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David Francis: It looks like we are live. Hello, welcome. Thank you for joining us. Welcome to the second session of the World Staffing Summit technology day, my name's David Francis. I'm the Vice President of Talent Tech Labs research. Those of you that were on the the the opening session. You know who I am for those who haven't met me. I'm based here in California Talent Tech Labs, a research and advisory for focused at the intersection of talent and technology kind of exclusively focused on how staffing firms in large corporations can leverage technology to transform their business.
David Francis: Excited. You can join us today. Our session is titled disruption or opportunity the platformization of staffing. And again, for the folks that were that were just on the opening session, we had like a kind of an extended segment on this topic, trying to set context for the conversation that we're going to have today are, you know, hypothesis is that the, you know, the rise of online labor markets and staffing platforms is both of a threat and in an opportunity and there's a variety of ways that staffing firms can react or play. And so what we've done with the session is we've got a couple of companies that have built platform businesses in different sectors and scale those and had phenomenal success. And we've got a staffing executive as well.
David Francis: Who's had some of these conversations around. Actually, I worked for some of these systems in the staffing business. And so we're going to have kind of two sides of the conversation around, you know, what are the opportunities here are the different ways that companies can play. And you know, what might you do with a couple of rules of the road?
David Francis: Yeah. This is going to, you've got a kind of open Q/A, so, I'm going to kind of see the conversation, but we'd love it. If you all could contribute questions. As well. I'll start by introducing our panel here. We have Yong Kim who is the founder and CEO of Wonolo. On demand marketplace for hourly workers.
David Francis: We have Matt Pierce. Who's the founder of Trusted Health, a platform for travel nurses and Ralph Henderson formerly an AMN executive. Who's a current operator in private equity. And I think maybe let's do kind of an extended introduction if you all could. And it would be great to you for Matt and Yong.
David Francis: If you could talk a little bit about your businesses, kind of what they are and what you do, how they were built. And Ralph could talk a little bit more about your background and kind of your relation to this topic. That would be great. Maybe we'll start with you.
Yong Kim: Great. Well, thank you so much, David.
Yong Kim: So this is a Yong really excited to be here. So we are a labor marketplace. That's connecting companies with workers through our software technology. We prime primarily focused on the light industrial commercial staffing space. And the way we came up with a solution just for full disclosure.
Yong Kim: I don't have any staffing background. I never came from the HR background, but back in 2013, I spent some time with a team at Coca Cola, especially on their frontline operations. So I spent a lot of time shadowing and, you know, spending, you know, working with the team. They're a warehouse supply chain, merchandising, operations, and logistics, then while spending some time there I noticed that, you know, one of the problems that they were faced with operationally was just the constant ups and downs of the staffing needs at the frontline levels.
Yong Kim: So for example, at their warehouses at any given day, there'll be. Anywhere between 5 to 20 shortfalls in terms of the staffing level and whenever they were faced with you know, workers shortage, they would, they'll be scrambling. And you know, as you know, Coca-Cola is a huge company, one of the largest companies in the world, they have strong relationships with many staffing companies like Randstad and Adecco. But whenever things like this even happen, you know, the big staffing companies like Randstad and Adecco really address the issue. So when I saw that this was happening at Coca-Cola and no one could really solve the staffing shortage issue that was happening.
Yong Kim: On a daily basis I became really interested in the problem and started talking to companies outside of Coca-Cola small, large, medium, different verticals and realized that. This mismatch between, you know, companies having the need for workers and then workers needing jobs, but somehow two sides were not finding each other.
Yong Kim: It became really fascinating to me. So, you know, I thought about ways to solve this problem using technology and through that effort when Wonolo was born I was really excited to share more about the story and how we differentiate. But that's kind of the background of Wonolo.
David Francis: Excellent. I appreciate that.
David Francis: Great. And Matt, why don't we, why don't we shift to you?
Matt Pierce: Yeah. Thanks David. And first and foremost, just appreciate the opportunity to be here. Really excited. My name's Matt Pierce, I'm the co-founder and president at Trusted Health. Trusted Health is a platform and we're on a mission to help people everywhere get care.
Matt Pierce: And the way that we execute on that is really to optimize the world of staffing for healthcare. And so, as David alluded to, our starting point was really to build a digital platform to connect travel nurses with opportunities across the country. And as some of you may have seen, we actually launched a platform called Trusted Works, which is a platform for healthcare facilities to optimize their, you know, really their staffing model and that not only focuses on contingent labor and travel nurses, but that also optimizes their internal staff, which shift optimization and distribution. And so we launched that here recently, which is exciting.
Matt Pierce: Just a little bit of background on myself. I grew up in the world of staffing. I started my career at Tek System group company. And made my way up in the organization, into the executive leadership program. And at that point, really. Identified the wave of technology that was coming towards the world of staffing and just saw it as an opportunity to be at the tip of the spear and you know, really kind of overnight moved from Chicago you know, at, by traditional staffing job to Silicon valley and trying to just learn as much as I can.
Matt Pierce: And somehow luckily ended up at a startup and that was called developer auction and ended up transitioning to hired.com where I just learned a tremendous amount of you know, how to build a product and the trials and tribulations of a startup. And I think most importantly probably met my co-founder Lenny.
