In light of some recent news surrounding the funding of Jobcase, the boys thought it'd be a good time to bring CEO Fred Goff on the podcast and get the nitty-gritty from the source. Topics like current state of the economy, hiring trends and site traffic all get covered too.
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Hide your kids! Lock the doors! You're listening to HRS most dangerous podcast. Chad Sowash and Joel Cheesman are here to punch the recruiting industry, right where it hurts! Complete with breaking news, brash opinion and loads of snark, buckle up boys and girls, it's time for the Chad and Cheese podcast.
Joel (1m 13s):
Hello today. We are super excited to welcome Fred Goff.
Chad (1m 18s):
Wait a minute. Wait a minute. He's my favorite SNL character. "You're spending the night with Fred Garvin: Male prostitute."
Joel (1m 27s):
You just know you just aged. You aged us out of about a third of the demographics that usually listen to us. Fred, welcome to the show, man. Where does the podcast find you today?
Fred (1m 38s):
Thanks guys. This is great to be here. You're finding me actually at the first day, I'm actually at 201 Broadway, Cambridge, Massachusetts in Jobcase headquarters. I am the office in the office, the only person, because the office is technically still closed, but I had an occasion to be here. And so I thought I'll talk to Chad and Cheese from the office.
Joel (1m 58s):
Yeah. How long are you gonna stay? Shut down. Are you doing like a, a Google style? Not reopening until 2032 or something?
Fred (2m 5s):
Well, yeah, it might be. We, we went remote on March 12th. I think we kind of put a color code in to make it kind of easy. And one, the color code we went to is red. So nobody comes in right now. We had told the team, kind of early on, back in April, we told the team, we have this yellow color code, which is we that's where if you, we would staff the office and be here, but you don't have to be. And we already said, there's no situation where you would have to choose to come to work.
Fred (2m 37s):
You should feel free independently to work from home or wherever you want for the rest of the year. That said, I expect that post labor day, we'll probably open up in some small fashion and staff support for the office in some small fashion. And it's probably more about independent work. I think guys that, you know, we have 30,000 square feet of square feet of space here, and there's an awful lot of folks that are based in Boston that might enjoy having some, some space to work instead of at home.
Fred (3m 7s):
So I think that it absolutely won't be a mandate to come work at the headquarters, but we think it can be something that a lot of folks might enjoy if we can get it running again.
Joel (3m 17s):
And, and you're not in the low rent district, by the way.
Fred (3m 20s):
Yeah. Yeah. That was like, that was a good lease to sign. We're more expensive where we are the Midtown Manhattan we're right next to the computer science, artificial intelligence lab at MIT by design. And that's pretty expensive real estate.
Chad (3m 36s):
So you can go ahead and, and abducted those computer sciences whenever you need them. Yeah. Yeah. They're all, we're all busy trying to protect us from the next election results and making sure they're honest. So I'll get them after the first easy November, we need them to focus on the right stuff. So they're practicing their Russian right now. Okay. Gotcha. What do you think about remote moving forward, especially for your team, the end of the year kind of partitioning that off, but when everything opens back up, we've seen so many companies talk about they're going to reduce their footprint.
Chad (4m 11s):
Obviously it does save overhead and, and not a low rent district that you're in. What are your thoughts about that in offering more remote, kind of a ability?
Fred (4m 22s):
Well, that's the question of the hour, isn't it? So that's a good one. And my only hesitation is, would do this in consultation with my team and people in culture. But in, in general, I am among the CEOs in the country, who prior to COVID was concerned about remote in terms of we get so much benefit from getting people together etcetera, and post COVID have really understood how productive remote work can be. And it can open up our talent base outside of the Boston community.
Fred (4m 53s):
So we're absolutely going to see an adjustment. I don't see a reduction in footprint. I see we're all going to be using our space differently. So I don't see, you know, we're going to still appreciate the 30,000 square feet we have and probably even expand eventually. But I do see a different cadences of work. I see probably more autonomy and people deciding whether they want to work remote or in the office, but I suspect we'll get to some normal cadence where number of days a week, you really want everybody in for those ideation sessions and whiteboards.
Fred (5m 23s):
And other days it's more optional and more autonomy. I'm definitely going to be different, but I, I'm not on the side of, it's great to be remote 100%. I really miss having my team. I missed the feedback. I think organizations need the glue.
