Bonus: Greenhouse’s Daniel Chait on standing out in a tough job market

0:02Hey, folks. Today, I want to play you an extended version of my interview that ran on yesterday's show with Daniel Chapeak. He's the CEO and co-founder of Greenhouse, and because of his job, he had a lot of insights about the job market. There's a bunch of stuff in this interview I found really helpful, especially as we're all trying to figure out why it's getting harder and harder for young college graduates to find a job. You join me in our studio in New York. It was a lot of fun. Here's the interview.

0:29Daniel, thanks for joining me. Hey, great to be here. So Daniel, for folks who have not used Greenhouse before, tell me, what exactly does it do? Yeah. So if you've ever applied to a job, you've probably gone to a company's website and looked for a job listing that you're interested in, filled in your name, and maybe retyped your LinkedIn profile again and hit submit. That information all goes somewhere. Well, it turns out that when you hire someone at a company, a whole bunch of work has to happen in order to make that hire. You have to think about what the job description is. You have to talk about who's going to do the interviews and what are they going to ask.

0:58And then, of course, you have to process thousands of candidates and ultimately make an offer and a hire. All that work happens collaboratively in Greenhouse. So we're the sort of internal hiring platform that companies use to run all of their hiring. We actually use Greenhouse for our hiring process. I think a lot of our team has actually been hired through Greenhouse. I think one thing that I want to zone in a little bit on, Daniel, is a LinkedIn report found that global hiring is 20 % below pre-pandemic levels. Given that Greenhouse is used by so many companies, have you noticed a slowdown in applicants recently?

1:32Yeah, well, we've noticed a few different things happening in the job market, and none of them great. Greenhouse processed last quarter about 65 million job applications across all of our customers. Wow. So there's lots of job-seeking activity that we see, and we see what happens in the hiring funnels and things like that. And similar to what you've seen elsewhere, we've definitely seen a drop in hiring activity. But the other thing that you may not see as a job-seeker is at the same time as that's happening, companies are under a huge amount of pressure to do more with less. Their own teams, in particular their own recruiting teams, are often shrinking and suffering from budget cuts.

2:05And so the number of applications per recruiter has gone up even faster. And what that means for you, the job seeker, is if you're applying to a job, somebody's got to be going through that pile of resumes. That person's pile is about three and a half times bigger than it was in 2022. Which slows it down considerably. Which slows it down and makes it less likely that you're going to hear back. One of the things that we've heard from people who wrote in to share their experiences is how frustrating it is, not just from the time lag from when they applied to when and if they ever hear back because the ghosting is real, but also just how many hoops they have to jump through.

2:41Do you have a sense of how many layers there are to application processes? You know, that varies tremendously, of course, by like what job and what company and what their belief is. We haven't seen a huge trend like directionally in terms of more interviews per hire necessarily, but it's absolutely taking longer. There's absolutely a sense of hopelessness, a sense of I keep applying to jobs more and more. It's getting easier and easier to do that. Partly due to systems like ours, who used to be you had to put a resume in an envelope when I graduated college. And then you had to fill in cumbersome online forms.

3:11And now it's really simple, often a one-click apply. Part of the effect of that is people are applying to a lot more jobs each. And so it's kind of this spiral, we call it the AI doom loop, where people are using automation to apply to more jobs to try to get an edge and grapple with this feeling that they're not getting anywhere. And every time somebody applies for more and more jobs, that's just more applications that the company has to go through. And when everybody does that, of course, it makes sense for the individual. But when everybody does that, the overall system is just getting worse for everyone.

3:40And you're not necessarily, if I'm understanding correctly, you're not necessarily applying to jobs that maybe you're best suited for. Well, that's definitely happening. People are auto-applying to jobs and, you know, sometimes those jobs are just kind of randomly selected or the AI made a mistake because we know AI does that. But in addition to the volume going up, the qualification of you for any one particular job may be going down. And so it puts people in a really difficult spot. I don't blame a job seeker for using the tools they have available to them to try to give themselves an edge. After all, getting a job is really important.

4:10Yeah. But the net effect of it is it feeds into this spiral that everyone's feeling. Are there candidates that are performing better than others? I mean, is there a way for someone to maybe stand out more through their resume or through their application that gets more hits? Yeah, there are things that you can do. So first thing is our data show that being early to apply for a job gives you a distinct advantage. If you're in the first few hours of a job being opened, you're much more likely to be looked at and therefore much more likely to proceed in and get hired. Because what happens from the company standpoint, they open up a job, they'll sometimes get hundreds or even thousands of applicants.