Matt Pierce: And from there Lenny's mom is a nurse and so she was kind of constantly asking hey, healthcare is struggling. Like we need a staffing solution that actually works for us. And around that time, actually, my brother suffered from medical error. All the light bulbs and dots connected for me on how important staffing is to ultimately delivery of care.
Matt Pierce: And so, Lenny jumped down the ledge and was like, Hey, I'm starting a company. Are you coming with me or not? And so I had my Jerry Maguire moment and enjoyed them. And we, you know, set off to start Trusted Health. And that was about a little less than five years ago. It's been a heck of a ride and excited to chat more about our journey.
David Francis: Brilliant and Ralph, why don't you tell us about your background, kind of where you've come from and what you're doing today.
Ralph Henderson: Yeah. Thanks and thanks for including me as well today. It's been a great week for the World Staffing Summit. I've been about 25 years now in the staffing industry. I actually started my career at. And then become part of Spherion. Now, part of Randstand I was there about 12 years and then I spent about 13 years at AMN Healthcare where I ran various healthcare divisions there.
Ralph Henderson: Kind of that platform or tech part of my story actually starts a little bit with Yong's. I was a vendor too. Coca-Cola and had to work on their system called Cayoneeds. And at the time there was some very basic applicant tracking systems around, but Cayoneeds was a slightly you know, an improvement on a tool that actually included the customer interface on it.
Ralph Henderson: And I remember thinking at the time, boy, if we could ever add the candidate side of this experience. And we can make it smooth and work effectively. There would be some real opportunities there. You know, from there kind of flash forward, you know, you've got kind of on the MSP VMS you know, it was part of companies that developed several different technologies to accelerate the placement of people in MSP marketplace.
Ralph Henderson: And then you know, more recent. Today man, we did implement a a mobile app which we worked up with actually Yong's Vermont when they were a very early startup to provide per diem nurses on a daily assignment basis. So this is those of you that know a per diem. Nursing is very much like industrial, that requests come in at the last minute.
Ralph Henderson: You have to contact thousands of people at once and deploy them out to work. So, You know, a very effective way to get into business without starting from scratch. So, you know, partnered with them to do that. We also had developed an internal tool for travel nursing. So we kind of treated those two markets separately.
David Francis: Brilliant. Well, welcome. All three of you, the way we're going to kind of, I think I'll kind of structure. This conversation is one kind of on some dynamics on, you know, what's driving. The platform model, what's driving the growth in, in, in your businesses. And then we'll shift a little bit to the, you know, staffing point of view and you know, ways to play.
David Francis: And then we'll kind of see what kind of cohabitation, you know, might look like. And first question, I just want to ask, you know, you'll learn or Matt, I'm curious to get your thoughts here, like, you know, in, in your view, like what's the difference between what you all are doing and a traditional staffing agency.
Matt Pierce: Yeah, maybe I can hop in here first. I think there's kind of two ways of thinking about it. And they probably converge in the middle because it's like, you know, there's a spectrum of an answer here. And what I mean by that is I think there's an answer that is, there is no difference.
Matt Pierce: And because the job to be done ultimately for us is to connect the right talent. So the right opportunity in the most cost effective time, efficient manner. Right? And so I think the job to be done is the same, but on the other side of the equation, the other answer is that we're fundamentally different because we're a technology company.
Matt Pierce: And so we're a technology company that executes on the job to be done, which is staffing. And so, you know, we are fortunate in many ways where, Yong and myself and our respective companies started on the foundation of building a technology first with a technology first mindset. And so we have the opportunity to create a tremendous amount of efficiency and digital solutions to execute on that.
Matt Pierce: And so it depends on which way you answered the question, but ultimately, you know, we're operating in the same arena and we're trying to. You know, solve a problem for our customers, which are job seekers and those who want to engage them.
Yong Kim: Yes. I'll chime in here and add a few more points. I absolutely agree with Matt. The set of problems that we're trying to solve is the same, the results that we try to get to the goal of they're all the same. But the approach is quite different. So I'll give some examples on that. So when you look at the structure of the traditional staffing agencies, it's largely based on.
Yong Kim: Headcounts of recruiters, you know, field operations, people, account managers, and that makes up for about 80, 90% of the workforce within staffing companies. If you look at tech marketplaces or platforms like ours that structure, you know, formation of the team is quite different.
Yong Kim: So we have more than you know, 30% of the workforce. So basically the internal team at Wonolo consists of, you know, research and development. So these are largely product managers, engineers and proportionally. We have viewers, you know, sales or ops team members compared to staffing agencies and Wonolo specifically, we don't have a single recruiter and recruiting is done all through technology and software platforms.
Yong Kim: The way we approach it is, you know, we look at a set of problems that we're all trying to solve and to solve that problem, I mean, with those problems, you know, you can either approach from the tech first view or, you know, human centric, nature. And we tend to view the world. Okay, can we solve this through tech?
