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Workday Sucker Punches Eightfold and Beamery


Workday acquires HiredScore, legal challenges in AI hiring, Deel buys Zavvy, Indeed's pricing woes. Industry shifts and privacy debates


YES, this is the kitchen sink of episodes. The stars have somehow aligned and we got news drop from all your favs this week: ZipRecruiter, LinkedIn, Indeed, Deel ... and of course, OnlyFans. We even mention the likes of CareerBuilder, Monster and HotJobs. Hell, we even through background check talk along with AI lawsuits on hiring practices with some of the most well-known companies in our space. Seriously, settle in for this one, grab a bourbon and enjoy. We're about to cause chaos and rock like Amadeus.


PODCAST TRANSCRIPTION sponsored by:


[music]:


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.

Joel: Oh yeah, two guys who are taking time out from their day buying NVIDIA and Bitcoin to give you another show. You're welcome. What's up kids? You're listening to the Chad and Cheese podcast. I'm your co-host, Joel insurrectionists band Cheeseman.

Chad: This is Chad surge pricing Sowash.

Joel: And on this episode, Workday scores, Deel deals and OnlyFans saves lives. Let's do this. Chad, we're infiltrating the minds of young children apparently. Who sent you the video of the kids in the backseat giving our intro? I mean, I'm worried for the future enough as it is.

Chad: Yeah.

Joel: The fact that parents are letting their kids listen to us is really scary.

Chad: So I'm not going to let that out. I don't want them having, child custody taken away from them or something like that for having them listen to Chad and Cheese, but yes, I got a video from one of our listeners and his two kids. I'd say they're probably around 10 or so 10, 12 Maybe, in the backseat of the minivan doing the Chad and Cheese Intro. So yeah, that was pretty legit. Yeah, they were good.

Joel: Lock your doors... Yeah, they knew it. And we know Adam Gordon's kid has been listening to the show. By all intents and purposes, seems like a pleasant young man. So maybe it's not as bad listening to us as it would sound.

Chad: Nah, it's the real world coming at you.

Joel: So with this cold front in the Midwest, how much do you miss Portugal?

Chad: Yeah, I don't even need a cold front to miss Portugal.

Joel: That's true.

Chad: But I get a cold front and then I really miss Portugal. So yeah.

Joel: That's true.

Chad: It's... I'm jonesing, I'm jonesing.

Joel: So we were talking before the show. This is like the the aphrodisiac of a show that I'm not sure our listeners are ready for.

Chad: It's packed.

Joel: We have thrown almost everything into this show.

Chad: Packed.

Joel: Zip is in the show, LinkedIn is in the show, Workday, Background check stuff, Indeed of course is in the show.

Chad: Deel, Acquisition.

Joel: And obviously, OnlyFans has to be in the show. So if you're listening and you love the show, take a seat, get comfortable because this thing is a loaded baked potato to say the least.

Chad: Here we go big boy, here we go.

SFX: Shout Out.

Joel: All right, let's get to it. The Four Horsemen keep riding on Chad, ZipRecruiter announced their earnings recently. So if you're trading the stock, and we know that all you JobBoard lovers out there, owning ZipRecruiter hand over fist, that ZIP at the NYSE. All right, so they faced challenges in 2023 due to what ZipRecruiter described as "one of the slowest hiring markets in recent memory." and other top line headwinds impacting its fourth quarter and full year earnings, the company reported a 35.4% decrease in fourth quarter revenue to $135.92 million. The number of quarterly paid employers declined by 35% year-over-year to a little over 70,000 primarily due to weakness among small and mid-sized businesses, which are the majority of ZipRecruiter's customers. Revenue per paid employer also decreased by 1% to $1922. First quarter 2024 revenue guidance is 120 million representing, yep, you guessed it, a 35% decline year-over-year.

Chad: Ouch.

Joel: The stock was down 10% this week. Shout out to ZipRecruiter.

Chad: Amazing. I mean any types of job sites, they're gonna have to go down funnel, they need more data. This is going to be about data this is going to be about targeting, this is going to be about being able to target qualified candidates as opposed to just clicks, just bullshit clicks, which is exactly what Zip and the rest are giving. Yes, Zip has more of a matching algorithm, but still, it's not far enough down the funnel.

Joel: What was their AI's guy name? The guy? What was his name? Do you remember?

Chad: Was it Phil?

Joel: Phil, yes, it was Phil. Phil's not working out. Phil needs to get replaced by somebody else. Cheers.

Chad: Yeah, I think I think Phil's gonna get a pink slip. Anyway, I've got a shout out but this is for the dumbass of the week who goes to the fast food chain Wendy's CEO Kirk Tanner for this Indeed-like dumbass move. Yes, Indeed-like dumbass move. Here it is kids, watch it.

