification or licenses like a nurse where it's a much smaller group of people that can maybe take on a role

Josh Bersin (00:12:36):

Versus Or a haircutter or a haircutter, which is absolutely is. Which is really, I mean, it blew my mind when we talked about that they need to be certified too.

Joshua Secrest (00:12:44):

You can't just have anyone come to walk off the street to come in and cut your hair. And it is one of the most competitive industries out there. One of the pieces that got me, I mean I kind of light up anytime you can connect HR to revenue, and I've spent my career really trying to do that and sort of post COVID what we were hearing from a lot of our clients, particularly retail and restaurant is, and I love the restaurant example of this where they, because staffing was challenging, they could actually measure their understaffed restaurants during peak hours versus fully staffed restaurants and could actually measure how much revenue they were losing because their drive-through lines got longer and their cash wraps got longer and their turnover got higher and their manager was pulled into a back office. And so they were quantifying that anywhere from $300 to $1,100 of loss per day.

Josh Bersin (00:13:45):

And

Joshua Secrest (00:13:46):

A lot of these restaurant groups have hundreds if not tens of thousands of restaurants and the revenue impact of not being fully staffed and that being a really very real number and so proud that recently we've seen Scott Boatwright the CEO of Chipotle being able to talk about

Josh Bersin (00:14:08):

Hiring fast, having impact. Listen, Josh, I want to give you credit for this. I mean you guys, you personally in your efforts and the company paradox have really pioneered a solution that really drives revenue and not just does recruiting easier because I mean, I learned this from you. I mean it's obvious when you think about it, but I really didn't understand the dynamics before that you're running a restaurant, you're running a retail organization, you're a trucking firm, you're a shipping company, you're a hospital. The volume of business you can do is limited by the quality and number and skills of the people you have. And if you're understaffed or you have a high turnover or people are undertrained because they're too new or it's taking too long to hire people and you're getting the wrong people, you're just underperforming as a business period, revenue, stock, market value, competitiveness, et cetera. So in most of the HR things we do that I get involved in, there is no direct connection to revenue in this one. There's a direct connection to revenue and I learned that from you guys. So my hat's off to you.

Joshua Secrest (00:15:21):

It means a lot. Thank you. We had pretty big news on the paradox front over the last several weeks with Workday acquiring us. I was curious of your take on that.

Josh Bersin (00:15:38):

Well, I think it's great. I know you guys are excited about it. And you've been partners with Workday for a long time. Workday is a, Workday is an interesting company, and I've worked with Workday since they were founded. And for many years, Workday deliberately did not want to get into these kinds of businesses, mostly because the pricing model of Workday is relatively high and these kinds of businesses tend to spend less money on HR technology. So they weren't good fits for Workday. But now that Workday has become such a big company in so many industries, this is an opportunity for you as a business within Workday and for Workday to really thrive in this frontline worker segment. And of course, you guys pioneered the effective use of AI kind of before everybody else even kind of knew it was coming. It wasn't called ai, it was kind of called NLP at the

Joshua Secrest (00:16:32):

Time.

Josh Bersin (00:16:33):

And so Workday gets all your expertise in that. So I actually think Workday doesn't realize the value of what they got. They probably should have paid more for you guys, but I don't know what the number was.

Joshua Secrest (00:16:45):

Well, it's exciting to see a very clear investment in the frontline worker and organization. And I mean, Workday is such a market leader on retail and healthcare and some of these large industries that we've been able to talk about. And so now to be able to bring our synergies to be able to really help that frontline manager through the Workday system feels

Josh Bersin (00:17:12):

Like, well, in some sense, and I think because of the focus that you guys had on Frontline, by the way, the other thing that I really cool about what you guys do at Paradox, which I've never seen in other, I mean SuccessFactor did this many years ago, is that you don't just sell software. You work with the customer to build the business case for re-engineering the talent acquisition process using things like time to market and revenue and so forth, which very few HR technology companies do almost none.

Josh Bersin (00:17:44):

And

Josh Bersin (00:17:44):

That means you're really close to the business issues behind Frontline and the revenue dynamics. And I think Workday is going to learn a lot from you guys. I think they got really quite a crown jewel from you.

Joshua Secrest (00:17:57):

Thank you. One of our approaches on that process design is maybe the exact opposite of the first question you think we'd start with, which we want to be and pride ourselves currently to be the best at automation within the hiring process. But our first question is where are you getting the most value out of your people within a hiring process? And I think it's really great to be able to hear frontline organizations talk about that because they would say, well, I really want my manager to interview, but everything else, I'm okay with you automating. And it's like, oh, that's actually a really important first piece to be able to start with. And so I think it's a great compliment as we get to go and chat with some of Workday's clients as well as continue to service those who aren't on Workday because it's really going to continue to be this consultative advisory on people are so

Josh Bersin (00:18:47):

Very important. Listen, Josh, I really hope Workday lets you continue to do that because you guys have some gigantic clients with huge volumes that have major revenue dependencies on the hiring process. And I think each company probably has a slightly different set of issues and cultural standards for how they want to do this. And your ability to uniquely tailor your solution for each company is very, very important. And those of you Workday folks that are listening to this, I hope you're taking advantage of what Paradox is built here.

