Valentine's Day is close and love is in the air. What kind of love are we covering this week?
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Hide your kids! Lock the doors! You're listening to HR’s most dangerous podcast. Chad Sowash and Joel Cheeseman 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.
Oh yeah. Valentine's day is here, which means nothing but love and respect on this week's podcast. Welcome to the Chad and Cheese show everybody. I'm your cohost, Joe "Margaritaville" Cheesman.
Chad "Walgreens" Sowash. Okay.
On this week's show Paradox goes visual, Paychecks goes where no payroll service should ever go. And we have some thoughts on the Superbowl ads. Hey, is that Drake from State Farm?
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Chad (1m 51s):
About matching the match up between Casey in Tampa Bay was for shit.
Joel (1m 59s):
I have one comment on that game. Unless you're like me and took a flyer on nine-to-one for the Bucks to win it all about six weeks ago. Other than that, it was a pretty shitty game.
Chad (2m 12s):
It was horrible to watch. I mean, it was horrible to watch. Although, although for you, I'm not going to cry because you're going to be in fucking Key West some time soon. Are you going to like dress up in a hazmat suit to get your ass down there? Cause I mean, you're not a young buck. We got to make sure. Make sure you're good.
Joel (2m 32s):
You're wondering why my middle name was "Margaritaville" this week. First shout out for me goes to my sister, my wonderful loving sister, Holly who's on marriage number two, tying the knot in Key West marrying some dude named Mike. I'm kidding. I know who he is. And it's a pretty small ceremony. I'm flying down Saturday, staying through Tuesday. Scared about my 81 year old father and 78 year old step-mother are attending.
Chad (3m 4s):
He better being a bubble.
Joel (3m 7s):
Yeah. Yeah. That's you know, but he's Texas. He's from Texas. He lives in Texas and he watches Fox religiously. So as far as he's concerned, there is no virus. He'll be fine. I'm glad that the double mask initiative is in play now. So I'm gonna definitely double mask it up. I've promised my wife that if I, if I stop at Shake Shack, I will eat in a janitorial closet somewhere near the bathroom. But yeah, I'm going to be as safe as possible. I'm not hating the fact that I'm leaving the house for the first time in a year. Yeah. A trip to New York Xity would probably be safer than one to Key West. So pray for Joel. Pray for Joel, everybody.
Chad (3m 47s):
Yes. We need Joel in a bubble for the next, just the long weekend. So you won't be gone that long.
Joel (3m 54s):
Bubble of linen pants because I'll be on a beach time. And you know, watching my sister tie the knot,
Chad (4m 1s):
Congrats to your sister, no matter what numbers she's on. That doesn't matter. Congrats to her. I love how you like to, to number these things. It's like, look at this it's number two. The first failure is already over.
Joel (4m 14s):
Cheeseman's tend to stop it two. So I feel pretty good. I feel pretty good about this one.
Chad (4m 21s):
Christine will kill you before that happens. And she has the forensics background to make sure that nobody knows that she did it.
Joel (4m 30s):
Come on, man. Valentine's day is coming and she's, it's all about this (background music plays love songs) in our house, man.
Chad (4m 35s):
I'll tell you who I show some love to not just, I mean, obviously I definitely want to show some love too to Julie, but Walgreens. They, they named Roz Brewer or Rosalynn Brewer, Chief Operating Officer from Starbucks as their new CEO. That means Roz Brewer actually the only black female as a CEO in the Fortune 500. So that's a good start. Let's get more of that shit rolling. Now also, can we get some shots in our arms? Walgreens. Roz, can you make that happen please?
Joel (5m 17s):
This shows a big shout out for women. I think. So I'm going to give a shout out quickly to Bumble talk. Speaking of second marriages, Bumble went IPO today and the, the founder they're female 31 years old. She's the youngest CEO female ever to take a company public. Yeah. Congrats to her. That's fantastic. Bumble Biz is sort of relevant. Although I guess no one gives a shit. It's all about dating.