SFX: Wendy's will soon test a plan to fluctuate its menu prices based on the time of day, the location and demand. It would be similar to the surge pricing used by ride sharing companies like Uber, raising fares during bad weather or rush hour.

SFX: Wendy's Baconator.

SFX: In this case, that Baconator sandwich could cost $1 more during your lunch hour.

SFX: Dynamic pricing or pricing algorithms allow companies to change prices throughout the day or perhaps even throughout an hour.

SFX: Wendy's CEO says digital menu boards could use artificial intelligence to raise and lower prices in real time, allowing the company to be competitive and flexible with pricing. Customers are already voicing concerns. One claiming surge pricing is just price gouging by any other name.

Chad: Yeah, so hey, Kirk, buddy. The big question here is will Wendy's employees receive dynamic wage increases during the surge times? I mean, the burgers themselves, they're not going to assemble themselves. And then there was this holy fuck moment they were talking about the Baconator. Gizmodo reports that the standard price of a Wendy's Baconator in New York City costs, get ready, $12.24.

SFX: Doesn't anyone notice this? I feel like I'm taking crazy pills.

Chad: For a sandwich from a fast food restaurant. And that's standard pricing.

Joel: Yeah.

Chad: Fuck.

Joel: This is the dark side of AI. When I know traffic flows, and personally, I can't wait till my wings cost $84 during the game in surge pricing.

Chad: Crazy.

Joel: I think it's inevitable. I think this is coming, Wendy's just did a shitty job of like, slowly boiling the frog. They just threw the frog right into the boiling pit of death and the whole world freaked out. And they've walked this back. But don't think for a second that fast food, restaurants, etcetera, are looking at ways to like increase prices when Oh, it's lunchtime. Are people going to change when they eat? Probably not. So this is kind of a built-in price increase, that doesn't look like a price increase. I guess.

Chad: They will stop going. I mean, they'll stop going to fast food. I mean, people go to fast food because it's cheaper.

Joel: Your lunch time is like 03:00 o'clock in the afternoon.

Chad: Yeah.

Joel: Because you're on your fasting thing. So everyone will be at 03:00 PM You eat at 10:00 P.M, Will be on European mealtimes. And do they increase or do they decrease? I guess would be a question. They didn't say much about, Oh, during the hours of 03:00 to 04:00.

Chad: Yeah.

Joel: Those nuggets are 25 cents, like watch them sell some nuggets between 03:00 and 04:00 when it's really, really low pricing.

Chad: But again these poor saps, Who are the ones who have to assemble the burgers in the first place. And they have to do it faster because of surge timing, because there's so many... There's so much demand that's happening. Yeah, those dudes aren't getting paid more. They're not getting more.

Joel: Yeah.

Chad: This is just a way to soak the consumer. I mean, they're already getting amazing profit as it is so yeah, hopefully we'll start to see. And they did see on social media that people were like rising up and like, Fuck you, I'll go across the street.

Joel: Yeah.

Chad: So yeah, we'll see how it rolls out. But I don't see this. This is like gas prices. You pass and then five minutes later, you go back past it. And it's like 20 cents more. It's like what the fuck just happened?

Joel: You may be onto something from a marketing perspective. If they would have come at this at like, look, our workers aren't getting paid anymore, when it's lunchtime or dinner time, they're still paid the same amount. So we are going to surge pricing, and pass that on to our workers.

Chad: That might be something.

Joel: Who are harder during these hours. And then they could kind of split the hair. Like we're gonna keep a little bit too and they're gonna get a little bit more. Like this could have been a home-run for Wendy's from a recruiting retention like PR standpoint, but they fucked it up.

Chad: Go figure.

Joel: They screwed it up. Because you and I would be celebrating if Wendy said, the burger is $1 more during lunchtime, but we're gonna give 80 cents of that to our workers and then 20% to technology or innovation or whatever, like we would have been applauding it. Instead, they're getting killed for it. Lessons in PR with Chad and Cheese kids. That's what we're doing here.

Chad: All they had to do was watch Indeed. Indeed comes out with new products and then they increase prices and then they said, oh, sorry that pilot didn't work out. That was not a fucking pilot.

Joel: I hope the folks at Chipotle are listening to this show on how to do it right, kids.

SFX: Oh my God, I love Chipotle.

SFX: Don't do it Chipotle.

SFX: You took away my life.

Joel: All right, since we're in the mood for playing some ads, I'm going to talk about LinkedIn's new ad campaign. They've launched their first ever brand campaign for LinkedIn premium, aiming to showcase the benefits of its subscription product. The campaign running until the end of March features three videos highlighting relatable career experiences and emphasizing LinkedIn premium as a tool to advance careers with 85% of US professionals considering a career change this year. I say bravo to getting more cash out of those damn job seekers. So if you're listening on the podcast, which a lot of you are, it's clones. Same woman, same outfit. She's in the office lobby waiting to be called for an interview. She's like, how do you stand out she opens her phone looks at LinkedIn. LinkedIn gives her magically these three guidelines to separate herself from everybody else. They pan back to the lobby. Now everyone's different, she stands out, she gets called back for the interview. You're shaking your head like you don't like this strategy Chad, you don't like the ad.

