The State of Recruiting in a Post-Pandemic, Pre-Recession World

Recruiting and hiring in the post-pandemic, pre-recession world presents challenges to HR and business leadership. The cost of turnover, how recession affects hiring, and employee retention are just a few of the stumbling blocks in today’s tight labor market. 

In this episode of America Back to Work, Dave Berk and Juney Ham—co-founders of Beacon Talent—discuss the challenges of hiring today and offer their unique insights and experience, led by your host Arnette Heintze. 

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S2 Verify is one of the leading, privately held, pre-employment background screening companies in the United States. 

Arnette Heintze is co-founder and chief strategy officer at S2Verify. Before establishing S2Verify, Arnette spent more than three decades working at the highest levels of federal, state, and local law enforcement. 

He served more than 20 years in the United States Secret Service as a special agent and senior executive where he planned, designed, and implemented security strategies to protect U.S. Presidents, world leaders, events of national significance, and our nation’s most sensitive assets, including financial infrastructure.  

After retiring from the Secret Service, Arnette focused on building growth and performance of innovative start-ups and SMBs. In 2004, he established Hillard Heintze, a globally recognized strategic security risk management and investigations firm. In 2009, along with Bill Whitford and Jim Zimbardi, Arnette established S2 Verify with an approach and methodology that delivers fast, accurate, compliant, and affordable background screening insights crucial to better managing insider risks, threats, and vulnerabilities. 

America Back to Work Transcript

Welcome to America Back to Work, brought to you by S2Verify where our purpose is to help you hire with confidence and manage insider risk. I’m your host, Arnette Heintze. 

Today I’m joined by recruiting industry innovators, Juney Ham and Dave Berk. They are based in New York and are the co-founders of Beacon Talent, an embedded recruiting service with a very compelling business model. 

But first, let me share a little background on these two. Juney is an active angel investor and has invested in over 40 companies across a variety of industries. Previously, he was co-founder and president of Upside, which was acquired by investnet. Additionally, has held senior executive roles leading marketing strategy and operations at high growth companies, including hired Airbnb and Expedia. 

David also has a stellar background in this industry. Prior to launching Beacon Talent in 2018, David held growth focus roles at Hired, Porch, and Harri before co-founding Beacon. Juney and David bring their combined expertise, cutting edge technology and recruiting best practices to help companies elevate their game in the pursuit of talent to achieve their hiring goals. 

David, would you mind providing our listeners with a little background on Beacon and how your team is impacting the recruiting industry today?

Dave Berk

Beacon is an embedded recruitment solution. So if you think about the recruiting services ecosystem, you have the traditional contingent recruiting agency model, the executive search model, um, which both are very transaction oriented, um, for most growing organizations. Identifying a, a partner, somebody who can compliment and work very closely with an internal recruiting team to add capacity, um, to be able to sort of come in just in time, operate in a very sort of similar way, um, and, and utilize consistent processes and extension of that team, almost staff augmentation. Um, that’s really the position that Beacon plays in the market. Uh, and this enables us to work with companies across the entire spectrum of, of their hiring mandates. You know, it could be anything from engineering and product design to go to market roles like sales, marketing and, and customer success.

Arnette Heintze 

Yep. Great. Thank you David. You know, as the two of, you know, firsthand bad hires lead to high turnover rates and ultimately this impacts the bottom line. Would you mind sharing your thoughts on how companies can best manage this issue in the extremely competitive labor market that we found ourselves in today?

Juney Ham

Sure. Um, I think it goes without saying that the cost of bad hires and turnover is immense. Uh, the US Department of Labor claims that it could be up to 30% of, uh, the employees first year salary. Uh, and I’ve seen other figures ranging from tens of thousand dollars to up to a hundred hundreds of thousands of dollars in sort of lost value. Uh, not only does this cost account for the time hiring, onboarding, training, and ultimately terminating a bad hire, but I’d argue a big piece of the puzzle is the opportunity cost of putting that wrong person in seat. That person is pull up, uh, performing below expectations, and in certain cases, the impact of toxic employee spreading, you know, negativity or exhibiting bad behaviors to the broader organization, uh, is additionally, you know, on top of that cost. And so, you know, in a competitive labor market, I would say the time to hire also increases, and it often means, you know, additional spend that a talent team would need to deploy in order to bring on additional candidate pipeline. Um, and also that cost is magnified in terms of the length of the time that role remains on bill.

