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How to Make a Strong AI in Recruiting Business Case

More than 50% of HR Tech projects do not take off because the business case does not pass the CFO litmus test. Overinflated ROI, unrealistic outcomes, and lack of change management plans tell the C-Suite that the idea is not fully baked. In this webinar Tracey Parsons and Erin Stevens talk you through the 5 elements that get your financial- and data-driven business case to “YES”, over and over.

Bennett
Erin is a corporate recruiter with #1 cabinet manufacturer, MasterBrand Cabinets, based in Jasper, Indiana, and recently spearheaded the adoption of AI Recruiting Software like AllyO to her organization. She is a native to the Southern Indiana/Louisville, Kentucky area where bourbon and horses rule! She started college career in music, but ultimately switched to Psychology and Human Resources. Earning her PHR prior to graduating, she started as a Recruiter in nonprofit and quickly realized recruiting was her niche. She returned to school after two years working in “the real world” and earned a Masters in Human Resource Management. In her spare time she is very actively involved in her local SHRM Chapter, sits on the HR Indiana State SHRM Council, travels to Cancun as much as possible, and is a certified Jazzercise Instructor. And Tracey is the President at Parsons Strategic Consulting, a consultancy at the intersection of employer brand, recruitment marketing and systems to create delight for talent and brands. Tracey has extensive experience in talent strategy, social recruiting and marketing, thought leadership, brand development and consulting at companies like SmashFly, TMP Worldwide, and her own startup, CredHive. She’s also been a contributing writer at SmashFly, her own blog, Work it Daily, and Social Media Explorer. As for me, I am Bennett Sung. My lifetime mission as an #HRTech marketing leader is to make recruiting delightful and efficient for everyone. And over the past 15 years, I have contributed to the success of HROfice by Ascentis, VirtualEdge/ADP Recruiting, Jobscience Staffing Software, MightyRecruiter, Koru, and now as Head of Marketing at AllyO, The End-to-End AI Recruiter.

 

Tracy
Today, we will be tackling the topic of business cases. We will be talking about two different paths to getting new tools, how you will go about making the case, not only with your c-suite, but what your teammates need to see so that the adopt their new tools, and lastly, how these lessons were applied by your peer, Erin at Master Cabinets. With more than 50% of projects failing to take off, and the ever-changing landscape of not only TA Tech but the job seeker behavior shifts, it is more important than ever to learn the skills you will need to not only build a business case, but to build one that gets approval. It’s important to understand how to communicate with the c-suite in their language. Building a future-proof business case for emerging recruiting software is one of the toughest challenges facing Talent Acquisition & Staffing leadership. But it is also one of the best skills to have in your arsenal. Learning this valuable skill will help you when you come across the tools and technology that you know will scale your TA & Staffing function and deliver the goods to the leadership team. 7 We’re excited to have you here today to learn not just theory, but how these ideas were actually applied by your peers to get the funding they needed and then deliver the results that the leadership wants to see.

 

When I think about the business cases I’ve had to develop in the past, and that’s been a LOT of business cases in my 20 years as not only a manager, but as an entrepreneur, it always comes down to money. I can have the best idea in the world or the most game-changing tool I’ve ever seen, but without the funds to pay for these ideas or tools, I am stuck. While ideas are free, to bring those to fruition takes time and money. Two things most organizations do not have a lot of laying around. So when I have something that I come across that I know will get my closer to achieving my goals, I know I am going to need money to make these things happen and usually, 90% of my budget is allocated when I start the year. I have a long-standing habit that when I am building my budget, I always leave 10% aside to try new things. 90% of my budget is allocated when I start the year. I have a long-standing habit that when I am building my budget, I always leave 10% aside to try new things. There are two problems with this. And even thought I know there are two problems, I still seem to be doing it year after year. The two problems are this: 10% is not a big number in my budget when I see something that is going to make an impact I’d like to try. The second challenge (and this is more a complaint about how corporate budgets are done. It’s tough to predict what I am going to need for a whole year based on how quickly things change, but I digress! So, here I am, I have 10% of play money each year, and I come across something that may solve the bulk of my challenges. 