Chad: Oh it's black mirror creepy as fuck. I mean you look it and you're like, I don't see myself in that bad haircut or that bad outfit. Trying to soak... I understand it's an entirely different revenue stream, but trying to soak jobseekers especially when they're looking to find another job for cash is always been just filthy, just creepy, just nasty to me. So and we actually talked about there are others who have done that before. The Marc Cenedella, the ladders of the world who just focused on hey, look, if you want access to these special jobs pay us for this, which was...

Joel: No one else get's this.

Chad: It was all bullshit in the first place. But again, it's just like, why are you trying to zap cash out of individuals who are looking for a job versus the companies that actually have the money and they want the talent? It's like we have this backwards in this country. It's fucked up.

Joel: Yeah, it's a long tradition of taking advantage. Let's be honest, of desperate people.

Chad: Fucking people over, Yes.

Joel: Yeah, like I need a job and this ad tells me if I spend, what'd you say, 40 bucks a month or whatever it is now for the...

Chad: Fuck.

Joel: For the job seeker one like, I'll magically get a job and that's just not the case. Infact, I would say that this probably does very little to help you stand out. And get the job of your dreams.

Chad: But what will help you stand out is free stuff with Chad and Cheese. You have to pay $40 a month for this shit? No way. This is great stuff.

Joel: No, not on this show.

Chad: New T-shirts that we're getting ready to push out design-wise that we've got a new sponsor Aaron app. I love the logo on the back of the shirt by the way, it's gonna look awesome.

Joel: It's so sexy.

SFX 4: Hi pappy.

Chad: Beer from Aspen tech labs on your door, your step right there, FedEx, UPS however it gets there but it's going to be brought to you. Whiskey...

Joel: We're not coming to your house, just so you know. It's not us.

Chad: And that's from Aspen tech labs. Whiskey from Textkernel, bottle from Joel, bottle from myself. So some whiskey coming to you. And if it's your birthday, rum from Plum.

SFX 5: Could you feel the tension in the air right now? I know I can, I can feel it all the way down.

Chad: One Lucky listener.

Joel: Gotta love it. And February had an extra day. We're recording on the 29th, it's leap year, so you had a little extra chance this month to get on there. But yeah, Celebrating another trip around the sun of our listeners. Is Kristen Urban, one of our fantasy favorites? I almost got there. Vershali Umrical, Colin Parker, Adam Salsa King Chambers. Do we know where in the world he is? Now, is he still in Mexico? Is he in Vietnam?

Chad: I think he's still in Mexico. It doesn't matter. Wherever Adam is. He's having a good time.

Joel: That dude's a trip. All right. Christopher Chamento. John Turner, Becky Green, Molly Northern Warner. My niece, by the way. Boss Von De Etered. Bob Etheridge and our favorite PR guy.

SFX: Hi Pappy.

Joel: Evan White celebrates a birthday.

SFX: Happy birthday.

Joel: All right. Happy birthday everybody.

Chad: Our friend Edward White, who we're actually going to see March 11th through the 14th at Transform. That's right, at the win in Vegas. Over 3000 attendees, a 100 plus investors, 100s of startups, 100s of speakers. So much, God, I'm tired just thinking about it right now. And we're giving away five free tickets. We're gonna shut this down sometime soon, kids. So get on Chadcheese.com/free and you can register for everything that we talked about before for beer, t-shirts, everything, and even possibly winning one of five free tickets to Transform.

SFX: All right. All right. All right.

Joel: Good Lord. I don't know if we're turning into Groupon or your local lottery dealer, but...

Chad: A little bit of both.

Joel: But man, we are out of control. By the way, our travel is sponsored by our friends at Shaker, Recruitment Marketing. And by the way, Chad, I mentioned it was the end of February. That means we're at the beginning of March, which means we'll be recording our Chad and Cheese podcast does data with Linkup, CEO.

Chad: Toby.

Joel: Toby Dayton. The number's a little bit weird, a little bit of estimates coming out. We'll know the numbers here in about a week or so. And you and I will be on with Toby talking about the real nitty gritty about where the markets and the economy is going. You can only view that on YouTube. So subscribe youtube.com/@ChadCheese and make sure you don't miss an episode.

Chad: Excellent.

Chad: Topics...

Chad: And a shitload of topics. Geez.

Joel: Yep, yep, yep. So much for Workday acquiring Beamery, at least not yet. Workday is acquiring HiredScore, an AI powered talent solutions provider to enhance talent management. The deal aims to offer a comprehensive talent acquisition and internal mobility solution leveraging responsible AI and focusing on human centric decision making. The acquisition is expected to be finalized by April 30th, subject to regulatory approval. Of course, Chad, your thoughts.