Joel (5m 37s):
So I'm curious, sort of Jobcase wise from a, from an employer perspective, I'm curious about what you're saying as a site. So my, my assumption would be, you know, 40 million newly unemployed people that you guys need more servers or cloud space to handle all the traffic...
Joel (5m 57s):
But hearing it from you, what do you, what's your take on what you guys are seeing traffic wise? Is there certain segments that surprise you? What's going on with that?
Fred (6m 6s):
So the surprise was in the second quarter. So as you guys well know the normal physics of the labor markets are as unemployment rates go up activity of, of on the consumer side: job seeker workers, employees, or whatever your perspective, rises. This was this overnight depression level we had, actually saw traffic drop across the industry, not just us, everywhere. I think we had less drop than others, but we were, that is not the normal physics of the market. And initially conjecture was the extra ordinary unemployment insurance support was having people stay sidelined.
Fred (6m 43s):
That's not our view as the dust settles. Our view is that the inventory of jobs and other content that, that companies like ours and others use to provoke interest and access had just plummeted. I mean, there was just nothing. And so how many times do you tell someone about the same three or four jobs? And that activity was down, as activity picks up going into the third quarter, we're seeing traffic really just start to skyrocket again. But the surprise was the absence of a traffic in April and may when one would have thought that, that would run through, but who knows maybe some as the dust settles guys, maybe that's also part of the lockdown.
Fred (7m 18s):
Maybe, it's also part of COVID concerns, but I think that's in the rear view mirror and I think normal physics of labor markets move forward much the same, that in the middle of it, you wondered why crude could settle negative on the exchange. And now it's back to normal, normal markets and crude. I think the dislocations are done and we're back to kind of normal normal physics.
Joel (7m 37s):
And how about from an employer perspective or customer perspective? What are your what's sort of your takeaways from the last few months?
Fred (7m 43s):
Pleasantly surprised that the activity on the employer side for us is, is higher than last year and, and continues to grow. I think that we're fortunate. We kind of focus on enterprise and agency and staffing and very strong in employers that hire large volumes at scale. And that tends to be a lot of ETL related, transportation related. And so that is kind of went on fire in the second quarter and continues in the third.
Fred (8m 14s):
I think the listeners of yours and some of our friends that focus on smaller business and hospitality and restaurant, that must be a lot tougher in the COVID era, but I think what's comforting to anybody who's in the labor marketplace as a business, which I think is a lot of your listeners is that the activity of employers using resources and tools to staff, their firms that continues. We don't see a trend of with high unemployment, people are just waiting for organic applications and not interacting with the marketplace.
Fred (8m 46s):
As we know, it, it, it appears that the activity is actually increasing, not decreasing to get more effective and efficient. And I think that's positive for everyone, employers, job seekers and intermediary alike.
Chad (8m 57s):
Are company's coming to you that you haven't seen before? What we're hearing from vendors right now is, is many companies are trying to warp speed their tech so that they can scale later.
Fred (9m 9s):
That's, that's a really pressing question, Chad. We are quite frankly, we've had a very large step function in our number of relationships and our depth of relationships in, in many different employers side of the equation. And our perception is based on two dominant themes from us. One is we, we do have a tremendous amount of scale that we've achieved, and there's not a lot of players out there with the scale that we're able to leverage, for folks. And the second one is, you know, the front pages of every paper are starting to talk about the talking points Jobcase has been championing for five years.
Fred (9m 43s):
We've been talking about worker value and frontline value and, and better treatment, whether it's a benefits coverage for 1099 or pass a living wage for hourly workers, we can keep going through this. We even are obviously strongly on, on a proponent of, of black lives matter and racial justice issues. And as, as these issues come to the forefront, I think, and I hope that one of the reasons we're gaining some traction is people understand that we have authenticity in, in these concerns. And I think that we have helped.
Fred (10m 13s):
I had one CHR reach out and he said to me guys, he said, it's really interesting comment. And he called up and he said, he had heard some podcasts. Maybe yours, let's say it was a Chad & Cheese that it was, yeah, let's re-cut that. And he had actually called from Europe and they've got a us operation. And he said, he called me. He said, because he called Jobcase. He said, they have a bunch of frontline workers that were working throughout the second quarter because they're in food prep in this business, big fortune 500 business. And he's thinking they just can't treat them.