 

Erin
I’m not not privy to see our budget in the actual numbers however yes this is fairly close to pretty much what we do it’s a lot of and as I’ll talk about later it’s a lot of wiggle room of what can we move what are we utilizing what are we not utilizing so if you’re in a large corporation like me make friends with whoever does your budgeting and accounting you want to be on a first-name basis with them maybe have your cell phone. 

You know who were psychics like we could see ahead and be like oh I should spend more time than this ten percent right but normally you know good ideas comes really quickly and you have to be fairly flexible of okay what it you know what are goals this year and goals change obviously year to year I just finished inputting my own goals for for the year but it’s you know what can I do with the money I have and how can I make things work I mean you have to be flexible 

 

Tracey
Funding is at the core of all business cases: I have this new tool I’d like to invest in and I can see that it is going to make an impact on the business. I have to secure the funding somewhere. I can either find the money from places where I am currently investing, or I can ask for new money from my leadership team. This is honestly the easiest place to start because funding is such a key component of the business case, it’s critical to figure out very first where is this investment coming from. So, to get the buy in from the leadership team, You need to either get extra money, or re-allocate money you’ve already been given. The rest of it should be about what the business stands to gain with this investment. 

So first, let’s look at finding the money. If 90% of my budget is already allocated, I need to look at where I am spending that 90%. I need to look at data and results from the money already allocated and identify places from which I can cut. In my years of working with my own budget as well as customer budgets, there are usually a few key areas where we can find some wiggle room. To do this, put a couple of columns on your white board in the office. Those two columns should have the following information: under-utilized and under-performing

One of the easiest places to find a few bucks is looking at unused inventory. This could be seats you’re paying for that are going un-used. Could be ATS seats, CRM seats, could be resume database licenses, could be job slots. But, I can tell you right now, that I have never worked with a customer who was utilizing 100% of the things they bought at the beginning of the year. If you have used 100% of your inventory this year, I salute you! The challenge with unused inventory is that you’ve likely already committed a dollar amount to that company. This will likely create a situation where you’ll need to re-negotiate your contracts. No easy feat, but the exercise itself is incredibly valuable. Even outside of building a business case, it is important to take a quarterly inventory of your tools and contracts to ensure you are getting the results based on your investment. Once you find where you have things that are not being used, it’s time to look at performance. What is delivering the best results against expectations. For example: take a look at your job boards. What is delivering the highest source of quality? Where are the best candidates coming from. What is not delivering. Put anything that is under14 delivering on a list. This is also going to be a point of negotiation and where you’ll want to look at your contracts to see what you can do to exit from these tools that are underperforming. Erin have you used everything that you’ve ever bought at the beginning of the year every year? 

 

Erin
I would have to say no for us yeah I definitely for us I would saying with us it mostly revolves around probably our LinkedIn seats I guess depending on time you know we out I think we have one floating out there right now just due to some turnover and change the business but yeah and that’s something that we obviously and everyone should look at every year what you know what are we using where are we not using and what needs to go away or what can we better utilize or get rid of for sure 

 

Tracey
In each case of under-utilized and under-performing, you will likely get involved in contract renegotiations. I don’t mention these things lightly as I know it is a difficult task. I’ve been on both ends of those renegotiations and they are no easy feat, but the exercise itself is incredibly valuable. Even outside of building a business case, it is important to take a quarterly inventory of your tools and contracts to ensure you are getting the results based on your investment. When you are finding the money (new ways of re-allocating your budget), there are additional challenges beyond contracts. I can tell you that there are a few things that will likely come up when you try to take away tools from people who are not using them. They will balk. They will complain. They will make excuses. They will tell you that these are things that simply cannot do their jobs without EVEN THOUGH THEY ARE NOT USING THEM. 