Joshua Secrest (00:19:22):

Thank you. And I know a key part of our strategy is to be able to support on the frontline side for Workday current customers and continue to support over 80% of our customers are on other platforms, so or utilize our A TS. And so a great way for us to continue to service hopefully the whole frontline industry and yeah, exciting days ahead. So thank you Josh, for the kind words. Want to get into our next segment, which is all about speed.

Josh Bersin (00:20:00):

And

Joshua Secrest (00:20:00):

So for this we're going to talk about quick doesn't just mean quick serve restaurants within Frontline. We've done some research and I know we've kind of gotten a talk, but for you, what's the importance of hiring quickly in the frontline space? Why has that become so

Josh Bersin (00:20:18):

Important? Well, I mean there's a whole bunch of reasons why speed is important. First of all, if you have to do it faster, you're going to do it better. Faster doesn't mean sloppier faster means more precision. So there's more precision in the process. So you do it faster. Candidates for these kinds of jobs don't wait weeks. They find another job the next day, so you lose them and then you're going through another cycle again, obviously time to revenue is huge If you can staff correctly, seasonal issues come and go very quickly. You can't afford to lose the season a hot buying season. And I think it forces the TA function to reinvent the way it works because the traditional approach that a lot of us sort of white collar types have been through is very slow. Get a bunch of candidates, screen a bunch of people, schedule a bunch of interviews, do a bunch of interviews, talk about the interviews, go back and look at who you talked to again, meanwhile the candidates twiddling their thumbs wondering what's going to happen. That just doesn't work in this industry. And from a candidate perspective, speed is such a value to them because they got to get along, got on with their life too.

(00:21:37):

They can't wait forever and they're going to find something else. And it's also a brand value that if you can get back to a candidate quickly and either make them an offer or not, that's actually a great experience for them. They're going to think more highly of that company the next time they want to do business with them. Because the worst thing that can happen is somebody gets dropped as a candidate and then they decide they're never going to do business with that company again. They were treated so poorly. So there's a bunch of drivers for speed that are counterintuitive to the old white collar. Let's slow it down and kind of take this thing down to the nth degree of detail, which happens on other kinds of hiring. I think

Joshua Secrest (00:22:18):

Really well said because so at Abercrombie, I was really focused on

Josh Bersin (00:22:22):

Corporate. You tell me because you know about this

Joshua Secrest (00:22:24):

From stand, I'm excited to get your take over, but I was always thinking corporate. And then at McDonald's I got to think about corporate and I got to think about, so maybe a couple pieces of data that we can go through. One would be when a frontline employee for most industries, especially part-time applies to your job, they apply to 20 other jobs at the exact same time.

Josh Bersin (00:22:43):

Wow, that does not surprise me, but I never really thought about it.

Joshua Secrest (00:22:47):

And that number's increasing because while we use AI at different companies, the candidate now is starting to use ai. So another way to flip that would be when a candidate applies to your job, you're competing against 19 to 20 other jobs at the exact same time.

Josh Bersin (00:23:00):

And there's a shortage of these people anyway,

Joshua Secrest (00:23:03):

Especially depending on what type of industry. If you are looking for a skilled worker that's even more precious to be able to go after an unskilled worker, potentially they might be applying to a lot more jobs. So that's interesting. The other piece of data, and this comes from, we've got now billions of interactions largely on the frontline and paradox, 52% apply at night or on the weekends. And this ties to our previous point of who's doing the recruiting. We don't have a recruiter in a restaurant, we don't have a recruiter. It's the manager and the manager sleeps. So now we're in this, we need to make sure that our stores are staffed

(00:23:38):

Fast and we've got people applying, we've got all this competition and then they're applying at night when we can't get to them. And so it's been really lovely solution of where automation has been so sticky because essentially it's like having a recruiter working 24 7 in every single store. And so one of the pieces that I've just been really proud of within the market shift, and maybe personally probably because McDonald's was the first to have a conversational a TS that leaned into all this automation, but seven years ago the average time to hire in frontline was 21 days. We just pulled our data and the most recent is just over three days on average. So we've got some that are going way faster. And just to be able to see that, and to your point,

Josh Bersin (00:24:26):

I think you have some where they get hired the same day, they apply,

Joshua Secrest (00:24:29):

We do. And that's also a fascinating model in this average. And you've got some in the warehouse distribution centers with less maybe frontline customer facing, and those are finding that they can do same day hiring and it's really fantastic.