Fred (10m 43s):
They can't call them heroes during the second quarter of COVID and then treat them the same way they did before, afterwards, what can they do to help people with skills and upskills and a whole bunch of questions in, and he had called us with ideas. Cause he knows we've been thinking about that for a while. We've been doing things with Joe Fuller at Harvard and stuff. And so my point is I think that our authenticity about really caring about workers is also a right for the moment as well. And so, yeah, we have a lot new relationships and if anyone's listening to this and we welcome more.
Chad (11m 12s):
You point out a very, very important topic around essential or heroes, right? It's hard to look at somebody and say, well, they're just doing this job, one minute and then the next call them a hero. And then try to think that that just goes away. That they're not essential anymore, that they're not quote unquote a hero anymore. So the big question is for employers, and we've talked about this on the show, we've seen employers drive wages up and add wages during, during this, this danger pay, kind of scenario, but then take it away.
Chad (11m 50s):
Jobcase being a community. Do the actual Jobcasers talk about this is, is there, are there topics that are, that are actually trending because of this on Jobcase? What does the community actually do to pretty much pull people together and then perspectively advocate for them?
Fred (12m 7s):
A couple of thoughts on that, a lot of the advocacy is, is kind of our responsibility. So we, we tend to think in step one empower people individually. And given the scale we have, how do we leverage that scale to advocate for workers? So in as an example, pre-COVID and February 14th, Delta airlines had a windfall bonus. They distributed to their employees. Now last September, Jamie Diamond on JP Morgan and the business round table got a hundred and some CEOs to say, it's about stakeholder value, not shareholder value going forward.
Fred (12m 39s):
We love that statement, but that same year, JP Morgan did a $40 billion shareholder buyback. And our thought is, well, you could have taken 20% of that,. 8 billion and distributed it as a windfall bonus. And you'd still have 32 billion for shareholders. We're not saying one versus the other, but one with the other and those individual employees of JP Morgan could have taken the 35,000 bonus home, which means a ton to a frontline teller. So when Delta does it proactively, what we did is we took out a national campaign, not telling our membership to work for Delta.
Fred (13m 10s):
I mean, of course we did that, but the point was fly Delta. The point was let's reward employers who treat workers well with consumer dollars. And so that is something that we're doing to advocate. In terms of the conversation in the community. I would love to say, this is the point, Chad, I would love to say that Target did it permanently and moved to 15 bucks and people are celebrating that in the community, but, but the reality is people are hurting and a lot of our community is surfacing the anxiety of, of the pain. You know, we, you saw, I think we communicated through social media, you and I, in the same week, there's an article about, you know, mansions and pools selling in Greenwich.
Fred (13m 47s):
And, and they're talking about all these bonuses on wall street and the government stepped in and protected the investor class by basically dropping the size of the Japanese economy into the markets. And meanwhile, 33% of our fellow citizens, aren't paying their rent on time in July. And that's what the UI. And so we're looking at this 11% unemployment, but I don't, I don't think these stats are right guys. We have one state that we're pretty close to and we're talking to the other day. And I asked them how many unemployment checks they've sent out.
Fred (14m 18s):
This is a pretty senior person in the governor's office of a state. And the number they gave me is three times the amount that was in the BLS number. And, and I don't think this is conspiracy theory. I don't think it's tinfoil hat. What I think is, as a guy who's used to trade on these numbers and now watches, I'm in a different capacity. These surveys, these methodologies for the national unemployment, they they're made for relative gauges are made for incremental steps are not made for Massachusets to go from 2.8 in February to 18% in May. It's the methodologies aren't catching up yet.
Fred (14m 48s):
And so the community isn't yet talking about employers that are doing the right thing and realizing in the moment, treat people better, keep treating them after, we're advocating for that. The community is trying to figure out how the heck they can get their next paycheck. And are they going to lose their job if they still have one?
Joel (15m 3s):
Well, not the best segue, but I want to pivot to this Fred, we, we, we got you on the show primarily because there was a news release from July 9th earlier in the month. And it talked about you guys getting new funding and, and Chad and I talked about it on the show and there was some confusion about what exactly happened. I know Workday Ventures was involved. So the primary reason you're on the show. And we're obviously, obviously talking about other things, but can you clear up the news and what happened for our listeners who got to hear us bumble over what exactly happened?
Give us the Dirt, Give us the Dirt
Fred (15m 40s):
I'm very happy to have the opportunity, but I'm, I'm even happier that you said this is the primary reason to get on the show at the opening. I thought the primary reason was to call me a male prostitute. So this is a step up, so thank you for that.
