What does it take to create seamless, end-to-end processes that satisfy the needs of modern staffing agency owners, recruiters, and candidates?
In this episode of The Staffing Show, Rishabh Mehrotra of Avionté discusses how technology and a consumer-centric mindset can help you create workflows that increase recruiter efficiency, offer an optimal candidate experience, and fuel agency growth.
David Folwell: Hello everyone, and thank you again for joining us for another episode of The Staffing Show. Today, I am super excited to be joined by Rishabh Mehrotra, the CEO of Avionté. Rishabh, why don’t you go ahead and give an introduction for yourself?
Rishabh Mehrotra: Hi, I’m Rishabh Mehrotra. Really excited to be here and thanks for having me today.
Folwell: Yeah. Thank you so much for joining. So why don’t you tell us a little bit how…your background and how you got into staffing.
Mehrotra: Happy to. I’ve been actually in the HR tech space for 25 years. I got started in the late ’90s when I built the first portal software business. This is when we were just thinking about delivering benefits to this new thing called the internet and I managed to be at the right place at the right time and built out a portal software company to do exactly that. And from there, I morphed into running benefits administration, employee enrollment type businesses, where we targeted very large employers and built out a terrific business that was one of the leaders nationally in that. And then moved further into an HCM and payroll business that I ran and made it one of the largest competitors in Asia and Australia.
And then had come back and I’d be looking at the trends that are happening in the industry. And frankly, staffing is just in a fantastic space where I’ve done a lot on the employer side, but when we think about the temp workforce and what their needs are from a technology standpoint, it just is a great place to be. And so through some of the discussions with Avionté’s investor, Serent, I had a chance to step in and take over this role and haven’t looked back since.
Folwell: That is amazing. I’m always intrigued as a fellow entrepreneur, how did you, with the portal software, the benefits, sounds like you built a pretty big company. How did that start off? What was the initial thought behind that?
Mehrotra: I think the first thought was around the work-life balance and simplifying people’s lives. And so that’s what I started with. In fact, my first name for that business before we grew up from there was PerksAtWork and will you bring your work-life balance? And then technology is really just a means to an end. And so the things that I learned, even in that initial startup that I did, have been things that as I think about solving for technology today and solving for the problems that we see and the opportunities we see, it’s still the same thing as ultimately, you got to make it really convenient for the user. You got to simplify how you implement. Some of the same lessons still hold true many, many years later.
Folwell: Oh, that’s great. One thing I always like to start off with is just understanding what does business look like for Avionté these days? What’s your growth trajectory at the moment?
Mehrotra: We’re in a great spot right now. So Avionté as you know, is one of the industry leaders. We see significant growth opportunities. We expect to grow two to three times the next few years, and that’s coming a lot through supporting existing customers and continue to grow in the staffing industry.
Folwell: Absolutely. And with that, I know staffing is booming right now. Everybody’s trying to find qualified candidates and trying to figure out how to improve the candidate experience. What are some of the major trends that you’ve picked up on staffing or that Avionté has honed in on?
Mehrotra: In terms of major trends, I think the first is that staffing is booming, but labor is hard to find. And so there’s demand greater than supply and labor shortages that we see is one pretty significant trend. And we talked about that in our CONNECT Conference where some of the drivers of that trend are COVID, some of the drivers are things that got accelerated as a result and catalyzed as a result of COVID. And so we see ourselves in this environment where demand for labor is going to continue to be greater than supply. We also see trends around having a disaggregated work stream. So someone who is working in home healthcare might be working three different jobs in a week.
We see this whole blend between virtual and onsite and how do we blend the two where you may have some employees that are virtual some are onsite. So that’s another trend. All of this leads to us to start thinking about that the power is shifting from the employer to the employee. And we’ve seen this and talked about the war for talent on the employer and full-time workforce. We’re starting to see the same thing here. And so, one big trend that we now talk about is the consumerization of labor. That probably is one of the singular most important trends that we’re tracking with now.
Folwell: Yeah. And when you talk about the consumerization, I mean, is that aligned with the digital transformation, same concept, or do you see this as a different kind of approach? Why don’t you explain a little bit more about that?
