In the Pandemic Era, Hiring Gets Automated

(Bloomberg) --

Tara Lindstrom doesn’t know when she’ll be able to fully reopen the 56 restaurants she runs across California and Utah. But the minute coronavirus restrictions lift, she wants to be ready.

“Every day we think, when are we going to be done with this?” said Lindstrom, whose restaurant sales are down between 30% and 60% since March 16, when California was ordered to shelter in place. “It’s been one punch after the next.”

As city and state officials are beginning to reopen their economies, Lindstrom’s biggest challenge is bringing back about two-thirds of the 1,000 employees at her Jamba Juice, Carl’s Jr. and Pieology franchises who haven’t worked in about seven weeks. But many are students who may have moved back home and workers who might have found jobs elsewhere or can’t leave their kids at home without childcare. And with Jamba Juice’s peak summer season approaching, she could be looking to fill lots of new positions.

Lindstrom plans to start ramping up hiring this month and to “have our new normal by July 1,” she said. “You can’t train people in a day, so you have to just project out and prepare so we can be ready to go.”

To hasten the task--while reducing physical contact during the pandemic-- Lindstrom has moved the hiring process almost entirely online. She’s tapped a San Francisco-based tech startup called Workstream, which helps automate the hiring of hourly and gig-economy workers for nearly 5,000 managers at companies including Uber Technologies Inc., Marriott International Inc., Chick-fil-A Inc. and Amazon.com Inc.’s third-party delivery operators.

Workstream operates like a silent machine turning the gears of a company’s recruiting process from start to finish. The software integrates with online job boards. Applicants receive a string of automated, tailored screening questions via text messages that make it feel like they’re chatting with a company recruiter. Those the company deems a good fit pick an interview time slot by text. In the Covid-19 era, most conversations are conducted by phone or video chat. Jobseekers complete paperwork on their mobile devices. The whole process can be done within a few hours.

“We use data and AI so businesses can save time and do more with less, and so hourly workers won’t get lost in the process,” said Workstream co-founder Desmond Lim.

Hiring has been moving online for years and funding for startups making human resources software rose to $6.7 billion last year, more than double in 2017, according to CB Insights. Workstream, which just raised $10 million from investors including the Founders Fund, Charles River Ventures, and Basis Set Ventures said its niche is recruiting and retaining hourly workers. That group has been among the hardest hit after restaurants and retailers shut their doors and people no longer hire cars to drive them to work. Other startups in the field, such as  Lever and Greenhouse, mostly focus on white-collar jobs, while Instawork and Wonolo connect workers with businesses for short-term gigs, rather than full-time employment. 

Workstream says the global health outbreak has also made the shift toward automation feel more urgent for its customers who are rushing to get comfortable with screening, interviewing, hiring and training a new worker remotely, without as much as a handshake. In mid-March, Amazon was still holding packed recruiting events in person. After images and a report by Bloomberg  about the lack of safety precautions made the rounds on Twitter, Amazon moved all new hire events and orientations to virtual platforms.

More than 30 million people in the U.S. have filed for unemployment since mid-March, and when restaurants and retailers can come back online, they’re going to have to move fast, said Ravin Jesuthasan, managing director at consultancy Willis Towers Watson.

“Companies have no other choice but to be resilient,” Jesuthasan said. “Automation is something we've been talking about for 50 years, but it took a pandemic to change people’s minds about ingrained habits like requiring face-to-face interviews,” he said.

Being ready to bounce back quickly is paramount to businesses like King Courier, one of Amazon’s third-party delivery service partners in the San Francisco Bay area.

Before the pandemic hit, the average King Courier driver would make 250 daily deliveries and would last about five months in the job, “so we’re always hiring,” said Chief Operating Officer Andrew Brady. But with Amazon prioritizing essential goods and implementing social distancing in its warehouses, demand for King Courier’s drivers waned. “For the first time ever, we had more capacity than Amazon could use,” he said.

Meanwhile, applications are up by 75% and drivers are eager to work. That’s a change from before the pandemic, Brady said, recounting a former employee who left for “a $30-an-hour job at Twitter where he just had to make sure the conference rooms had warm coffee and neatly-placed notebooks.” Now, Brady is leaning on Workstream to increase staff by eight times in a matter of weeks. “Ramp up times for Amazon are very aggressive and we have to be prepared,” Brady said.

Workstream’s Lim is familiar with the difficulties of hourly workers, from both sides of the equation. His father is a driver and his mother a cleaner. Lim, 34, ran a restaurant before working on Wall Street and launched Workstream in 2017 after seeing how much time managers wasted on scheduling interviews with job applicants who didn’t use email.

But the company is facing some well-entrenched rivals: Human resource software leaders like Automatic Data Processing Inc. and Workday Inc. dominate the industry and many businesses that have been using their software for years are reticent to switch providers. The pandemic has also led to a slowdown in new software adoption as companies try to reduce costs and avoid the disruptions that come from trying out new things. And even if social distancing has put an end to in-person interviews for now, some hiring managers may not be won over the the practice enough to continue after regulations lift. In the first quarter of this year, the number of deals in HR tech dropped by nearly a third from a year ago, according to CB Insights.

Workstream is adapting with new features to help managers in tight spots. For businesses unsure of future hiring plans, the software allows them to funnel potential employees into a reserve pool for later. The moment a position opens up, the manager can push a button and send a text message to the whole database to see who is still interested. Since their details and paperwork are already saved, hiring can move faster.

Other new features include remote Covid-19 safety training and batch hiring, where, for example, a restaurant could split its staff into three distinct groups who never come into contact with one another. That way if one employee gets sick, it won’t risk infecting the whole staff and rendering the business inoperable.

Workstream helped Envoy America,  a ride-sharing company for senior citizens, screen for better applicants and reduce its 40-day hiring process to an average of 18 days, said recruiting manager Sheri Thueson. “We need to make sure grandma is in good hands and it turns out you can screen for compassion in the language people use in their texts.”

Envoy’s business dropped during the pandemic, but seniors still need to get to doctor’s appointments and dialysis treatments. The company has seen a flood of new applicants from Lyft Inc., Uber and other drivers who can’t find work. Forecasting a business pickup in June, Envoy is using Workstream to collect a pipeline of drivers on demand “so as soon as the situation improves, we can pick up the process right where we left off,” Thueson said.

©2020 Bloomberg L.P.