Chad (5m 44s):
Not really relevant. And so continuing the female talk here, shout out to Zoe Xu, Jonathan Xu's daughter for hooking me up with some friendship bracelets that she made herself. She sold them and used the money to help local families in need over the holidays. Now that is bringing your kids up. Right? Good job. Xu family.
Joel (6m 9s):
I'm glad you finally have a friend. And friends of the show real quickly, Josh, when right of boom of Poon Tang, I mean, sorry, pontoon and Victoria, Conley of ADP. They modeled some sexy, sexy t-shirts this, this week, their sportin' Chad and Cheese again, sexy love theme of the week.
Chad (6m 35s):
Valentine's I mean that's to Philly t-shirt shout outs in the last two weeks, emissary.ai logos all over Philly. And by the way, if you're not using texts to recruit welcome to 2021 kids and visit emissary.ai.
Joel (6m 52s):
No doubt. No doubt, well, shout out to Dennis Tupper. We talked about him yesterday, but he got his beer last night. And boy is he excited? Dennis don't drink it all, we're going to have a little zoom tasting soon. At least save a couple cans for the call buddy.
Chad (7m 7s):
I had one last night with James Dean, and this is all brought to you by kids, don't forget, AdZuna. Doug Monroe actually has an interview out there we did the last week, I believe, or we talk about Google Jobs antitrust. So go listen to Doug. Then go to chadcheese.com/free and register for a t-shirt, beerdrop, and we also have this whiskey thing that we're going to continue to do, right?
Joel (7m 37s):
Yeah. Yeah. We got the Chad's choice and the Cheese's choice of whiskey. We're bringing back the Blockbuster tradition and Sovren is sponsoring this because they hate everyone's liver apparently. Every month we're going to pick a winner. They're going to get two bottles of your favorite whiskey as well as one of my favorite whiskeys. I don't know how you beat that deal again. Sign up at chadcheese.com/free to enter for a chance to win some brown water. It's awesome.
Chad (8m 5s):
It's two bottles of fucking whiskey for God's sakes. Good for you. I've got a rant. Are you done with your shout outs? Because I've got to take a little time. It's time for catharsis and counseling right now.
Joel (8m 17s):
If you feel a little punchy. I'm ready, baby.
Chad (8m 20s):
No. Okay. So the Kroger story from last week where they closed two locations in Southern California. Where they, they wouldn't pay the additional $4 per hour for the essential employees that they have. They're essential workers while I did just some quick research, cause I was still kind of pissed about it and saw that Kroger's CEO makes over $14 million a year. So I screenshot that and I tweeted it at Kroger and just pretty much said, Kroger won't pay added $4 per hour for essential employees, yet they will pay their CEO $14 million a year. Kroger replied, and of course they didn't address the CEOs $14 million salary because they don't want to talk about that shit.
Chad (9m 7s):
They talked more about profitability. So Kroger's talking about profits yet, pay a single person more than 3000 times that of an essential worker. Why do we call them essential workers? If they don't do what they do, does anything get done? But this old white dude sits in a fucking chair and yet he makes 14 million dollars. Anyway, people stocking the shelves, doing the work, greeting customers. This is really Kroger is the shining example of polishing a turd when it comes to inequality.
Joel (9m 43s):
So I got it. No dude, there's a Kroger like almost within walking distance of you. Are you boycotting Kroger there in Columbus?
Chad (9m 51s):
Yeah. I'm going to. And see this is the hard part, right? We've got like the, we used to have a Marsh. We used to have like the smaller groceries. Now, you know, we have Walmart and Kroger. So the days of having the grocery around the corner, which was like the family owned or what have you, those days are really gone from most of small town America. These are the hard choices that we have to make because we've got to get our groceries from somewhere.
Joel (10m 18s):
Look at you, man, putting your mouth where your wallet is. And Julie doesn't shop at Amazon anymore. Right? Julie, doesn't like to get out. She's like wherever I get wherever I get it from that's fine.
