Staffing Industry Spotlight: Raleen Gagnon, CEO of TalentEdgeAI

Mickey Pelletier: So tell us about your title and role.

Raleen Gagnon: So TalentEdgeAI is actually a venture capital-backed company that was launched late last year by Hexa Global Ventures.

I was hired as the Chief Executive officer, so I'm the CEO of the organization and within the Hexa Global Ventures family. That means that as the head of the organization, I'm responsible for setting the product roadmap, I'm responsible for identifying the right sales resources, the right key messaging, the value propositions we want to take to market, and understanding how we might want to shift our target audience or align better to certain means within the marketplace. So, really, because we're still in startup mode, I am a person who gets to wear all of the hats.

Mickey Pelletier: What really inspired you or moved you to take on this role?

Raleen Gagnon: Well, I've been in the staffing industry for quite a long time and in the past, I always oversaw the use of data to help guide our clients. So, I was the vice president for global market intelligence at ManpowerGroup for 12 years. And then I ran total talent intelligence at Magnit, and in those positions, I spent a lot of time talking to employers and, in some cases talking to the suppliers at the MSPs were managing, but in either case, the fundamental challenges they had was getting access to the candidates and getting as quickly as possible.

So turnover and time to fill, were always two huge pain points that clients had now in those roles. I was also over compensation analysis and making recommendations about what employers should be paying, what the total cost was that they should be bearing. So I did some of this location strategy work, but what I found was that in that role, I had to pull from dozens of different data sources, and even though I was able to find all the data necessary in the marketplace, it didn't all sit in the same place. It wasn't formatted a structured in the same way, so my team always had to manually pull down that data, normalize it, and build out analysis ourselves in order to be able to do any sort of accurate forecasting in the marketplace for our clients

I know there was a need in the marketplace to put that in their hands to allow hiring managers or recruiters to access that forecast at the click of a button, and I just didn't see anyone else working on it, so that was the first product that we decided we had to bring to market because we had all of this data and we had the ability with this predictive and prescriptive tool that sat within the Hexa ecosystem to build it out.

So I'm really excited that's actually launching within the next month and it's going to give the industry a different way of looking at data that will be by nature of the forecast, more actionable. So it's data that can drive action instead of data that can drive meaningless thought leadership. So that was the first thing that got me excited.

The second thing was that no matter how much data I have fed to organizations over the years, nothing changed. The fact that it takes a long time for a recruiter to source candidates, contact those candidates, convince those candidates to send their resume, and then schedule interviews with those candidates. And that is unavoidable. Or it seems like an unavoidable length of time that sat within the time to fill that we were measuring. And now by enabling the sourcing with a click of a button and by allowing those recruiters to automate through an AI recruiter that first round of screening, we're able to shrink that time we take days and weeks and turn it into minutes. And that has proven to be not astonishing when clients are able to see how quickly it can impact their process.

Mickey Pelletier: What is TalentEdgeAI?

Raleen Gagnon: So TalentEdgeAI is a data-driven recruiting solution, that's powered by artificial intelligence. It's intended to drive efficiency and profitability for staffing firms in the marketplace. So what we've done is we have pulled four years of historical data. That is all the information and recruiter might need to know in order to make a decision about where to remotely source talent and what to pay that talent, or how to negotiate for salaries or hourly rates with those resources.

So anything from supply and demand turnover compensation, industry trends, demographic details, migration, that sort of stuff, and we've built on an algorithm that allows us to take the correlation of those data points and the historical data that we have to accurately forecast out six months.

So that allows for recruiters to have more strategic conversations with their clients. It allows for hiring managers to take that information and help to drive decisions around where they might want to invest or divest their focus on bringing in new talent. And then leveraging that information, it allows them to hone in on particular locations and priority skills. Once they do that, they can basically lean into that particular marketplace and leverage the power of our AI sourcing capability to click into that location and identify all of the active candidates in the area.