Joel (15m 51s):
It's better than a Steelers fan, right?
Fred (15m 53s):
Ah, come on bro. You're wrong on the yinzer Browns man. Come on. It's Stealers for those don't know I'm a big Steelers fan. So there you go. Sure. I happy to say this. This is a huge inflection point for our company and we're really excited about it. There were three things that happen in a capital transaction that we announced at the end of the second quarter or three components of it. One component is, we have had a dominant shareholder that helped us make a transition from the hedge fund years ago into the consumer internet space and has been a strong partner.
Fred (16m 25s):
We really appreciate when we made the conversion in 2014 to launching Jobcase and this mission driven company. They have been looking to the right time for them to make an exit. That's a long time to, to stand aside one company for that kind of a mission from a firm like them. At the same time, Providence Strategic Growth, which is just a fabulous partner of ours, great character bag, great ability to helping companies scale and, and a great track record is, was interested in owning and stepping up and having a stronger stake in, in Jobcase.
Fred (16m 57s):
So part of the transaction was between the two of them where Providence strategic growth has. And that was part of the announcement taken a larger majority ownership in the company. And we saw one friend say so long for now. And, and another friend step up. The second part of the transaction was a $30 million primary raise, they call it. Which meant the company took $30 million onto our own balance sheet. And that is a combination. The deal was a combination of Providence Strategic Growth. And as you mentioned, the third part of the announcement is Workday Ventures.
Fred (17m 29s):
And so a change of a dominant shareholder, 30 million invested additionally to that, into the company and then welcoming Workday into our ownership structure and what we're really excited about it. I think one of the things that drove, it was a lot of appreciation and empathy for our mission. When we talk with Workday and we talk with PSG, it's not just about empowering workers and, and this moment that we were just talking about, but also a vision of where labor marketplaces should go. We've been advocating for a long time about removing friction, about basically this platform to manage the future of work, without people have to take the reins of control in their own hand.
Fred (18m 7s):
You have to have one place where there has to be co-ownership of data. The employer can own your data, but you have to own it too, and you should have the right to surface it, how you want. So the concept that we have a community to support you and this mechanism to try to be an agnostic platform, to remove friction and kind of labor marketplace appeal to both Workday and PSG. And, and I think the three of us together are very aligned to do, one, lean into a lot of the product development and motions and that includes products for employers and agencies and staffing that are trying to access our community.
Fred (18m 38s):
But, two work really closely with Workday on that latter part, I just said. I think that we have been a firm that since we were started our focus, we go to sleep at night and wake up in the morning, thinking about our members, thinking about workers, thinking about employees, and to have a partner at the table like Workday, that can help us interact with all of their client partners. And, and a lot of the projects they have is just really exciting, not just to have their, their insights in the boardroom, but also to think about where we can find new partnerships to remove that friction between employer and employee.
Chad (19m 11s):
So Fred, not too long ago, you guys raised a hundred million dollars and now you have, it sounds like investors competing to be majority owners for God's sakes. It doesn't sound like a bad problem to have. Am I getting this wrong?
Joel (19m 28s):
Like an episode of the bachelor over at Jobcase.
Fred (19m 31s):
There are people out there in this country struggling with a lot worse issues and we have, but I think that the, I think the stakes are high now, Chad and Joel, I think that, you know, we, what's fun about our day job. I'm, I'm just so appreciative of the Jobcase employees. Like, it's just, it's hard for everybody everybody's listening to this, this, this 2020 is a tough year and we have people just working so incredibly hard and, and yes, we're proud that the business might be growing and yes, we love the new partners, but what's rewarding is watching what's happening in community.
Fred (20m 3s):
We had a team, because we replatform technology last year with some of that investment from that a hundred million round, you said we were able to stand up an unemployment center in like two weeks that has been really helpful for a lot of our members to navigate this. So many people don't even have their checks even now. Like how do you deal with that? And then to surface opportunities, you know, we have this lady, Evelyn Mysong on our site as an example, and okay, she lost her job, but she's able to identify through somebody in the community and talking about this call center certificate. And next thing you know, she's got to work from home offers, she's been productive and she's got a new skill in moving forward.