Chad (10m 30s):
Not to mention, she loves the Walmart pickup. So she will do everything online and just drive up. They throw it in the trunk and boom, you're gone. So she loves that too.
Joel (10m 42s):
Do you feel better after letting that off your chest a little bit.
Chad (10m 45s):
I do. I do. I think I'm ready. Are you ready for topics?
Joel (10m 47s):
I'm ready for the news, man. Acquisitions galore, this week! Let's get to this one first, this one's a little baffling Paychex released Lesser Group, the company that owns Paychex acquired Emply or Emply, I think it's Emply, right? Although it's Etsy. So maybe Emply anyway, Lesser Group bought Paychex in 2018, today, or this week they announced the acquisition of Emply Emply as a fast growth. This is from them, a full suite, HR SAS provider, including a, a solutions for HR management, recruiting, onboarding and learning management Emply is recognized as a rising leader with an HR solution space in Denmark. Part of the acquisition is growing into big markets like the U S and Germany.
Joel (11m 30s):
The company has customers in 30 countries worldwide. The so will accelerate growth throughout the country, quote from the CEO "payroll customers in our main markets, Demark and Germany, have expressed a need for advanced cloud-based HR solution." So apparently there's a huge clamoring for payroll customers to get an ATS.
Chad (11m 51s):
Paychex sees the writing on the wall. We have all these individuals who are unemployed. That's going to flip, recruiting's going to turn back on, once we start getting shots and everybody's arms. So they see where the market's going to go. I don't want to hear this whole, we hear from our customers. I think that's bullshit. They see where the market's going. So to me though, it might seem odd. And I think to our listeners too, it might seem odd that when there are so many applicant tracking systems in the US that they could have acquired, but they buy a system across the pond in Denmark. And we're talking about a platform that's already, multilanguage not to mention it doesn't have as much leverage against it with funding as most of the U S platform.
Chad (12m 42s):
So if you think about it, a company like Paychex goes out, looks for a platform that they can use in multiple countries because obviously they have clients in multiple countries. And what can they plug in quickly that isn't incredibly leveraged at say a hundred million dollars in funding from VC or what have you? Right. It seems smart. And it seems easy, right?
Joel (13m 5s):
We talk all the time about one platform to rule them all right, and have one one-stop shop, make it easy. But I can tell you that the folks buying payroll services are likely not that involved with the recruiting side, the business or the candidate management side of the business. So I get the customer over overflow or maybe being able to add customers, but it just seems like a round peg in a square hole to me, all those round pegs go through square holes, but not square holes through round holes. So it's on the size of the peg. So that's a little bit confusing. I just, to me, this feels like a forced platform play.
Joel (13m 46s):
Customers will probably be confused because the ones that are on an ATS, aren't going to switch over to this ATS. The people on this ATS are not likely to move over to Paychex. So I don't know the jury's out on this one, I'm no, I'm no payroll expert, but this one seems a little bit strange to me.
Chad (14m 6s):
Yeah, it is interesting, because they aren't the same decision makers. They're not the same individuals who adopt now. I do like the whole thought process. And again, I think this is one of the deals that works on paper. Overall, you're talking to two groups that really don't communicate or work together that much. There's a handoff and the system hands off through an API and you're done. So we already have enough companies who have to use Workday. They're forced to use Workday because it's their ERP, right? It's their downstream system. I don't know that Paychex or a payroll system can actually have that much force or leverage to make, you know, the ATS decision.
Joel (14m 52s):
Well, here's our second acquisition of the week that you might be more interested in. A recruiter.com acquires Scouted, a recruiter.com is a public company. I don't know if you knew this or not, but they are a pink sheet penny stock, roughly trading at $3.30. If you're interested, you can find them at our C R T to ticker symbol. They are an on-demand video enabled and artificial intelligence hiring platform. They tout themselves as the world's largest network of recruiters, which is probably news to LinkedIn, but they've, they've acquired. They've acquired a scouted.io venture backed tech startup focused on unlocking human potential by developing deep insights into candidates, using video screening and AI based scoring algorithms.