Unlike most AI sourcing tools, we are not relying on one particular data source. We have three different AI sourcing tools built into our platform so that we can get a more comprehensive and robust level of access to candidates and their contact details and then we integrate the platform with an AI recruiting tool, Interview AI, that allows for recruiters to simply select all from the candidates so they have identified and send them an invitation to interview.

This gets to the larger portion of candidates through the first-level screening process, which means the candidates are found more quickly and more candidates can be screened and considered for a position where, under normal processes, a recruiter might not get to the second page of the search results or connect with a particular person to consider them for an opportunity. So all of these things are intended to increase the speed to hire. It allows for lower operating costs per hire for the recruiting organization, and it allows for each recruiter to have a greater capacity. They can handle five times as many racks because they have that support on the sourcing and screening side, and that sourcing and screening side, through our research, really, on average, represents about 70% of the time that a recruiter spends when filling positions.

Mickey Pelletier: What kind of clients are you servicing with TalentEdgeAI?

Raleen Gagnon Well, I'm sure you picked up on it from some of my previous responses, but predominantly, we're looking at the staffing industry themselves, not the largest global staffing companies in the world because they've over the years built up their own technology or piece together different solutions and they frankly have their own data. But the small and the mid-size staffing firms that drive the bulk of the hiring activity in the market today, they don't have access to all of this data.

If they're using an AI sourcing tool, they're using one, and I've used every AI sourcing tool in the market. They're all fantastic, but at the same time, they all have flaws, and they all have gaps. So that's why we picked the three different tools that we're leveraging within our ecosystem to make sure that we're filling in those gaps and that we have fewer flaws.

And then, you know, when we think about how we connect all these pieces together, you know, those staffing companies wouldn't have had access to that type of efficiency. So, those staffing companies are our primary focus. We predominantly reach out to the executive teams and talk about the ROI that we can bring to them from an operating cost and a speed-to-revenue standpoint. And then we work specifically within their sales and delivery teams to implement and train.

Now, it's not that we're restricting ourselves only to the recruiting industry. We do have other client relationships that we've begun to explore and a few that we've already executed. We have one that is a global EOR and PEO who's leveraging these tools to allow their account delivery teams to be more strategic with their clients. So they're leveraging the data and the sourcing capability to meet with their clients and say, hey, we believe there's an opportunity for you to achieve more cost savings and access better talent by shifting your focus from this low-cost market to this other emerging market in the Middle East or Latin America or whatever the case may be. And they're able to show at a click of a button what the availability of that talent is and what the six-month forecast looks like from a cost-to-supply and competition standpoint.

There are a few smaller RPOs we've worked with, too, and there are some smaller employers that have an interest because it's a great way to augment their talent acquisitions team. You know, they only have a couple of recruiters, and their turnover spikes, so their hiring needs increase rather than taking on the cost of another recruiter or having to pay placement fees for all other hires. It's a very reasonable investment to pick up a license to Talent Edge and be able to increase the capacity of the recruiting capabilities they have.

So again, our primary focus is on the staffing industry, but really, anyone who's hiring and lacks a technology or the access to this data themselves can benefit from partnering with Talent Edge.

Mickey Pelletier: Why do clients need this service?

Raleen Gagnon: It's a good question, and you know the individual client needs shift somewhat over time, but at a high level within the staffing industry, it's been a difficult set of years. The past few years have been up and down. If you didn't capture a particular wave of growth for cyber security or networks and communications engineers, then you missed out on the opportunity to cover your operating costs when other parts of hiring activity were shrinking.

It's been a period in the past 12 to 18 months I've extended hiring cycles. Hiring managers are slow to pull the trigger on a candidate. That means that from a staffing firm standpoint, they're carrying a lot more operating costs, and they're not able to balance their sales and their delivery as effectively as they have been able to in the past. They might see opportunity within clients, but they can't bring on additional recruiters to support growth. So it stems from their ability to drive additional learn new streams of revenue.