Mehrotra: Yeah. For us, I think the first thing is in terms of, if you go back in staffing, you went, if you wanted a job and wherever had the jobs was king. And now, there’s more jobs than people. And so we start thinking about how conveniently and easily can you help someone find a job and get on a job in the shift. That’s where we see a little bit of a shifting balance of labor, if you may, or balance of power. In terms of the digitization, I think technology always follows the need. And so, yes, this is part of that whole trend of digitization and digital transformation that we’re seeing, but I think it’s going to have some nuances from purely putting in a tech stack. It also means, how do you engage people? How do you enable people?
Folwell: Yeah, it is interesting with the labor shortage and the level it’s at. I think I’ve talked about this on the podcast, but I’ve recently heard that at McDonald’s, I don’t know what location, but they were actually offering iPhones if you stayed for 60 days as a referral or a retention play. I know there’s a lot of… As candidates have more options than ever, all of the details and how you approach your candidates and it is more of a shopping experience for a candidate now than it has been in a very long time. What are some of the key insights that you see in terms of the, I guess, call it the consumer-centric revolution?
Mehrotra: I think one of the key insights is that, the first thing people start off with is resisting, this is not going to happen. Staffing is different. We are on…because our industry is different. I think they’re also going to be some early adopters who haven’t thought through all the implications, strategy, technology, business metrics, and culture. But the bottom line is that there is a rapid adoption of consumerization that’s going to be driven by this fundamental economic driver and trends. So that’s one piece. The second is then a consumer directed service model will require a rethinking of the business. You can’t just add on a piece, you need to step back and think about what do my end-to-end workflows look like and how do we engage that talent upfront in this more consumer-centric delivery?
Folwell: Absolutely. And with that, how is Avionté stepping into that? Are you guys approaching your business in a different way and to make sure that you’re aligned with what you think staffing firms need?
Mehrotra: Yeah, very much. We see ourselves having… Obviously our background has been in terms of doing the end-to-end process from ATS platform, to CRM, to payroll, right? From req-to-check, that’s been our end-to-end. We have then thought about that in order to extend that platform, we want to make sure that we find partners and build components that go towards the enablement of talent. And so we’ve added Avionté+, which is our integration platform. And in effect, we’re trying to build better workflows end-to-end, whether it’s for a recruiter, a payroll person, or for talent. And then the third part of that is that we are focused on talent enablement.
So we’re thinking about how do we help talent find a job, get onboarded, because a lot of onboarding today is just going to be virtual and remote. How do we help them find a shift, and get on a shift? And how do we help them get paid and see all of that in one place? And so the use of the mobile phone and being able to create a place where talent can go and feel comfortable in terms of finding a job and getting paid and all of that in one place, that’s a key area for us that we’re starting to develop. And working with our clients to find that end-to-end workflow that’s going to work for them.
Folwell: That’s awesome. And so you guys are going pretty significantly into the mobile space, trying to push further into that, making sure everything’s fitting the candidate expectations?
Mehrotra: Absolutely. We see that 294 million smartphones in the US and growing, we think that that’s the one place where everyone has access. And if you’re a temporary worker or contingent worker, your mobile phone is also your mobile office. And so that’s how, if you can be able to do all your business in one place in one app, that’s certainly the direction that we think markets going to go to.
Folwell: That’s great. What other evidence do you see that this consumerization is a real trend in staffing?
Mehrotra: I mean, if we look at other industries where this has happened, right? We start seeing that take the travel industry, in the travel industry, when we had the disaggregation that happened, you had the likes of Airbnb come up and they went after one segment of the market. You had certain high-end travel agents, you have Concur that did just the business travel. And so we’re starting to see that many of the staffing agencies and customers that we have are thinking about their businesses differently. They’re thinking about how do we compete in clerical and light industrial and how’s that going to be different from professional.
And the questions we’re being asked are, “What are going to be the workflows and how do we optimize these workflows based on technology?” And so, I think there’s this broadening recognition that change is here, and then we should be ahead of the curve. And maybe some of the ways we did things before, might not be the best in terms of how we do them in the future. Let’s find the right partner who can help us think through these things.