Yong Kim: If we can solve through tech immediately, then can we eventually get there? And that has always been our approach. And the second part that I say is when it comes to the worker side in particular you know, staffing. You know, industry as a whole is still largely viewed as very much the customer or client centric, but on the worker side, we very much look at it as, you know, what does it take for us to really win the mindshare of the broader set of hourly workforce that may not even be aware of the traditional staffing.
Yong Kim: You know, job opportunities. And to do that, we approached, you know, very much like how, you know, the traditional, you know, the typical tech B2C type companies, the approach. So like how, you know, the companies like TikTok or you know, Instagram go out and acquire users. And we've, we very much think about it from that way as well when it comes to a worker's act conditions.
Yong Kim: So I would say that those are two additional aspects to what matches here.
David Francis: Right. It's fascinating. Speaking of that, can you, if you're not you know, if you don't have recruiters, what are kind of your like candidate growth or acquisition strategies? Like how do you know, how do you get folks in the first place?
David Francis: Are you guys at a scale now where you don't need to kind of acquire new candidates? Because you got so many that are already in the.
Yong Kim: Yeah, we, I mean, we definitely want to continue growing and expanding, expanding our presence in mind shares, but typical acquisition channels are, you know, we heavily rely on digital acquisition channels, so social media other sorts of digital channels.
Yong Kim: And then we also rely on heavy referral. You know, the way we refer is quite different from how staffing agencies would do. So it's app enables you to click, you know, two steps and then all of a sudden you can reach out to a very broad network of your friends and family members.
Yong Kim: And then there is a strong like, you know, referral loop based on that. And then the last part is just words of mouth. You know, what would happen is You know, let's say that you are not on the Wonolo platform and then you're working at let's say warehouse, and then you also suddenly see new faces at the place.
Yong Kim: And then you ask them, Hey, you know, haven't seen you, how did you get this job? And they say, you know, I picked it up through Wonolo and then they download the app and then they start using the service. So there's a very strong kind of the. Network effect, that's kind of built into it. So those are kind of the three primary channels that we rely on.
David Francis: Got it. Fascinating. And you guys do have a Salesforce I'm assuming for going out and actually in selling to, to clients
Yong Kim: Yeah. So on the client side, yes, we very much have the large, you know, Salesforce that go direct, but also there is the indirect pool that we have built within the system.
David Francis: Got it.
David Francis: Okay. Any comments that you want to add there, Matt or Ralph?
Ralph Henderson: Yeah, we did. I would jump in it. I think they described the tech first approach and that's you know, firms like trusted Wonolo, you know, they, that's where they've started and they are migrating right. To be, become a platform that can serve all of their constituents.
Ralph Henderson: The traditional staffing firms actually start with. You know, a person first, a model and then they right. Technology to optimize over time. And so they kind of, the question is, can you get there as fast, you know, from this people first model and optimizing through technology, or are you better off going from technology first and then gaining your assets for on the people side?
David Francis: Yeah, that is the million dollar question. What's the answer? Do you have an issue? You took the question out of my mouth, man. What's the answer, Rob, which is better, which is. You know, what are your thoughts?
Ralph Henderson: I mean, I think both approaches are very good and reliable.
Ralph Henderson: I mean, if you take a look at other industries, like ride sharing started, but you know, tech first, but wiped out the taxi cab industry. Cause they, they weren't, you know, thinking about that customer experience and all of that. So I think that's the big advantage that the tech players have is that they have a lot of data.
Ralph Henderson: They understand the candidates probably that mini staffing companies do. And as a result, right, they built a platform that's, you know, very focused on them. You know, the staffing first approach, you know, it gives you a, you know, a legacy that, you know, you know, maybe in some ways holds you back.
Ralph Henderson: But in other ways, if you could shed it, you could move there. I don't think there's any option about whether or not a staffing agency needs to do this. I think it is probably going to become important for them to continue to thrive in the industry, just like it was for them to add ATS, get on the internet you know, understand now MSP works, you know, all the Griffin changes that have happened.
Ralph Henderson: I think this is just the next one that's coming their way.
David Francis: This is just an evolution of kind of already in the place that they're coming from. It's just different than they don't need to. So I guess maybe this, Matt, I do you want to jump in if you had anything else you wanted to add or we might kind of shift your little bit.
Matt Pierce: Well, yeah, I just one thing here that kind of connects some dots between Ralphs and Yong's point, which is, I think when you think about the different customer core cohorts, and when I say customer in this particular case, I'm talking about the candidate. When you think about those different cohorts, think about it in kind of the classic of like the crossing, the chasm you have, like your innovators, you have your early adopters, your early majority, your late majority.
Matt Pierce: And then your laggards. Right. And what I mean by that is when they're onboarding onto your platform, some of them are not going to be those innovators and early adopters and like to hop right in, build their digital profile and be completely, you know, touchless. Right. And so I think that the strong technology companies in this space understand where there's interventions.
Matt Pierce: From a human perspective, right? So we talk a lot about, and you know, for the last five years of these staffing conferences, we've always talked about the recruiter-less model. But the question is like we have a bad jobs problem from a staffing perspective and that bad jobs problem is like, nobody wants to just constantly be smiling and dialing and calling a bunch of candidates and getting hung up on.