So by focusing on reducing their operating costs per hire, increasing the capacity of the recruiters, and accelerating their speed to revenue, this solves for a lot of those problems. It means that their sales team can actually use our tools to gain more penetration into their clients and increase their revenue or share of wallet with those clients themselves. And they can capitalize on it by filling those positions faster.

So that's the primary focus is that capability, the speed, the efficiency, and just the accuracy of the process from a human resources standpoint for those smaller organizations we might partner with. It's really about helping to give them the bandwidth and the capability that they might not necessarily have invested in within their own HR infrastructure. Some smaller organizations have eliminated HR teams and don’t have a dedicated recruiting organization. They rely on Ziprecruiter and online postings, and that's not necessarily the most efficient way to go because it can really impact the hiring managers and their ability to do their full-time job if they're constantly working with HR to fill those positions. With TalentEdge, an HR coordinator tht has access to the tool, or even if the hiring manager themself, it can enable with the click of a button: What should I be paying this person? Who are the available candidates I might like to hire? And then select all, send an invitation to interview, and the AI tool will provide back to the hiring manager or that HR resource recording and transcript and AI notes on how each of these interviews went against the criteria that were programmed into the tool. So it's really about augmenting their existing capabilities and giving them a better capacity and a better process to hire with.

Mickey Pelletier: I think you kind of answered this one, too, but how are you different from your competitors?

Raleen Gagnon: And so to me, from my experience of working in this space, there are a few really key differentiators. The first is that forecasting module I mentioned, there really is no forecasting capability. That's readily available in the marketplace today. Yes, we have economic indicators, and there are people who will say GDP goes up if the new jobs posted by the BLS goes up. If unemployment goes down and there are people making assumptions about those economic indicators, but I don't believe that they are as accurate or as relevant as looking at how supply demand, migration cost, industry activity, and those types of factors have correlated to one another in a particular market or a particular skill set. So that we can, with a much greater degree of accuracy, say look, we've seen an increase in hiring demand in Nashville, TN for these data scientists. And as such, the supply has become greatly diminished. We see migration in these three areas, and as a result, we expect that the pay rates or salaries will continue to go up by X percent over the course of the next six months, and we refresh our data every week.

So the analysis shifts slightly based on the data as new data becomes available, but it's always giving you the most current view of the next two quarters. And that's just not something that's available to recruiters today. So, given that at least 20% of all hiring activity is remote or hybrid, I think understanding the markets and the future of those markets is more relevant today than it ever has been before.

So that's the first differentiator, and the second is simply this: we're integrating these capabilities in such a way that no one else has done in the past. Yes, there is compensation data available in the marketplace. Yes, there are AI sourcing tools. Yes, there are AI recruiters out there and different models that are available, but no one has put the power of these three together in such a way to specifically meet the needs of the staffing industry or of those that don't have a strong recruiting capability themselves. And I think that's really where we stand out.

Mickey Pelletier: Was it a custom platform that was built?

Raleen Gagnon: So we're building a unique platform, and not that it's a concept that doesn't exist already in the marketplace, but we're building a platform that's specific to TalentEdge that sits on top of all of this data and capability that I've just described. So we partnered with an organization called WageSCAPE that built us a custom data feed. They started to build new data elements into the instance of Snowflake that we have that are unique to what we were looking for to build out our forecasting module. So all of that data, it's behind the platform that we've built the AI sourcing tools. There are three different tools that exist.

Hexa Global Ventures owns one of them and is in the process of acquiring another, and the third we just partnered with, and those tools feed into that candidate sourcing piece. Interview AI is another Hexa Global ventures company that we're partnered with so that we can embed that AI recruiting capability. So integration is key. What we've had to build out ourselves is the platform itself, the UI and the UX, the forecasting modules. So we are leveraging and building in algorithms that my team previously used years ago and putting them into a solution to automate those calculations for the first time. So that's really where their proprietary piece comes in. And then in the output and the communication. So it's the process that is unique and then the UI and the data calculations. The rest has been a very strategic selection of the right tools that allow for the right level of capability when integrated together.

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