Joel (15m 38s):
Does it sound a little bit like Verbo, maybe? Scottish CEO and co-founder Jacquelyn Loeb. This is a female startup, both co-founders are females. I mentioned this was a female heavy heavy show at the beginning. She said, quote "with Scouted's automated video and data forward approach to candidate onboarding recruiter.com can provide a turnkey experience that allows clients to tap more rapidly and more accurately into richly diverse talent pools" terms were not disclosed founded in 2015. Scouted only had an undisclosed seed round. So this baby was bootstrapped since 2015.
Joel (16m 18s):
So good for them. This was probably a pretty nice payday.
Chad (16m 21s):
Recruiter.com paid for the acquisition primarily in restricted common stock. So you think so?
Joel (16m 28s):
Can I revise that statement?
Chad (16m 32s):
Yeah, I think this is a candidate data play. This is nothing like Verbo. This is a more of a backend assessment. I need candidate insights, Scouted pretty much, it seems like they get a ton of data from the candidates that actually use their system. That's awesome. But overall, the recruiter.com network in itself, I think this is an interesting data play overall. They want to be able to quickly match candidates to jobs, throw a recruiter on it, get a payday. I mean, th th there's there's some mechanics in here that actually makes sense.
Chad (17m 12s):
But overall, do I think this impacts our industry as much as you know, maybe LinkedIn adding a feature tomorrow?
Joel (17m 22s):
No, no, not at all. What surprised me was how much recruiter.com is pimping, you know, the quote unquote video enabled our AI hiring platform because forever they'd been a network of recruiters and they've been that for a really long time. So this to me is like, Hey, let's get into some tech shit. Let's throw out some AI stuff. And Scouted as is a nice little, probably technology, a small team to acquire, to bring on and plug that in hopefully to their largest network of recruiters in the world. Don't tell LinkedIn, they said that. Alrighty. So if are we bearish on both of those? It sounds like pretty much.
Chad (18m 1s):
Yeah, I'm not, it's not that I'm bearish on recruiter.com. I just don't know that this actually moves the industry at all. I think the Paychex one is, again, it's more funny when you look at it on paper versus practicality.
Joel (18m 17s):
Yeah. Yeah. A couple of pen pushers checked out the Paychex did before that went through. All right. Let's take a quick break and we'll talk some more video with Paradox.
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Chad (19m 28s):
Got another t-shirt announcement here. Kids actually literally just got a message from Jarvis Corral apparently we sent her a Chad and Cheese t-shirt yeah. And she's wearing it and enjoys listening to the podcast religiously to stay up to date. That's right. That's right. Jarvis, not just an Operating System, by the way.
Joel (19m 53s):
Looking good. Looking good Jarvis. Well, you know what else is looking good candidates in Olivia apparently. So this is one of our shreds. So listeners already know this, but Chadbots are go, Oh, sorry. Conversational AIs are going video kids! Paradox who we've talked about quite a bit on the show, we've interviewed a lot of their employees. So you, you knew at some point the text messaging thing was cute. The automated chat bot was cute, but you knew they were going to go video at some point. And they finally have officially, they're not the Mavericks in this. They're not the trailblazers. And I'm sure Chad will talk about that, but they've added video.
Joel (20m 34s):
Three primary selling points of this is that as employers can embed videos within messages. So if you got a nice little employment branding video, you want to throw in there to let a job seeker see that, you can do that and it plays within the messaging app. You can also record a short video responses. This is the candidate to standard pre-screen or have interview questions from there. So if you want to like, have an automated, 'Hey, videotape yourself this answer, and then we'll prescreen you through that.' And then lastly, they have hosted video and they've also integrated with Zoom, Microsoft Teams, Skype, WebEx, Blue Jeans, and a few others that are integrated.
Joel (21m 18s):
I'm sure you're bullish on this right video beyond chat bots?
