How The Rise of AI Will Affect Jobs and the Economy in 2023: EP41 W/ Steven Rothberg

Full blog and transcript:
Welcome to "How I Work" Episode 41 with Steven Rothberg, where we dive into the impact of artificial intelligence (AI) on jobs and the economy in 2023. Join us as we explore the insights of Steven Rothberg, an accomplished entrepreneur and Chief Visionary Officer of College Recruiter. With over 27 years of experience in the recruiting industry, Steven shares his valuable perspectives on the challenges and opportunities in this ever-evolving field.

In this episode, Steven takes us on a journey through the transformative power of technology, specifically AI, in the recruitment process. Discover the importance of embracing innovative strategies to attract and retain top talent in today's digital landscape amidst concerns about AI job replacement and displacement. Gain unique insights into the shifting job market, economy, and technology trends that are shaping our world in 2023, including what jobs will be replaced by robots and lost to AI.

Here are some captivating highlights from our conversation:

• Unveiling the jobs at risk as AI advances and understanding what jobs will be replaced by AI
• How job boards have shifted over the past 5-10 years
• Steven's intriguing product development philosophy: Bubble gum, baling wire, and bandaids, which addresses the challenges posed by AI job displacement and recruiting in 2023
• Exploring the 2023 macro conditions with a staggering statistic: two job openings for every job seeker, shedding light on the changing landscape as AI takes over and the economy changes

Don't miss out on this insightful and thought-provoking episode, where we discuss the rise of AI, its impact on jobs, and the economy in 2023. Join us as we navigate the ever-changing landscape and uncover strategies to thrive in the age of AI.

Explore more content from leaders in the marketing community on our podcast. Or visit our blog to find more digital marketing tips and ideas.

Want to learn more about Augurian? Reach out to speak with an Augur today about your marketing strategy and digital advertising performance.

Transcript

Josh Becerra:
Hi everybody, this is Josh Becerra from Augurian. Welcome to the next episode of How I Work. I'm here with Stephen Rothberg, the Chief Visionary Officer and founder of collegerecreater.com. Thanks for being here, Stephen.

Steven Rothberg:
I am really looking forward to this conversation, Josh. Thanks.

Josh Becerra:
Yeah, it's going to be awesome. So for listeners, just so you get a little sense for whatcollegerecruiter.com is, it serves primarily Fortune 1000 companies, government agencies, and other employers who hire at scale, helping over 12 million candidates find great new early career opportunities every year. That's a lot of people. Congratulations, Stephen.

Steven Rothberg:
Thank you. What's the expression that you can fool some of the people some of the time or something like that? No, when we think about those numbers and kind of what that translates into. It's really awesome. There's no higher honor than being able to find some help somebody find a great, great career.

Josh Becerra:
Yeah. No, I think it's really is awesome. And you're not fooling anybody. You're obviously doing a great job. And I'm sure that the companies you work with are really happy with the work. So, but you weren't always like in recruiting.

So I think you have just a crazy unique story leaving like law to pursue these entrepreneurial passions. So can you tell listeners a little bit about what made you decide to shift gears? What’s happened to make that and kind of where you are today.

Steven Rothberg:
Yeah, sure. No sweat. So first of all, I think I've never run across anybody who's my age or older. I'm 56, who can truthfully say that their entire career was a well mapped out plan and that they had this grand vision and followed it. I think it's life is a series of mostly happy accidents, hopefully mostly happy. 

So on my dad's side, his dad, my dad, then me, we all have the entrepreneurial bug, DNA, virus, call it what you may. So when I was growing up, it was very normal to me to be in a family where somebody had a small business and the cliche about the people who have their own business would rather work 80 hours for themselves than 40 hours for someone else. That definitely runs very deep in my family. And Growing up, I lived in Winnipeg, Canada, right smack in the middle, about 500 miles northwest of where you and I live now in Minneapolis. Well, we live separately, but we live in the same metro. 

I went to undergraduate school in Winnipeg at the University of Manitoba, which is by far the best undergraduate school in the province of Manitoba.

