Episode Transcript
[00:00:03] Speaker A: Okay, welcome back to the Frontline Conversation. Today I'm excited to have Josh Seacrest and Nahal Nanjia, one of our lead analysts, to talk about two very important issues in recruiting and talent management, time to hire and quality of hire, which are massive topics in and of themselves. And of course they're interlinked. Josh, you had some interesting, interesting comments when we were getting started about what's been going on in time to hire in the restaurant industry. Why don't you get us up to speed?
[00:00:32] Speaker B: Yeah, so some really interesting data as we've been tracking. Time to hire, time to fill. We're going to have this from time to apply to start date. Really? That's been stuck for the last 15 years. So you've been seeing a 21 to 30 day time to hire rate in the front line. Okay. Some organizations pass that, some organizations a little bit in front of it. But from an average about 21 days, we started to see that tick down a little bit by day post Covid, there was just more energy being thrown at it. A new report coming out in April from the National Restaurant association has this timeframe down to 16 days. So it's pretty good five days faster. But what really sticks out is that the top 25% of organizations from a speed perspective are moving in three and a half days. So in a lot of those organizations, and Nehal's going to have quite a few different case studies. I've got a few different case studies are the biggest and most recognizable, which would say something different is happening for the largest frontline organizations than the rest of the 75% of organizations that is creating this kind of generation skip or leap. And so we'll dig into how they're moving that fast, why they're moving in that fast. But I just think when you break down data like you two do all the time, I just, I geek out on this because holy smokes, the top 25% moving at three and a half days means that there are some organizations that are moving faster than that. And then from an average, if the average is 16 days, that means there are a whole lot of organizations that are probably moving at 30, 40, 50 days, which we come across quite a bit. Now you all are doing a lot of really interesting things on segmentation. So I'm just going to call this out again that this is heavily weighted towards restaurant. I did couple this with our data, which is about a billion interaction points, and we were able to carve out frontline hires. This is paradox. We do quite a bit of hiring in the frontline space, our numbers frontline average is around this 3, 4 to 3, 7 across a broader industry. So validating some of that data. So I wanted to bring that up and get your thoughts on wow, why do you think that's happening? Why do you feel like there are so many organizations that are even maybe slower than that 16 day mark? And maybe why it's starting to creep up. Any initial thoughts?
[00:02:52] Speaker A: Let me turn it over to Nihal. The interesting paradox of the situation is I think a lot of people at first blush would say the longer time to hire is intended to improve the quality, but actually it may be the opposite.
So Nihal, tell us a little bit about what you think's going on, why there's such wide variations here.
[00:03:12] Speaker C: Happy to do that. And Josh Seacrest, thank you so much for getting us up to speed on some of the data around speed to hire and how that's changing in the market and how technology like workday paradox is influencing that. Just high level synopsis There is the frontline workforce is largely a very fluid workforce. They have a lot of options and a lot of avenues. Especially in the context of AI coming in, we see the back office jobs are still stagnating, shrinking, but the experience that the frontline jobs drive is accelerating. You can have the biggest giants of companies, you can have the most skilled of talent in back offices, you can have the most cutting edge AI. But if you don't have the right people at the right time and the right roles on the front lines delivering that final production value, you don't really have a business. So you need to get those people enrolled in time really quickly.
And if you don't do that, you lose them to your competition. Whereas if you do that, and the reason why organizations have this heightened awareness of making those investments in speeding up the time to hire is because they realize that it is an important lever in locking in the commitment of high quality talent. If you don't do that, someone else will do that. There's a reason why those 25% organizations are the high maturity organizations, surpassing other organizations in talent, business and innovation outcomes as we've seen in our research. Long story short, there's a lot of business value. It's not just, well, let's just fix a little gap over here and increase the speed to hire. It is a business imperative. It is important for operational stability and resilience of a business, especially at a time where the pools are shrinking. People coming in are not as much anymore. So if you lose them to your talent You've lost to other organizations, you've lost your competitive advantage.