 

Erin
I understand we have maybe more longer contracts I can say recently we engage with our ATF provider it went through that negotiation process which it is it can be very stressful we were to the point where are we going to stay on with this individual or we gotta try to implement a new ATF system within two months so that I will say for my you know some some relationships are easy some aren’t it just depends on you know what what you want out of their relationships kind of like just in everyday life 

 

Tracey
When finding the money, you will need to make a case to the team that the thing you want to replace from their toolset will be of benefit to them. In the case of AI tools, this will create a LOT of anxiety. Erin, you went through this didn’t you?

 

Erin
So a little background we began this process last year of an AI came about in discussions of how can we make the recruiting process better for our production associates so to give you a little quick little background on master brand Master brand is the number one cabinet manufacturer in North America with a little more than 15,000 employees in the US Canada and Mexico we have 20-plus manufacturing plants for distribution assembly centers and often employ production associates to make our cabinets we are not highly automated at all even in our manufacturing environments there’s a lot of touching there’s a lot of machines there’s a lot of moving about so preparing the humans for save for a more streamlined recruiting process was something that we wanted to do we needed to you know in the tight labor market we needed to make the process more simple and more efficient and also free up some time for our HR managers in generalist in those plants to also do their own jobs because with the tight market recruiting was taking up a lot more of their time was giving them a lot more stress so we wanted to look for something that would help with that most of their time and I remember going to one of my plants and sitting there listening to one of our HR generalist make phone calls she would look at the cuticle at the application and her idea she would call the individual she would go through some simple questions she would say great you qualify let’s set you up for her phone enters or for a phone interview or on-site interview and she did that over and over and it’s literally in my head oh this is there’s got to be a simple way to do this and so at the time was one of the tools that we have been reviewing so when we first kind of prepped this and have the discussion a lot of our pushback and I will tell you from being in it as much as I am now the number one thing you’re going to have to deal with this change management is getting the in getting the buy-in from your team saying hey listen this is for you this is to make your life easier I will say you know we got this that we got we got a we went we’re in our second round essentially with dress and to give you I guess a little more info we’re a fairly consistent of company we rely a lot of our decision-making based on data and what the data tells us and so the first part of this kind of would say six month trial we gathered a bunch of data and you know put the process in play with AllyO doing the screening and setting up the interviews and we found the number one kind of issue was our HR teams having trouble kind of getting out of the weeds and letting AllyO letting the AI tools do the work there was definitely some trepidation there and there is a lot of instill even now eight nine months later we’re still having conversations about it I think it’s just getting people more it’s something new right and everyone you know deals with change differently some are more welcoming than others it’s just showing showing them how this makes their lives easier how it’s not you know a lot of people were worried it’s going to take over their job I don’t think it’s gonna take over their job but it’s definitely going to assist in helping make them more efficient and more and a better recruiter overall.

 

Tracey
50% of all projects fail. Your leadership team knows this which is why it is so critical to make a business case that is thorough, thoughtful, and well planned. You need to be realistic about your ask. You need to be realistic about the potential results. Because your leadership team has seen about ½ the things they approved fail. Either way, you’re going to need a business case. Not to over-simplify, but a business case is all about proving that the things you’d like to invest in are going to yield positive results. So, you have to show them the following things when building your business case: The problem you’re trying to solve What the problem currently costs the business The solution you’re proposing How your solution will solve the problem Data to support your solution SWOT of your solution Risks of your solution A plan to address change management What the business can expect in terms of results from your solution (or RROI) This should be the outline for your business case. AllyO will provide you all with a downloadable template to build your business case from based on this outline. So, let’s dive right in and talk about each component. The problem you’re trying to solve This is a straightforward statement. This statement will help frame the entire presentation. They key thing here is to bring your leadership into your problem. Make this problem their problem. Paint it in a light that helps them see how this problem is a business problem and use hard numbers to help them see this is impacting the business. Lastly, make this problem specific and actionable. So here are some do’s and don’ts. On the don’t side: Don’t tell your leadership that we can’t find the right people for the right jobs. It’s too general and it is actually your job in their minds. On the do side: the problem you’re trying to solve could be this: The average worker in on the market for 10 days. Currently, it takes us 40 days to fill a job. We would aim to close that gap. When you get specific, actionable, and data-driven you are showing your leadership that you have thought this through, you understand the problem and you show them that it is an actual problem. To take this further, you then tell them what this problem is costing the business… What the problem currently costs the business The c-suite wants to have hard numbers. In HR it can feel like all of our dollars are soft dollars. Since HR is viewed as a cost center, we have to work to change that perception. We have to show them that investing in these tools will create either savings or efficiencies. In many cases, we will be showing efficiencies. We need to show them how our efficiencies will create savings. When we talk about what the problem we are trying to solve costs the business, this is where we get additional data to bring this conversation to dollars and cents. This is how we get their attention. If you don’t put it in financial terms, you lose the CFO and when you lose the CFO, you lose your funding. So, if we talk about things that are soft like engagement, it’s difficult to get the CFO to buy in. We have to show them realistic costs to support the problem we are trying to solve. 