Folwell: And with that, I love talking about the parallels between the travel industry and the staffing industry. I think it’s a very similar concept…and my background at Hotel Engine. And one of the major trends with that, that we are also seeing, it’s the marketplaces and the gig workplace and the gig economy or the uberization of the candidate of the staffing industry. How do you think that’s applicable to traditional staffing and what approach do you suggest for staffing firms?
Mehrotra: That’s a great question. And I think Uber is a great example where they took one job and it was a big enough job called driver. And they were able to then create an end-to-end workflow for that. It just happens to be there’s millions of people that could go into that single job. And it was not as differentiated where you need a forklift driver or a nurse that’s going to need to be credentialed, which are very different roles. But in general, they have this end-to-end workflow. They had things like incentive pricing that was built in, so that if you had to do a late night shift or there was high demand, you got paid more in order to do that. So we think that that model is actually quite applicable, but we are talking about very niche sub-markets. And so what we’re trying to do when we work with our clients is in effect, give them an ability to have that end-to-end, right?
You’ve got now the recruiter that’s dealing with the end customer to say, “hey, I’ve got a job.” That’s the Uber example, you’ve got somebody looking for a ride. That’s what the recruiter is doing is saying, “okay, I’m going to now find you the driver.” And so then when we think about the mobile strategy, that’s something that we will have with the talent and make sure that the talent has easy access and quick access to being able to find that job, get on the job. And really short-circuiting the time that it takes between when someone requests and when someone gets on a job. And so we’re going to be enabling our clients to create really many marketplaces in much the same way that Uber did in that industry.
Folwell: That’s very cool. I didn’t realize you guys were doing that. So you’re basically enabling staffing agencies to go out there and have their own gig platform through mobile, through Avionté, is that?
Mehrotra: That’s right. So they already have the end-to-end workflow through Avionté+ and through our own change card, we are starting to build talent to come to us and provide them with this user experience as well.
Folwell: Absolutely, absolutely. And how is this changing the talent funnel or the candidate experience in terms of talent?
Mehrotra: I will say we’re still at the early stages of this. So I think in terms of talent experience, we can keep on refining it and improving it. But the way it’s changing is it’s speeding it up. And so the talent being able to get a text that gets them to find an opportunity or to check in on them, then they can click on that and then be able to interview and get a job, and then be able to have virtual onboarding. Then they get to sign up for a shift and then get paid to their change cards. So we’re orchestrating that experience right now. I think the future, we’ll find ways in which we can actually have a lot more simplification and efficiency. Just as you think about the first version of any industry, then figure out how do I make it better, and how do I make it more convenient for talent, and how do I make sure that they want to keep coming back to this place? That’s where I think the future levels will be, but we’re putting all the building blocks in it right now.
Folwell: Very cool. And how has this… I mean, we’ve talked about the talent side, but what about when it comes to recruiters or the actual employees at the agencies?
Mehrotra: When we speak with our clients, and this year we had the CONNECT Conference and we had the chance to do a quick survey of our clients, 79, almost 80% said that their biggest goal was finding talent. The second biggest thing was engaging and retaining talent. That went from 80% to 60%. And then 25% said, finding new clients, because if you have the talent, you’ll get clients. And so how they’re responding to it is they’re very engaged in thinking about talent enablement strategies and how do we make sure this helps them further their business, because at the end of the day, that’s what’s going to help them drive their own growth is being able to have a partner that can help them find talent, and be able to do the end-to-end workflow that the recruiters already do.
Folwell: That makes sense and it seems like a very smart approach to that. How would you compare the process steps compared to the traditional talent funnel in terms of… And then what’s changing?
Mehrotra: I mean, I think there’s efficiency on both sides. So I can give you an example in this environment, right? So a recruiter typically would have had to call talent, put them on a schedule. I’m just going to use scheduling dynamics shift beginning as an example. What they’ll do now is they’re going to be able to send out a schedule and then the talent picks what they’re on. Talent is happy because they’ve looked at it on their mobile app. They have an opportunity to grab the shift they want. The recruiter is happy because they can fill an entire eight-hour shift a lot faster. And this is a real example with one of our clients I’m talking about. And then the other piece that we’ve seen data is that if you tell someone live, “hey, I’m going to get on a shift.” 70% of the time people would show up. If you do it through an app, 90% of the time you show up because you chose-
Folwell: That’s amazing.
