Pete Lamson is the CEO of JazzHR with offices in Pittsburgh and Waltham Massachusetts.
QUOTABLE
“And since then we have wonderfully seen a steady climb back. As of right now, our total jobs listed, we gained about 50% of the total jobs that we lost. So we went from 120k to about 100k, and we're now back at about 110k, and that continues to grow on a daily basis.”
FULL TRANSCRIPT
Pete Lamson:
This is Pete Lamson, CEO of JazzHR. And I'm next on the RecTech.
Speaker 2:
Welcome to RecTech, the podcast where recruiting and technology intersect. Each month, you'll hear from vendors shaping the recruiting world along with recruiters who'll tell you how they use technology to hire talent. Now here's your host, the mad scientist of online recruiting, Chris Russell.
Chris Russell:
Welcome to the only podcast that helps employers and recruiters connect with more candidates through technology-inspired conversations. If you want to know about the latest tools and tactics for finding talent online, this is your show. Your sponsor of course in part by our friends at Emissary, the text recruiting company. They have a number of ways to make texting into your recruiting process from short code campaigns, to text reminders, to recruiting chat bots. The team behind Emissary.ai will let you text your candidates and employees with ease and save you time automating those pesky recruiting tasks. Find them on the web at emissary.ai and book a demo today.
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Chris Russell:
All right, on this episode, we'll talk to the CEO of JazzHR, an SMB-focused recruiting software company based in Pittsburgh, and get his take on what they're seeing in the job market and learn about what else the company has been up to lately. Pete, welcome to RecTech.
Pete Lamson:
It's nice to be here, Chris.
Chris Russell:
Yeah. Glad to have you. I followed JazzHR for a number of years. It used to be called the Resonator, I believe right?
Pete Lamson:
Years ago, that's true. We've been JazzHR for some time, but our roots were as the Resonator.
Chris Russell:
Yep. That was great. I love kind of SMB-focused products like this, and it's great to see that you stuck around and really thrived over the last, I guess, 10 plus years.
Pete Lamson:
We were founded in 2009. So that's correct.
Chris Russell:
Yep. Nice. Excellent. So Pete, I happened to see a graph you posted on LinkedIn recently that showed an uptake in job postings by your 6,000 customers. I wonder if you could just tell me more about those numbers and go behind the scenes here a bit to what you're seeing.
Pete Lamson:
And I'm happy to do so, Chris. If you don't mind, I'd like just to start by addressing some of the domestic and share that like all Americans, I and all of us at JazzHR watched last week as some of the racial injustice that continues to plague our nation once again painfully and violently highlighted our need for societal change. Black lives matter. And JazzHR has 80 team members stand shoulder to shoulder resolute against racial equality of any kind. And certainly what we saw in Minneapolis and New York last week and what we've seen in our centuries long history in the United States needs to change. And if there's, in some ways, some good can come of this, it's certainly our hope that this brings about the change that is finally truly needed in the United States. So there are issues that are more important than business, and this is clearly one of them. And it's a human necessity. It's a moral imperative that we address this. So I wanted to begin with that.
Chris Russell:
Yeah, appreciate that.
Pete Lamson:
I think that's more important than anything else happening. But having said that, I know we're here to talk recruiting, which I'm excited to do. So to speak to your question or to address your question, just some context. JazzHR has a little over 6,000 customers, and as you mentioned, we're small business focused. So it's a good representative sampling of what is happening across the United States and small business hiring. And our jobs listed by our customers have grown approximately a little over 30% per year, year over year and certainly buoyed by the strong economy that has been taking place for the last decade really since the recovery began in 2009 and continued up until, let's call it, early March.
Pete Lamson:
So in early March we had approximately 120,000 jobs listed through JazzHR. And that had been just a steady monthly climb up into the right. And then we saw a really precipitous drop. We dropped approximately 20,000 jobs in a matter of just a few weeks. And it's what you would expect when at that time about 20 million, and now if the kind of headlines you think are true, we're somewhere in the neighborhood of 40 million unemployed Americans. So we dropped about about 20% of those jobs. So just a little over 100,000 jobs listed. And that was approximately in the period between March 10th and about the middle of April. And we bottomed out at that point. And since then we have wonderfully seen a steady climb back. As of right now, our total jobs listed, we gained about 50% of the total jobs that we lost. So we went from 120 to about 100, and we're now back at about 110, and that continues to grow on a daily basis.