4:46within just a couple days. And speaking as a hiring manager, I do tend to prioritize the people who get in early versus the ones who get in late. I mean, that's human nature. I think the other thing is, you know, you hear a lot of myths out there about what people can do to game the system. You heard for a while a lot about people putting secret keywords in like white text on a white background, try to trick the computers. Is that right? I never heard that. Yeah, it's like, oh, like people are trying to figure out the story that they're not being told. And so it's like, well, maybe that'll work for me.

5:13But things like that generally don't work. That's generally not how the system works on the back end. But what does work is make sure that your resume very clearly tells the story, not just a listing chronologically of like the job titles you've had, but the impact that you've had, the activities that you were, the responsibilities that you had, and sort of what that meant to the business. So if you drove revenue increases, if you helped launch a new product, if you serviced a bunch of customers that became happy, like whatever it is you did in your job, make sure not to just talk about what your title was, but about the impact that you had.

5:43And then I think the third thing is, you know, good old-fashioned networking still works. And I know it's difficult to say and it's not accessible equally to everyone. But if you have the opportunity to try to go to industry events or make connections with people that ultimately work at those companies, like, that's definitely going to help you as well. I want to talk a little bit about how entry-level candidates are faring versus more senior candidates. Because the job market is so soft. I have to assume that entry-level candidates are at a disadvantage against people who maybe have decades' worth of experience.

6:17You know, there's a couple things happening in that regard. You know, the first is, to your point, in a job market where there's lots, you know, relatively fewer jobs and lots of candidates available, companies have the luxury of maybe hiring a little bit more experienced people for roles than they otherwise might. So, on the one hand, just in a classic sense of the labor market moves in both directions occasionally. Sometimes there's, like, lots of talent available. Sometimes there are lots of job openings. You know, right now you're in a market where there's relatively few job openings means employers can be more picky.

6:45And yeah, they'll have the ability to hire people maybe a little bit more senior than otherwise. On top of that, to make it worse, is you've got the effects of AI starting to really be felt in the workplace. I think for a couple years people expected that and sort of talked about that as a possibility. I think you're now starting to see that happen. AI is really taking tasks off people's plates and automating them. It means people can get more done. And it's helping people do things that they otherwise couldn't do, like write a strategy memo in a morning or, you know, produce an entire new piece of software as a non-technical coder.

7:20And so the need for entry-level employees is somewhat getting replaced by some of these, like, automations, and it's just further constraining opportunities. I mean, that's concerning in and of itself. But how do you feel like AI will play into the hiring process or in the job market more generally long term? Yeah, I mean, the initial things that people are doing with AI are kind of helping themselves be more efficient. So job seekers apply to many more jobs. And companies, like, use AI to filter through my inbox and, like, hone in on a handful of people that I need to talk to. And each of those are pretty limited.

7:57and when they're used too much, they make the process overall worse for everyone else. So that's kind of what we've talked about as AI doom loop. I think I happen to be an AI optimist and I think AI has a ton of potential to make hiring better, like in so many areas. I mean, AI is used in a lot of ways to make things more efficient and a lot of ways to sort of take work, but also in a lot of ways to be creative and to support human expression and to analyze writing for fairness and all kinds of ways that it can be used. And so if you think about the future, as a world where everyone's got an AI agent doing all kinds of things for you in your life.

8:32It's helping you pay your bills. It's helping you, you know, with your homework. Well, surely it's going to help you find a job. And so in that world, can't it do a better job than your resume, which after all is like a rectangle piece of paper that's the same as it's been for 100 years, at helping you identify like actually which opportunities would be right for you and tell you things about the hiring manager that you may not know or tell the hiring manager things about you that may not be on your resume. like what kind of culture you'd thrive best in or the kinds of problems that you've solved that might be applicable to this job.

9:02So I'm optimistic, but I think it's gonna take a lot of work. I think there's a lot yet to invent that doesn't exist yet, which is why the process feels so bad for so many people. Do you have any advice for hiring managers? I mean, we've talked a lot about candidates right now, but as we've talked about, hiring managers are dealing with this deluge of candidates. It takes time. You may not even get the right candidate hired at the end of this. What kind of advice do you have for them? Yeah, I mean, number one, good old-fashioned structured hiring is like always my foundation for everything. It's like make sure that you've got a really clear sense of what your criteria are.