Mehrotra: … and you got on. So it becomes a win-win. It enables the recruiter to be more in the business of talent and takes efficiency and provides efficiency to the recruiter. But it also makes the entire experience for talent a lot better.
Folwell: Yeah. We’ve talked about this a lot on the show, but all of the automation, all of the tech stack, all these things, it’s like if it’s not enabling the recruiter to build a stronger relationship and to focus on the parts that are actually innately human, it’s not really the right… You got to free them up so they can have more conversations and get rid of the things that aren’t value add that can be done automatically and be done better in many instances.
With that, the next topic that is always one of my favorite. You guys are building out, I think, have a unique approach to your marketplace and your marketplace partners. And you guys talked a little bit about the tech stack. What would you say is the optimal tech stack?
Mehrotra: That’s a great question. I think I still will start by saying that the cornerstone of the tech stack still needs to be your end-to-end workflow, which is your ATS, your CRM, and your payroll, and your billing engine. That’s the cornerstone. And that’s how we enable our clients to be in business. The next layer on top is then our Avionté+ if you may, and that’s the integration there. And what we’re doing that is how do we get the different partners in the ecosystem that are going to help in one of two ways. One, how can we make the recruiters more efficient? These could be things like background checks and tax credits and just things that they need to do, but we create embedded workflow. So instead of it being where you do an integration or it’s yes, I can use an API and go integrate with anyone. That sounds good.
But if I actually had an integrated workflow where you could click, it was just done seamlessly and you never have to leave the app, that’s going to save you time. That’s going to increase compliance. And so that’s the approach we’ve taken through Avionté+ in terms of how do we make each role more efficient. And then the other piece is, there’s going to be a set of partners. There’s a lot of innovation that’s happening that’s targeted at talent. How do we bring those in and how do we create a better workflow for talent as well? And so that’s how we’ve used Avionté+. And we think that that is an important part of the tech stack. Obviously I’ve talked about the mobile app and talent enablement as the third cornerstone for it.
And then the wrapper around all of this, we look at, is business intelligence. We think that’s fundamentally important because as we move forward in this industry, ultimately our clients are starting to look at what’s the lifetime gross margin per recruit? Not just my growth rate, but my gross margin per recruit. What’s my return on people? What’s the value if somebody stayed in my ecosystem for another month, for another three months, for another six months? And we all know that, that’s what’s going to really help fuel the drive. So business intelligence, we think having a strong component of business intelligence that tracks your data across your workflows, from your ATS, and CRM, and payroll, all the way to also the other pieces of your tech stack becomes pretty important.
Folwell: I mean, anecdotally, one of the things that you’ve touched on was the fact that, having somebody stay, the ATS being the single source of truth or the main place for the recruiters to manage the candidates and the talent flow. And I can tell you, I feel like every staffing agency owner that I talked to is that they do not want to give another tool to the recruiters. The recruiters do not want to have to log in or remember something else. The more that it can all be done from within the ATS and have that be the central source of truth, I consistently hear that, that’s the right direction. And that’s great they are moving that way. You guys you’re building technology and also enabling your marketplace partners and staffing agencies to move forward. Do you have any recommendations on how you would approach building a tech stack?
Mehrotra: In terms of the clients, I think it first starts with that process. So again, say technology is a means to an end. Exactly. You need to start with first studying your talent pool carefully, and then thinking about how do you want to design your workflows. And when we provide technology to our clients, we always configure it based on what their workflow is. And so I think starting with, what are you solving for, depending on what industry segment you’re in, because that’s one thing that consumerization also drives, right? You got to be really good and pick your niches and where you’re going to compete. Obviously larger firms will have multiple niche areas that they’re going to compete with. Some might be geographic, but more likely they’ll be based on job roles that they’re trying to fill.