Pete Lamson:
So certainly hopeful that the trend continues. I think realistically we will be impacted by the health headlines, which I think are leading and driving the economic headlines. And what I mean by that is as the states begin to reopen, if the infection rates stay reasonable or hopefully continue to go down, in particular if the horrific death rates continue to drop, and the health news ultimately is more important than economic news, of course, but if those continue to trend in a favorable direction and the reopening is successful, I don't think there's anything underlying or inherently wrong with the American economy other than the horrific pandemic. So I would expect that to continue to recover strongly.
Chris Russell:
So you see a good second half of the year.
Pete Lamson:
If not now. It's certainly happening right now. I would expect that to continue through the second half of the year and beyond, again, if, and the big caveat is if, the health news continues to be favorable. And we're all seeing these headlines every single day. I think there are pockets where the news isn't what we would all hope and certainly prayers for all the people that are going through that right now. But on the whole, the numbers are positive. I think it's the Northeast, New York, New Jersey and the Boston area that had been the hardest hit. And in all of those areas, while the numbers are still large and even comparatively large versus some of the other states that are reopening, but on a percentage basis and on an absolute basis there, the numbers are unequivocally trending down. So again, if that continues, it certainly bodes well for the second half of the year.
Chris Russell:
Yeah, definitely. How's the Jazz team doing? I'm curious. Are you still working in remote? What plans do you have, if any, for returning to the office at some point? And also a number of your competitors have also laid off or furloughed staff. Did you have to do any of that as well during all this crisis?
Pete Lamson:
Yeah. Thanks for asking. Our team is holding up remarkably well. We have been a 100% non-remote environment. It's just been part of our culture here, at least in the four plus years that I've been on board. And so we wanted people in the office with the belief that we build the organizational and institutional knowledge by being together and by learning from each other. And also we believe it makes our culture stronger by having that shared communal experience.
Pete Lamson:
But as of March 16th, we went 100 percent remote employment. So it was a big change for us and perhaps even bigger than some companies that had at least partial remote employment. And I have to say the team has handled it remarkably well. Because we had been so far the other way, I was concerned about everything from performance to culture, to communication, to daily interactions and efficiencies and inefficiencies. And it has been a real testament to the team that we have not missed a beat. And it certainly is something we've worked at, and we've taken steps to create as much of a community, even though we're not physically together as we possibly can. And I think probably some things have been more successful than others, but we're trying, and certainly the team has responded really, really favorably. I'm so delighted with the performance. We also have, knock on wood, so far remained healthy, which was the most important thing.
Pete Lamson:
With respect to your question on layoffs, I do know that some of the players in our space have unfortunately had to have layoffs. This has been a commitment of ours to our team and to each other that we want to get through this difficult time without a layoff. And so we have not had a layoff. We've managed the business historically in I think a fairly responsible manner with respect to cash and revenue and expenses and so forth that we were... I can't say anybody was well-positioned to handle the magnitude of the downturn that the industry has experienced, but we've been able to meet it head on and be in a position where wonderfully, and we're very, very grateful, we have not had a layoff and we do not have plans to do so.
Pete Lamson:
So we're appreciative of all of our team members. We want them here. They've been the team that has been the engine that has driven our growth over the last four years. And both from a kind of human and personal perspective, we feel a commitment to them. And then from a business perspective, they're the ones that have been driving the growth. We lose some folks and it'll have an impact on how we're able to perform for our customers. And so we're really pleased that so far we've been able to keep everybody on board.
Chris Russell:
Yeah, that's great. That's terrific to hear. In terms of the remote stuff, what have you learned through this process of going fully remote? Do you plan on going back to the office full time again, or remote becoming a part of the overall way you can work at Jazz?
Pete Lamson:
Yeah. So I'll speak to the when we go back or what our plans are first, and then we'll talk about what it might be like when we go back. So right now we have no immediate plans to return to our office. As I mentioned a minute ago, we've been performing very well, and we don't see any reason that that won't continue. And I think until we feel confident that our offices, we have offices in Pittsburgh and Boston, are as safe as they possibly can be. There's not a pressure for us to return to an in office environment other than we really want to do it. And I can't wait to be back in the office and be able to interface with on a day to day basis with our colleagues. And I know that all Americans want that.
Pete Lamson:
But we're fortunate in that we're not the type of business that requires a physical presence. We're not a landscaping business. We're not a retail store. We're not a restaurant. And you feel so terribly for those industries that have been impacted in that manner. So we've been able to perform well remotely. We are putting together plans now for what JazzHR might look like when we go back in terms of how we will emerge or re-enter our offices. But when that date will come is unknown at this point. And again, for me, it really is dependent upon the health news.