9:35Make sure you've got a written scorecard that you and your team have agreed to because then that reduces decision fatigue. It helps people collaborate. It gives you better data to make smart, defensible decisions. So no matter what you are, an AI, no AI, I don't care if you're doing that index cards, that's the foundation. And on top of it, what I would say is, you know, there is a tremendous flowering of technology available to today's hiring managers and recruiting teams that just wasn't available even 10 years ago. Use it. It can help you be more efficient. It can help you protect against scams, fraud, all kinds of bad things that are happening, cheating in the job process itself, which we haven't really talked about in this conversation.

10:11But it's rampant. And you can guard against those things using technology. So use the technology they have available to solve those problems too. Tell me a little bit more about the cheating in the job process. Because as, you know, the Boy Scout that I am, I never would. So I have no idea how that would even happen. Yeah. Well, it's actually fascinating. It used to be that interviews happened in person. Yeah. And so you kind of knew who the person was that you were talking to. Well, now they're largely happening online. And so that's made space for all kinds of behavior, ranging from people using AI to kind of burnish up their resume a little bit.

10:44And maybe it sneaks in a couple of things that, you know, weren't super true. which is sort of a story as old as time. Yeah, yeah, yeah. But just like AI-fied. And then on the other end of the spectrum, like the most extreme, you've got a concerted effort by countries like North Korea to infiltrate remote IT work using teams of fraudulent workers to impersonate, hang up on hiring managers, and make their way into your company by passing interviews using deep fakes and AI. And so the security community is on high alert and talking a lot about these things. Many of them have been caught. And in the middle, there's a bunch of gray areas like candidates using AI during an interview.

11:20Maybe writing a cover letter. Or maybe writing a cover letter. Yeah. And so some of those things are good. I mean, a lot of employers are hiring candidates that are going to use AI in the job. They want to know during the interview process, are you proficient with these tools? And some of them are bad. Like if I'm asking you a question, I want your answer. I don't want ChatGPT's answer. Sure. And so the kind of societal rules about that are changing and people are kind of figuring out like what's okay and what isn't okay. But it's no doubt like there's a ton of risk. Oh, and then, of course, I didn't even mention one of the big risks is there's a complex and evolving legal and compliance landscape.

11:54So different countries are regulating AI, even like the EU, so on a regional basis. And then even down to the city and local level, local law 144 here in New York, for example, California has laws regulating the use of AI, particularly in hiring decisions. And so as a company, you need to understand what those are before you deploy technology, or you might find yourself subject to lawsuits, which we've seen, class action lawsuits, legal action or worse. Daniel, I had mentioned to you before we started recording that we've heard this idea that this is a particularly bad job market for entry-level jobs and recent graduates.

12:31I, without aging myself too much, graduated in 2011. And of course, that was coming right out of the global economic crisis. And we were told that this was the worst hiring environment that you could possibly graduate into. So which is it? Was it 2011? Is it now? Is it just any time there's a downturn? Yeah, I mean, it's hard to necessarily compare eras. I mean, if you're looking for a job and you can't find one, like, I don't care what time of year it is, like, it's not a good day for you. So, you know, I think people are definitely suffering. I think what's unique about this moment is the following.

13:03The job market has always historically gone up and down and swung from high employment to low employment. And one side or the other feels the pinch when those things happen. What we've seen today that has never happened in my memory is both sides are unhappy. It's getting harder and harder to find a job. At the same time, it's getting harder and harder to make a hire. And so that's really a unique situation in my lifetime and something that's really been caused by this confluence of factors of like work moving online, changes in the global economy, the rise of AI. And it's why I'm so passionate about our mission, you know, make hiring work for everyone, because everyone is feeling the problem and something's got to be done to solve it.

13:42Daniel Chait is the CEO and co-founder of the Hiring Platform Greenhouse. Thank you so much for your time, Daniel. Thank you so much.

13:55This episode was produced by Henry Larson. It was mixed by Sam Giovinco. I'm your host and editor, Mark Filippino. and our theme song is by Metaphor Music. Check back Monday for the latest business news from the Financial Times.