Deanna Shimota (00:00:05) - Welcome to The HR Tech Spotlight podcast. I'm Deanna Shimota, CEO of GrowthMode Marketing. The HR technology market is crowded, and we know it can be hard to find the best software solutions for your business in the sea of sameness. On this podcast, we shine a spotlight on some of the best up-and-coming technology options out there. Check it out if you are interested in learning about new, innovative solutions available in the market. And if you are with an HR tech company and interested in being considered for a guest spot. Stay tuned for details at the end of the show. Hello and welcome to another episode of The HR Tech Spotlight. Today we are exploring Sprockets, a technology solution designed to help employers hire and retrain great hourly workers. From comprehensive virtual interviews to AI-powered sourcing campaigns, Sprockets equips businesses with the tools required to reduce turnover, slash hiring costs and when in the tumultuous labor market. Joining me to talk for this conversation is founder and CEO, AJ Richichi. Welcome to the show, AJ.
AJ Richichi (00:01:19) - Oh, thanks so much for having me. I'm thrilled to be here.
Deanna Shimota (00:01:23) - So tell us about your background in the HR tech space.
AJ Richichi (00:01:26) - Yeah, I think my background is a little unconventional compared to others. The start of Sprockets was actually in professional sports, where, when I was in my dorm room, had this idea of using personality modeling to help my New York Jets finally beat the New England Patriots. So back in those days, it was always just so amazing to me, and still is today, that despite NFL and Major League Baseball teams having seemingly unlimited resources, they still make the wrong draft picks. And so we started to build algorithms and different systems and technologies in a dorm room, really to be able to predict success and help a few teams win real championships, which was amazing. And as we started to scale the idea and scale the business side of things, we realized, hey, professional sports, small world business, big world and our technology at its core, selection software is very good at being able to predict behaviors and performance and things like that can be applied to the workforce.
AJ Richichi (00:02:29) - And it's been about six, seven years since that day, and we haven't looked back. And over the last over that time, we've just been completely obsessed with hiring primarily within the hourly workforce.
Deanna Shimota (00:02:42) - Okay, that's pretty cool. I've, never had any guests come on and say that it actually started with that kind of angle, so I love it. tell us a little more about what Sprockets does.
AJ Richichi (00:02:53) - Yeah. So we are technology that helps hourly employers hire great people. so at our core, our longest-standing best technology is, our matching technology. Let's say that you're a five-location restaurant, or you manage a call center or you manage a small ship warehouse. What Sprockets would do is it's software that you would screen your top performing people with a very brief three questions survey. And then we would compare all incoming applicants via that same survey to your best-performing people and give you predictive models of who's to stay and who's to go. And over time, we've built on that core matching technology to also have sourcing tools, additional screening tools beyond personality like background checks and I-9 all the way to a virtual recruiter that can do your entire hiring process for you without a need for human involvement.
Deanna Shimota (00:03:54) - So what are some of the big challenges or problems that you see facing HR departments today that Sprockets can really help with?
AJ Richichi (00:04:02) - So the hourly workforce is where our business specializes. So I can I'll speak to that. So more than half of America punches a time clock. And in this space there's about 150% turnover for hourly workers. And it costs about according to Sherm $5,000 to hire, train and replace these hourly workers. So typically a customer that engages with us, employs hourly workers and is challenged with turnover specifically. So they're tired of the traditional let's get people in, let's run them through our old school process and get those same high turnover results and instead want to use not only speed and automation, but also precision with matching and assurances to to hire the right people. And over time, our customers have been able to articulate tremendous gains in this area where customers that come to Sprockets usually see an increase of 90-day retention of about 40%. We speed up hiring by about 90% in some high-volume situations, and aim to provide as many tools for recruiters to make their job easier, reduce the tedious task they have day in and day out, and allow them to do what they do best, which is spend time with applicants, truly get to understand them, and then ultimately hire the right ones.
Deanna Shimota (00:05:23) - Probably no surprise to you, the HR tech market is very crowded and there's a lot of options for buyers out there. What would you say is Sprockets unique point of view or differentiation in the market compared to some of the competitors?
AJ Richichi (00:05:36) - Yeah, I always preface this with saying there's a lot of really good platforms out there, and we've actually designed our system to be able to work with whatever you're currently using today. So if you're using your eyes, like your payroll system all the way to posting and distributing jobs, you can add Sprockets to it. If you're using a new-age applicant tracking system that has chat bots and these different automations, all those different things, you can add Sprockets to it. If you're using just traditional job boards like the makeshift ATS and payroll features therein. You can use Sprockets to do that. So I think first and foremost, we want to be in we want to be seen as steroids that you can ingest or inject into any hiring process to make hiring more efficient and more accurate, and provide more quality for your recruiters without ripping and replacing whatever current solution you're currently using.