And so based on that, you might have the same staffing company that will recruit differently and have different workflows for two of their divisions because they’re targeting very different people. And so your tech stack and how that’s aligned needs to then follow through based on how that’s going to be different from one segment to the other. And that your tech partner needs to be able to actually be working with you to provide that different variation of your tech stack. And what I mean by that is, for example, you’ll have some industry segments that you will definitively want to have daily pay, right? And others, you may not. In some segments, you’re going to really need to have a rapid way to text people. And so it’s going to be varying in terms of what other components beyond your end-to-end workflows that you need to bring into the tech stack based on the segment and based on the customers you’re serving and the talent that you’re acquiring.
Folwell: Makes complete sense. And jumping a little bit, but a little bit of a fun question here. But if you were to own your own staffing firm, what would you do? Actually, I’ve got two questions on this. So one, what vertical would you pick? And two, how would you go about designing that business differently?
Folwell: Loaded question.
Mehrotra: I think from a vertical standpoint, no surprise. I would say, if you think about clerical and light industrial, there’s a lot there in terms of how you can really improve. And I have an impact on the end employee, right? By being able to provide so many more tools to them, such as daily pay, such as being able to help them stitch together a full-time job with a lot of part-time work and then be able to bring them to the right employers. That’s certainly one. Healthcare we see a great need, which is very similar to the segment. And professional similarly is very similar needs to that segment.
And how would I design the tech stack very much in the same way as we talked about is thinking about for our clients, whether it’s in a clerical and light industrial, or in healthcare, where you might need to put someone into two different home healthcare situations with two different end employers in the same week, which means I’m going to need things like assigning time sheets and being able to use my mobile phone, to be able to go click in and click out of time sheets and then aggregate all of that and have a single W2 associated with it. And so I would really design workflows around the needs of my end customer and then build a tech stack from there.
Folwell: Yeah, I do think it’s funny as this comes up quite a bit on the show as well, but I think people looking at the shiny object without actually understanding if it solves the problem that they have. And starting with the razzle-dazzle versus the issue that at hand.
Mehrotra: That’s a great point. I see that in many times that clients get enamored, staffing companies get enamored by, “Hey, I got this new thing.” And the fact is, you can have all these shiny objects, but they don’t work together. You’re not going to have any impact. You’re just paying a lot of money for nothing. And so for me, the main thing is, I would rather have, just like you’d have a well-orchestrated team, than a lot of great players that don’t work together as a team, right? You want an orchestra, not a cacophony of musicians that don’t actually work together. And that’s really what I think is the single biggest thing that I would say that the staffing industry needs to think about, is the end-to-end workflow and not get enamored by the next shiny new object. Figure out if that fits in or it doesn’t fit into your workflow. And if it does, great put it in, but if it doesn’t, it’s just a means to an end.
Folwell: Absolutely. And with all of these changes and the consumerization of the staffing industry, how do you think this is going to impact technology costs for staffing agencies? One thing I think about is this going to edge out recruit— everyone has different opinions on this, but it’s like, are recruiters going away? Do you think they’re going to stay? What do you think that role looks like? And what are the budgets for staffing agencies look like five years from now compared to today?
Mehrotra: Great questions. Firstly, I think in terms of the total cost of ownership for technology, a lot of technology will help recruiters become more efficient. And so they’ll be able to spend more time in terms of the relationship building. And in some ways your efficiency of a recruiter will go up, right? Even though your costs may remain the same. The second thing is that some of that efficiency is going to be given away by spending the money on attracting, and retaining, and retraining, and redeploying talents. Right? So I think net-net, it’s going to be one where I think there’s going to be winners and losers in this industry. Those that are able to deploy technology, even though they’re going to spend more, it’s going to create a greater barrier to entry. And therefore the return on that technology will actually go up. That’s one of the things that we see, is that it’s not necessarily what your total cost is not going down, but your total ROI should be going up. And if you’re not investing in the right way in technology, then you’re going to be really left behind.
Folwell: The State of Staffing Report, I think it’s like two or three years in a row, we’ve seen that the fastest growing firms, they align with being early adopters. And so I think tech really driving a more significant ROI.
Mehrotra: We’re excited. I mean, the number one company on Inc. 5,000 was one of our clients. And last 18 months, they’ve grown dramatically and they plan to keep growing because they’ve deployed technology well.