Pete Lamson:
And if we're at a point where there's either a treatment or a cure or a vaccine or both, and we feel comfortable that we have a safe office environment for our employees, then it's at that time that we really start to think about heading back, or I suppose if COVID-19 has simply dissipated to the point where we can do that. I don't feel like we're there yet. And again given the performance we've been able to sustain in a remote environment that there's wonderfully no pressure on us to do that.
Pete Lamson:
With respect to what it will look like when we go back, I think that's a really good question and one that we don't have answers yet. I mentioned before that we were very much a in the office environment, and I expect that that, that will largely continue. I mean, I think it's part of who we are, and I think that people enjoy that, but I could certainly envision some changes happening to that. And whether that's people can work one day a week from home or some other change in how we think about working together as a company, I think that's certainly going to be open for discussion. One thing I know for sure, and again, I've been the primary driver of having people be in the office, but we have proven in the last three months that we can work effectively remotely. I think it will likely change somewhat, but how remains to be seen.
Chris Russell:
Yeah, definitely. Are you seeing more sales activity these days more? Are you getting more phone calls, more demos, requests to learn more about what's happening in that side of the business?
Pete Lamson:
Yes. Well, we're seeing... Interestingly, our inbound demand generation and sales activity didn't actually go, I mean, it went down, but it didn't go down all that much. And what really happened was it went down driven by the industries that logically makes sense. And we don't do business with a ton of restaurants, but restaurants, retail, kind of those small or businesses, sub 50 employees, which isn't a huge percentage of our customer base, but it's not immaterial either. Those elements of our demand generation from marketing and our sales activity certainly became quieter over the call it mid March to mid to late April timeframe. Although again, they are rebounding right now. And so our business was down in April not a lot. We were back up significantly in May and June is starting also very, very strong manner, although early days.
Pete Lamson:
And then the other thing that was really interesting is we have a, within our existing customers, I mentioned we've got 6,000 small businesses, we have a functionality that we offer for some customers called Hibernate. And Hibernate is just what it sounds like. It allows you to pause your JazzHR account. If you're the kind of a small business where you expect all of a sudden, you know what, my hiring needs are more episodic. I don't anticipate making a hire for a couple of months. So I'm going to pause my JazzHR account. And for some type of types of accounts, we've offered that. And because of what happened with COVID-19, the number of Hibernate accounts went materially up, which of course makes perfect sense. All of a sudden everybody stopped hiring. Even the businesses that didn't lay off, they stopped hiring, which of course mitigates their need for a recruiting solution like JazzHR.
Pete Lamson:
And so our Hibernate requests went way up. Well, what we've seen in the last, I'll call it, let's say three weeks-ish, kind of mid-May to now has been the number of accounts requesting to go into Hibernate status is at pre-COVID levels, back where we were in January or February, like almost nothing. And we're seeing a lot of businesses that went into Hibernate now come out of Hibernate and resume their normal hiring practices, which has been really great to see. And I think it speaks to the reopening that's happening right now is businesses are getting back into, I'd hesitate to call it business as usual, but certainly taking steps in that direction.
Pete Lamson:
And there were some early unemployment numbers that it came out this week from ADP. ADP is an important partner of ours. And you may have seen these, but the expectation that that unemployment was down was expected to be somewhere in the incremental new 9 million unemployed Americans was somewhere in the 2.5 million range. And while that 2.5 Million is a distressing number, it's massive, especially if you're one of those 2.5 million. So in no way am I mitigating the impact of those numbers on the 2.5 million. But having said that to be about 20% of what it was expected is certainly encouraging. And I think it reflects the numbers that we're seeing as well, where our new job postings are up. The number of accounts pausing their relationship with us is way down. In fact, we have many, many accounts now coming out of Hibernate and resuming hiring. So all the macro signs that we're seeing from our 6,000 customers are also encouraging.
Chris Russell:
Yeah. I've talked to a couple other job boards in the space in the last week or so, and they're all kind of echoing what you're saying here is that we've hit bottom, we're bouncing back now. So, good news is something that I felt we could all use these days. Let's talk about the product a bit, Pete. So you announced a new white label program for partners. Tell us more about that and how it works. I'm curious.