[00:05:08] Speaker B: Yeah, it's really interesting on that from a business impact. Josh and I have talked now on a couple different episodes on just this business impact. But I loved how the sophistication of these frontline organizations is starting to come together in terms of tying things that maybe used to be held in like the HR space, time to hire, time to fill, quality of hire, and actually are really tying into revenue, as you've seen in a lot of your case studies. We see it in some of ours where you've got restaurants or retail organizations, hospitality organizations, manufacturers who are basically able to walk you through sort of their cycle of what understaffing looks like to them and how it actually impacts revenue results. And usually it's some format of understaffing leads to more understaffing, like more turnover because people are taking shifts that they maybe didn't want or are stretched thin and feel like they're doing multiple jobs at once. That typically leads to lower productivity. Maybe in a restaurant that's slower ticket times or less conversion rates, you impact customer experience. Whether you're a facilities manager or a restaurant. If you're not able to supply the people, you're not providing the service. And then you can actually start to measure revenue impact. And so every organization, regardless of where you sit on the front line, has some sort of negative impact that likely impacts revenue or customer service, which impacts revenue. And I like hearing how many organizations are starting to think about that. I'll give one last structure to this. You know, in the similar National Restaurant association report, what also is going to come out is the cost again for a restaurant, but the cost when you're down one person per day. Josh and I have talked about this on some other episodes. It need to see this dollar amount continue to be reaffirmed where they're seeing that organizations are reporting between about $300 and $700 lost per day when you're down one person per location. Now this is restaurants, so they've got drive thru lines and stuff like that. It's a little bit easier to measure. But that's really fascinating because then you can take that time or that dollar amount and then also look at the time to hire and you can turn it into real revenue loss. Right? And so if you were to say, oh, in my restaurant it's costing me $500 to be down one headcount per day, then I can actually take an average time to hire at 21 days and say, ooh, If I'm hiring that slowly, I'm probably gonna have more turnover. I'm gonna potentially lose about $10,500 in revenue. And so there are real business implications to moving a lot faster. Josh, I know you've been able to think about this too. How are you seeing organizations starting to talk about revenue impact?
[00:07:36] Speaker A: I think in the frontline world, certainly in restaurants and certain retail, they already know that time to hire is critical. I mean, we don't need to make that business case because they see the revenue gaps. I don't think they understand the fact that it is possible to reduce the time to hire to a very small number and improve the quality at the same time. Because in a sense, what you're saying is not let's hire people faster because that could backfire too. Right. If you're hiring the wrong people. But let's tighten the process and change the process so we quickly determine who's the right fit, quickly determine who's ready, quickly determine who's skilled and get on with our lives and get them on board. Instead of waiting for managers to find time to do an interview, how do they do that? I think the magic is much more complex than people realize. Nahal, why don't you start? You've been doing a lot of interviews on this. And then I know, Josh, you have examples too.
[00:08:29] Speaker C: Absolutely. So the broader trend we are seeing is organizations are chasing this, of course, click to apply minimalism. The broader intent there is, let's reduce the frictions in the hiring experience. At a point when someone just says hello, you don't want them to give you their entire life data to just know whether they can flip a burger or not. So it's reducing that friction, reducing those unnecessarily thumb maneuvering on a phone. But at the same time, organizations realize that it's important to be very deliberate. So you want to reduce unnecessary friction, but at some point, you want to introduce some friction to make sure that people you are hiring are the right standard and the right quality for your organization. So it's really about separating the wheat from the shaft. What is the information that you need to know? And assessments can help you accelerate where you need to go, what you need to do, what is the past experience that really matters, or if it doesn't matter at all, we can train you and just These are the five steps.
[00:09:30] Speaker A: These companies that are taking 50 days to hire, I don't know who they are. Are they just asking for too much information?
Do they just not know what to ask?
[00:09:38] Speaker C: It's Complicated. It's getting the right people in, it's retaining the people. There are so many touch points, and that's actually one differentiating strategy in these 25% high maturity organizations that we're speaking with is really understanding what are the different fallout points. One of the organizations we spoke with explicitly mentioned that they did the study to see that back in the day, when people accepted an offer, they would show up. But post Covid, there's been a significant trend that 35% of people after accepting an offer are still looking for another job.
[00:10:14] Speaker A: Let's just talk about that for a second. Is that because there's so many jobs out there, there are buyer's remorse, oh, I don't want that job after all. I think I can find a better one.