Josh Bersin (00:24:46):

Well, I think it's also to some degree, this is a perfect example of where AI can change the dynamics of the entire system because without ai, the idea of hiring that fast means you would've had to have a hundred recruiters, a hundred interviewers staying up all night talking to, which is ridiculous. So you can basically re-engineer this process with AI in a way that was impossible for, that's like an order of magnitude faster.

Joshua Secrest (00:25:17):

And I like how you're thinking about it as I think some of our most innovative clients, seven 11 comes to mind re-engineered. It wasn't take our same process and add a little bit of automation or a little bit of AI to it. So they had 400 field centralized field recruiters and most of those are contractors. And the reason they had that was because understaffing was an issue and they didn't want to burden their managers. And so by being able to figure out ways to be able to automate that, they were able to reallocate that 400 headcount and be able to put that responsibility back on the managers and still return 40,000 hours back to their system per week. So they received 2 million hours of manager hours back to seven elevens within the year. And so it's exciting. That's business impact. It's not only cost savings, but it's actually revenue driving business impact that I think is quite neat.

Josh Bersin (00:26:15):

Spectacular.

Joshua Secrest (00:26:20):

I wanted to talk about quality with you as well because sometimes we think this faster we go the lower the quality and I want maybe address quality in a couple different ways. So maybe the first would be a quality of the experience, the quality of the candidate experience. And you mentioned this before where maybe faster is actually better for some candidates. Can you elaborate on that?

Josh Bersin (00:26:45):

Yeah, I haven't applied for a job for a long time, but I know a lot about it. Probably the worst candidate experience is spending all this time applying, filling out a bunch of forms, whatever it may be,

Joshua Secrest (00:26:58):

20, 30 minutes,

Josh Bersin (00:26:59):

Which takes too long, and then hearing nothing for days or maybe getting an email back and then never hearing back again, or they lose your resume or you're not even sure what happened to it. So the good candidates, whatever good means, the ones that are maybe the most ambitious or the most highly skilled, they're gone. They're not going to wait, they're not going to wait very long.

Joshua Secrest (00:27:21):

You put too much friction in the process,

Josh Bersin (00:27:23):

They're very capable of looking for a job somewhere else and probably finding it so you're going to lose them. So if you've gone slowly or quality of hire just went down. The second thing is if you engineer around a high speed process like we talked about earlier, you are going to force yourself to build a really high quality candidate experience

(00:27:45):

Because you've got to get through that screening process quickly. So you're probably going to end up doing a very good job of sole sourcing or sole searching, rather what does the perfect candidate look like? Because we've got to refine it down to a short amount of time to select the right people and to let people select out quickly. You may not do that if you have a whole bunch of time and you're going slowly, so you're going to make a more, that's what I was talking about earlier. You're probably going to make the process more precision quality if you focus on speed. And I don't need to talk about what the value of quality of hire. Everybody knows that.

Joshua Secrest (00:28:23):

I'm going to make you talk about it in a little bit.

Josh Bersin (00:28:25):

But the other thing that occurs to me is a lot of these jobs are high turnover jobs anyway for people are young and they're changing roles and they're

Joshua Secrest (00:28:32):

Moving 200% and some they're

Josh Bersin (00:28:34):

Moving and just have other things to do with their lives. So again, if you're not thinking about speed and quality, your turnover is probably higher with the slow process, making the process even slower.

Josh Bersin (00:28:48):

So

Josh Bersin (00:28:48):

I think the relationship and speed and quality is not that. Speed reduces quality, but actually speed and quality go together in a vicious a, what's it called?

Joshua Secrest (00:28:59):

Vicious cycle,

Josh Bersin (00:29:00):

The circle, what's the positive virtuous circle as opposed to thinking that speed is going to reduce quality. So I think it's very different than people might

Joshua Secrest (00:29:10):

Imagine. I am excited to dive into quality of hire within Frontline. I'll maybe just add on to the quality of the candidate experience has gotten so much better because we're moving faster. And it kind of goes into a couple of different pieces. One is speed is just one form of friction, and friction is really bad in the frontline. And so when I was saying, hey, it used to be 21 days, there wasn't a bunch of good stuff in those 21 days. It was waiting,

Josh Bersin (00:29:42):

Just

Joshua Secrest (00:29:43):

Waiting and probably some messages back and forth. And so speed has really consolidated one the process that was maybe already starting to happen, but when we think about it, we're measuring just about every point in the process. You mentioned the application. Well, it's speed and it's simplicity. So it's mobile for us, it's chat based, there's no logins or passwords. No, it takes about two minutes versus a 20 minute. Okay, so that's the apply process. They can get done in two minutes. They hear back usually within two minutes if they qualify.

Josh Bersin (00:30:14):

But Josh, lemme ask you. So I think one of the things that probably happens, you tell me if it's true or not, when you sit down with a client and you say, we're going to do a two minute apply process, now they've got to rack their brains on what is the most important information we need as opposed to let's get every piece of information we can possibly find. So again, I think you create a more precision quality, quality process by focusing on speed.