Pete Lamson:
Correct. So we launched a channel program a few years ago, a couple of years ago, and which allows players in the HR ecosystem, whether it's HRAS, human capital management, recruiters, benefits, brokers, HR consultants, the ability to sell JazzHR to their customer base. It allows them to deepen the relationship with their customers. It strengthens their own brand by expanding the suite of services that they can offer and offer more solutions to their customers' challenges and problems. And then of course, they earn a revenue share in perpetuity for doing that. So it's kind of a win-win for everybody, for their customers, for them, and of course, for us.
Pete Lamson:
Today, we've got about 650 businesses in our channel program in total. And they range from companies as large as ADP and Intuit, Zenefits and Namely and Prism HR, and others to hundreds of local, more regional human capital management players as well.
Pete Lamson:
But up until very recently, if they wanted to offer JazzHR to their customers, they offered it under our brand. And what we have just released this month or last month is white label capability. So they can now have all the same award-winning product solution that JazzHR offers, same level of support, same pricing and commercial terms they have with us, but they can now do so under their own brand. And it's not a requirement. They don't have to do this. They can continue to sell it as JazzHR if they choose to do so.
Pete Lamson:
But we had a number of requests from partners to say, "Hey, love the product, love that we can offer this to our customers. We really want to do it under our brand because we think it would strengthen our brand with our customers and with prospective customers we're pursuing and whatever footprint we're going after." And so we listened to that and we spent about six months building this, and we're delighted to be rolling this out now. And I think you'll see in the coming weeks actually and then months certainly more and more of our partners going live with our white label capability.
Chris Russell:
Yeah. Interesting. I think it's an interesting move in terms of spreading your brand out there. Is there a revenue split here? Because you're a SaaS based business. Do they make a piece of the revenue from the employer? Tell me a little more about how that works?
Pete Lamson:
They do. Our channel program has two types of deal structures, if you will. One is they can resell JazzHR to their customers. So when that happens, they are offering JazzHR or JazzHR under their own brand to their customers. They sell it to their customers, and then they are able to purchase on behalf of their customers JazzHR from us at a discount to retail price. So they get a discount percentage off of retail. They then choose whatever price they choose to price it out to their customers. And it may or may not be what our retail price is. That's their business, not ours. But they keep the difference. So they are able to purchase JazzHR at a discount and then offer it to their customers at the price point of their choosing. So resale is one model we offer.
Pete Lamson:
And the second for our partners who choose to not handle the actual fulfillment and payment processing, we offer a referral model. So what they can do if they choose is they can refer business to us. We will then work with their customers or prospective customers on helping them understand the benefits of JazzHR. And should their customer choose to purchase JazzHR, we will then handle all the payment processing and the fulfillment and so forth. And then we offer them a revenue share check on a quarterly basis in perpetuity. So as long as their customer remains a customer of JazzHR, we will continue to pay them a percentage of the fees that we collect.
Chris Russell:
Yep. Very cool. So Pete, the US market in general is becoming a kind of a cluster of fully feature investor breed solution providers. Is this how you would describe your own product at this point?
Pete Lamson:
I'm sorry. Say the question again.
Chris Russell:
So the applicant tracking system market, you're seeing a lot of the companies just basically buy our companies to add more features to their overall feature set. How do you describe your own product functionality as far as helping companies hire from start to finish here?
Pete Lamson:
Right. So if you're talking about what's our point of differentiation, how are we different from our competitors?
Chris Russell:
Yeah.
Pete Lamson:
So we offer three things, the combination of which we think is best of breed. First, we offer an extremely robust award winning product. I think our product stands up with one of any of the competitors in the space, but certainly there are a number of competitors, and many of them are very good. No question about it. And I actually like being in a space that has good competitors because it means we're in a good and growing market. Good and compelling and growing markets attract investment capital and attract strong competitors. But having a robust product is critical, it's table stakes for our target market. And we have that. I think if you go look at any of the third party review sites, independent review sites, whether it's G2 or Capterra or Software Advice, you'll see pretty positive reviews on JazzHR.
Pete Lamson:
The second thing we do really, really well, and I think truly better than anyone is customer support. That we [inaudible 00:26:10]. And if you want to come to us and interact with videos and knowledge bases and how to articles and so forth, they are all there. They're very good. They're very helpful. And all your questions will be answered, or we hope they will be.
Pete Lamson:
But we also have a human level of service as well. We've got a team of dedicated professionals in our Pittsburgh office that do a fantastic job of taking care of our customers. And that's something that really, really stands out versus our competitors is while we do sell to folks from the tech industry, a lot of the verticals we sell into are nontechnical people. They shouldn't have to be technically inclined to understand how to use software. And I think we've done a good job of designing it so that the usability makes it very intuitive and easy to understand, but sometimes people have questions and sometimes they want to easily talk to a human being to get those questions answered. And I think we do a really good job of that.