Chad (21m 23s):
Yeah. I know. I'm totally biased because I'm friends with Adam Godson and I think he's like one of the smartest people in the industry. I think it's between him and
Joel (21m 32s):
I consider you a friend to Adam, just so you know.
Chad (21m 35s):
Quincy Valencia, who's the queen of chat bots or conversational AI, whatever. Yeah. I think we take a look at this, right? And we're talking about inline video answering, which is different than actual, lightweight connectors for a video interviewing and the Hirevues of like, you know, they've been around for like what 10 years or so?
Joel (21m 55s):
Quite a while.
Chad (21m 56s):
Yeah. They still Hirevue's been around for a while, they built a platform from the ground up, and that was great 10 years ago, but today there's not a need for that. Right? We have Zoom. We have all these different platforms that companies are already using. It's a part of their routine today, right. And instead of forcing a recruiter or a hiring manager into a new technology or a platform that they don't even know, they have to get trained up on. They have to adopt, they have to use why not just use what their existing platforms are and create connectors between those two so that you don't have to go through all of that crazy friction.
Chad (22m 42s):
And that is what Paradox did. So I know, like it was one of the things that talk push did back, you know, a few years ago. And I think that companies like Paradox will continue to do things like this instead of trying to build platforms from the ground up. Because right now, if you think about it, what kind of technical debt is Hirevue going to have to go through to keep their shit up to date rather than being a connector type of platform, per se, that just brings together all the platforms you're already using and make those a much, just a much more seamless process.
Joel (23m 21s):
Yeah. I had a note here that says, does Hirevue go downstream. And when you think about the incumbents and when they see a new technology, you know, driven by things that didn't really exist when you started in this case, maybe mobile messaging, sort of the adoption of that, and also FaceTime and Zoom video. And you probably saw it coming, but how does it sort of integrate with our space and when Paradox and Maya and Zaur, and all the ones that we talk about launched Hirevue had to look at that and go, ah, damn it, it's just a matter of time before this starts to get into our space.
Joel (24m 2s):
And it really starts to cause us some significant headaches. So does, you know, to me, it's like the people who are using Paradox now know that it has video. So it's like, okay, do we need Hirevue? Do we need that contract? So the question I had was now it is Hirevue go downstream and create some sort of a mobile experience, a chat bot kind of thing.
Chad (24m 25s):
They bought AllyO.
Joel (24m 27s):
Yeah. Yeah. That's true. So that that's there, right? So they've, at least they've put up defenses against what's going on. So that'll be interesting to watch, you know, I think this commoditizes chat a little bit, maybe the move to sort of evolve into video. I don't know how much importance the texting, the text-based messaging will have as you know, 10 years from now versus video. And we talk a lot about like every company as a platform is going to have to all have all these things. Like we joke about Tengai, the robot, you know, Tengai eventually needs to be a chat bot at some point.
Joel (25m 7s):
Like there needs to be a full sort of array of experience, with these things. So, yeah, I, when I first read this, I was like, Oh, Hirevue is going to take a shit. And they probably are also think from a standpoint of talent, you know, Paradox has done a really good job over the last year of getting in people that know what they're doing. And I think a lot of that is starting to come to fruition and they keep adding quality people onto the staff. So a Paradox is one to look out for, for sure. I think this is just the beginning of the features that will impress.
Chad (25m 41s):
Well, I think what we're looking at now is we're looking at a lightweight startups that aren't trying to create something from the ground up in totality, right? So it's try to create their own quote unquote "ecosystem." Rather what they're doing is they're just, they're being the connector to make this whole process easier. I mean, we hear about you know, RPA and, and how just the process automation piece means so much. This is another example of that. And when you're looking at Hirevue, they were on the frontier, let's say of building these things. How do they pivot and try to fight against some of these faster, more lightweight types of brands and platforms.
Chad (26m 28s):
I mean, it's gonna be different and hard and, and trying to use AllyO to prop up legacy technology is not going to be easy neither.
Joel (26m 37s):
It disrupts everything, but it's fun to talk about on a podcast.