Chad: So, congrats to Athena Karp and the HiredScore team who stayed disciplined and focused on the problem they were solving this entire time. HiredScore never played the we can do it all Vaporware Tam expansion game, which I've always respected. I've always respected that. What this all comes down to though is one thing, timing. We've seen some big names rush generative AI products into the market to meet OpenAI and ChatGPT, Amazon, Google, Facebook, and Twitter are all either launching GenAI into the market or they're taking steps to do so. So how does a HiredScore cut through all of those big names and the noise? The easy answer is they can't compete long term. They can't with those big names and those deep pockets. So this is a perfect time to sell. This is the perfect time to sell. The question is why HiredScore? When we take a look at like the Beamery and the Eightfolds and some of those other companies that are out there, why HiredScore and why now? What do you think?

Joel: Because AI bleeds into everything. And if you are a public company like Workday is, and you're not talking about AI, introducing AI, using AI, profiting from AI, You're gonna be left out by the market. I mean, shareholders and people who buy the stock. I guarantee board meetings at Workday were like, where's our AI shit? Where's our AI? We need AI. And somebody said, well, we're working on that internally. And finally someone said, shit, we're not, it's not working. We need to at least buy something with AI in it and we can announce on our earning score, which wasn't awesome, by the way. That we are now, we've acquired this itty bitty AI company. The market wasn't that impressed. Apparently, the stock... Well it was earnings. I don't know if it was, it wasn't AI, but it was more earnings thing. Just, there wasn't a lot of people impressed that they had bought an AI company with 125 or 50 employees. But why'd they do it? Because the market says if you're not AI, you're not with it, man, you're not hip. It's like the 90s. Like youneeded.com. You better have a website. You better have some e-commerce shit. It's just like the future. The past is present now.

Chad: Well, When ADP applies pressure like they have over the past few months and being able to talk about the GenAI that they're putting out and the data that they're actually crunching, not to mention we're talking about HiredScore has mature matching algorithms complete with what Athena would call defendability or explainability. Which is something that Workday does not have. And one of the reasons why they're in court, which we'll talk about. But this is also interesting from the standpoint of a buying binge. Does this start SAP, Oracle, ADP, will the Dominoes start to fall? And then you look at the companies that were sucker punched, in this case, Eightfold. They have close to $400 million in funding. Limited vendors out there can afford them. This is one that is off the table now. This is off the table. Now they're even limited more. Beamery, 223 million. There's no way in hell they're buying Beamery. And then the vendor that I think has the most risk that we've talked about for a while, we haven't talked about here lately is Textio. I mean, they have 42.5 million in funding. But again, these are all companies I believe are at high risk.

Chad: With tech and the velocity that's out there today. If they don't sell, they're gonna be worthless.

Joel: Yeah.

SFX: Just the 10.

Joel: HiredScore didn't take any official money VC-wise. From my understanding, they had kind of a sugar daddy or a few people that had money that kind of kept them in the early days going.

Chad: Rich friends and family.

Joel: This was a sweet deal for Workday. Very little risk. Probably small price tag. Compared to what you're talking about, Eightfold. They do the deal. They probably get some employees. I think Athena's probably gonna move on after her year contract or however long she's there.

Chad: Oh, yeah.

Joel: I don't see her enjoying her time at a huge ass company like Workday. And look, Google's Gemini, I'm sure you saw this, hit a huge speed bump with its graphics and producing popes that were black and Vikings that were like, people lost their minds. This is Google. I think there's real questions about if Google can't get AI right, how can a little company in the workspace get it right? I have my questions, but for Workday, it was a market situation where let's do a little risk. We can say we have an AI company. Anyone that think... A lot of our network lost their minds over this deal, that like, revolutionary, amazing. And people that we both respect. And I would caution everybody and throw some cold water on this deal and say, look, if you think that Workday a 20,000 person company, I think at the end of the day, Workday's not gonna change and HiredSolve is gone... HiredScore, sorry. See, I get them mixed up, solved, scored.

Chad: I see a lot of the bigger companies really suffocating the platforms that they've bought and then they go away? Taleo is gonna go away. I mean, you take a look at Conexa. BrassRing. You take a look. A lot of these big companies that were big in our space were acquired by larger organizations. And then they were just fricking... They were strangled in the... Not in the crib, by the way, but yeah. They were strangled.

Joel: Acquisitions are hard. I mean, you get company cultures, you get politics, you get things that you are not used to. Look, we both applauded when Andrea sold Opening to iCIMS. Would either of us say that iCIMS is greatly different today than it was when they bought her company?

Joel: I would say from a technology standpoint internally, yeah.

Joel: Greatly... Like, greatly changed the business.

Chad: That's the thing is that if you have a HiredScore like this, and we can start to kinda like, push into the next Workday lawsuit, they needed to do something. Their AI was already on trial.