Pete Lamson:
And then the third area where we differentiate is in pricing. We compete unabashedly on pricing. We offer the best product and the best service at the best price. And I think the combination of those three things is unmatched in our space. It's been a big part of why we've been able to grow so quickly. It's why we're, even in this period of downturn, why we are still growing. And I think that that's why our 6,000 customers not only selected JazzHR, but tend to stick with us.
Chris Russell:
Yeah. Very cool. You added candidate self-scheduling and candidate texting I think back in February. How have those new features been received?
Pete Lamson:
Very well. One thing I think we do a very good job of is we listen to our customers, and we have an ongoing quarterly review of what are our most requested features by our customers. And if you take the time to ask and more importantly to listen to your customers, they'll tell you what they need. And while we do offer innovative solutions that are sort of originated JazzHR, like white label as an example, the customer features and functionality that the SMB market is demanding is in many ways is a result of us listening to our customers. So self-scheduling, candidate texting like you talked about are both examples of that.
Pete Lamson:
We're about to roll out later this summer a very robust reporting a reporting suite for our customers. And so this is continuing to invest in the customer experience so that they can both engage more easily with candidates, but also have an understanding of recruiting performance and candidate performance such as what we're doing, we're reporting, are all examples of us just hearing our customers, asking for their feedback and reacting.
Chris Russell:
Yeah. Cool. One thing I'm seeing some ATSs struggle with these days is handling remote job listings. I'm curious how you guys handle as far as letting companies specify remote as a location, which helps with things like getting indexed properly in Google for jobs. Do you have any thoughts around that?
Pete Lamson:
So it is a challenge, and I think the challenge matters sort of job posting location by job posting location. So you're right. Some of kind of common job posting listings are not accepting of remote as a location. And it kind of is what it is. So what we've done is we've offered alternative ways for these employers to still attract candidates. So for example, increasingly social media is an important source of candidate flow. So all of our social media tools to enable our customers to post on LinkedIn or Twitter or Facebook or other kind of more local job boards whether they be schools or other kind of local regional job boards, the things that we've done to overcome that.
Pete Lamson:
Another example is we have to completely rebuilt our employee referral program, which allows our employers, our customers, to not only easily use their current employees as your referral, as a candidate for [inaudible 00:30:46] referrals. I think most people would agree your existing employees are often your best source of candidate flow. But on top of that, we'll also track any rewards you might want to offer to your employees for doing so. Chris, if you were an employee at JazzHR and you were to refer someone to us and we were to hire them, our system would know automatically that you referred that employee to us.
Pete Lamson:
And then if we've had some kind of a spiff or whatever it may be and whatever caveats as a customer I might put around, rewards, we can track all those for you. So it's not only the referral program, but also the rewards that go with it. And then that mitigates the hiring manager or the recruiting manager or HR managers' need to keep track of this and spreadsheets and so forth. It's all done automatically for them. So those are examples of how we try and work around that.
Chris Russell:
Yeah, very cool. Well, Pete, I certainly appreciate the time today and being able to catch up with you and JazzHR. I guess, any last words of advice and tell people where to connect with you and the company?
Pete Lamson:
Well, you can certainly find more about JazzHR at jazzhr.com. We do offer a free trial if you might have interest. So we'd love to work with you. And I guess I'd close with a we're in some very difficult times. And I hope we are embarking upon a revived, a new national discussion on racism and equality. And secondly, I certainly hope for everyone's safety and good health during this epidemic. And so thoughts and prayer with all impacted groups.
Chris Russell:
Well said, Pete. That will do for this episode of the RecTech podcast. Be sure to follow us on the socials, Facebook, Twitter, LinkedIn, via the @RecTechMedia handle. I just want to say remember, everyone, always be recruiting.
Speaker 2:
Another episode of RecTech is in the books. Follow Chris on Twitter, @ChrisRussell, or visit RecTechmedia.com, where you can find the audio and links for this show on our blog. RecTech media helps keep employers and recruiters up to date through our podcasts, webinars, and articles. So be sure to check out our other sites, Recruiting Headlines and HR Podcasters to stay on top of recruiting industry trends. Thanks for listening. And we'll see you soon on the next episode of RecTech, the recruiting technology podcast.