Joshua Secrest (00:30:40):

And sometimes it's just the questions you can ask, what do you need to know right away? This is a good example of we went and sat with restaurant managers as they were sifting through sometimes applications or resumes. It was like, what are you actually looking for? And they were saying that they can work in the US that they're of age and that they have the shift schedule that I have ability, simple stuff. It's like, oh, well just ask that. Let's just that at least at the first part. And then, hey, I may need to ask some other questions and I can do that in the interview or I can do that with a different part of the process. And so it's interesting, but each phase of that process has really gotten truncated, I think in really effective ways that are fit for a frontline manager running the process for a candidate. It's now easier, it's more transparent. You basically find out if you're qualified for a role based on basic criteria within a few minutes, there's no back and forth on interviewing. You're usually served up a time to interview within 24 hours, you can actually reschedule your interview. Now

(00:31:41):

Prior to your interview, you can ask questions and get answers, maybe about benefits, maybe about how to prep for the interview. And then let's say you get the offer and maybe you start the next day, but maybe you have to start in a week. You actually have communications coming in that you can in real time be chatting with. So one of our clients, captain Ds, had a 20% reduction, 21%, sorry, 21% reduction in just the people who accepted offers and then started, I mean from a candidate experience, they actually didn't truncate just that time, but more people who were saying yes actually showed up one and part of it was because they were able to have someone to communicate and get some messages, get

Josh Bersin (00:32:22):

More questions answered.

Joshua Secrest (00:32:24):

So then if you have, you're getting more people, you're getting more good people in front of your managers quicker. And those right people are starting more frequently.

Josh Bersin (00:32:35):

So

Joshua Secrest (00:32:36):

Instantly we've got

Josh Bersin (00:32:36):

More. Another thing I'd be interested in your feedback on this relative to quality of hire, several of the interviews I've done over the years have been about fairly strategic HR people that have looked at maybe store performance or I remember a MC theaters did a study of the profitability of their theaters. I don't know if they're a client of yours, but

Joshua Secrest (00:32:58):

A MC is Yes.

Josh Bersin (00:33:00):

So of course in a movie theater, the more confessions you buy, the more revenue and the more profit they don't really care about whether you paid for the ticket because that barely covers the cost of the movie. So they really want you to come in and have a good time and buy a lot of food. And the CHRO at the time was racking his brain to figure out why some of the theaters, regardless of location, were really good at selling a lot of confections and some were not. And he thought it was maybe sales process or something in the stores or whatever it was. And he eventually did a bunch of analysis of the data of the employee engagement in these stores, in these different theaters. And he found out that the theaters that were selling a lot of candy and stuff had really happy employees and the theaters that weren't selling a lot of candy didn't have happy employees. So he goes, okay, maybe in the recruiting process I should figure out what we're doing to find employees that are going to enjoy working in a movie theater.

(00:34:03):

He looks at the recruiting process and he goes, we're asking them for their grade point average, what kind of extracurricular activities they've had, the pedigree of their school. He says, why are we asking any of those questions? They have no relevance as to whether they're actually going to like working in a movie theater and have fun. So he went back and he had some iOS psychologists and he changed the whole screening process and he said, do you like movies? What movies do you enjoy? What are the things that, what are the kinds of sports you like? And he started to assess whether people were going to have fun doing this job, love it. And I think the profitability of A MC went up by 3% and profit that year when he figured this out. So I think another part of the whole process is getting back to the core of who are the right people that are going to be good at these jobs. I mean, it isn't just volume and

Josh Bersin (00:34:56):

Speed,

Josh Bersin (00:34:57):

It's also what is the characteristic of these people that are going to love working in these jobs and maybe stay a little longer and drive more value and your platform allows them to do that kind of stuff because you have a whole assessment engine built

Joshua Secrest (00:35:10):

In and managers get time back to spend that time talking to the candidate and actually going through maybe their passions and some of the administrative questions are now off their plate. You've already captured that information so you can spend time. So as I'm talking to more restaurant and retailers, they're saying, oh, we're certainly asking certain questions, but we're also taking time to understand their passion about our brand.

(00:35:34):

We're going to take some time to walk them the store maybe into the stock room, into the kitchen, Hey, it's a little hot back here. We're standing up. Here are the things you're going to learn. And it's like, oh, that time is now really interesting in affording them something. The other piece that it really ties into this the passion, but quality at least one metric in the algorithm of quality of hire within frontline would just be like how long do they stay? Certainly they need to perform to, but how long do they stay? And some of the people from a candidate profile who stay the longest are your customers. And so that's really interesting because our platform is really good at, you can be in a restaurant and see the QR code or do a quick text. You paid nothing for that candidate versus a job board where you paid something and it's going to be someone who is likely to stick around a little bit longer. So really being able to convert those,

Josh Bersin (00:36:27):

That's a really cool thing that you guys do. I think that's amazing.