Joel: Yeah. Or at least give the impression that we're doing something. We'll see, time will tell if this really does change the company. And iCIMS is a much smaller company than Workday, by the way.

Chad: Oh, God yeah.

Joel: Workday is a big, big company. All right. All right. Well, time will tell, I guess, on this one, but we agree. Athena great job.

Chad: Oh God, yeah.

Joel: Hopefully pay out and then in a year or so, you can go do whatever the hell you want. Good for you.

Chad: That escalated quickly.

Joel: All right. Let's go to lawsuits. Derek Mobley has filed a lawsuit against Workday alleging that it's AI powered hiring software discriminates based on race, age, and disability, violating federal laws. Workday denies wrongdoing, stating and ensures its products comply with laws. The case highlights concerns about AI bias in hiring. But wait, Chad, there's more. HireVue has been partially relieved from a class action lawsuit in Illinois. The court dismissed claims that HireVue profited from selling the data focusing on software sales. Instead, the case highlights legal complexity surrounding biometric data use in hiring me thinks. A trend is developing, Chad. What are your thoughts?

Chad: So, Workday, we're just talking about it. Hence the HiredScore acquisition. What Workday needs at this point is a show of contrition through this acquisition with a will do better statement, and then pay a pissy little fine. And thank the Gods, this case was not filed in the EU because a 6% global revenue fine for Workday would've cost them $420 million. So hopefully, HiredScore helps Workday get through this shit together. So I see this almost as an optics play as well. It does make sense from a tech play. I don't know if it'll actually work out that way for Workday, but we'll see. Show of contrition. Sorry. We did wrong. We actually bought these guys over here who understand AI. They can explain AI, etcetera, etcetera. Now, on the HireVue side of the house, collecting biometric data on candidates. I mean, Illinois was the first state to craft what I would like to call an anti HireVue legislation.

Chad: And then in Massachusetts. The plaintiff, Jesus, claims that CVS, this is not a claim against HireVue. This is what all companies should be aware of right now. The plaintiff claims CVS, not HireVue, CVS violated state law by subjecting him to an AI powered interview, HireVue that analyzed his facial expressions, eye contact voice annotation, inflection, etcetera, etcetera. So notice that once again, that was not against HireVue, it was against CVS. The bigger issue, I cannot imagine. We know people who work there. We know people who have worked there. I cannot imagine CVS would be happy with the prospect that HireVue is collecting biometric information on CVS's candidates. So the question is, is that actually happening behind the scenes? Just because that the biometric data product isn't available, or at least I don't believe it is anymore, doesn't mean that HireVue doesn't have the capability to actually collect that biometric information.

Chad: And that to me is the scary part. If you are a CVS, not only can you be taken to court because of this, but wait a minute, are they collecting data that we don't know that they're collecting? And what are they using that data for? So then I reached out to a few practitioners and asked them about this, and they've freaked the out. One said, it is going to be an interesting case to follow, as it could have huge implications on the tech space. No kidding. It's a fine line between... Listen, it's a fine line between biometric data collection, sentiment analysis, which we hear a lot of companies talk about and lie detectors.

SFX: Shall we play a Game?

Joel: The recent news that Washington really cares about this issue is promising. It's an election year. We've talked about the chaos that could ensue with deep fakes phone calls from Joe Biden that aren't Joe Biden, that really scares politicians a lot. Well, guess who makes the laws? The politicians. So in the last 60 days, they have moved really fiercely to make sure that Meta and some of these big tech companies, number one, it's illegal now to do that. So the FTC, now, if you're a candidate and you deep fake politicians and like you could be in trouble. We're not sure what those penalties are, but at least, the government has said that's illegal. So the fact that the government cares about these issues to me is a good sign. I don't know where it will go or how fast it will evolve.

Joel: But with Washington has their attention on this issue. I don't know who's representing these cases. I don't know if it's Dewey Cheatam & Howe, and our friends, Baron and Budd. But lawyers smell blood in the water. They smell an opportunity where they can go after companies like CVS has more money than HireVue. So like, let's go after them. Workday has a lot of money, LinkedIn, the lawsuit with them. So like, I think it's more lawyers targeting looking at these laws and saying, who can we get? And these are the top of the list. We need a healthy balance of laws, so that everyone knows the rules. And we need, I think a greater certification, a greater sort of third party that has everyone's trust that we're doing it the right way and FairNow.

Joel: And companies like that, I think are in a really great position to say, look, we've worked with the government. We have all the AI stuff. We're making sure that every company is dotting their I's and crossing their T's. So if you take us to court, we are certified FairNow, or whoever it is, that they can go into court and say, look, we're the law of the land. We're doing this the right way. Until then, it's still the Wild West. We're gonna talk about more and more lawsuits. More and more customers like CVS are gonna be worried about using vendors that have ai because they're gonna worry about, am I gonna be dragged into court because I'm using this vendor? Well, yeah, you are. And by the way, a lot of these terms and services on these companies say, if you use our shit, you're at fault if it goes to court. Like, we're not at fault if you use our stuff. So something's gotta come to a head.