AJ Richichi (00:06:38) - Because we know intimately, and I'm sure your listeners know how challenging and daunting of a task it truly is to upgrade another system, because there's been so much turnover in that case as well, and have to train all the recruiters and general managers and hiring teams something new. So I think providing tremendous lift, not requiring a lot of new training and yielding a ton of efficiencies is really where Sprockets takes pride in.
Deanna Shimota (00:07:11) - Why should leaders think about managing today's workforce?
AJ Richichi (00:07:16) - Humanize the hourly workforce. I actually just wrote a book. It's on track to be a best seller. Comes out June 18th. It's available on Target and Amazon and Barnes and Noble with Forbes and the Si, the chief people officer of Inspire Brands. And that's the entire topic of the book, is, I think, a lot of times. We have a tendency in white-collar jobs to look down on the blue-collar and hourly workforce. Yet all of our processes and our technologies and our people are really focused on getting the next VP of marketing, right? But when it comes to hiring warehouse workers or drivers, it's done.
AJ Richichi (00:08:02) - Not all the way. I think that people skip steps and don't go to the degree they do with white-collar workers to make sure that those people feel welcome at the company and in the hiring process. And from my really humble opinion. And I think actually the numbers suggest it is, there's actually a better gain of mastering the hourly workforce turnover than the few instances that you'll have in the white collar, workforce that you might have. So I think flipping the switch, really encouraging people to treat the hourly workforces beyond numbers and cogs in a machine, humanize them early and see the benefits from business accordingly.
Deanna Shimota (00:08:47) - That's great. And we can certainly put a link in the show notes to your book. So glad you mentioned it. What type of companies are the perfect fit for Sprockets?
AJ Richichi (00:08:57) - Yeah. So right now, as an emerging technology company, we don't have all the resources in the world to do everything right. So despite us being able to, I think really help impact hiring drivers or hiring warehouse workers or shipyards or whatever because of resource constraint.
AJ Richichi (00:09:15) - Right now we service typically for major markets. First, this quick service restaurants and just restaurants in general. So that's like the Burger Kings and the McDonald's and the KFC's of the world. Second C stores and gas stations, which ironically, oftentimes do have a quick service restaurant inside of it. third is home health care facilities. So those that hire at great volume caregivers and hospice care and front staff, workers and forth is on call centers. It should be no surprise that call centers require a lot of really hard work, just as these other roles do. And despite being more white collar than the desk list, jobs actually have a 300 to 400% turnover because pay is very low and the work is more complicated than others.
Deanna Shimota (00:10:05) - What impact have you seen organizations that you have worked with experience through Sprockets?
AJ Richichi (00:10:12) - Yeah. So I think the immediate one is like an immediate increase in applicant flow. So when one of the cool features about Sprockets in our eye is the day that you sign up for Sprockets, we ask for an export of all of your past applicants.
AJ Richichi (00:10:29) - So this is somebody that applies. These are people that applied ten years ago, ten months ago, ten weeks ago, ten days ago. And usually that is surprisingly very dense, right? We have people who are uploading lists with millions of people, believe it or not. And when you import that into Sprockets, we do a little bit of filtering. And then what our AI chatbot does, her name is JoJo, is she will reach out to all 1 million of those people, 1 to 1, getting to know them and see if they're still interested in that role, and if not, what other roles within the company, now that they might be a little bit older, might be a good fit for them. And I think practically we all want to go back and call our candidate graveyard, as we lovingly call it. But when you have a recruiting team of two, you have 10,000 past applicants. A human can't do that 1 to 1 just based on time constraints, right? So leveraging the technology to do the tedious hard work to qualify and do a pre-screen.
AJ Richichi (00:11:43) - And if the person is a good fit, what JoJo actually does is she'll schedule the in-person interview with the recruiter like, the next day. I think the immediate lift people get is an increase in applicant flow and then over time. And the only reason why I say over time is turnovers, typically measured on an annualized basis or retention, is measured on a 90-day basis. So as we hit those thresholds, we're able articulate reduction of turnover. You have to make fewer hires and therefore significantly less spend across the board to improve your customer experience. You as a business and improve employment, engagement and retention overall.
Deanna Shimota (00:12:24) - With your eye, JoJo. What's the candidate experience like on their end?
AJ Richichi (00:12:29) - Yeah, I'll have to show you a screen. Or if you can go to our our websites to Sprockets eye slash JoJo. But imagine getting a text from a job you applied to maybe a year ago. It's like a recruiter says, hey, AJ was just thinking about you. You apply to our job in the past.
