State of Hiring Market & HR Tech Landscape w/ Prelude CEO & Co-Founder Will Laufer
Insights into how companies can best win talent in this market
From every startup to enterprise I talk with these days, everyone is complaining about the tightest and most competitive labor market anyone has ever seen. I was curious to learn more about why this was happening and what learnings companies could take to better position themselves.
I’m fortunate to have my friend Will Laufer, Co-Founder & CEO of Prelude, as a resource to explain these trends to me and thus all of the readers. Please feel free to reach out to me or Will directly if you would like to discuss any topics below further.
Recently we have seen one of the craziest hiring markets that I have ever experienced. As someone who is talking to founders, people executives, and hiring managers on a daily basis, what have you been hearing about the driving factors?
A: I see a talent crunch across almost every industry and stage of company, it’s incredible. Zooming out, this trend has been “sneaking up” on us for over 10 years – the average time to fill a role has gone from 41 days (2010) to over 70 days today. I see a broad shortage of talent available, combined with changing workforce and hiring dynamics due to the shift to remote work during Covid, contributing to the current state of hiring markets.
As an example of what founders are dealing with, we recently hired a software engineer that had seven other job offers. How do you build a repeatable (and high quality) talent funnel when the best candidates are getting over half a dozen serious offers?! It’s definitely a candidate’s market and companies are needing to get creative to stand out from the pack.
What tips would you share with other founders and hiring managers from the learnings you’ve seen from customers so far? How have you seen companies scale their hiring in this market?
A: Companies that take a people-centric approach to HR are winning. That could be standout experiences for job candidates, investments in benefits and culture, or finding ways to increase employee engagement. Companies with people-first employer brands are outcompeting the rest of the field on hiring speed, quality, and employee retention. In this era of the Great Resignation, anything that can decrease time to hire and employee attrition is taking center stage.
There is an explosion of innovation in this space. The new HR tech stack includes people-focused platforms like Lattice, BetterUp, Remote, and Prelude (if I do say so myself), along with new platforms for employee development, benefits, culture-building trips and much more. The landscape is evolving every day – new solutions are emerging that will redefine candidate and employee experience, and companies are eager to invest in products that combat the low candidate close rates and high attrition that they see.
Human Resources was considered a cost center for a long time. Now we are seeing the rapid rise of the Chief People Officer being a core member of the executive leadership team. Can you speak to the changes you’ve seen in terms of budget being allocated to the enablement of hiring?
A: Absolutely, it’s a very exciting time for HR tech. We’re seeing strategic personnel investments across the HR department. Companies are realizing that small improvements to key HR metrics like time-to-hire, quality of hire, and employee retention & engagement are yielding huge gains for their business.
Beyond the Chief People Officer’s rise in prominence, this shift has led to strategic investments in new functions like Talent Operations, DE&I, and Employee Experience. HR teams are becoming more data driven and nimble – we’ve even seen experimental comp structures in recruiting to better align incentives across the organization.
Just as the hiring market is quite tough, the HR tech space is crowded as well. How has Prelude (as an example) and other companies you’ve seen differentiate their offerings to deliver value to end users?
A: I believe that the primary differentiator for the next wave of HR tech is taking a people-centric approach. The last decade’s solutions focus on the employer’s internal tasks, but today that functionality is table stakes. The winning HR platforms of the next decade will be the ones that enable modern and engaging experiences for employees and jobseekers. Using Prelude as an example, we think it’s ludicrous that the majority of touchpoints in the hiring process (from “Apply” to “Hired”) still happen using email templates and .pdf attachments! Companies that can build better experiences that deeply engage employees and candidates will stand out and win.
In sales you have Salesforce, cloud infrastructure you have AWS, what are the core systems of records in your opinion in the HR space? How do you see these evolving in the future if at all?
A: Historically it has been the ATS (recruiting) and HRIS (HR). I see this framework evolving – most companies use dozens of other point solutions to augment the capabilities of their system of record (employee surveys, background checks, performance reviews, etc.). I believe the ATS and HRIS will continue to be core systems in HR, but our idea of those systems will look very different in 5 years.
Over the last year, Prelude has morphed from a single product company to a multi-product company. What have been the most interesting aspects of this change? How would you recommend other founders think about moving into adjacent product areas?
A: Listen to your customers. We didn’t decide on day one that Prelude had to be a multi-product platform. Instead, we heard our customers complain about how broken the hiring process was for candidates and realized we were best positioned to help them fix it. The beauty of SaaS is that your customers are never completely satisfied – if you’re considering expanding your product, start by listening!