Joshua Secrest (00:36:30):

Thank you.

Josh Bersin (00:36:31):

Would you like a job with that hamburger?

Joshua Secrest (00:36:36):

It matters. And then the other one was people like working with their friends. And so we make it really easy for your referral, your buddies text and then your buddy can

Josh Bersin (00:36:46):

Come see. Those are little things that I think HR tech vendors might have as features, but they don't think about them as the impact

Josh Bersin (00:36:54):

The

Josh Bersin (00:36:54):

Way you guys do. So I think the way you've engineered paradox is this whole system kind of fits together with all these very interesting features that drive quality and speed because of your focus on this whole frontline area. So that's really the point I'm trying to make with a lot of this research we're trying to do. It's not that frontline is just one more workforce. It's a very different dynamic and it takes attention to really manage it well,

Joshua Secrest (00:37:21):

And it really opens up how you kind of think about things a little bit differently. One example is within the restaurant workforce it's about 10 to 15% that English isn't their first language and that's a really important population to invite into applying into your roles. But think of typical applications

Josh Bersin (00:37:43):

That

Joshua Secrest (00:37:44):

They're having to apply in English. Ours translates in real time, and so it makes it a very warm and welcoming inclusive experience just about any language you apply in. And so that's a real advantage for a lot of our clients. So even just things like that, it can just be this is where kind of this conversational AI or a agentic AI is a better enhanced candidate experiences is some of those warm pieces that invite people that maybe didn't feel invited in previously. Let's shift to quality of hire and we're going to talk about quality of hire

Josh Bersin (00:38:22):

In

Joshua Secrest (00:38:23):

Frontline

(00:38:24):

And we can ditch that term, but I think overall what I hear pretty consistently within the space is I want speed, but I'm not willing to sacrifice quality for speed. And you hear that about technology being brought in, whether it's robotics, but I think you also hear that about the hiring process. Yes, I need to move fast because understaffed stores are going to make less money, but I also can't just have a bunch of people leaving and being a quick quit because those are probably unprofitable hires. How do you think about quality of hire? And I know this is going to be very different based on industries within Frontline, but any examples?

Josh Bersin (00:39:08):

Well, there's the qualifications if it's a skilled job, but I think the critical issues are for any of these jobs that are manual labor or operationally difficult, you have to be extremely honest about what the job really is. So somebody doesn't come in and get really surprised that, whoa, this is a lot harder than I thought. I'm out of here.

Joshua Secrest (00:39:29):

Yeah, then they're out pretty

Josh Bersin (00:39:30):

Quick. Well, that's just such a waste of money for everybody. So being really honest about the experience and what it's going to be like because some people will select into that if it's a very difficult job for some reason or a very fast moving job, some people are going to get a kick out of that and some people are going to say, I don't want to beat. I do that. Or if it's a job of taking care of people in a hospital and very care centric, some people will love that and some people won't. So that's number one,

Joshua Secrest (00:39:56):

Knowing what they're getting in being

Josh Bersin (00:39:58):

Really honest about it. I think this idea of showing somebody around, you can't do that during the apply process very easily. So that's I think a big part of it.

(00:40:08):

The second is this idea of, and this is something that I've seen in my life, in my career, whether somebody has done this job before may or may not be as important as their interest and ability to learn and desire to do the job well. Most of these jobs are going to require training. The first minute they show up, they're not going to know how to do the job until they've learned from the manager how this particular operation works. So I think a lot of quality hire successes are hiring people that have passion and ambition and interest and flexibility to learn what this business is about because they like it and they really want to do it. So I've seen that in our company. We are not really a frontline company, but I've seen it in general. So that's number two is

(00:41:01):

What is your as an employer sort of persona of somebody that wants to be in your business and is willing to learn because even if they have done it before somewhere else, that may not always be the best hire because they may come in and say, well, you guys do it this way, but I've always done it that way and you don't really want a whole bunch of that. Then the third is dealing with the demographics or the personal issues that employees have. I know in healthcare for example, where there's a massive shortage of clinical professionals, most nurses are women, not all, but a lot of them are women. They have kids at home and they have families and they have responsibilities, maybe chunk young children and they can't work a certain number of hours or they can't work certain shifts. And so healthcare providers are very flexible on shifts. A lot of them let people bring their kids to the hospital for childcare, which is a pretty cool benefit that most people wouldn't think of. And so in understanding the unchangeable issues that people have in their lives that might affect their quality of work, when you do hire them, that has to be part of the experience too because even if they want to work for you but you make it impossible for them to do a good job, it's either they're going to be a poor experience for them or they're going to quit.

(00:42:22):

So all of those to me are really parts of this.