Yeah, claim to fame, right? In my last year there, in what Americans would call their senior year, Canadians would call their fourth year, I was in a small business marketing class with a friend of mine and he had a little micro business on campus. He was doing things like publishing calendars, giving them away to the students, and his customers were advertisers. They were restaurants, retailers, apartment companies, etc. his business, 

I came to him with an idea to do a campus map of the school. He thought it was a bad idea. I thought it was a good idea. He said, Hey, if you want to do it, go for it. So I did this campus map, same business model, restaurants, retailers, apartment companies advertised on it. Um, I made way more money than my friends did that summer and also worked way more, but enjoyed it way more and then I did, um, what I had been to do since I was 13, which was to move away from Winnipeg. It's way too cold. And I came to law school here in Minneapolis, went to the University of Minnesota,

Josh Becerra:
Where it's much warmer.

Steven Rothberg:
Oh, well, yeah. And I think in a previous conversation I shared with you one of my favorite jokes about myself that I'm probably the only person who lives in Minnesota and moved here for the weather. The, and those of your listeners who have been here in January, will understand now that they are listening to a crazy person. But okay. 

So I graduated from law school, was working for a first year as a lawyer, working for the court system in Minnesota. And I kind of got back into the business. I started at part time. And the new second version of the business, I published a map for the University of Minnesota, another one for St. Cloud State University, which is a state school, about an hour and a half from the Twin Cities. some stuff like that. And then after a few years, mid 90s, this thing called the internet came along. And we added an employment website called collegerecruiter.com. And it's basically it's a it's a job search site or a job board, somewhat like say, indeed, LinkedIn for the older listeners, career builder, monster.

Josh Becerra:
Sure.

Steven Rothberg:
Where the candidate goes, types in a couple of keywords, the location for the job, their looking in, they hit submit, they see the job posting ads, click on them and apply. It's basically online help wanted ads, online classified ads. We launched in 1996. We were one of the first 200 job boards worldwide. They're now about 100,000, depending on how you count them. And when we first launched, if we had more than about 200 users hitting our site at the same time, the site would crash.

Now, we literally have hundreds of thousands a day on busier days we have several million, what we call early career jobs. Those that require zero to three years of experience. We're global. About a third of our businesses are overseas. So yeah, it's been a ride, but it's also been 32 years.

Josh Becerra:
Yeah. Yeah, so in that time, you've told me that you've seen this massive improvement in your customer skill sets and abilities to use data to make their decisions.

And my listeners are all marketers and data wonks and geeks. So can you talk a little bit about what it used to look like when you're thinking about selling to companies and now the buyer within some of these Fortune 1000 companies. or change skill sets and abilities. Like, how is it different today than maybe it was 30 some years ago?

Steven Rothberg:
Yeah, it's really different now even from how it was five years ago. So the niche or the industry that we're in, most people would call it TA tech, talent acquisition technology. It almost in almost every single way lags what I would call consumer marketing. That, you know, the advertising, the promotion of product services, services, even educational opportunities. We're, we've always been. as an industry five to 10 years behind. 

So the best way that I can put it is that until literally just a few years ago, three, four years ago, the vast majority of talent acquisition professionals that even claimed to use data were using data to justify decisions instead of using data to drive decisions. In other words, I'm going to run an ad job board, and then they say in between their ears, because I saw the ad on the Super Bowl, and I think that that monkey was really cute.

But what they say to their boss and their coworkers is, because the data shows that the ROI should be really positive.

Yeah, ask them three, four, five years ago what ROI meant. They probably didn't really know, even if they could say return on investment, they wouldn't be able to articulate actually calculating that. It was just something they heard at a conference. It was something they heard a vendor say. It made them sound and maybe feel smart. Now, I'm definitely not saying that they were all like that, but there were a sizable number that were. By and large, they were people from my generation, Gen X, and the older generation, Boomers. Not that we're dumb, not that we don't know how to do math, didn't grow up with data analytics.