Arnette Heintze

Yep. Yeah, you know, they, and that kind of goes in, in line with, you know, once a company has a bad hire, I’ve also seen where they don’t move quick enough to terminate that individual. So that, just to your point about how it’s impacting things, you know, negatively in the organization is, is so true. You know, with, um, unemployment rates, near historical lows right now, uh, how is this impacting the search for talent and what do the two of you expect over the next couple of years? I mean, it’s everybody’s, you know, talking about we’re potentially headed into a recession. What’s, what are your thoughts in this area and, uh, how are you working with clients in this space?

Dave Berk

Yeah, I could take that one. Um, I think it’s important when we talk about labor market shortages to think both about the fact that there’s many different segments of the labor market. It’s a very large diverse ecosystem. So that’s one. And then the second is, um, to think about the fact that there are, what I would say are systemic challenges to labor shortage and then more market driven forces. So touching first on segmentation. Um, the majority of, uh, the types of, uh, companies we work with and types of roles that we work on tend to be what I would call knowledge workers. Um, folks that, you know, can work remotely and are, are typically, uh, engaged in activities, um, that don’t have a dependence on being in a physical space. Right? Um, if you think about the other segment of the market we’ll often talk about is the services sector.

Dave Berk

And if you look at the most recent jobs reports, you can see a lot of it increased in jobs, uh, has been driven through that service sector. Uh, leisure and hospitality has been a big, big driver recently. So, um, in terms of those systemic forces, I think we do a lot of work with, you know, software engineering type organizations. It, um, there’s been for the last 15 or 20 years a systemic shortage of engineers. So no matter what the market dynamics are at a given time, you’re always gonna be, uh, dealing with that. But in other ends, the labor market as well. You know, you mentioned, I, I worked at Harry, which is a, um, human capital management platform for the hospitality industry. And finding back of house staff has always been a systemic challenge as well. Um, and so those challenges exist in, in every segment of the market.

Dave Berk

Um, and then if you look at what are the current market dynamics, um, yeah, I mean, you can see the Fed is actively working to drive us towards, they don’t wanna go into recession, but obviously we’re raising rates in hopes of slowing down the economy. And one of the biggest signals we’re looking at is the monthly jobs report, right? So in any other world, if the jobs report was up, you know, stock market would be up. But we’re seeing an inverse relationship now because everybody’s waiting to start to see the economy slowing, which should drive down consumer prices. And so I think if we look down, um, the road to 2023, and ju and I talk a lot about this on a basis, but, um, you know, we’re, we’re sort of seeing probably a continued slowing, steady slowing of the economy for the first half of 2023.

Dave Berk

And honestly, for us, when we look at that knowledge worker segment of the economy, we, we’ve been seeing that, um, crashing for the last six, eight months, right? The layoffs that are happening now are still flushing out, but that’s been going on for a while. So I, I actually believe if and when we get to a recession, that’ll be a signal to people that there’s gonna be hiring starting there. Um, so if you’re in that segment of the economy where you are an HR or a talent leader, you know, you’re gonna be looking at things slowing for a while until that uptick begins to happen. Uh, if you’re more on that service end of the economy, you’re gonna start to see things slow down a little bit over the next co three to six months, But I actually think you’re gonna see a lot more slow down, um, towards the back half of 2023 when a lot of this plays out. Um, and you’re gonna see, you know, the, the impact what the Fed is doing, start to, um, impact the the jobs numbers.

Arnette Heintze

Dave, you laid out a concept there that I think is intriguing, which is by the time, um, we recognize we’re in a recession, you think that potentially could be the start of maybe better hiring because the typically recessions, you know, we’re coming out of ’em after, you know, 18 months, give or take some, some less, some a little more. So by the time the word is official, that might be a sign of better things ahead then, because we’re gonna start anticipating more hiring.