Chad: HireVue specifically did that.

Joel: Yes. And more and more will, because nobody wants to be sued. That's not fun. It's bad for business, so to speak. So I think government giving a shit about this is a good thing. Companies that are dedicated to like, let's make sure everyone's following the rules or let's certify people is a good thing. But until then, there's gonna be some stories like this. And more and more stories like this.

Chad: Agreed.

Joel: Because there's money to be made.

Chad: There is.

Joel: And speaking, speaking of money to be made, let's take a quick break and we'll talk about Deel doing some deals or at least one deal...

Joel: Hey, Workday, hold my beer. Deel. That's D-E-E-L. A $12 billion HR business focusing on distributed workforces, is acquiring Zavvy, an AI-based people development startup. This move aligns with Deels shift towards more AI integration and expanding its service portfolio, Deel plans to make its HR tool free for all existing customers. In terms of the deal, get it, Chad? Terms of the terms of the deal? Was that not good? That was...

Chad: Deal.

Joel: All right. We're not disclosed, Chad, as TechCrunch says in their article, "consolidation is afoot in the world of HR services." No shit. Chad, what are your thoughts?

Chad: So Deel is one of the few unicorns that are killing the game right now. So remember we reported that Deel's annual recurring revenue are over 400 million, and they have been profitable, hear that? Profitable since September, 2022. So Zavvy a people developments, performance and training programs platform, that's not something that you want to build from scratch. So use some of those unicorn blocks to buy something that actually gives you a much faster way to expand your total addressable market. Which means Deel can now go take Zavvy to their 25,000 clients and start expanding wallet share. They're gonna have a free version, it sounds like. Get out there, get the tentacles out there, and then boom, they're gonna have some paid versions. I can almost guarantee you. Let me also quickly point out that the TechCrunch article also said, "originally Deel approached Zavvy with a partnership proposal before making an offer to buy it outright." If you are a startup founder and you don't have an understanding of the power of partnership development, hire someone immediately who does. This is how deals fucking happen. Get it deals. This is how it happens.

Joel: I'm not the only one making dad jokes around here people. It's interesting you mentioned partnerships like, going back to the Workday deal. Athena and her team had made a really concerted effort apparently to get into Workday and integrate and build that relationships. So yes, those relationships do pan out many, many, many times. So this is what successful companies do. And that team goes out and says, what pieces do we need? What companies can we target? This wasn't like a small deal.

Joel: Zavvy's valuation was 16 million at one point. It's a small deal for Deel. Let's be honest, they were founded in 2021. So they really hadn't gotten a lot of time to get traction. I don't know what it was about them. Clearly it was a piece that they needed, maybe some of their skill sets and the talent that was on the Zavvy team really fit well into what Deel is looking for.

Joel: But look, these apex predators, we've talked about it, it's clearance rack time at TJ Maxx. These companies are looking to sell, the runway is shorter than it used to be. The profits aren't what they used to be. It's time to sell. And if Zavvy's not making those calls, Deel and others with money are making those calls. And we're gonna talk a lot about consolidation this year. On the big end, like we're about to talk about, or the big eating a small fish, there's gonna be a lot of consolidation. And I think Deel is gonna be at the forefront of gobbling up some of these companies that are not super expensive, but have a lot of value and are up and coming and fill a need within Deel's feature set.

Chad: To one point, Zavvy's only been around for a couple of years. And yet again, they were acquired. Timing, timing. You miss every shot, you don't take. So if you're not creating these partnerships, so if you're not trying to at least talk through, and it takes a while to get these partnerships done, integrations, those types of things doesn't matter. It's fucking worth it. Portfolio penetration. Not to mention also opportunities like this. So no matter how early you are in the funnel as a startup, start having those discussions right out of the gate.

Joel: Yeah. And by the way, we talk a lot about the companies who take too much money are the ones that... Are usually the ones on the short end of the stick. Zavvy raised $4 million. That's a really nice place to be as a startup. You're still very saleable. You've got enough money to get you through some timing. So like, applaud their efforts. Going back to Eightfold, going back to Beamery. A lot of money raised, very few options when you do that, and I think that's gonna be prevalent for them in the coming months. Well, we talked about one acquisition that we like. Let's talk about another one that I don't know, I guess the jury...

SFX: 60% of the time it works every time.