Chad (26m 40s):
Joel (26m 41s):
Almost as fun as buy or sell!
Chad (26m 44s):
Joel (26m 44s):
You ready to play a little buy or sell?
Chad (26m 46s):
Joel (26m 47s):
Alright. First up on the chopping block is WizeHire, that's Wize with the Z kids, you can find out more at wizehire.com. So the Houston-based maker of a hiring solution for small businesses raised 7.5 million in a Series A announced this week prior to institutional funding WizeHire bootstrapped to over 7,000 paying customers and 4.7 million in recurring revenue throughout 2020. WizeHire's recruiting platform has been implemented across real estate, mortgage and insurance industries with what they say is growing traction in the hospitality vertical.
Joel (27m 28s):
One thing that probably launched them into another stratosphere was that they partnered with lenders for the paycheck protection program, or PPP to make relief, more accessible to local businesses. They also provide job description help, and they blast those postings all around the web for small businesses. Buy or sell Wizehire?
Chad (27m 51s):
Yeah, I think they've already demonstrated that they're a buy. To be able to make the right types of partnerships, to be able to go grow to 7,000 customers. I do think that the system, you got to remember SMBs are going from pencil and paper and Excel spreadsheets to now this new tech. So they don't know what they don't know. WizeHire has these hiring coaches that actually goes through, they have a chat that's there. So it's like a constant help in a crutch that's there the entire time. So I think that's good to a degree. I would love to see more of an RPA kind of a system set in place for them moving down the road.
Chad (28m 34s):
But I mean, overall, these are great platforms. And if you make the right partnerships, you can see explosive growth and these guys have already demonstrated they can do that. So it's a buy.
Joel (28m 44s):
Wow. So for me, it was a tough one, but I'm going to go sell on this one. I hate small businesses, small businesses, small businesses go out of businesses. Okay. Yeah. And you gotta, you gotta recycle this shit. You got a ton of churn. This business has people involved. So it's like heavy with the handholding of these businesses. You got a ton of competition from all the way from Craigslist to the gig platform. You know, the gig economy to the job cases of the world, you know, 7.5 is a drop in the bucket compared to what they're going to need to compete. It's a nice little story. It's a sweet, you know, a sweet deal so far.
Joel (29m 26s):
And the PPP thing was a good snag for them. Oh, Snag-a-job by the way. There are competitors as well. So it's a nice little story, but for me, it's a sell. Next up on the chopping block is Ethena not Athena Karp, who's one of our favorites on the show, but this one can be seen it goethena.com, the Brooklyn, New York based provider of sexual harassment prevention and corporate compliance training raised an additional 2 million in funding. The startup had it raised 2 million previously in June. Clients include Netflix, Zoom and ZenDesk. They provide bite sized, ongoing lessons for workers.
Joel (30m 8s):
They launched geez, February, 2020. So just a year old, they also have women co-founders, we always, you know, love that. I love this. They use comic book, light graphics to explain bad behavior, which people like me need keeping companies out of court with comic book graphics. Buy or sell Chad?
Chad (30m 28s):
So first off it's Ethena with an E as opposed to an a like the goddess of war.
Joel (30m 35s):
Chad (30m 37s):
goethena.com. Here's here's the biggest key companies are spending billions with a B on DEI training. And now that Trump's dumb ass is out of office and his EO is null and void. DEI training is back on this platform feels like Netflix, TikTok and DEI training had a baby it's curated and updated content, short five minute videos and a nudge when you need to get your training on. So companies are spending billions and humans are always looking for a quote, unquote, "check the box, silver bullet" type of solution and Ethena gives them all of that in one package.
Chad (31m 20s):
This is a huge buy for me. It's an, it's an easy one for a company that to plug into.
Joel (31m 25s):
Totally so huge buy for me as well. I'll just sort of reiterate what you said. Like, you know, HR is, is made to keep companies out of trouble, out of court, right? We had a recent background check discussion, which was one of the best interviews in our short year so far.
Chad (31m 41s):