Dave Berk

I, I think so. I mean, it could be wishful thinking, but you know, the difference between this recession and maybe think about oh 8, 0 9, um, in oh 8, 0 9, it kind of caught everybody by surprise, right? So we weren’t anticipating it here, we’re anticipating it. We’re we’re, you know, we understand there’s a market correction underway. The Fed has been very clear that that’s their goal. Um, again, their goal is not a recession, but their goal is to slow the economy and the recession’s a natural outcome of that. So I do believe when that happens, people are gonna look and say, Okay, mission accomplished for the Fed. Let’s now, you know, almost likely the Fed’s gonna, if not drop rates, definitely keep rates static. So they’re not gonna continue to increase, which will signal to that segment of the market, um, it’s time to move again. Now, at the same time, a lot of those knowledge workers are the folks that are driving up consumer prices. And we look at, you know, the increase in hospitality and leisure jobs that coming from, it’s coming from a lot of disposable income from that other segment of the market. Now you start to see these layoffs at Meta and, you know, Google and all these other places that’s gonna start to play out. Those are leading indicators of those jobs that are gonna contract, you know, six months from now.

Arnette Heintze

Yep, yep. You know, the recent Labor force participation rate remains low. It’s just at over 62%, and I believe it’s likely adding fuel to the tight labor market that we find ourselves in today. Are, are you finding recruiting teams doing anything, um, different as they search for talent in, in this low rate environment? You know, I, as we were talking earlier, I think in the nineties and early two thousands, we had that participation rate level was higher. And so now we, maybe there’s a little apathy among the, the workforce in that with a number of 62%, there’s obviously some gains we can have to put more people back at work, even though we’ve got a low unemployment rate. What, how do you feel about that?

Juney Ham

I could take that one actually. So at this point we’re, we’ve all heard the term, the great resignation, or have experienced it directly, or maybe indirectly in some way. Uh, they’ve talked a lot about some of the macro forces and some of the headwinds that we’ve been facing over the last few years. There are many components to that. Uh, and I would say that that is one part of it. You know, there isn’t a single reason I would say that is causing labor force participation to remain low, But a lot of changes have happened that are, I would say, almost societal, that is changing the nature of work, changing the way that, uh, individuals perceive work. And that could be something, uh, from, say the shift in the way that we’ve done work caused by the pandemic. Uh, we went, you know, many companies went remote, um, and they positioned themselves as, you know, remote first or fully remote companies in a world where just a couple years ago, even months beforehand, that was not a consideration that many companies really, uh, sort of evaluated.

Juney Ham

And at the same time in, in this year, many of those companies that have said we would be fully remote forever are now actually implementing return to office mandates. And so if you think about labor participation and, and going back to day’s point, I think it is really dependent on the sector or the type of work or the sort of categories of, um, companies and the types of employees that they employ. But I would say that the nature of work shifting and people having gone through so much, um, burnout and sort of psychological strain from dealing with the pandemic is impacting labor participation in a way that I don’t think we’ve seen, at least in terms of the, the layering effect of all these different challenges really, you know, uh, for, for many years, many decades. Yeah. Um, I would say in terms of what companies can do to address it, you know, without getting too tactical, I would say the number one thing that companies should consider is, you know, given that the balance of power is tipping towards employees, given that labor force participation rate being low, uh, I would say that’s important to listen to what employees want as part of their professional experience.

Juney Ham

You know, everything from, you know, intrinsic motivations, you know, you know, sort of Maslow’s hierarchy of needs, you know, as, as a perspective to say mission alignment or the types of benefits that candidates actually value versus what companies believe that candidates have valued in the past. I think having a two-way conversation, you know, allows employers to sort of receive that feedback, um, and then process it and deploy relevant changes that are still authentic to the company’s mission and culture, um, and impact, uh, potential employees, candidates in a way that get them more excited about, you know, working.