AJ Richichi (00:12:46) - How much do you currently make? An hour. And I would put, oh, I make $18 an hour. And then she knows if the job that she has in the queue offers more, she'll pitch that job. So it'd be like, oh, we just opened a new job for $22 an hour. Are you interested in learning more? And then she if you say yes, then it initiates a in conversation and it feels very human, like it's scary at times how close it can be, but engages in the conversation as if it's a real bio like a person recruiter and brings them through the a few screening questions like are you eligible to work in the US? Still, has anything major changed since your last application? And then if you check, then JoJo will ask, hey, seems like you're a good fit. When can you come in for an interview? Here's the schedule. We'd love to get you in tomorrow or the next day, so go from getting a text to scheduling an interview in about 90s.
AJ Richichi (00:13:46) - And from the recruiters perspective, they just sit back and cross their arms and wait until their calendar gets filled up by JoJo.
Deanna Shimota (00:13:55) - So from the candidate perspective, it feels like a real person is engaging with them and having a conversation. And really, it's all automated to help the recruiting team.
AJ Richichi (00:14:05) - And I think that's a key distinction here. Right, it's subtle, but it's important is. The hourly workforce is very seldom recruited. Right. So those in the white-collar workforce, you're used to getting messages on LinkedIn being like, hey, I got this awesome job, or like your cousin at a cookout, hey, we're hiring over here. Do you need a position in sales? You have a group of people that historically and systemically have applied to 30 jobs every six months or so, and it's not fun. It's not engaging. It's just like part of the grind of being in bottom America. Right? And it's I think it's sad, but I think it's very true. And I think what JoJo does, what I think, why I think she has such high conversion rates on those lists, is this might be the first time really ever that somebody got recruited or felt special, that something or someone was reaching out to them.
AJ Richichi (00:15:03) - And I don't know about you. That's just, for me, a fantastic, amazing way to start a relationship rather than you have to apply my job on this job board, and then you have to go through this tedious process, right? It just sets a tone that, again, I think humanizes the hourly workforce and leads to a really strong employee experience.
Deanna Shimota (00:15:24) - Yeah, that's really cool. So what is your future vision for Sprockets?
AJ Richichi (00:15:30) - Yeah, I think I want to be a place where hourly workers can come and find meaningful tools to get great employment, but also navigate other challenges that they have in their life. As especially as we were writing this book with Forbes, we started to interview hourly workers in mass. And what we discovered is that beyond work, these are groups of people that have financial literacy issues. They have crippling debt. They have that credit card debts at an all-time high school. Debt is at an all time high, very unclear as to what health insurance packages they should take. And with inflation, rising costs of rent, it's very hard to be in this group.
AJ Richichi (00:16:14) - And as we've scaled our company, we've always placed an emphasis on the candidate experience because from a business perspective, I feel like if we have the candidates, the companies will just come naturally, right? Like companies always need a great community of people, right? But as we continue to scale, it's about building out a better experience for candidates, give them resources to navigate the trials and tribulations of lower class America and as a result, build the volume. We need to be able to really support the businesses that are on our platform today and into the future.
Deanna Shimota (00:16:52) - So for companies that are looking at a solution like Sprockets or similar, what are things that they should consider and take into account as they're evaluating their options?
AJ Richichi (00:17:06) - It's a really good question. I would be skeptical. Follows a buyer around what's eye and what's not. And I actually talk about this in the book too. Companies are being rewarded right now by venture dollars and customers because of AI. If you say that you are AI, you will sell more like categorically right? You will raise more venture capital.
AJ Richichi (00:17:28) - You get more excitement. So I think that there's an unnatural temptation for companies to mislabel their technology and lead people to think that they're using specific tools when they're not. And I saw this stat, it was only about 24% of HR professionals use it today. I believe that was from Sherm and I saw on another website. So not the same study, but it's like 91% of companies want to add AI by 2026. So when I hear that, I'm like, okay, the market is going to aggressively pursue as KPIs for their business AI-powered solutions, and you have a cohort of customers or technology platforms that may not be true AI, right? I don't think it's like cloak and dagger people are outwardly trying to commit fraud or anything like that. But I do think that if your business has a true appetite for adding artificial intelligence or deep learning into your models, I do. I stay, skeptical that every single pitch you hear is, in fact, fulfilling that direction from your boss.
Deanna Shimota (00:18:45) - I think that's really good advice, because if you walk the floor at any HR conference these days and you see the vendors, almost everybody is pushing AI and it's a really interesting time in the HR tech market.
Deanna Shimota (00:18:58) - But I think there are certainly vendors out there who have built their product around AI as a basis of it. And then there are the vendors out there who had a product and were like, oh, we need to add AI, and they're trying to plug it in. And I think there's probably a different user experience when you step back and think about it, about the one that was natively built with AI versus the ones that are trying to add it in on a product that was already built.