Matt Pierce: But if you have a candidate that shows intent and you're just helping them cross that line, we have a. Role in our organization, that's called a nurse advocate and that nurse advocate just is actually a nurse and they meet the nurse along their journey to get them over the hump. And that is really kind of where they're at in that journey from when you think about it from a crossing the chasm perspective.
Matt Pierce: So I just wanted to connect some dots on where there might be some gaps for anybody in the audience there.
David Francis: Yeah. That's an excellent point. So somewhere in the middle, you basically just got to kind of, Two different approaches. Joe Rossi asked her, I have to be part of MSP programs.
David Francis: And if so, how has the experience been? Not only in the placement but does the MSP understand your value and support the solution? Jill, that's actually an excellent question. You again, have taken a question out of my mouth. So thank you for doing that. Might be a good time to broach it.
David Francis: And so, I know we've got some different opinions on participating in MSP programs, Matt, what's your experience been? You all, what's your experience been?
Matt Pierce: Yeah. I mean, my 2 cents here is the MSPs and the travel nurse staffing industry have been like incredible partners to us and getting out of the gates.
Matt Pierce: What allowed us to tremendously grow was we just had a 100% maniacal focus on the travel nurses experience. And the demand side of our marketplace, where the jobs came from, was 100% MSPs. So we plugged into those partners and we said, Hey, look, we execute on the same job that a staffing agency does.
Matt Pierce: We're going to deliver travel nurses better and faster than anybody in the industry. That's our promise. And we're going to execute on that promise because we're taking a tech first approach and we can help you deliver on your promise to your end customer, which was the hospital. Right? And so we, you know, for several years only operated as partners with MSPs and it's been an incredible opportunity to have focus as a startup, which is, you know, really important in the early days.
Matt Pierce: And so they've been great partners to us and still are.
Yong Kim: So from our perspective, we took a different approach. So we do not work with MSP or VMS environments at all. Because you know, when we first developed our solution and started meeting with customers, it was very clear that what we were offering was viewed as something so, so different. Right. So we would go to the customer and say, Hey, I see them.
Yong Kim: Ron's not delivering, you know, 50% of the jobs that you're trying to fill. We're not asking a lot, just give us maybe 5% of what's getting unfilled, and then we're gonna solve the problem for you, like at the end of today. And oftentimes the reaction from the customer. Hey, you know, Hey Yong, you're a tiny startup.
Yong Kim: If Rondstad can solve this problem, how are you supposed to solve this problem? And not only, you know, assault a problem, but you're saying that you can have the candidates by the end of the day. Like, I just don't believe you. I don't trust you. And then I tried to show them the demo and this is how it works.
Yong Kim: And then the customers are. This doesn't make any sense. Like I haven't even seen these candidates. So there was a very strong reaction and a resistance from our customers to adopt a solution like Wonolo, because there was just no trust factor. So, for us our realization was that for us to really evangelize the labor marketplace or platform like ours.
Yong Kim: We have to ensure that the customers are fully educated. And then if you, if we have a layer in between us and the customer through MSP and VMS network customers would never change their behavior around how they adopt a solution like us. So it took a while for us to get going because we weren't going to abrupt every single time.
Yong Kim: And oftentimes we would either be side-by-side with MSP. We just targeted ones that didn't have the MSP relationships. So our current strategy is still to you know, build our own and educate customers on why we are offering something that's fundamentally different. You know, Potentially supplement what they're using through MSP or at VMS.
Yong Kim: But what we are proposing here is quite different. We may solve different types of problems or offer different value propositions. And that's been our strategy so far.
David Francis: That's amazing. And you've had some success, you know, might've been pretty hard early days, but as I understand, you've been, you know, Successful building direct kind of channel your own channel, basically directing to clients to do some of this, which is, you know, scary if you're an MSP and, you know, exciting if you're, if you are you so, want to talk about basically like what a staffing companies do here, right?
David Francis: So there's a few options. I'm curious Ralph, actually, to hear kind of the story of, so, there was actually some use between, you know, you know, where you used to be at and Yong there's kind of a couple options for staffing companies. One is you can try to build something from the ground.
David Francis: And another option is you find a company like, like, like, like a Wonolo or or one of these other platforms that's kind of in a segment that you serve and you see if you can broker some kind of strategic partnership or maybe you will acquire them. So I'm just curious, can you talk us through what that experience was like when you guys, you know, lack of a better word.
Ralph Henderson: Yeah. Yeah. Our journey actually predates dealing with a Yong as well. Our board was, you know, kind of observing what was happening across the country with, you know, Amazon and Lyft, Uber and others. And they really were. You know, starting to think about, you know, what other more matchmaking type businesses, you know, where their work would be disrupted.
Ralph Henderson: And they put us, you know, very likely to be disrupted early on and out profitable. So we were looking, gosh, Maybe 2010 at firms like it's cool. I think it was in Switzerland that was doing another company in France. I think it was a brigade or something like that was doing it was deploying a workforce for events.
Ralph Henderson: And so we were, we're kind of looking at what was happening and other places in other industries. And then that, that became the burning platform for us on the decision about whether to buy or, you know, Well, you know, or bill, there was no buyer at the time. I think there are some options now where you can, you know, acquire third party or even white label software and options didn't exist.