[00:10:21] Speaker C: It is because 75% of the organizations haven't figured out the way to shrink this gap. Because as an hourly worker, every hour of wage lost impacts my being, my existence, my family, my sustenance.
So for this workforce, you really have to understand that time is money.
[00:10:42] Speaker A: The slower your process, the more likely you are to lose people who are in a hurry or ambitious.
[00:10:47] Speaker B: Let's dig into that. We sometimes get lost in this overall time to hire number. But if you start to look at these organizations and how fast they're moving, they've mapped these critical points to the hall's point. So when we look at these companies that are doing three and a half days to hire, I break it down by these key stages, right? Like how long does it take someone to apply to your job? Typically about two minutes now. There's no logins or passwords or anything like that. Okay, so then how long does it take from someone applying to you, getting back to them? Okay, usually that takes 48 hours. If you look at the average company, these top 25 are getting back to them instantly, right? They're doing a screening mechanism that's automated, and they're basically saying, josh, thanks for applying, you're qualified, we'd love to chat with you. Then they send them interview times, typically for the next day, right? Instantly. So now in three minutes, what used to take 48 to 72 hours, they are responding back to candidates within three minutes. Right. And so then you'd start to say, does that matter? Is that an advantage? And you'd actually look at a couple different pieces of data that also influence quality. So one would be when people apply to a frontline job, they typically apply to 15 to 20 other jobs at almost the same time, like batching it as they go on to Indeed or ZipRecruiter. That number starting to creep up. Different studies are coming out where that number for maybe the back to this like top 25% is 80, 90, 100 jobs at one time. Okay, so flip that and you would say wow, as soon as I get an applicant, if I really like that applicant, the sooner I can get back to them and talk to them and get them an offer is really going to give me an advantage for the best folks. And I'm going to want to break down best folks with you guys.
So that's pretty interesting. The other thing that's interesting is when people apply in the frontline, 54% apply at night or on weekends and in the front line. We'll bring this up at every single turn in this podcast. It's typically not a recruiter that's working with these candidates. It's typically our restaurant manager who sleeps and if their store or restaurant is understaffed is under that much more pressure. So probably their first priority isn't reviewing candidates as soon as they get in. And so this automation of that process has gotten really slick. Instantly get back to the candidate that they're qualified. Instantly schedule the candidate, get them in usually within 24 to 48 hours. If it's slower than that, usually there's drop off because somebody else has gotten to you give them an offer right after your interview. So now you're 24 hours in, you've seen them and given them an offer. And then Nihal to your point, some of the best companies are getting really efficient on onboarding and so that's including background check that can now be maybe it's not instantaneous but can be done in 10 minutes and some paperwork where it's almost a lot of the forms that are necessary are mobile, simple, self filled out. And so it's expediting some of that all the way. Right. It's allowing for you to have much less drop off of high quality candidates who you feel like would be able to stay. So pretty interesting on how condensing that especially if your systems are in good place. Most organizations know what they want or who stays longer. It's just making sure that you can get a higher proportion of those folks and train up who's doing the interview.
[00:13:53] Speaker A: Nahal so in our maturity model, I think you mentioned about 25% of companies are really good at this. Give us an example of a company that maybe wasn't very good at it, that got good at it. Are we talking about little mom and pop shops that are not good at it and big companies that are good at it or big companies that are not good at it, or tell us what you've learned.
[00:14:11] Speaker C: The good news is we have a whole plethora of examples at this point that we can share thanks to our ongoing commitment to this topic for at least a couple of years now. It started with McDonald's where the sea change initially came, right? We loved when we spoke to them that they said, you know what, with AI, with paradox, it now takes the same amount of time to apply for a job as it does to order a burger at McDonald's. You can just scan a QR code and you could have your burger delivered and you could apply for the job. And the rest of it is what we just spoke about.
Now, one point that I do want to make is managers need to sleep, they need to go back. And these managers deal with a lot of cognitive load and compliance load because essentially when you enter a restaurant, the manager is running it like the CEO of the enterprise in the moment. They're fully in charge and they want to focus their time on running the operations, making sure compliance is meant making sure customer experience is up to the mark.
You don't want them to be spending time on hiring and things like that. So managers love these advancements in technology.