Folwell: That’s amazing. I know we can look that up, but since it’s on the Inc. 5,000, can you share a little bit about what they’re doing or anything that’s public on that?
Mehrotra: I won’t steal their thunder, it’s a company called Human Bees and you can look them up, but it is certainly one where I think how they are deploying technology is certainly a big plays to their advantage.
Folwell: That’s amazing. I saw their name on there, but I haven’t read about it yet. So I’ll put that on the list. One thing we also talk about a lot in this podcast. Do you think that this is going to be a winner-take-all market as we shift to a gig economy as this more like travel where there’s going to be an Expedia that’s just dominating or a Booking.com that’s dominating or do you think this is going to stay as fragmented of a market as it is?
Mehrotra: Great question again. I personally think it is going to remain a fragmented market. There are subsegments of the market that will get pulled together and there’s a winner-take-all in those. So in the market for drivers, if you may, there is almost a winner-take-all. There’s Uber, there’s Lyft. And when we think about, are there other subsegments, if they are, then there will be winner-take-all. But if we are talking about really niche markets where we may have a large employer that’s asking for multiple different roles of a staffing company, then you’re going to have a combination of saying, “Hey, who can create these many markets the most efficiently?” And that’s who’s going to win because you’re able to serve the end needs of the large employers. And so, we think that some of our clients and staffing companies that are able to deploy technology in the right way will be the ones that scale up and create these niche markets for their clients.
Folwell: That’s great. And it is interesting to see… parts of me that I always think it’s going to consolidate, but then you think about the importance of a relationship and the choice of a job is way more than booking a hotel room. There’s a lot more value created by having somebody to talk through in those conversations. But it is interesting to see a shift a little bit.
Mehrotra: And the jobs are different, right? So you have different roles that are there. The other piece that I see changing is that there’s a lot of millennials and younger people that actually want to have the flexibility of jobs. So it’s putting pressure on what employment looks like. Almost everybody can then become, doing multiple different jobs that they find flexibly done. I actually see an increase in the number of people that want the so-called staffing jobs, because if they do it right, they’ll be able to build a career out of it but they get a lot more flexibility.
Folwell: Yeah. I think that’s a great point. And I also, one thing that I think might be valuable for the audience to just think about is, we did a survey a few years ago asking about… It was in the travel nurse space, but we’re asking about like,”What do you value most?” And we were trying to figure out, I was thinking like, “Oh, everybody wants self service and highest pay.” And it turns out it’s like, just like any other market, there are market segments within each vertical. And it was like, at that point, I don’t remember the percentage, but there was a percent that wanted the highest pay least touch. There was a percent that wanted concierge service that was willing to take a hit on pay. And when you think about this approach, it’s like, there’s going to be people who focus on these different segments of the market over time. I think that’s something that will maybe play out in the staffing industry as well as it continues to evolve.
Mehrotra: That’s a great point because even if you look at employees, not all of them want the same thing. Some of them actually want that flexibility and they’re going to leverage the staffing industry to say, hey, I want to just work two days a week or three days a week. And then others will want to go from temp to perm and take different types of careers. And so how do we make sure that everyone has an opportunity to play as an employee regardless of what their end goals are.
Folwell: Absolutely. And then you brought up Human Bees there. I’m going to circle back a little bit. Do you have any other examples of companies, best practices or winners that you can share with people who you think are using tech really well or just approaching the market differently?
Mehrotra: I mean, we’ve got a number of clients that are in that Inc. 5,000, I would say without naming them, I think the clients that I feel are doing this right are deploying platforms that also allow them to engage with talent. So for example, being able to use the talent that they already have, but we think that’s going to be one of the biggest assets that you have is the talent that’s already worked for you. And so how do you leverage that database to make sure you help them apply for that next job and you simplify how you interview them, and you simplify how you onboard them. So we’ve got clients that are doing that. They’re putting them on schedule and they’re seeing massive improvements in terms of the percentage of people that they’re finding and how fast they’re getting on shifts. So we’ve got examples of clients that are absolutely doing well.