Ralph Henderson: So for us, it was, you know, could we buy somebody? I think we approached just about everybody in the on-demand staffing business to see if anybody wanted to sell. Nobody did. And so then we started working towards a partnership with Wonolo and we made investment in them as well. You know, we kind of, we believe in the company we believed in the management team, the board that was, you know, very successful in their past endeavors.
Ralph Henderson: And so, you know, and then we dug into the technology and, you know, and so we, you know, we went that route on the decision on whether to do that or build it yourself. I'm all for, you know, doing stuff in house, but I felt like unless you're a super technology. Staffing company, that it would be extremely difficult to build it yourself.
Ralph Henderson: You know, so if you've had a product, that's actually had consumer success before maybe but you might've had business to business success. We may not have had a business to consumer success. I would say very unlikely. You could be successful. You. I kinda have to look at yourself. Are we, you know, still a traditional staffing company, are we becoming more of a tech provider and where are you on that continuum might define, you know, whether you acquire, whether you know, you rent or lease software or you try to develop, but I shy most companies away from developing.
David Francis: Yeah. And on the, I mean, there's, we're at a point now at the time we've gone from one end of, you know, at the time there weren't any, you know, companies you know, for you to license from now, there's like a plethora of them. And on the, you know, builders side they might not have wanted to sell to you.
David Francis: But now a lot of these platforms are probably at a point where they'd be too expensive to buy. Except if you were at the, you know, You know, even for the largest companies that might be kind of without an out of the budget at this point. So the partner or or licensed.
David Francis: So speaking of that, you know, I know there was, you know, there's a category of software, which is basically replicated, you know, what you all do. And it's trying to, I guess, for lack of a better word, arm the rebels and help staffing companies kind of, you know, become more digital native and look to have more of a platform offering, you know, do you guys see that as a competitive threat?
David Francis: Are you worried about that at all? And if not, you know,
Yong Kim: Just curious right here, if I just want to make sure I understand your question. So
David Francis: I'm curious like a, for a, you know, like the other session that's going on right now is that it's called like how to implement the deployment platform. It's so it's, you know, Integrity Staffing, for example.
David Francis: Basically how they went in licensing the software. And they're trying to develop these capabilities coming from obviously as we've already kind of talked about a different starting place. Right. But they're kind of moving towards solving the same problem and they're trying to get more tech enabled to do that.
David Francis: And so, you know, like I guess there's just, I'm curious about two things. One is just, you know, is how competitive do you see that? Is it a, you know, a risk factor for you at all? And I guess in the future, basically, where does this go? Like how, where in our, we all platforms in five years from now?
Yong Kim: Yeah.
Yong Kim: So on the first question, I'm not too worried about it. What we have realized while building Wonolo is that even though the problem that we're trying to solve, so, you know, connecting companies with workers and, you know, ensure that both sides are happy just to make that happen, you know?
Yong Kim: So from. The clients need a certain amount of workers and to all the way to workers getting paid on time. And then they come back to the job just between that time. Like there are hundreds of things that can break along the way. So like for example worker sets. Yeah. I'll show up at 8:00 AM.
Yong Kim: And the worker doesn't show up, like, how do you solve that problem? You know, the, for whatever reason, the worker put the wrong, you know, made a spelling or typo in the bank, you know, bank account information so that the workers not getting paid on time, all these things, like there are so many things that can break and the the way we think about approaching every single problem that needs to happen.
Yong Kim: So. At the end of the day, two sides are matched and that they're having an amazing experience. Like we have to solve every single problem either through technology or operations. And when I think about how the traditional staffing companies approach using, you know, Wonolo, like, you know, software to bring that experience I think some of the things that need to happen are not happening.
Yong Kim: So for example the adopting a software solution, like this is not a, it's not a tool set. It's not like you know, bio, I don't know, payment software. And then all of a sudden, like, like you started cameras, fed software. Yeah. Something like that. Right. So, what this means is that you, as a staffing, traditional staffing company, I have to be okay with bringing a real change management.
Yong Kim: So for example you know, one of the things that you know, we work with other staffing agencies too. And one of the things that we are very clear with staffing agencies is that, Hey, once you adopt our solution, it would mean that you may have to close down hundreds of your branch offices, because.
Yong Kim: The work that your team members at branch offices are doing are actually going to be done by the software. Are you okay with that? And oftentimes they're not okay with it. So, so, so then they deploy this expensive software. They're trying to get their team to adopt it. Somehow they fail at it and it just becomes a shiny tool.
Yong Kim: So unless staffing agencies are really willing to. Take the next 18 month road to the pain points of completely transforming the way they do their business. Right. I think that there's a danger that we're going to adopt it and hope that this software solves the problem, but that's usually not the case.
Yong Kim: So because of that we're not too worried you know, whether it's the traditional staffing companies trying to build their own or you know, buy software solutions and then implement it in-house so that's kind of, our thesis.
David Francis: Okay. That's fascinating. You've done it. You've done the work of making a marketplace, you know, And that kind of goes unseen.