AJ Richichi (00:19:27) - Yeah. And I think we have a really good idea of why we're starting to see this phenomenon. And I'll just use when I first hit the market with Sprockets. I remember going to several HR events and talking about AI, and this was like before I was a craze before GDP. And this is like when Watson on Jeopardy! Was airing. And a lot of those leaders in that room that I was talking to still associated AI with Arnold Schwarzenegger and the Terminator. Right. And I remember very vividly standing up and starting the presentation with, hey, how many people here used AI in the last ten minutes? No one raised their hand.
AJ Richichi (00:20:10) - I was like, how many people here used AI in the last six hours? Nobody is. And they said, okay, crazy how many people have used AI in the last year? No one had raised their hand and I was like, okay, can I get a hand? Somebody raise their hand if you used ways to get to this meeting. Half the room went up. I said, okay, how many people here used AI or how many people here logged in to Facebook today and like the rest of the room, put their hand up. And back then it was almost like the large businesses and the best technology providers on earth were using AI in secret, right? They didn't want a market. I had such a big PR problem that they had somehow made this room believe that no one was using AI, and I was awful. It's here to take our jobs like all these things. Yet they were all adopting it in secret. And I remember the reactions I got after weren't like, oh yeah, you're great, agent.
AJ Richichi (00:21:09) - Oh, that was such a good move. It was like, you're wrong. Like, they don't do this or people turn like doing like terms of service. I think to me, after being like, I don't think this is quite it, but this language is ambiguous. But now I bet you if I walked into that same room for all the reasons you just mentioned around, like going to conventions and stuff. These HR leaders particularly are starting to be like AI forward, and it's gotten more normalized. and I think it's the expectation now is that if you don't adopt it, you in fact will fall behind. So it's just been like amazing, magnificent art that I've just been like full and had a lot of challenges because of it.
Deanna Shimota (00:21:51) - Yeah, I can see that. And I feel like in the last couple of years, like it's really been elevated. And you're absolutely right. It's not like some of these companies didn't already have it. It just now it's front and center. And I could tell you like you're probably like episode 4041.
Deanna Shimota (00:22:08) - In the last six months, I've talked to a lot of CEOs, founders and marketing leaders. Almost every one of them talk about AI in their product now. I want to happen two years ago. So it's really been an interesting time. Yeah. So AJ, what final thoughts do you want to leave our audience with?
AJ Richichi (00:22:28) - Oh gosh, what final thoughts?
AJ Richichi (00:22:31) - I think that largely. And I'll I've said this for the last five years and I'll say it for the next five. Those that adopt I. Will be secure in their jobs, will optimise their output and help their companies win. Those that defy AI for the sake of defying AI, new technology and advancement and progress and all those things. You may be more comfortable today, but the world will move on beyond you, right? And you? Your business as a result, will suffer because your competitors and your peers will move faster to adopt. And that's when you're in the danger zone. So a lot of times people ask me, hey, is I going to is going to replace recruiters or HR said AI is going to replace people that refuse to use AI, but those that adopt it and find ways to leverage it in their day to day and teach their children about how to do it, are going to be in a far better position long term.
Deanna Shimota (00:23:35) - Where can our listeners go to learn more about Sprockets?
AJ Richichi (00:23:37) - Yeah, just Sprockets, that AI, and there's a ton of resources there. We pride ourselves on our thought leadership. So there's like hubs of knowledge base, articles of ebooks on how to reduce turnover. The book itself, we have our own podcast called Hourly. We bring on leaders to talk about hiring that group specifically, and a ton of other resources that hopefully you can sink your teeth into.
Deanna Shimota (00:24:01) - Excellent. We'll be sure to put the links in the show notes. AJ, thank you for joining me on the show today.
AJ Richichi (00:24:08) - Now. Thanks for having me. Really enjoyed it.
Deanna Shimota (00:24:11) - Great. For those listening. Don't forget to check out Sprockets and be sure to join us again next time as we dig into another innovative HR technology company shaping the world of work. Thanks for listening to this episode of the HR Tech Spotlight podcast, where we showcase some of the best up-and-coming HR technology options in the market. If you are an HR tech company leader who would like to be.
Deanna Shimota (00:24:40) - For a guest spot on this program, please contact me via GrowthMode Marketing.Com. Or reach out to me, Deanna Shimota, on LinkedIn. And if you found this show informative, subscribe, like on social media and leave a review.
Deanna Shimota (00:24:55) - This is Deanna with GrowthMode Marketing signing off. Thanks for listening. We hope you'll tune in again next time.