Joshua Secrest (00:42:25):

Yeah, I love that. And we've started, we have a frontline industry advisory group and one of the topics we talk about within this is how can we bring to our CE suite better metrics on turnover? And really tied to that would be quality of hire. And so one of the things we talk about a lot is this point of profitability for a hire, and it's not just turning people into numbers,

(00:42:52):

But I think there's a reality too if you have a lot of quick quits, a lot of people who start and then to your point, really don't like it and then they leave, well, you spent money recruiting them job board, you spent manager time on them, you did some onboarding, you potentially got the uniform, you spent a manager or an extra associate teaching them, those are dollars that are going away that are wasted. And so the language that's starting to be used is really neat where it's basically we want to eliminate unprofitable hires, bad hires, we need to get more people past that. And then a lot of them talk about a sticking point. And so in frontline hiring potentially, especially part-time, say a lot of industries, it's usually around the three to four month mark. Hey, if I can just get them to four months, then they stay nine months.

(00:43:40):

Or I can in what's going away is the language of just reporting annual turnover because it's a more sophisticated exercise to do this, Hey, let's get them past their retention sticking point and get more profitable hires in. And then some of them will become managers and some of them will stay longer. And that's amazing. And I've just really liked that dialogue because it feels like it's really tuning into what drives the business. Let's move away from things that are unprofitable, let's really invest in profitability. And then because they have these markers, a lot of their training and their benefits programs and some of the things that they're able to add on

Josh Bersin (00:44:18):

Rewards. Lemme ask you a question, Josh, another dimension this, I'm curious what your perspectives are on. So every one of these frontline jobs, there's a level of pay you get to decide, and of course if the pay level is low, you're going to have high turnover because people are going to maybe get frustrated with the level of pay for the amount of work they're doing. And so if the pay level goes up, the retention level will probably be longer, but you're spending more money to hire them and keep them. My general experience has been that if you pay slightly above average, you're going to get higher quality candidates and they're probably going to stay longer. I'm curious what your experience has been with this.

Joshua Secrest (00:44:59):

Mine has been more around pay versus hourly rate. And so with that, and it's actually a key indicator of retention is can you give someone the shifts that they want to work? So I'll give you the example.

Josh Bersin (00:45:15):

So that's a pay factor for them, a

Joshua Secrest (00:45:17):

Pay factor for them. And so, hey, I'm applying to this role. I need to work 30 hours. I would like to do that in these four days. You give me 15 hours. Let's say you're paying a higher hourly rate than the place across the street by even three hours, but you're giving me 15 hours and I can get 30 over there. We see there being high turnover as soon as there's that delta. And so people want the match sense be able, the net pay. I would also say job boards and I'd say employers and how they're marketing these jobs. And I'd say job seekers even at frontline level are getting savvier in how they're thinking about total

Josh Bersin (00:45:56):

Comp

Joshua Secrest (00:45:57):

Beyond just hourly pay. And I think there are, some of the big retailers will shout until they're blue in the face on this, which is our hourly pay is competitive, but we have the hours for you. We're

Josh Bersin (00:46:09):

Flexible. Flexible, but your total pay is going to be

Joshua Secrest (00:46:11):

In your total total pay because we sponsor college, et cetera. And then

Josh Bersin (00:46:18):

Adjacent

Joshua Secrest (00:46:19):

Benefits in adjacent, and we don't have to go too into it, but you've got some that either at register or to my bread, lobster experience offer tips.

Josh Bersin (00:46:31):

Another factor I'm curious of your feedback on is as we think about the more systemic issues and hiring and operations in an organization that does for a lot of frontline hiring, there's this idea of working, it is what is called the top of your license. I'm sure you know that concept. And it comes from the healthcare industry where if you're a nurse and you're highly paid and highly skilled, you should be spending 90% of your time with patients. You should not be moving furniture around, scheduling things, clicking stuff into the data systems, trying to take out the trash because you're being paid to be a nurse.

(00:47:12):

If I think back about my days at McDonald's, I don't know what top of license meant to be honest, because we did everything clean. The toilets swept the floors, clean the windows. But over time, those four years that I worked there, I saw McDonald's, and this was sort of in the seventies. It was a long, long time ago. They were operationally improving the stores more and more and more to make the job more interesting, more enjoyable, more safe, a little bit easier, more standardized For me. I know this isn't your particular area in recruiting, but I think a lot of frontline online success is figuring out how to make the work experience productive and meaningful to the people you hired and try to automate away the stuff that's really not worth their time and not affecting the customer experience. Those are just as big an opportunities maybe as a lot of these recruiting issues.