One example that I can bring up is this is the largest seafood QSR chain in the us it's called Captain D's. If you've ever come across them, it's really nice, warm and cozy environment. This is probably digressing from the topic, but they are best known for their beer battered fish.
So do try that out if you
[00:15:37] Speaker A: visit them next time you have them at India Nehal.
[00:15:40] Speaker C: No, they're US based. It's on my list every time I
[00:15:43] Speaker B: go, all right, next trip, next trip.
[00:15:45] Speaker A: I just wanted everybody to know that you're not here so they could get a sense of your enthusiasm here for our weird way of eating.
[00:15:52] Speaker C: So this organization did a thorough analysis of again, the fallout points and where they needed to remove friction and bring in deliberate friction. So they work with the paradox to minimize the friction points in the hiring experience to make sure that it was the essential information that mattered. Simultaneously, they built in some deliberate friction to make sure they were hiring for the right quality, but also to the point of really putting in the right people at the right time and making sure that the managers focus on the things that matter. To that point one, they were able to reduce more than 50 of the hiring time. They're now able to keep their restaurants 95% staffed at all times, which is a huge reduction in lost customer sales and driver of average sales unit for restaurant location.
[00:16:42] Speaker A: I want to ask you the $64,000 question. Is this a business process problem or a tech problem or both? Is the answer by paradox and these problems go away or take what you have and use it differently? Because I think the technology now is so different with the AI capabilities and the chat capabilities that you maybe wouldn't have been able to do this very easily in the past, but I don't know.
[00:17:05] Speaker B: Yeah, I'll jump in there and halal. I'd love your opinion on it and call me out if you feel like I'm too biased on it. Josh, it reminds me of maybe our first episode together where you were saying like, what's going on here? And for me there was a swell of we all have wanted to do this. We've all tried to do this. It's just that with large organizations doing a lot of frontline, you get to a place where pre automation era, you would have had to build up your process in team infrastructure at such a large amount, it's essentially unprofitable and untenable. Right. You look at some teams and 711 was able to share this with you all in their case study that I thought was very well written. Thank you for sharing that story. Because they were trying to build this and scale this.
[00:17:48] Speaker A: So they were the hundred people in the call center handling 400.
[00:17:52] Speaker B: Right. And they would have probably said we needed even more to be able to scale it and get back to them. So people knew. I think it was just like in business, you have to be able to look at what the cost implications were there. And so only five years ago, only seven years ago, we had a choice to make, which was if all of this is manual processes, but we know we need to move fast. At what point is there a breaking point where I actually can't scale up enough to be able to support these processes? And so I do think tech has really helped here because not really replacing the interview. Right. But it is replacing some of those quick administrative things where it's pretty clear that you're qualified and should advance to an interview. It's pretty easy to get you scheduled for an interview. It's pretty easy to answer your questions. It's pretty easy to nudge you to come in. It's pretty easy to give you interview tips. It's pretty easy to help you with onboarding paperwork and fill out X or Y form. And when you talk to most organizations they would say all those processes are the same. What's been eliminated is are people needing to go into a computer and click, click and the candidate having to just wait.
[00:18:54] Speaker A: Let's talk about the interview for a sec. So the manager has much less to do because the scheduling and the pre qualifications done by the technology, the background checking, all that kind of stuff. Where do you think the interview is going to go? I was on the phone with Ashutosh from Eightfold last week and AI interviewing is pretty big now. What are you guys thinking?
[00:19:12] Speaker B: There goes in a couple different categories. I'll split it into three. One would be interviewing's not going away. And I think there are a lot of buckets where it's customer facing, where a manager who's going to be responsible for the onboarding would love to be able to meet the person, have them actually show up, not only chat with them, but then take them maybe back of house, back of restaurant, back of the retail store, walk them through the distribution center, xyz. And so you hear time and again, that's sometimes one of the bigger pushbacks is hey, that's a really important part of the process. It's where we want our humans in the process.
The second piece I'm going to go the full other side is you do hear more on non customer facing roles in distribution centers or warehouses where there's actually no interview at all. So not even this AI interviewer. Okay. And so within that process, what they're doing, and maybe we get to this as our next topic is they're basically doing the calculation of the business impact of not having our lines filled, not being able to pick and pack as many packages. And that's pretty detrimental to have even a day of one line open.