 

Erin
So a lot of our leadership interesting enough ours was turnover and getting I guess determined busts into the seats when it comes to recruiting especially at the production level we they didn’t understand why we could get individuals what was the issue so we drilled down and said what is the issue it’s obviously the process we need to improve that process we are you know it’s taking and we had learned later approximately forty to fifty days like you said to close and get someone in a role on so how can we shorten that time to fill and then essentially how much money is it going to save us so you know that was what we took to the business and said this is our problem like you said our problem is your problem so you know I don’t you let us try to solve it but that was it that was a pretty big sell for them we ended up expanding on that too to use turnover you know how can we better how can we get people to be more honest with us about why they left the organization how can we combat turnover with check-ins and follow-up so that is kind of what we’re currently working on now  sure you know you were just telling us. You have to go back a bit going back to knowing your accounting person on our first-name basis because I’ll be frank I accounting money Excel spreadsheets those are not what I’m good at and I know that personally um so when it comes and I want so hard to be able to understand it but I and I don’t and the irony is I recruit for accounting the financials too but I have made I know right that I made those friends I’m like listen you’re really good at telling the story for me in the data I you know this is what I need it you know need your help with what is it telling me so making you know making those connections with your accounting person or someone who is really good at the data is what it’s been a big help for me in this proper

 

Tracey
To build on the problem statement of: The average worker in on the market for 10 days. Currently, it takes us 40 days to fill a job. We would aim to close that gap. We fill this job on average 50 times per year. This is currently costing our business $474,000 per year. Now, never let a stat like that sit. You have to tell them how you got there. Every day that this job remains open costs our company $237 dollars. In problems like this, we like to look at average revenue per employee per day. Here’s how you can calculate the revenue per employee per day: For example, Company A had $10,000,000 in revenue this year. Divide the amount of revenue by the number of employees. In the example, $10,000,000 divided by 100 employees equals $100,000 of revenue per employee per year, which is the average for American businesses. Breaking it down further, you divide that by 365 and you get $273/day/employee. So, for each day that a job stays open, the business loses $273. If we can close the gap by 10 days, we can save the company $2,730 per role. On average, we fill this role 50 times per year, so, by closing the gap by 10 days, we could save the company $118,000/year.

So, for each day that a job stays open, the business loses $273. If we can close the gap by 10 days, we can save the company $2,730 per role. On average, we fill this role 50 times per year, so, by closing the gap by 10 days, we could save the company $118,000/year.

Other opportunities to show them the cost of the problem could be reducing the cost per hire. The key here is to understand how the problem impacts the business in financial terms. And that your solution can achieve the goals you’re setting forth. Erin, talk a bit about the problem you were trying to solve at Masterbrands. Tell us about the numbers you pulled together to get the leadership team on board with your problem. One you’ve established your problem, it’s crucial to share them how you’re going to solve it. And it doesn’t need to come across as a sales pitch from the partner you’re interested in. It has to come across as a thoughtful approach to saving the company money they are so clearly wasting with the “old way.” As you’re establishing your solution, share with your leaders how your solution will solve the problem. Building on the problem we are trying to solve, we have discovered a solution that will help us reduce our time to hire by 10 days based on the following research and assumptions. Tell them what your assumptions are. And give them data to support the solution. 