Joel: Might be still out for opinion. Hey, Workday and Deel, hold our beer says, First Advantage, who acquires Sterling Check in a $2.2 billion cash in stock deal to bolster its background screening services. The merger aims to generate at least 50 million in cost savings and create a combined firm with around 1.5 billion in annual revenue. First Advantage, CEO Scott Staples will lead the new entity focusing on AI, tell me if you heard that one before, driven automation and growth opportunities. The deal values each share of Sterling Check at $16.73 cents a share. That's a 35% premium to its previous closing price. Chad, what are your thoughts on these two Megalodons getting together and creating one huge background check company.

Chad: I first remembered back that in 2012, Findly acquired First Advantage. Remember that? Findly was a gobbling up companies and they were doing it through Symphony Talent Group money, right before they were rebranded as Symphony Talent. So back then, First Advantage was acquired in 2012. They were then First Advantage was acquired by Silver Lake in late 2019. Silver Lake has raised a total of 3.1 billion in funding over four rounds. Their last funding round on August 1st, 2023. So whether we think background checks are exciting business or not, they aren't going anywhere anytime soon. So it's definitely a segment that needs disruption because the personal information a company keeps on an individual should be the individuals not stored in an applicant tracking system or a background check database somewhere. It's what we've been talking about. We've seen European legislation, GDPR and even the US signaling that the days of building resume databases and housing personal information are nearing their end. So knowing all of this, this market segments will be disrupted, much like the little old, OpenAI leaped over big names like Google and that was just in a single bound. I see something like that happening with the background check companies. Now, Silver Lake has a shit ton of cash. The question is, are they going to be looking for that disruptor or are they just gonna sit back on their piles of cash and not worry about it?

Joel: I'm gonna go with the latter on that one. Look, we're gonna be going from three publicly traded background check companies to one. HireVue's now gone effectively, they're gonna be CareerBuilder by private equity.

Chad: HireRight.

Joel: And then these guys... HireRight. Sorry. The edibles are kicking in clearly on this episode. It's interesting that you mentioned history, because I thought back to the early job board days. There was a time where you had CareerBuilder, Monster and HotJobs. CareerBuilder got private equited, and Monster Public Company, HotJobs was public, got bought by Yahoo. Monster went in, bought HotJobs. We know how that ended, how all of that ended. Nobody was better off. Fortunately, you had a disruptor like you mentioned in Indeed at the time. Job postings aren't sexy, but they're not going anywhere.

Joel: Background checks aren't sexy, but they're not going anywhere. This is a commoditized business. It's a brace to zero. But when you have two companies that are valued at 2 billion, they come together. Like you can fend off the Meteor shower in the end of days a lot longer, when you make those kinds of moves. But I was thinking about that industry. The question is, is a Checker gonna be the disruptor? I don't know. But I think it's a great opportunity for them to be the non sort of big company and in background checks. I think, we talk about Fama, there's an opportunity for Fama to go upstream where there's still tons of mom and pop background check companies. I know, 'cause I worked with a few of them at employee screen that went off and did their own little background checks.

Joel: Like Fama could get more into the holistic background check and social media check business. That would be kind of interesting. But ultimately this is two dinosaurs, cuddling, hoping to fend off the end of the world. What is interesting is when I was researching this deal, both Sterling and First Advantage, well over half of their employee base are in India, which is basically sweatshop for background checks. So if they can just eliminate 40% of that workforce, like they're gonna be more profitable and take a lot of the duplication out of the business. So this will be a nice deal. But look, background checks are still boring. They're still a shitty business. It's still a race to the bottom. And now you'll have less... As a consumer, you'll have less in terms of optionality than you did before.

Joel: Which means a raise in prices, which yes, opens the door for a disruptor. If I'm Checker, I'm in some serious meetings because I was less valued in 2021 at $4.6 billion and this deal at half that means we better create some value. We better get the shit in gear and start either buying or merging with companies that can help us. But Checker needs to be really strategic right now and say, this is an opportunity for us and if they take advantage of it, great. If not, we'll have other stuff to talk about.

Chad: Hey Ben Mona is over at Fama. If the phone rings and you see it says Checker on it, you might want to answer it.

Joel: Yeah. Ben's probably getting a few calls these days.

Chad: I'm sure he is...

Joel: With all this activity. Oh man...

Chad: Good For him.

Joel: And what a great guy. Hopefully, we're talking about Fama getting paid here soon. Speaking of getting paid though, Chad. Let's get to Indeed. Which aside from OnlyFans, I think is our full bingo card is full for all of our listeners. It seems like your Indeed resume subscription will be replaced by Indeed Smart sourcing starting on April 2nd. There are some changes to pricing and features such as a price freeze for standard subscriptions, but an increase in additional contact purchases to $5. Professional subscriptions will see a price increase to $400 per month with unlimited additional contacts and shared contacts pricing at $4. The new features in Indeed Smart sourcing, that's a mouthful, focus on automation, matching technology, team collaboration and productivity and probably AI too. Anyway, Chad, what are your thoughts on the Indeed pricing?