And so their math would basically say, anybody who meets these six criteria, let's give them a contingent offer, let's get them in. That can happen usually within 10 minutes. They get them an offer in 10 minutes, start usually the next day or two. And their math would basically say, we know we're going to lose a few people after day one, they're just not going to like it. However, it would have been far more damaging and far more costly to not have that line filled than to have a little bit of turnover because we weren't able to screen it out. Okay, so then you've got that bucket where they're not actually doing an interview almost at all. It's a basic screening mechanism. I think where you're starting to see this AI interview is typically this first screen While I'm seeing maybe some retailers playing with it as like the full screen, maybe a human still watches it after the fact or kind of checks in on it. A lot of times it's more of this first screen. So maybe valuable in that corporate environment or if you're looking for set answers or even sometimes what we find is at some retailers they would say yes, the candidate answered x way. But 30% of the time when we're actually sitting across from them, they answer that same exact question in a slightly different way. And that slightly different way actually is around the schedule that they would prefer versus the schedule that they put into our system initially. And if we could have an AI interview or vet that a second time, that would be really valuable. So I think we're going to see it emerge. I think it has to be really smooth and slick. I think it's definitely another kind of skip forward from maybe the video technology, video interviewing that we'd seen in the past. It's a lot smarter, it's a little easier to use.
[00:21:40] Speaker A: So Nahal, I have a question for you and I'm going to take you back in time for a second. You spent a lot of time doing our leadership research not that long ago before you got into Frontline. It seems like a lot of the linkage here is what does the store manager do? If this system is working really fast and candidates are just coming in to interview and the store managers. I don't have time to talk to this person or I'm too busy. I'm going to make it a five minute conversation, maybe call them back tomorrow. Does the manager become a bottleneck here or do they have to be trained or they're not going to be eliminated? Obviously. What is the management topic that needs to be discussed in these high volume situations?
[00:22:18] Speaker C: Let's think about what has changed for these managers before versus after. So I loved how Jocris you called it the pre automation era. What technology is doing is it's replacing the process, it's not replacing the human judgment. So the human judgment of the manager is still very critical. But back in the day, these managers slash were doing human judgment plus administrative task 1 administrative 2 administrative 3 administrative 10. So now they don't have to do all of it. All they have to do is what we see in most organizations, especially the leading organizations that we spoke about in our research. They automate the process. But the final decision stays with the human that is actually running the store, slash restaurant, slash outlet, whatever that is. And managers appreciate that. One for the human Dynamic two also for the location specific nuances. Now the same restaurant outlet in the north and the south has very different implications. The same retail store, we spoke to one of our mobile store retailers and they said that it's only in Hawaii that they have to put a board outside their retail store which says no shirt, no shoes, no service. But that doesn't apply to anywhere else in the world. So there are these location specific nuances that those managers can focus on for building the right culture and the dynamics for an organization. For a restaurant outlet or the organization that they run for it to be successful managers, their role stays, but they perform, if we talk about it in health care terms now, they perform top of their license. Their role is to shape the culture. Their role is to be the coach, the mentor, the growth catalyst, but not to do the process or the administrative stuff that now in the post automation era can be taken over by technology.
[00:24:06] Speaker B: Yeah, I think it's such a cool reframing of it too because if you were just to say, hey, a manager can have the most outsized impact on the success of a store or a location. So the difference between a good manager and a great manager is like literal revenue results.
Right. Then you start to frame that question so much differently. Then how do we enable that manager to be great in? Hey, before, if some of the foundational administrative stuff wasn't happening, you've got a sloppy store, you've got paperwork not being filled out, you've got people not being hired. Like those were things that had to be done, but now that they can be automated, they can fill into this administrative bucket and then it's actually moving them and shifting them to top of license.