As you walk through the solution, it’s important to be highly realistic because frankly, 50% of all projects fail. So talk through the Strengths, weaknesses, opportunities, and threats. Talk about the risks and acknowledge that most projects fail because you don’t think about how we will get people to adopt the solution. It is critical to talk the leaders through the “what” and “why” of the solution and be plain and thoughtful about each of these pieces. Be sure to support the what and the why with data. With the problem, the what and why of the solution, we must address the 

“How”. How do we plan to the team to change. How do we get people to adopt this solution. You see, many business cases include and cover a project plan, like how are we going to roll this out. How will we implement it. What is not missing from most winning business cases, is a change management plan. The #1 cause of project failure is adoption. Which is why a change management plan is so key to success of getting to YES on your business case. This shows your leadership that you are thinking it ALL the way through. Because solutions like this often times require not just money, but they require time and change. 

 

Erin
I will say it’s still a work in process and I was one of those people that I would say we thought that they would just adopt it like we thought that they were just like yes this is great it’s making my life easier and necessarily didn’t work that way so one of the things that like I mentioned prior is getting out leads you know the way that the process works is on you fill out you know you go to the pre-screening questions you’re set up with an interview at that point we direct them to complete our application that was a push point that many of our managers did not like that they did not have a completed application now I come from the background of I don’t care let me get you in the door and I’ll evaluate you and they will figure that out later but many of them were very and I think that’s when the FDA opened – is that not everyone things like you – but you know that was one of the things I was like okay so this obviously is important to you how can I make how can we get that application complete then so now we’re in the post ATS version of it where essentially they do not get reached out or screened until that application is completed so that solves one of our problems and I think that was probably the major pain point the other thing would be you know the private creating a new process around how we handle rehires how does that happened it was a lot of the images thing but for the most part it was just the change management of letting getting them comfortable enough to where they’re going to let it work let the businesses let the process work and by that it made it to where I had to be like okay the application portion is important to them we have to get that done first 

 

Tracey
Finally, we talk ROI, and more importantly, REALISTIC ROI. To be really honest, this is where I have taken more hits than I care to admit. My glass isn’t half full, it runneth over. Which is why it’s really important to be realistic. Do not overpromise. Earlier when we were talking about what the problem was costing the business, it would have been easy to say we can cut the time to fill in ½. But is that realistic. Would it be even better to say we could cut the time to fill by 25% or less. Even 25% may be too aggressive. What’s important is that you put a line in the sand that is achievable. One that you can deliver against. It’s important to show the return on investment in as realistic a light as possible. Because if we ARE able to deliver a 25% reduction in time to fill with one tool, you are winning! Erin, talk to us about how you positioned the ROI to your leaders and what if anything you would have done differently, or what worked well for you.

 

Erin
So we initially looked at the problem we are to our two pinpoints where cost for hire and time spent and then kind of a third of ease of candidate experience we wanted to really make sure that candidate had a good experience as we are and now he say it bad at dis positioning candidate for getting back to them letting them know follow up and again I think that goes back to a time saying you know they don’t have time to get back to those that were not interested in lot we calculated interesting enough I think we calculated our time Kosta Phil for hire for just a production associate and again I learned what soft cost versus hard costs were I did some polling and found out we were cynicism of the research approximately two hundred and thirty seven dollars per production higher in our first round of the AllyO pilot we reduced that down to one hundred and thirty one dollars per hire and also reduce time down yes and we had a great feedback in regards to the candidates were saying that they felt it was a good process whether or not they were picked or not um so but that was just with eight now this goes back to data and yet one of the things I would say is go all in at the very beginning we were just doing a portion of our candidates and we were doing a few select plant locations on this time we went for a second round because I ended up taking our findings to our EVP and he came back and said I’d like to see more data hops like okay okay round two so we did this business I’ve actually done this business case twice now the first time was getting it done and then the second time was adding more plans and getting more buy-in so that we could go bigger go as big as we could in the what we call the post ATS or where we’re fully integrated with our ATS system so now that we have that your again that’s taking the feedback from the change management they want the application this is going to solve that problem it also gives us a look into all of the data now as opposed to just a portion of the data so my goal is to further reduce that that that’s time to fill it also we reduced we were looking at time to fill waves around forty to fifty days and with that small section that we did we got it down to 14 days to hire on so we have some great data it just wasn’t big enough it wasn’t a big enough piece of pie so key takeaways for me go big the first time go all-in do it you know do it as crazy as you can don’t be afraid to do it and then also again the data portion what are your like you said what are your key things do the research on the front part so really dig into that data you know get the buy-in and again going back to buy and I think I spoke to everyone Under the Sun at MasterBrand that was involved in not only HR but the operation side getting their buy-in on this I remember pitching our general managers on this as well you have to get everyone on board luckily and it goes back to the relationship we need to have good relationships with those people as well that’s really going to help.