Folwell: I’ll just second that as a lot of the companies that we talk with, their job boards are great and will always be probably one of the key or maybe even primary places get placements. But the thing that I think is interesting is your network is unique to you. It is a differentiated, it’s a competitive advantage if used correctly, because nobody else has your network or your talent on staff. When you’re buying resumes or buying new applicants, you’re buying the same thing that everybody else is. So it is interesting to think more about how do you get more out of the database you’ve created. And especially some of these companies have spent 15, 30 years building these databases and they’re still going out and just constantly were focused on the new adding to it versus leveraging what they built.
Mehrotra: I couldn’t agree with you more. I think this is a time employers figure this out, right? Large employers figure out, hey, the war for talent is there. How do I make sure I retain people? How do I retrain them? How do I make sure we go from one place to the other? We need to start thinking about the same thing in the staffing world. And those that do better leverage their talent. So that of course you’ll have go hunt for new talent, but why don’t we fish in a barrel? Because…
Folwell: I like that. I like that.
Mehrotra: …and in fact, those companies that do, they’ll have greater loyalty, they’ll have greater gross margin per recruit and greater lifetime value that they’re going to have per person that they place.
Folwell: I also think this is interesting. Maybe something that I think I brought up a couple of times on here, but I feel like in the software space, startups space, Silicon Valley, you and I, when having software, we think about customer lifetime value. What’s your retention, what’s your churn? And I feel like in staffing, a lot of times they’re thinking about, “What do I make off this one contract,” when reality is, if you can start to get the renewals in and start looking at the lifetime value on the candidate, it changes the entire business model. And it allows you to increase your…when you pay for the acquisition of the candidate, it changes it quite a bit. So I think that’s something that I’m starting to see bubble up and seeing more staffing firms approach things that way as well.
Mehrotra: That’s exactly right. I mean, when I look at a business, I look at what’s the customer acquisition costs? What’s the long-term value as a ratio of the customer acquisition cost? And based on that, you decide how much you’re going to spend on marketing. And then you look at saying, how do I increase the lifetime value? Well, one is, can I retain the customer for a longer period of time? Same thing with talent, can I retain talent for a long period of time? Can talent go up to higher skill sets over time by being in my ecosystem? And then, obviously you’re able to drive profitability from your client’s standpoint by doing that. Which is why we think business intelligence is an important part of the solution. And that’s why we’re investing pretty significantly in that.
Folwell: Do you have anything specific that you’re able to share on the business intelligence side? Are there any features, benefits, directionally, where you guys are going on that front?
Mehrotra: We’re looking at a couple of different things. So one is, we want to make sure we provide executive dashboards that enable our clients to see what’s your profitability. Whether it’s by division, by recruit, what’s your gross margin? You can start then looking at data in different ways and help make executive decisions on the business. The second part of that is, a lot of our clients would want to have ad hoc-type reporting capabilities because they want to be running reports, et cetera. And we want to make sure they have the complete data set that cuts across from your recruiting, all the way to your payroll, and then down the road from any of the other partners that we may have in the ecosystem. And then overtime, we’re going to be actually adding embedded analytics. So if you’re a recruiter and you say, “Hey, it’s taken me 25 days to find someone and the average is 22 days or 30 days, I know I’m doing better or worse.” And so you’re able to enable people to do that. So that’s where we would see ourselves doing over a period of time.
Folwell: I haven’t really thought about the recruiter performance metrics. I’m always thinking about the candidate, but that’s a fun concept to build that out and dig in. You have all the data right there.
Mehrotra: Yeah. And then if you measure it and show it to them, they’ll want to hit better than averages there.
Folwell: That’s great. So with that, we’re going to jump into the more personal side of the interview and some of the additional questions. What advice do you wish you were given before entering the staffing industry?
Mehrotra: One is that, one shoe doesn’t fit all. And that I think our clients are fiercely entrepreneurial, and that in order to help them, we really need to pause and understand what problems they’re solving and how they’re solving it. And that’s something that I very quickly picked up and I want to get all of our staff right at Avionté to participate with our clients and learn from them. We don’t need to be telling them, we need to be listening from them, and then building solutions that actually meet their needs. And I think if we just did that, right, we’re going to be fine.