We didn't go to school where that was integrated into our course offerings. So when we were taught either in school or at a job, how to evaluate an advertising opportunity, most of it was our other companies like yours using it. And if so, it's probably a good place to advertise. There wasn't

Josh Becerra:
Yeah, are there successful companies using it, even if it may not be exactly in your industry, yeah?

Steven Rothberg:
Yeah, so, you know, like when I was in high school, the first personal computer, the first successful commercial computer came out, IBM 1982. And there was this expression in that era, not so much about the personal computer, but their larger, mainframe computers, that nobody ever got fired for buying IBM. In other words,

Steven Rothberg:
if you're like an IT professional, and you go to your boss and say, we can either buy compact computers or spare computers or control If you bought IBM, if you recommended IBM, even if it proved not to be the best choice, it was never gonna be a bad choice.

And so you wouldn't lose your job. Advertising was very much like that. If you ran an ad in the Sunday newspaper, it might not be the best use of your money, but it wasn't a bad use of your money.

And when this thing called the internet came along, and now all of a sudden you can track impressions, track clicks. You can track applications which to consumer marketers would be the same as a lead. Now you have the data at your fingertips where you could say, hey, if I run an ad in the Sunday newspaper, I'm going to get somewhere between 40 and 45 applications and it's going to cost me $1,000. If I run an ad on monster.com, I'm going to spend a couple hundred dollars and I'm going to get a couple hundred applications. Where's your money best spent? It would be a monster.

Josh Becerra:
Yeah. So now fast forward to today and everybody knows what ROI is. They know how to calculate it. They have their fingers on the pulse of an...

Steven Rothberg:
Yeah. Your listeners do. Yeah, but yeah, yeah.

Josh Becerra:
Yeah, so the world has definitely changed. And it sounds to me like because of all those changes, you've made some pretty significant changes in your business model, developing products, responding to those changes and customer needs. So can you talk a little bit about, you know, what you've done with your business recently? Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.

Steven Rothberg:
Yeah, I love to. So quite literally a year ago at this time, kind of Q1 2022, only a small percentage of our employer customers, those advertised near jobs with us, were able or willing to share conversion data with us.

We sent them 1000 clicks. How many of those are converted into applications or leads?

And I think only one was doing that in real time. Without even just summary data, like once a day, even once a month, we would have no way of knowing if we sent them a thousand clicks, how many of those converted into applications. So we had no benchmark. We had no idea if 800 of them were applications, or eight, or zero. And we also had no way of measuring or knowing then which of those thousand are converting into applications, the kinds of clicks they want more of and which aren't. 

And so we couldn't adjust the kinds of traffic that we were sending to them to send them more of the good traffic, less of the bad. Last summer, we reached a tipping point in our business. We brought on some new people. And they had new knowledge. and that coincided with kind of a turning point in the industry where more of the employers felt comfortable about sharing that data. It was becoming more the norm. They were just now one of many sheep, rather than being the one out in front. 

They were comfortable that this was a good thing. So now, almost all of our customers are sharing conversion data with us. Most of them are in real time. is that if a company starts advertising with us on Monday, by Tuesday we're delivering meaningful traffic and by Wednesday we're adjusting the traffic that we're sending to them.

Josh Becerra:
Right.

Steven Rothberg:
To reduce the bad traffic, increase the good traffic. So the common denominator that most of our customers use to evaluate their media, whether it's college recruiter or Indeed or LinkedIn or whatever their using is what's called the effective cost per application. If they spend $1,000 with us and we deliver 10 applications, they've got an effective cost per application of $100.

The actual effective cost is usually somewhere 25 to 50 for most kinds of jobs. But if it's $100, if the ECPA, the effective cost per application that we're delivering, is $100, and indeed is $120. That's going to lead the customer to reduce how much they're spending with Indeed and increase how much they're spending with College Recruiter.

That makes total sense. That's using data to drive your decisions because Indeed clearly has a more powerful brand than College Recruiter. Now some might say, well, if Indeed's at 120 and College Recruiter's at 100, why would the customer spend any money with Indeed? And then you get into a question of scale. Can they get all the candidates that they want from college recruiter? No.