David Francis: You just see the front end of it. And you think you could buy the front end to make the whole thing work. Yeah.
Yong Kim: All the you know, nitty gritty details that are happening behind the scenes. Those are not well captured when you just buy a software solution. Yeah.
David Francis: Matt, anything that was to go ahead.
Matt Pierce: Oh, I was just gonna touch on two additional points here. One is that you know, I think there's been several people who have chatted about this. I think David, you had alluded to Marc Andreessen's quote, just to say. Each kind of sub category of job and whether that be industry or even down to the specific job category, is it going to be verticalized?
Matt Pierce: And so we think about nurses as like 20 million nurses globally, 4 million in the United States. When you talk about a nurse staffing company, You know, plugging in a technology, it better be, you know, focus. If you're trying to compete with those who are building technology, staffing you know, products in the nursing space.
Matt Pierce: It has to be really focused because there's a lot of nuances, which, you know, Yong alluded to that make it really challenging to do that. So you're not just going to be able to plug in and make it happen.
David Francis: Double working vertical challenge. That's the reason I think the growth has been more sell on vertical platforms because it's like the whole platform is optimized around all the specific nuances inside, you know, all the workflows and stuff that comes up in that one particular.
David Francis: Yeah. Go ahead.
Matt Pierce: You have healthcare. It's like you have shift differentials, you have licensure, you have verification service. Like you have all of, you know, that's just like a small hint of what it takes to connect the right talent with the right opportunity. And then I think just really put a magnifying glass on what Yong said.
Matt Pierce: I came from a trip. I came from the traditional staffing world. The biggest challenge. To really making the digital transformation is the culture change in the organization. Like you're going to need to create a separate skunkworks team. They're going to need to create an environment that is like, you know, a life or death environment.
Matt Pierce: Like if a startup doesn't isn't successful, they're not going to get money and nobody's going to have jobs. Are you going to create that environment in your, you know, large staffing? And that's the kind of way in which you get hyper productivity and hypergrowth. And that's why startups work and have done so for a long time.
Matt Pierce: And so you have to create that culture change of innovation and disruption and high pressure in somewhat of an organic way. And that's really hard to do,
David Francis: right. Particularly in an environment where you've got, you know, Folks who have done stuff a certain way for so long. Did you run into any of that Ralph, when you guys were deploying, would you consider that partnership a success or were there issues?
Ralph Henderson: Yeah, that's a good question. We, I would consider it as a success, but I think we had the challenges that Matt and Yong are talking about, which is, you know, we were using tech to enable our strategy rather than making our strategy tech and You know, it did struggle a little bit, particularly at first.
Ralph Henderson: I think, you know, over time I think adoption rates went up a lot and I think they had a lot to do with the candidates and the end user experience. They were more comfortable working on their mobile device and they, you know, then, you know, getting a lot of phone calls and things like that. So the, you know, you know, in time I think, right, that you know, some of those businesses, you know, will transition to be, you know, kind of tech first.
Ralph Henderson: There, you know, it wasn't easy to do internally. I totally agree with what everyone has to say. I just feel like if you can get it and make it your strategy, then you know, you got, you could do it that way, but just thinking of it as another piece of software that enables internal processes you're almost wrong to think about it.
Ralph Henderson: Yeah. Cool.
David Francis: So, two other big picture topics I want to get here. The first is speaking of there's kind of an interesting dynamic that came out where we were. We were having our prep call where there's kind of the big company. Small technology company, a dynamic that happens. And it probably will be the same if it was even a small staffing company trying to partner with us you know, a small you know, startup.
David Francis: And that is like, there's this congruence between basically trying to, you know, meet the needs of you know, a possible strategic partner in the staffing industry. And kind of also execute on your own kind of mission. Do you maybe, you want to articulate maybe some of the challenges that happened, you know, kind of in the early days when you were, you know, trying to execute against that.
David Francis: And I don't know any advice for builders or staffing companies on.
Yong Kim: Yeah. It's so we've met with a lot of large staffing companies over the years and you know, they, their boardroom discussion, you know, definitely has this topic very much on their mind, right? Like, how do we. Innovate, you know, how we do things within the company or how do we adapt the new innovative technologies internally?
Yong Kim: And, you know, whenever I meet with them and they approach us by asking like, Hey, we want to partner with you. We want to adopt more technology internally. The question that we always get blocked on is okay. Let's say that the partnership becomes incredibly successful.
Yong Kim: What does. And you know, company look, look like, right? If you want a solution like this, then does your company look differently or. It is this going to be just one of the, you know, Salesforce or Paychex or type tools that in your mind? And oftentimes there's, you know, the large companies have a hard time answering that as to what that really looks like.
Yong Kim: So, so then the question, the next question is, okay if a company like Randstad or to start from scratch today, so let's say. The, they forget everything that they have built in the last 50 years. And then let's say that they have to start from scratch. Like again, like what would then the company look like?
Yong Kim: So, a lot of the fundamental questions that drive the potential changes within the large companies, those questions are really hard to answer. And then there's no strategy in both as well. And so until that part is very clear. Either them approaching, you know, top on players to either partner or acquire the probability of successes is quite questionable.