[00:24:46] Speaker C: I want to go back to one of the questions you raised earlier, Josh. I want to make an important comment there related to the manager role. You'd asked if paradox is the answer or technology is the answer to every problem that we're talking about. My two cents there is can technology solve the problem? No. But can it give you a jump start in solving the broader problem? Absolutely, yes. So the largest part of the problem is getting people in the funnel. Technology can help you do that very quickly. But not to forget that there's another part of the story where there's 180 to 200% churn that's common in this population. So when you free up managers time to not focus on the administrative stuff, you are giving them the bandwidth to impact attrition, to do coaching, to build those other pillars of the employee experience that can minimize that 200% churn. It builds into the overall problem solving engine where you grease the wheels, you bring people in faster so you're already ahead of your competition. And then you have that extra room to be nice to your frontline talent. And not just nice, but do what really matters for them, for you, for the business, for your success as a manager and for the success of the enterprise.
[00:26:01] Speaker A: I think your point, I think there's really a triad here. There's the time to hire, there's the quality of hire, then there's the turnover. Well, you go, they're all related and none of them stand alone. I had a higher level question for you guys. You want to take a little more of an economic perspective on this for one minute?
[00:26:16] Speaker B: Let's do it.
[00:26:17] Speaker A: So let's assume this restaurant data is representative of the world. Where it used to take 50 days or whatever it was 30 days, now it takes 10 days, six days. And the average frontline worker used to have 20 jobs. Now they're applying to 100 jobs. I think that's what you said, Josh, Something along those lines.
[00:26:36] Speaker B: Yep, average is 20. But we think the top echelon is applying to 100.
[00:26:40] Speaker A: So on the one hand the employers are getting smarter and better automated and more AI and better employee experience and all that. That's the stuff we're trying to help it with. And the job candidates are getting pickier and super powered in their applications. So now they can apply to a hundred jobs at a time and they can look at this wonderful thing you just gave them and they can go into Poly Market and say wait a minute, I think I can make more money over there. So I'm going to come in on Monday and then on Tuesday I'm going to go back and see if I can get this. Where is this going? I have an answer, but I want to hear your guys perspective.
[00:27:12] Speaker C: This goes back into some labor data analysis that we just very recently did. When we look at what is the size of the working population in the US versus when we look at the size of the employment, there's a 50 to 60% difference. There's 2.8 million active job roles in the US right now. That's not equivalent to the size of the population. And that's very clear to say that we're operating in a multi role ecosystem. People are doing multiple jobs because they have the autonomy and the flexibility to do that. And that is what really matters. People want that flexibility. That's one of the biggest drivers. When we see people choosing frontline jobs or switching Frontline jobs, What schedule flexibility do they have? What kind of preferences can they build in? Can they swap their shifts? Can they do the uberization of model where I don't want to work today or hey it's holiday season, I want to buy gifts for my family, is there a way I can pick up extra hours?
There is this entire multi role ecosystem that exists and that is going to become the norm, that is going to become mainstream because technology is enabling that for the first time the focus is shifting on the frontline to give them what they need and to realize that they are the structural backbone of the economy.
So if we want them to function the way they function, we want to give them the right facilities and infrastructure to operate in the way they drive.
[00:28:36] Speaker B: Yeah, I think that's so well said and I think it's a positive for everyone. Right. Have we been operating in sort of a less transparent system in the past? And now really what's lifted is transparency. And so it's great if someone who's offered you has 20 hours in one location now can get another 20 hours in another location or has access to tools and resources that can help them optimize net pay because a certain benefit is really beneficial to them or, or it can calculate tips at registers that one organization does that maybe another doesn't. That actually could be much more take home pay or those extra 10 hours are better served driving an Uber than it is taking a role at the local X location. That's the stuff where I do think there's going to be this flexibility and transparency, access to information like Nihal's calling out that I think will really benefit the frontline worker. And I think that's something that should be embraced. And I think for organizations you have to consider that now that they're going to be able to have access, access to there and systems are going to make it a lot easier. I don't think it's too far off in the future where your agent on your phone or your computer that is super easy for just about anyone to understand would know your exact pay, your exact schedule that you'd like to work exactly where you live. And it acts as your precision tool to apply proactively. As soon as a job at Costco opens up that pays $3 more and offers a shift that's more aligned to your lifestyle.
[00:30:04] Speaker A: And that sort of leads me to one of my themes for many years, this idea of the irresistible organization that if you take care of the people and you're really vigilant about what these Issues are you may end up paying people more and having a more profitable company in addition because of the lower turnover and the higher quality of candidates. So this is all related. All that stuff is connected.