Arnette Heintze

Yep. Right. When helping a client recruit, hire an onboard new talent, how do you help ensure that the new team member will be a good fit with the company’s culture? Ju you were just talking about the culture aspect of a organization, so how do you, how do you help with that?

Juney Ham

Well, you know, kind of extending that, uh, sort of component around having that to a conversation. I think that, uh, companies at this point are, uh, really challenged to differentiate their offering, um, as it relates to how employees participate in the, in the organization. You know, there’s a lot that has been done in the last few years, particularly around things like, um, you know, erg, uh, employee, uh, resource groups and, uh, diversity equity inclusion, the labor force particularly, uh, the current generation are really valuing these components, uh, as part of what they want to experience, uh, working, uh, at companies. And so, as it relates to, you know, onboarding, I would say that given that all of these changes are sort of layering on, so whether that is a company is shifting from, you know, working in the office to remote or they’re going, uh, and acquiring talent, uh, more globally, you know, folding in these considerations as it relates to both the recruiting process and onboarding, and ultimately the way that they do work, uh, is just really, really important.

Juney Ham

And I think the word that, you know, I would use here is, is authenticity. It’s making sure that the components around how you onboard the components are around how you integrate, uh, new employees into the overall organization. How does it come from a place where, you know, the mission, uh, is, is aligned really deeply with that? And it doesn’t feel like, uh, that work is done primarily to, uh, you know, for, you know, efficiency purposes or for just making sure that, you know, the, the bottom line is, is, is maintained. You know, I would say that the current generation employees can see right through that, you know, and really quickly.

Arnette Heintze

Yeah. Yeah. So as we’ve been discussing competition for talent is fierce right now, What strategies are you suggesting to clients to gain an advantage in recruiting the top talent in the global workforce? Are there specific examples that maybe you guys can cite to kind of give your clients, uh, an edge up in this, uh, constant pursuit of talent?

Dave Berk

Yeah, it’s a great question. Um, <laugh>, a lot of people pay us to try and give ’em the answer <laugh>. Um, you know, look, the, the thing I say a lot is there’s no silver bullet when it comes to recruiting and talent acquisition. Um, there’s a lot of lead bullets and it needs to be a coordinated effort. You need to have, uh, a strategy and the ability to execute against that consistently. So, um, you can draw a lot of parallels between, um, the actual effort and the process of, uh, talent traction or recruiting to sales and marketing, right? Very, very similar. Um, any marketer will tell you that you need to have a multi-channel strategy. You need to approach people from many different angles. Um, that’s just get them engaged. Then from there, journey talks a lot about authenticity, uh, and culture. You know, a lot of times we get companies who say, you know, we’re looking for somebody who’s a culture fit.

Dave Berk

And I usually will reflect that back to them and say, Well, what does culture mean to you? How do you define that? Um, and a lot of people don’t have a very clear and sharp answer for that. And so that’s a great place to start is understanding, you know, as an organization, what are the things that you value and what are the things that you do, the rituals as an organization, Cause oftentimes that’s actually what comprises your culture. Um, and so your ability to engage people, particularly people who have a lot of optionality, which is one of the drivers that’s been, um, leading to this lower workforce participation rate and the tightness in the market is very important. Um, you don’t have to engage everybody in the market. You have to engage the people that are gonna resonate with the opportunities that you have. So it’s a combination of really knowing, you know, what, um, behavioral patterns, profiles people are you looking for? What types of skill sets do you need? You know, as a combination of those two, how do you go out and, and get on those people’s radar in terms of the, the many different channels you can use to engage with them? And then how do you construct a message, uh, and an opportunity that aligns with their incentives? And that that’s really the high level approach.

Arnette Heintze

That’s wonderful. You know, as the economy contracts, we’re gonna see HR and recruiting budgets tighten as well. Do you have any suggestions for these teams, um, then what they can do on, you know, hiring new members and, and onboarding how they can do so in a, in a tighter economic environment?