Yong Kim: So as a result of that, I think it really goes down to the question of like, are you willing to take the risk of potentially. Foregoing a lot of the things that you have built in the last year, multiple decades. And if you're willing to take the chain that I take that risk, because you believe that in the future, you can actually see, you know, multiplier effect by adopting fully adopting technology like this.
Yong Kim: Then I think it's a, it could be like a wonderful strategy, but without, you know, willing to take that risk of losing what you have. I think it's really tough. I mean, that's my view. So, I mean, there's numerous examples, right? Like Netflix when they started as selling or renting out DVDs and then they have to go from DVD business to streamline streaming businesses.
Yong Kim: It was like a internally like very very tough decision for critical business. Right? So they made that change. So the question is like our staffing companies like Randstad, Adecco, all the large ones. Like, are they willing to do that? Like, are they willing to go from $20 billion of revenue?
Yong Kim: All of a sudden to potentially maybe half of that and all of a sudden losing all of their profits because they believed that in the next 10 years, like, Come on. You've been in a better place. I just don't know.
David Francis: What would their investors forgive well, we're, we've got Randstad on a panel later today.
David Francis: So I'll ask him exactly that and we'll find out what he says. It's a brilliant point. I think Matt, you guys actually wouldn't. I mean, you wouldn't even consider a strategic partnership like leveraging letting another staffing company license your technology with you.
Matt Pierce: No. I mean, we work with other staffing companies.
Matt Pierce: I alluded to it previously, such as you know, we staff into MSPs, but no we don't have a product in which allows other staffing companies to license our software. That's not something we've ever really considered.
David Francis: Got it. So the the another strategy we've seen, and this seems to be kind of earlier earlier days here, but it's actually pretty fascinating and quite honestly kind of exciting to see is so normally the conversations revolved because of kind of the power dynamics of, you know, kind of start up versus, you know, the incoming industry it's been, you know, oh, could we acquire one of these tech companies and power our business, but we've seen some.
David Francis: You know, technology builders go out and basically part of their go to market or the client acquisition strategy is like going and buying small staffing companies that want to sell and sell. You know, you guys both just raised a pretty substantial amount of money. Are you in the market to buy, you know, staffing companies and use that as kind of a kind of inquisitive.
David Francis: An acquisition strategy and they wander the platform.
Matt Pierce: I think one way I can answer this is
David Francis: That's okay. But I'm just a,
Matt Pierce: Yeah, I think one way I can answer this without directly answering it is looking at like, taking a venture or private equity point of view on this, which is. At the end of the day, you have to look at a CAC to LTV ratio, meaning customer acquisition to lifetime value equation.
Matt Pierce: And so, you know, us as trusted are going to look at what is the cost to acquire customers. And in this case, that could be either job seekers or healthcare facilities looking to use our technology and, you know, what is the lifetime value of those customers? And, you know, there's several different ways in which you can execute on that job to be done one way is to go out and build a sales team to digitally acquire those customers to acquire them by acquiring companies.
Matt Pierce: And so I think trust is a point of view. We, as, you know, intelligent and hopefully intelligent business people are looking at all different avenues on what's the best CAC to LTV ratio to make our business successful. And you know, that's our point of view.
David Francis: Very analytical way to look at it.
David Francis: Matt, you might've missed your calling as an analyst or as a strategy consultant. Yong you have , do you have a similar point of view or different point of view? What are your thoughts on it.
Yong Kim: Yeah, it's very similar. So there's. Economics perspective that Matt alluded to.
Yong Kim: So if it becomes a cost effective channel, like one of the channels to acquire the clients and then the workers then strategy, I think the other angle is like, what is the adoption rate of your new technology going to be with the set of clients and the workers that you're acquiring? Right. So. If you let's say that you are looking at a potential acquisition target, it's a smaller staffing agency in a specific market than you, who you want to get into.
Yong Kim: Then you have to think about, okay, are you just acquiring a traditional agency? And that you're letting it run as if it's, you know, the traditional way, or are you trying to transform the agency into the way you operate? And if it's the latter then you have to think about it. You know, how likely is this cohort of customers and the workers willing to adopt your way?
Yong Kim: And then what is that transition going to be like, if they're not willing to convert then, you know, then there is a risk that you are actually operating like a, you know, a standalone traditional agency. And if that is the case, will there be real synergy through the acquisitions? So there are, I mean, theoretically it sounds like a logical step, but I you know, we definitely approach it in a, both analytical and then adoption perspectives.
Matt Pierce: Yeah. What one example here is I won't name any names, but there's an organization who is side by side building sales and growth. And seeing what the cost per acquisition of customers is on that.
Matt Pierce: And then they're like AB testing, a Corp dev team and acquiring this small local regional you know, staffing agencies and seeing what the costs and conversion is of that. So that's just, I wanted to paint that as as an example to kind of back into the CAC, to LTV unit economics bureau.
David Francis: Right. I'm going to, well, personally, I'm going to be fascinated, you know, I guess on all, like, whether that, I'd be curious to see what the CAC to LTV is on an acquisition versus, you know, hiring a sales team go to market and try to do it. I know for the companies that haven't been successful in platform business, that's been one of the challenges like selling, right?