Chad: You'd think they'd learn. Just changing the name of something doesn't mean that they can just go raise prices. They tried that with the CPSA or whatever the hell they want to call it. Cost per started apply. And that got... That went down in flames. It's like, okay, we're gonna change the name. We're gonna add some of this matching... These great matching algorithms, which we've talked about all the time. LinkedIn, Indeed. Most of these companies who should be amazing at matching candidates to jobs are shit. So all you're doing is giving me your shit tech and then you're charging me more for all of this. No, no, thank you. I wanna go back to the cheaper version, which is not gonna be available. So the question is, will this "pilot" actually be kicked to the curb after all of the people are like, no fuck you. I don't want that. I want what I had.

Joel: Yeah. It's easier to get under the radar when it's part of your like terms and service. Or sort of a term terms and service still. Look, this to me is like, okay, customer, you don't want the PPA, you don't want other pricing model. We're gonna stick it to you in a much more subtle way with smart sourcing or like... Of all the names, not like a growth industry, sourcing. Why they would pick, like why not just the Indeed resume coal mining project or something. This is like, we're gonna make money no matter what. We're just gonna do it in a more covert way than we did before. As we're talking about history, Indeed's initial resume access product, you probably remember this, was a dollar per resume.

Joel: If you wanted to contact the person, it cost you a dollar, which I thought was beautiful. Like, okay, I see the resume. If I wanna contact this person, I gotta pay a dollar. Like, that's easy. So this is sort of a nickel and dime. It looks small, but it's probably bigger at the end of the day than it was before. But yeah, Indeed, we see you, we see what you're doing. And now all our listeners see what you're doing too. And I hope you get to field a lot of phone calls asking about this new pricing model. This new Indeed Smart sourcing product. Tell them Chad and Cheese sent you.

Chad: They'll never learn. They Just won't.

Joel: They will never learn. They'll never learn. So evil. All right, man. Let's take a quick break and close them with what they want. A little OnlyFans news.

Joel: All right, Chad. Drea de Matteo known for her role in the Sopranos...

Chad: Oh, hello.

Joel: Credits OnlyFans for saving her life. No shit.

Chad: What?

Joel: Stating she paid off her mortgage in five minutes joining the platform facing financial difficulties due to being out of work and caring for a parent with dementia, she turned to OnlyFans after having just $10 in her bank account. Chad, what are your thoughts on this life-saving technology called OnlyFans?

Chad: Well, two things. First off, just five minutes? And secondly, if it only took five minutes, I wanna see those pictures. 'Cause they've gotta be amazing. They have to... Five minutes to be able to totally just blow away somebody's debt. They've gotta be amazing. She's 52 years old. She looks wonderful, but you'd better be able to see the Jesus toast or something like that out of this.

Joel: Well, it highlights the power of OnlyFans, and how many just horny dudes are out there ready to spend some money. If if you don't know her, she was in Sons of Anarchy. She was the girlfriend or sort of the mistress of the main character, but she was also in Joey.

Chad: Really?

Joel: The spinoff from Friends. Do you remember Joey?

Chad: I do not. I never watched it. No.

Joel: Oh, did you watch Friends?

Chad: Oh yeah, of course.

Joel: You weren't too good for friends, were you?

Chad: Yeah.

Joel: So Friends is over. Joey Tribbiani, he gets his own show. He moves to LA. She played his sister in the show. Her name was Gina Tribbiani. So she was in that. So if you don't know her from the Sopranos, which nobody watched, you probably watched Joey and you remember her from that show. So she was apparently a big anti-Vaxxer. And she went on interviews and she was blackballed by Hollywood apparently, this is part of her story. I did love what she said. She says, "anybody who wants to condemn me and put me down, go for it. I just hope you never find yourself in the position I was in to take care of two little kids." Her house was in foreclosure and she had lost her mom. Like she was in bad times and this thing bailed her out. So the old adage of those who live in glass houses should not throw stones. Drea, like you said, Chad is her age. 52, looks great like us. So if this isn't a sign that Chad and Cheese should finally launch our highly anticipated OnlyFans page, then I don't know what is. I mean, come on man. I got three kids still at home and you got a blossoming real estate empire in Europe. Let's do a Thalman Louise. Let's hold hands and jump off this cliff together. What do you say, lover boy?

Chad: No.

Joel: Shit.

Chad: We out. We out.

Outro: Wow. Look at you. You made it through an entire episode of the Chad and Cheese podcast. Oh, maybe you cheated and fast forwarded to the end. Either way, there's no doubt you wish you had that time back. Valuable time you could have used to buy a nutritious meal at Taco Bell, enjoy a pour of your favorite whiskey or just watch big booty Latinas and bug fights on TikTok. No, you hung out with these two chuggle heads instead. Now, go take a shower and wash off all the guilt, but save some soap because you'll be back. Like an awful train wreck, you can't look away. And like Chad's favorite Western, you can't quit them either. We out.

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