[00:30:24] Speaker B: I wanted to leave us with one more piece because Nehal, you'd mentioned large numbers around annual turnover and Josh, I totally agree with the man. All these things are connected. One of the things we haven't defined as a group, that this is where my brain space has been going. Please push back on me if you don't agree with this one. Was just trying to define quality of hire a little bit better in Frontline. In Frontline, it's so much easier to do this because this is quite the quagmire of a conversation when you try to do it in corporate. I'm sure all of us have been dragged deep trying to do that. But in Frontline, where I feel people sometimes fall into the trap is they talk about annual turnover rates and that number in that percentage is always big, right? And usually it's even over that hundred percent mark. You filled the role and then you filled the role again. So one of the things that we're working on is just this idea of what makes a bad hire. It's probably easier sometimes to define a bad hire versus even a good hire in an organization. So here's the theory. A bad hire loses your company money, okay? So you've made an offer and potentially they didn't even start. So you lost a bunch of money trying to hire them and then they didn't even get there. Or maybe they start but then they leave early. And what I define as leaving early is going to change based on company, but they leave before your break even point. And so a break even point in an organization would be the moment in time where someone is in like a net positive value hire. So if you think about someone, they get hired, they get trained, what we'd call like a ramp up. They then hit at some point a day of positive contribution, their first day where they have added more than they've lost. But that's still actually not the break even point, right? You have to have a few days or a few weeks or maybe a few months to be a net positive value to get past that break even point. So our first piece would be let's get more Frontline organizations reporting on what your break even point is, roughly. Be pretty Precise about that. Ditch 30, 60, 90 days, because I think you lose your C suite when talking like that. Hey, 21 Days is our break even point. We're going to try and get as many people past that point point as possible. We're going to try and eliminate all turnover before that point because that's a bad hire, we lost money. And then the next point that's of consequence is what I'd call like a retention sticking point. This is also typically in a frontline organization well before the one year mark. So the retention sticking point would be, hey, there is this moment in time where after the break even point, you see your turnover numbers drop way down. Okay? And so if I can get as many hires past this retention sticking point in my organization, then they're going to stay much longer. Now my average tenure is maybe eight months or nine months or 15 months. If I'm consistently hiring people that are not only getting past the break even point, but also getting past this sticking point. And then I start to orient my benefits and my orientation and my ramp up to get people past the sticking point. Now I think that's really important because actually that break even point and that sticking point aren't necessarily at the one year mark. And so by starting to speak that language, I think we can reset the conversation in frontline hiring to frankly disregard the one year mark. If people stay at one year, that's great. But if you think about it, it's actually kind of arbitrary. This population does have a lot of options. There are a lot of lifestyle things that happen. We've got a lot of 16 to 18 year olds who are going off to college or back to school. We've got a lot of seasonal employment. So annual turnover rate's not the way to report this to your C suite. But start thinking about it in break even points and sticking points and some more research hopefully coming out on that. And I think it's a great way to be able to tie this to revenue and how your organization is hiring and quality. And I think gives us some like real metrics to be able to use and to know how a lot of your research every segment, every industry is going to have different sticking points and breakeven points. But I think it's a great exercise to be able to establish that even if theoretical with your particularly finance team.
[00:34:13] Speaker C: 100% just for someone who can learn to flip a bugger in three hours and be productive, versus for someone who operates in a mobile retail store and has to talk about finance options, carrier options, device options, mobile networks will probably take three months. And we've had these conversations where organizations are worried that early turnover is particularly more expensive when you have to make those upfront three months training, investments, and then someone leaves. So that's a very pertinent point that the break even point is very important and it's very different for different segments and different skill levels that you're hiring for. So it's definitely a metric to keep in mind. 100% aligned on that.
[00:34:54] Speaker A: Guys, I think we're out of time. Thank you very much. Next session, maybe we'll unlock the keys to the framework you've been working on, Nahal, and disclose something really interesting and new. Thank you, Josh. Thank you, Nahal. See you guys again soon.
[00:35:09] Speaker B: Always a lot of fun. Thanks, all.
[00:35:10] Speaker C: Thank you.