Fred (20m 38s):
And so that's really what drives. And so I think when we, when we have that mission and, and when you look at the moment, it's hard to see how that won't be relevant for next few years. There's a lot of people that want to join that and we welcome partners, anybody who's going to come to this fight that we can help or want to join us in any way or partner in any way. We can do something to help people that are going to be navigating a really difficult work life for the next few years. Boy, we would love to work with you or partnering with you. And, and in some cases, take your investment and putting it in our balance sheet to secure our ability of succeeding.
Joel (21m 13s):
So of the, the working with, and partnering with, and Chad and I, as, as you as well, are seeing a lot of carnage in our industry. And I think we'll, we'll see more and more carnage going, going through the next into 2021. So I'm not going to ask you who's on your acquisition list or who's on the M and A short list, but I am curious about, are you seeing an increase in companies coming to you to try to partner or try to, you know, get, get your money and buy the company? Are you more aggressive in terms of looking at potential deals out there?
Joel (21m 46s):
What are you seeing from your, your C suite?
Fred (21m 48s):
There's a number of spaces in, in our industry. We define it as talent acquisition or labor marketplace. It was pretty active at looking for capital transactions in 2019. You're absolutely right. Joel. It's like the activity is really high in 2020, a lot of conversations going on. So yes, there's a velocity of intentions of conversations happening pretty, pretty high. Our perspective is yes, we are interested at, at considering growth on multiple fronts. You know, you kind of short phrase it to build, buy.
Fred (22m 20s):
And, but the fun is I don't have extraordinary expertise in that when I was on the street, that's not what I did. My CFO come from Bain. She's extremely well versed in this and Providence Strategic Growth has just an incredible team on this. And I could not, as a, if you have any entrepreneurs or any founders on this call, I could not speak higher of them as a partner in terms of if you need a thought partner to talk to. So I'm, I'm going to rely on our CFO and our friends at Providence to help frame that for us. We're definitely interested. And you're right.
Fred (22m 50s):
There is a large amount of activity.
Joel (22m 52s):
Just to make sure PR is circled on that so that the Chad and cheese podcast knows about any acquisitions that take place.
Fred (22m 58s):
I think you guys are the only people I've talked to about this transaction. So we we've started the precedent here, I think, Oh yeah, Fred, we appreciate
Chad (23m 7s):
You taking time. We know that you, you didn't just go in the office for us. We understand that, but we hope that you enjoy your time alone in the office. And if people want to find out more about partnership investment, or maybe they just want a job, where should they go?
Fred (23m 25s):
Well, you said brother, jobcase.com. You can send me a message. Direct at firstname.lastname@example.org. If you are off the site and I just closed, let me say that, that you give me this chance of saying something. It, this notion of it's hard out there for people. This is no small thing. The inequality is increasing just dramatically. The potential for social unrest is just going to be dramatic art, federal government. Isn't going to do much about it, but everybody listening here, I know you have a really powerful audience. I know your audience is actually a little more powerful than what they probably give themselves credit for, you know, scrub the job listings you have.
Fred (24m 1s):
Do you really need those degree requirements? Can you look for skills and widen the pool of candidates you're looking at beyond the fact that they're blocked from getting fast to funding or, or a community that put them into a four year degree, little things like that. Can you, can you make the move to thinking about being the person in the room, using technology to replace a task, not a job. Can you, can you do something in your part of the world to help this unemployment rate, to help workers? If, if we do this decentralized guys, we can actually try to lessen the pain here, but it's not going to come from federal government or coordination.
Fred (24m 34s):
It's obvious. But I think your community, you got agencies, you've got employers, you have this incredible community that can just start to move the needle. And you know, one more hire, one less hard requirement. That's unnecessary can start to move the needle. So I just would encourage everyone to that might still be listening after this to say, what can you do this week that could even help one person? And if everybody on this show can do that, that will have a material impact. And let's just keep that going forward.
Chad (25m 1s):
Amen. Fred well said! Well said! applause
Joel (25m 5s):
With authority, Fred Goff
Fred (25m 9s):
Thank you very much guys, always love talking with you.
Joel (25m 10s):
Chad (25m 11s):
You got it, man. We out!
Joel (25m 11s):
Go brownies ! We out!
Outro (25m 14s):
Thank you for listen to podcasts with Chad and Cheese. Brilliant! They talk about recruiting. They talk about technology, but most of all, they talk about nothing. Anyhoo, be sure to subscribe today on iTunes, Spotify, Google play, or wherever you listen to your podcasts. We out.
Pic Props to - 3D graphics image by Quince Creative