 

Tracey
Absolutely, so we have a question and they’re asking our opinion of automated screening tools like hacker rank do we have an idea of impact on the recruiting bottom line I think anytime you can automate something in the process that is not going to be requiring a human that’s gonna free the human up to do human things I think that’s really important I do I do it concerns about you have to make sure that the algorithm is really solid and all of those things but you know there’s I want recruiters to be recruiting and selling and having people answering questions and educating that audience so I think screening tools like hacker rank are really powerful

 

Erin
I think in regards to ai ai is not going to take the place of humans you can humanize it and that’s one of the things I’ve done with my questions is try to make it as flowing and human sounding like as possible but they’re they’re not going they just aren’t going to take the place you have to keep that human interaction in there somewhere I just came off of attending Sherm Talent in Nashville and that was the main thing yeah there’s AI but we still we’re the ones using it were the ones controlling it and you have to keep some sort of that human aspect in there absolutely it doesn’t make your lives easier but yeah yeah you have to do you know I would be like I said I’m very much seeing on social media you can reach out to me at Twitter and LinkedIn I keep facebook for myself you know to be to keep my human side but yes you know definitely reach out to me I’d be more than happy to kind of let you know a little more in depth how it worked with us again I come from a company that we love data we have a lot of people who you know need to be in on what changes we make and we’re involved I will say for a larger company you’re probably going to have to really dig in deep if you’re with a smaller company you know it could be as easy as walk into your CFO or CEO and be like hey I would have been X Y & Z dollars I’m trying to clean tool out it really just it you have to alter your business case to your business essentially you have to know who you’re selling to and know what pain points are going to work for you

 

Bennett 
Erin, what feedback have candidates provided to the employer about using the AllyO bot for application scheduling interviews? 

 

Erin
Great question, for us is usually you know were you depending on if they showed up on site to their interview it’s it’s more or less you know did you show up to your interview were you hired you know how would you rate your experience using the product we are delving in with the second portion of our pilot our expansion we are delving into 30 60 90 day check-ins with our current new hires and we are actually setting up questions for them such as did you feel prepared for your first day do you feel you’re close with your supervisor those type of questions and then we’re also looking at exit interview follow-up so you know those individuals who either no call no show or you know just John Bainer Matt or decide they just want to quit they may not want to talk to you face to face but they may talk to a chatbot so we’re gonna work on you know setting up questions and hopefully having them give us more direct answers as opposed to maybe the sugar-coated answers you might get in an office with an HR setup. 

 

Bennett
Has MasterBrands considered using AllyO for any internal talent mobility

Erin
Yes that that is a great question and I have a feeling who I think I know that came from I met with an individual Kari and Nashville that we were talking and she gave me this great idea of using AllyO for internal candidates as well an internal talent mobility of you know if someone is interested in moving into a team lead role or a production supervisor role they could interact you know with questions they can ask am I able to do this what are the qualifications necessary you know it or maybe even just I have no idea what I want to do with my life you know those types of questions yet so that that is not something we haven’t got there yet I’m trying to get through the second pilot first but it’s definitely on my list

 

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