Dave Berk

Yeah, I mean, I, I think I’ll bring it back to the first question you asked, which is, how do you, you know, prevent turnover? Because turnover is the biggest cost. And I think, you know, the, the biggest thing that HR teams need to, to think about and, and really get their, their leadership team thinking about is, we can’t be a penny wise and a dollar foolish, right? A lot of times, Hey, let’s just move fast. Let’s try and, you know, get some, some quick wins to try and get people in the door. That’s where a lot of times things, um, lead to, to bad hires, bad turnover, you’re not gonna gonna know that until, you know, 90 days after somebody started. And so, um, investing, um, the time and the effort in having the right set of processes and tools is very, very important. We work with a lot of companies who have an applicant tracking system.

Dave Berk

We’ll go in and we’ll see that the applicant tracking system isn’t really being used that well, because the process isn’t solidified first. The, the tool isn’t gonna solve a lack of process. And so being thoughtful about that, being aligned as an organization is the best way to conserve costs and, and resources, you know, long term. Um, and then beyond that, it’s about being resourceful. I mean, one of the biggest things that we’re seeing, uh, is that the first people to, to be laid off, uh, in, in a bad economic environment tends to be the recruiting team. Uh, you’re not hiring people, so you’re definitely not using your recruiters. And so that’s part of the reason why Beacon exists. You know, we are a fractional embedded recruitment solution so that when you’re scaling up and you’re hiring a lot of people, you don’t have to grow your talent acquisition team as big, which creates a lot of fixed cost structure, right?

Dave Berk

Rather you start to offset that through, you know, working with a group like us, and there’s many, you know, uh, groups that participate in this, um, set of the recruitment services market. And then when you’re scaling down or slowing your hiring, you’re not in a situation where you have a big overstaffed team and then you have to do, you know, layoffs and, and headcount reductions. So I think it’s solutions like us, and again, we’re not even, you know, we’re not a silver bullet. We’re part of a, a thoughtful, broader talent strategy, but thinking about those types of solutions, uh, is also a really important piece of the puzzle.

Arnette Heintze

Yep. You know, I’ve seen some reporting that more than three quarters of employees say they’re ready to learn new skills or completely retrain. Are you seeing companies adapting to these demands from the workforce for more professional development? I mean that, I’ve seen some, uh, thought out there that employees are looking for continuous development. How are you seeing that in the market today with the companies you’re supporting?

Dave Berk

I can talk to that one. Um, you know, I, look, I think every talent and HR leader knows that this is important. Um, if you think about the, the, the values of the workforce, particularly as we, you know, have kind of the millennial, um, you know, gen, uh, workforce coming in, the value, they really value learning and development. You can see that on any survey. And so it’s very important. Um, so I think everybody knows that. I think the challenge is how do you actually execute on that? How do you implement that and how do you sort of justify it, right? You have to have a perspective that there’s gonna be an ROI for your organization to invest in those, uh, in that upskilling. And so, you know, what types of roles can be upscaled? How can it be upskilled? Um, I think one of the biggest opportunities when you think about upskilling is that it means you can afford to make a trade off in terms of the skill that somebody brings, right?

Dave Berk

So if you need somebody to have, you know, five years of accounting experience, but maybe they only have two years of accounting experience, but you have a good upskilling program that gives you access to a bigger pool of talent and it creates an opportunity for somebody who can come in and actually is gonna value that learning development. So I think incorporating that into your hiring and recruiting strategy can help a lot. Um, but at the same time, you have to be realistic. You know, when JU and I worked together@hire.com, we would, uh, we partnered with a lot of the dev boot camps. These were, you know, kind of a thing where they would train, you know, people to become developers over six months, then try and get ’em into organization. The problem is, those folks could only be successful when they went to much larger engineering organizations where there was enough capacity and slack for people to actually spend time training and mentoring them. If you put those people into a smaller engineering organization, they just don’t get enough, um, focus and time and attention and it doesn’t work out. And so, um, the reality is, for an individual organization, you also have to understand, you have meaningful constraints in terms of your, your team’s time to actually do that, that work and upskilling

Juney Ham

Yeah, completely agree with that. And also to like maybe take the question in a slightly different direction, um, as well as, as you kind of question this idea of, um, you know, learning new skills, professional development, but also retraining or kind of entering a completely new, uh, sort of skill set or, or discipline. You know, one thing I I’ve read is that almost 40% of workers believe their job will be obsolete in the next five years, which, you know, really is reflective of maybe concern or sort of nervousness that the rate of change, uh, in industry is just happening so quickly. You know, if you think about, just anecdotally, right? There are so many articles about robots and automation impacting manufacturing jobs to, you know, recent advances in, you know, AI creating fear and uncertainty and even more creative pursuits or, or even software engineering.