Joshua Secrest (00:48:07):

And I think you see that probably most in that frontline manager. I think one of the reasons we've been growing so fast and so sticky is we just take a lot of the lower value but necessary work off of their plates, at least on the hiring front, and then it's returning it so that they can focus on the business, focus on their people, focus on their customers. And that has created

Josh Bersin (00:48:31):

A lot of Well, and that brings me to another point that I just wanted to mention that maybe on your radar screen, we did find that front time, it's hard to survey frontline workers. It's hard to get their input because they're so busy and they don't have computers and sometimes they don't have access to those kinds of systems. But a lot of the best ideas on how to operationally improve the company are in the front line in the managers. And I remember we interviewed a restaurant chain in Canada who was having a lot of operational problems with drive-through orders in conflict with in-store restaurant buyers and not being able to staff enough correctly. And one of the managers, and this is from the HR organization, basically decided we're not going to have shared staff between drive through and in-store. We're going to have a dedicated person for, I mean, seems so obvious to me, but nobody had thought about it, so he just did it, didn't tell anybody who was doing it. People saw that his store was having higher revenue through and they said, what are you doing that's different? He said, well, I changed the staffing model to deal with these drive-through orders.

(00:49:40):

And they go, wow, great idea. Let's do that across the whole organization. So another issue in Frontline is opening up the lines of listening to the first line leaders and the first line employees on what's getting in their way so that we can improve the operations in general.

Joshua Secrest (00:49:56):

Yeah, what's getting in their way. And that's a huge piece,

Josh Bersin (00:49:59):

And you guys have a tool for that actually in your new employee experience system

Joshua Secrest (00:50:03):

And really employee listening. So I mean, we can just be able to quickly pulse, they can get the hours they're working, but they also get questions answered. And it just makes it a really seamless employee communications platform, which I think is really powerful on it.

(00:50:24):

I love how you're thinking about staffing and it's what we so much is maybe the conversation four or five years ago was how do you reduce staff and drive still more revenue and now you're just getting to this place of well flow through and customer service is so dependent on having the right staffing levels. But one anecdote I wanted to share, I can't share the QSR, the quick service restaurant who brought this up, but they basically said, Hey, we know our footprint and our footprint ideal is to have 11 people at any given time during our peak hours. That's how we maximize flow through, give a great experience, but the revenue is going. And if we just randomly added a 12th person, that's loss, that's one extra headcount that we'd be inefficient. However, if we added the 12th person at this very specific point in the line before, this is kind of like a line set up after they've gotten their X food and before they've actually cashed out, if we add a person right in that middle section, it allows for them to basically up order, Hey, do you want

Josh Bersin (00:51:34):

They have more time to order digital

Joshua Secrest (00:51:36):

Or something? Do you want digital? And so they were saying they were seeing pretty large percentage upticks that made this investment in one more person strategically there, super valuable. And so you start to see the impact of the technology where

Josh Bersin (00:51:50):

Conversations, it's a fascinating

Joshua Secrest (00:51:51):

Operations

Josh Bersin (00:51:51):

Research exercise to run a frontline business because there's all these little tweaks like that you may not even realize are opportunities.

Josh Bersin (00:51:59):

I

Josh Bersin (00:51:59):

Mean, I don't know the data on this. Maybe this is a project we should do, but I think a lot of companies probably do understaff and then they suffer their revenue as a result, for example. It's exactly like that.

Joshua Secrest (00:52:10):

Yep. And it's interesting and you kind of sense stage gates and maybe it's light. There was

Josh Bersin (00:52:17):

Actually, I just realized, I just remember there was a fascinating book called The Good Jobs book written by an MIT professor. I read it many years ago. And she studied Costco versus other grocery retail type companies. And it turned out that Costco and the other companies that she'd studied had overstaffed.

Josh Bersin (00:52:38):

They

Josh Bersin (00:52:39):

Had more headcount per maybe customer volume than their peers, but they were much more profitable. And so she was scratching her and said, how could they have overstaffed and be more profitable? And what she found out when she went in and studied these stores is the extra staff was cleaning the place, putting things on the shelf where they belong, taking care of customers, answering customer questions, helping customers who are disabled get from place to place. Whereas the understaffed stores didn't do any of that. So I mean, there's this economic formula that's unique to each company on what the right combination of people is. And it may not be staff minimalization that gets you the best revenue.

Joshua Secrest (00:53:21):

It's great talking to customers about peak hours because then there's enough. You're looking for these moments where there's a lot of demand and how can you get the flow through to move through that. And so for a restaurant or a fast food group, hey, let's talk about staffing and flow through during your peak hours lunchtime dinner. For a retailer, especially like a fashion based retailer, it's fascinating to talk to them about seasonal hiring. Hey, you're getting ready for the holidays. You need way more people. You've got more people trying to buy things. And you can process through what's your process? How are you stationing them, how are you doing that? And it's true revenue and business impact. I wanted to pick your brain. You've really kind of led on this role of not only the super worker but now the super manager. And I think I know some of that is thinking about it in a corporate context, but boy does it seem relevant in our conversation here around great managers running million dollar businesses. Can you talk about maybe some of your research on the super manager and maybe do you feel it applies to Frontline?