Folwell: That’s great. And in the last five years, what new belief, behavior, or habit has improved your life the most?
Mehrotra: I think for me, in terms of businesses, it’s about creating a system in place that allows everyone to play on the field. And that’s something I say to our employees is that we’re all on the field, we’re not in the stadium. And so how do you create… My role is to enable people to all play their best game. And so I actually think people have inherently great potential. And how do we make sure that as a leader myself and as a leadership team, we enable people to find their potential and play the best game that they can play. And that means that we got to keep on thinking through how do we put the teams in place. So that’s something that I’ve really learned from a business standpoint is that, systems win, individuals don’t win, leaders don’t win. It’s actually, if you’ve got people that you enable them well, they all want to go out and win. That I think is going to make a good company.
Folwell: That’s great advice. What is one of the best or most worthwhile investments you’ve ever made? Could be an investment of money, time, energy, et cetera.
Mehrotra: Well, my kids.
Folwell: Oh, that’s great.
Mehrotra: That’s the most important.
Folwell: How old are your kids?
Mehrotra: I’ve got an 18-year-old who’s headed to college next week and a 20-year-old who’s a junior at college as well.
Folwell: Oh, that’s fantastic.
Mehrotra: Both at the same place. Both at Tufts.
Folwell: Oh, great school. What are some of the bad recommendations that you hear in your professional area of expertise?
Mehrotra: I think people chasing too many things. In many ways, focus shows conviction. And I also see a lot of people that are entrepreneurial that want to do well, chase too many things. And I personally used to do the same thing myself. I always have 10 different things that I need to do. And what that says is you don’t have conviction around the one thing or the two things that you really need to do well. Over time, you might have to pick three and four, but just get this one done now. So that’s one thing I see people not being able to do well and give them advice, just have conviction around what you really believe in. And that’s really, get yourself calm enough that you go after the things that you truly have conviction around.
Folwell: I love that. I feel like I’ve in the process of learning that one for a long time.
Mehrotra: I’ve…to learn that one.
Folwell: What is the book or books you’ve given most as a gift and why?
Mehrotra: Probably the one I’ve given the most is The Alchemist, which I do love. And I think it’s got some great lessons about pursuing your dreams and your journey and that ultimately it’s all within you and you don’t have to go because we all set off on a big chase. But then we’ve figured out that ultimately it’s all of the cards we hold ourselves. And so that’s the book that I like to share. There’s a great little story also in there that I share where the kid who was pursuing his dreams, goes into this palace and the king gives him a spoon of oil and says, “Walk around and come back and tell me what you saw.” When he comes back and starts telling him what he saw, he says, “Where’s the oil?” He’s like, “Oh, I was looking around.” And then he said, “Oh, make sure you don’t drop this spoon of oil.”
And so again, the kid goes and he comes back and king asks, “What did you see?” And he’s like, “I didn’t see anything. I was focusing on the oil.” And the lesson of life and of business as well is that, make sure you see the wonders of the world, but don’t spill spoon of oil. And I think that was a great book. And I share that a lot with people.
Folwell: That’s a good one. Last question I’ve got here is that, how has a failure or apparent failure set you up for later success?
Mehrotra: I keep telling my kids that, everybody sees your success, but they don’t see the hundred times that it takes to fail. Even to make a Grandmaster in chess, you got to lose a certain number of times and know how you learn from that. And so I think, we cannot succeed without failure. If you’re scared of…fear of failure is there, then you’re fearing success as well. And I’ve learned that as well. I used to have fear of failure, but now I just try things and I trust myself that I can make changes as I go along, because it’s just a learning lesson. It’s not a failure. It’s just, if you take on things that are big and challenging in life, you will fail. Otherwise, you can either sit and not take on anything challenging. But if you are, you will fail. Just learn from them and keep going.
Folwell: I second that one as well. Well Rishabh, it’s been super great having you on this podcast today. Is there anything else that you’d like to share with the audience?
Mehrotra: No. This was great conversation and really appreciated the questions, both business and personal.
Folwell: Yeah. Same. Thanks so much.
Mehrotra: Appreciate it.