David Francis: Like you'll use survive the hard times of customers being like, I don't get this and, you know, so like acquiring you know, an agency like. Some of that. Cause you've got the, you know, the client base kind of you're buying the client base and you've at least hopefully can help them get over that hurdle.
David Francis: Right. I'm personally going to be curious how this develops, you know, two or three years. And on that note, you know, the question is what happens 2, 3, 5 years from now. You guys have, you know, had a, had an incredible run so far, you know, where do you go from here? You expand horizontally.
David Francis: What kind of the future looks like? And it really wants to profusely look like the whole market, right? Like what are you expecting kind of the competitive landscape to look like in like three, five years from now,
David Francis: Anybody of you feel free to chime in?
Ralph Henderson: Well, I'll jump in just from the staffing company perspective. I think in five years you will see, you know, all of the majors, you know, most of the mid-market companies will. You know, some sort of a tech platform to enable that relationship between the candidate and the customer, you know, to be primarily digital But I also think that some of the firms that started as tech only will also catch up.
Ralph Henderson: There'll be mid-market. They may even be in the large category by then, by the kind of the five-year mark. So then I think that's where the competition will get super interesting. And right now I don't think anyone's super concerned. They all know what's going to happen, I think, but they haven't, they aren't to the point yet where they think.
Ralph Henderson: So when they get their backs up against the wall the big staffing firms have survived a lot. Right? You think about her and then the VMS industry you know, vendor neutral models and things like that. Staffing industries responded appropriately. And, you know, in often case, right. They hire from the tech industry to go run the staffing firms.
Ralph Henderson: So they get the change that they need internally.
David Francis: Right now the industry is at record levels of revenue right now. Right. So. So yeah, maybe you can speak, you feel, you might feel tempted to be comfortable, but, you know yeah.
Matt Pierce: Yeah. As far as trust goes, you know, we are laser-focused on our mission to help people everywhere get care. So what that means is we're laser-focused in the healthcare space. Our initial go-to market was to build a digital staffing solution for travel nursing. And so we worked on that.
Matt Pierce: You know, our first three years would even, you know, nothing else just that only, and over the past year, we've been focusing on trusted works, which is really a healthcare staffing platform for healthcare facilities. And that expands our capabilities from the demand side. So healthcare facilities.
Matt Pierce: Engage. Any healthcare professionals, nurses, allied healthcare professionals, et cetera through a myriad of different agencies, trusted health you know, staffing solution, not being the only one. And so that's a little bit of foresight into our expansion, you know, throughout the healthcare category.
Matt Pierce: So that's a trusted point of view. And then, you know, as far as the industry looks, I think, yeah, staffing. Is a laggard you know, over 50% of the fortune 500 companies from 2000 are no longer in the fortune 500 because they haven't really made the digital transformation. And I think staffing needs to look at themselves in the mirror and you know, start making those big, difficult decisions.
Matt Pierce: You know, as Yong alluded to, to kind of bet the company on what the, you know, what the future looks like. And I think all of us would say there's a lot more digital solutions in tech platforms that can, that are going to be at the top of the. In five years than there are right now. So I'm excited you know, to play our part in that
Yong Kim: I'll add that, you know, one thing that, you know as someone that's coming from no staffing and HR background, you know, one of the biggest lessons that I learned you know, while building one, the last, you know, seven, eight years is to. Staffing, industry's just incredibly complex. Because we are, we're dealing with humans, like you know, the end, the customers that we're serving our people workers that.
Yong Kim: That you know, where jobs are, you know, one of the most important things in their lives and, you know, you know, having the income opportunities is just critical part, and because we are dealing with such a critical part of the lives of humans you know, there are just a lot of complexity around it on predictability you know, related to human behaviors.
Yong Kim: I think that's what makes the industry so exciting and you know, opened for more innovations happening. It's not just about connecting workers with companies, but innovations can happen around, you know, benefits or how you pay them. Like nowadays you hear about, you know, pre it's a fun conversation to have around that yet.
Yong Kim: Yes. And background checks. Sourcing. I mean, there are innovations happening in all different ways. So, you know, our focus is, has always been serving the frontline hourly workers that have not been you know, not felt like they had the voice and years. So we want to continue focusing on empowering the frontline workers.
Yong Kim: And we want to be able to find solutions around, you know, how to really help them. I feel like they have access to more things through Wonolo then anywhere else or anywhere else. So that's kind of, kind of what we are focused on doing and building in the next, you know, five, 10 years. But in the meantime, there will be a lot of new entrances coming in to solve various problems within the staffing industry.
Yong Kim: And we're really excited.
David Francis: Phenomenal. It's been a great conversation. I want to thank all three of you. Incredible, thank you, Ralph. Thank you. Yong and thank you. Matt, I appreciate this. We've had a bunch of folks like kinda, kind of give a shout out here in the comments section. So wishing you both actually all three of you continued success and With that we will wrap up.
David Francis: And I will see everyone on the next session. We're going to talk about building a billion dollar business. Cheers everybody. Thanks guys.
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