Josh Bersin (00:54:38):

Totally, totally. Of the frontline type of companies that I've talked to over the years, and we've studied many industries, the higher performing companies spend more time and attention and money on management, selection management, development management coaching, management support. They probably pay their managers better because as you talked about, Josh, a manager in a frontline operation is a general manager. They're not just a people manager. They're managing operations, they're managing customers, they're managing revenue, they're managing cost, and they're taking care of people and they're training people and they're dealing with change. And when we did the research on super managers, what we basically found is that if you look at the rate of change of either technology or product cycles, it's faster and faster and faster. And we would like at headquarters, those of us who work at headquarters to understand what those changes are and be making changes in the company as fast as we can, but we can't.

(00:55:41):

The company's big, it's sprawling. There's people all over the world. We can't talk to them all day. So we're expecting the line manager to deal with these changes in the market and technology and the competitive environment or maybe the economy on their own. That is what a super manager is. A super manager is someone who doesn't just manage people and direct their work in the McDonald's, but thinks about the bigger issues and what do we need to be doing differently or should we be exploring different models like how we're staffing people or how we're organizing people or who we're hiring and continuously iterates in some way improves the operation at a local level.

(00:56:24):

And I think the companies that have figured out how to do that, whether it be the old do the right thing, whatever's good for the business, you decide really have opportunities to differentiate themselves. Too easy to say, here's a cookie cutter manager job. Let's just hire people that know how to do it. And this goes industry after industry. We also found, interestingly enough, we studied sort of the impact of management development and HR across many, many industries. We have this big capability model of what are HR people good at and one of the families of capabilities is leadership development. And so it tends to tell you how much money or attention this company spends on leadership development in their industry compared to their peers. And we found that if you correlate all the things that happen in HR against the growth rate of the company, the most impactful practice is not pay or DEI or speed of hire, it's management development. And most companies don't spend enough money on it and they don't think about it all the time. So I think in the front line, it's maybe even more complex than it is in hiring a manager to lead a bunch of software engineers or marketing professionals because the operational issues are so important. So I just want people to just remember that and think about

Joshua Secrest (00:57:49):

It. Well, it would sync up, and this isn't one where I have the breadth of research. We've got more anecdotes, but we're chatting with the chief financial officer of, it's about 200 unit restaurant group, and they said there was a clear distinction between highest performing and even moderate performing restaurants. And it was the strength of the manager. So to your point, who those managers are, how you're being able to train those, really making sure that your best managers are in your best locations. It's a fascinating model in terms of how much I think attention the frontline manager is starting to get. It was great to be able to see that. You mentioned even pay packages starting to shift in frontline

Josh Bersin (00:58:36):

Work. Yeah. You're seeing frontline managers making more money now being paid as real general managers because they're basically leveraging a major amount of revenue, opportunity and profit in their stores. And then the other thing that's interesting about the whole management issue is in most frontline organizations, there are some super managers that have come up with inventions or new ideas that just work for them. And we need to share those. The people at corporate don't come up with all the best ideas and how to run the stores. They're not in the stores all day.

Josh Bersin (00:59:09):

And

Josh Bersin (00:59:09):

So tapping into their expertise and rewarding them for sharing it with others is another part of

Joshua Secrest (00:59:14):

This. Yeah, it's great hearing about manager pipelines as well. It seems like most frontline industries are seeing that managers, their best managers are coming from within versus coming in training from outside. And what's also, not only is the pay package gone much wider and bigger, which is amazing, it's tied to revenue that's being driven, but you're starting to see very clear and transparent paths for training to get someone from a crew member position to a manager position. So I was sitting with a CEO of a regional restaurant group and they said, our goal is to really get someone there within three years, but once they hit the manager level, it's a significant six figure role because of the volume.

Josh Bersin (01:00:01):

Well, a funny story on that. I don't know if you guys have done any business with Wegmans,

(01:00:07):

But Wegmans really spent and there are just a really highly regarded supermarket. I guess they're more than a supermarket, but I think that's the category they're in. What they told me is that the way they develop managers is they take a team of people that are running a really well run store, including the sort of lower level department heads, and they move them. And when they open a new store, those people get to go to a new store and train all the people in that new store on how to run that store. And that process teaches a lot of the institutional knowledge that they have and helps them understand why they've been successful. And so then they move those, many of those people get to run that new store. They get promoted when they run that new store. I mean, these are sort of innovative ideas on how to develop leadership

Josh Bersin (01:00:59):

In

Josh Bersin (01:00:59):

Organizations that really have a big impact on frontline.

Joshua Secrest (01:01:03):

Yeah, I love it. Josh, this has been a fantastic conversation. Thank you for taking the time and from all of us who've spent time in the frontline industries and thinking about it, it means so much to have your eyes on and your brain on it. I think the research that's going to come out from you and the team is going to be really cutting edge and propel us forward because I think all of us are desperate for better business cases and bringing in other case studies to our C-Suite, and I know you'll lead the charge. So just thank you.

Josh Bersin (01:01:35):

Thank you, Josh. I appreciate all your help.

‍

‍