Juney Ham

You know, I think this is just something that’s gonna continue to come up. And, you know, as it relates to professional development, a lot of what Dave has said is true, and we’re also in an environment where companies have less slack, right? They are, are reducing their creating efficiency. And so it becomes more difficult to rationalize that, like within an organization if they want to be able to do that. So I think that concerns just going to continue to be something that, uh, the, the broader economy will need to kind of reconcile with the fact that a lot of, um, employees and workers are saying that they want to develop new skills, they want to retrain, but, uh, you know, in a, in a fairly challenging environment today. Yeah.

Arnette Heintze

You know, s to verify we’re trying to, uh, do the best we can to help clients make the best hires that they can. And we do this through, you know, uh, verification services and background screening services. Have you seen a trend in, in, over the last couple of years, given the dynamics we’ve gone through of coming out of a pandemic? Have you seen any different trends with, um, uh, pre-employment background screening with any of your clients?

Dave Berk

I mean, I, I think the trend that we have seen is, is continued and broader adoption of this is one. So in our role, we’re typically not administering that. That’s usually handled by the internal HR people operations team. Um, we’re asked often to do reference checks, um, and, and you know, we think that’s very important. But, you know, we’ve seen organizations where we’re doing reference checks and there’s not a background check. So, you know, generally our advice whenever we’re working with an organization is you should absolutely be doing this if you’re not already. And I think more and more companies who maybe don’t traditionally, you know, have a compliance issue, uh, around this, are doing it, you know, as an optional, um, effort, understanding that it, it’s critically important. Um, so I, I think yes, I’m just seeing, you know, broader growth and application to this across the board. Yep.

Arnette Heintze

Great. Great. Well guys, thank you so much for joining us today and for sharing your experience, thoughts and ideas around the latest trends in recruiting in hr. And if anyone is listening, looking for an innovative recruiting solu solutions, I think, uh, you know, Beacon talent is certainly up there and you should be checking them out. Um, and I think it’s always best to give my guests the last word. So here it goes. If I ran an s two verified background check on the two of you, what would be the most surprising discovery, if anything? And Dave will let you go first.

Dave Berk

Um, well interestingly, I, I recently, uh, was selected to our local school board, so I don’t know if that would come up in the background check, but um, it’d be the first time I guess I would know. So, uh,

Arnette Heintze

Oh, we could certainly

Dave Berk

The most interesting thing, yeah,

Arnette Heintze

We would figure that out in the verification process. And how about you do anything in that?

Juney Ham

You know, I was thinking about it as you asked the question and you know, in terms of background checks, um, for a 10 year period, I actually had 10 different addresses cause I had moved so frequently. Um, and so I think that would probably raise some sort of <laugh>, give you look. Cause during that period I was, uh, I lived everywhere from Los Angeles to San Francisco, to Seattle, to St. Louis, uh, and now in New York. So, uh, that’s probably something that would, would come

Arnette Heintze

Up. One thing it tells us is this guy’s on the move, that’s for sure. So <laugh> <laugh>, so please tell our audience where they can find more information about Beacon talent, if you would for a second.

Dave Berk

Yeah, you find us on our website@beacontalent.io. Um, we’re online there.

Arnette Heintze

Great. Well guys, thank you again so much for joining me today. And thanks to all of you listening, watching, or reading, please tune in next week when award-winning author and former CIA intelligence officer Carmen Amato joins me. And it goes without saying, Let’s get America back to work because dreams only work if we do. Thank you guys.