We're just probably not going to be able to deliver that. So then you need to sort of layer on some less efficient sources, you know, that, you know, add on in Indeed or whatever. Indeed's actually kind of a bad example because they tend to be one of the lower-cost providers, but that's another story for another day.

Josh Becerra:
Sure. So you developed this new product. And I know when we were prepping, you used the terms like bubble gum, bailing wire, and band-aids as a product development philosophy. So obviously, you wanted to get to where you could really show what this cost per application metric was. So talk a little bit about that product development and how it led you to get where you are.

Steven Rothberg:
Yeah, so the product managers who are listening to this get prepared to be having to have a lot of cringes and roll your eyes really seriously. So if you're driving, pull over because you won't be able to see the road. So I am for good or bad, one of those people who is not afraid to take chances. I've gotten better at evaluating those and hopefully minimizing the risk and maximizing the upside. I wouldn't say I'm perfect at it, but I'm better than I used to be.

What happened with the product, and it's what we call jobs that scale. It's a pay per click job posting product. We had two customers come to us. One was a big insurance company, another one was a big gig platform in 2016. So seven years ago now. Both of them came and said, Hey, the most expensive job posting package that we can buy from you from College Recruiter is $12,500 a year because it wasn't pay-per-click, it wasn't pay-per-lead, it was just post and pray. You run an ad for 30 days, it costs you X, or you sign up for an all you can eat or all or an unlimited posting package for a year and that's what they had, $12,500 a year. And both of them basically said within a couple of days, independently of each other, if we paid you four times as much, Could you deliver four times as many candidates to us and as a business owner? When somebody says I want to give you some more of my money Can you help me do that the answer is always yes? And then very often you figure out how to do that later.

Josh Becerra:
Right.

Steven Rothberg:
And that's when that's when our employees complain about us and say what was Stephen thinking, what was Josh thinking? That's a lot of times where that comes from so I clearly said yes and that's where the bubblegum, bailing wire, and band-aids came from. So what we did is we took our existing product, the duration-based traditional job posting product, and ran their job postings on our site exactly as we had been. But then what we did is we took those postings and we sent them over to some other job boards like Glassdoor, for example. And we said to Glassdoor, we'll pay you 25 cents a click for every candidate that you show that job to and who clicks through. The customer was paying us 50 cents a click. 

So when we paid Glassdoor 25 cents a click, we had a 50% profit margin on that kind of locked in. And that allowed us to scale. That job posting could then scale. That's where the name jobs at scale came from. So what we were, I'd like to say that I entered into it as a well thought out pilot. Let's pretend that I did. 

What it really was, it was a pilot in hindsight because if it had failed, we wouldn't have moved forward. We wouldn't have spent months and months and tens or hundreds of thousands of dollars in development. It proved itself out by doing it incredibly manually, incredibly inefficiently, but then we could see that automation now was a worthwhile investment.

And then we invested that money and automated that process. That whole job distribution that we were doing is now called programmatic. We were programmatically distributing job postings through our early automation, but we didn't have the word for it yet. We just called it job distribution. But there was a machine that was basically deciding this job runs best on Glassdoor, and this job runs better over here, we should pay per click, and this is when we're gonna turn the jobs off. It was rudimentary, but it was automated.

Josh Becerra:
I mean, I think it's amazing and I think, you know, you probably have those moments where you may have regretted saying yes to a customer, but I'm pretty sure that this was not one of those moments where you regretted.

I know that it's transformational for your business.

Steven Rothberg:
I have definitely said yes when I should have said no. No

Josh Becerra:
So you bring up something really interesting around automation, like the chat GPT, right? AI is a big new thing. But there's all these other thoughts on the impending recession or possible recession. So I want to just hear what you have to say about where the employment market is at. Where are your thoughts? are on this possible recession, future impacts of chat GPT on your industry. I'd be curious if you have any tips for employers on hiring with all this chaos going on.

Steven Rothberg:
Yeah, yeah, well, you know, when people, when people ask me this job title that you have chief visionary officer, what does that mean? What do you do? This is what it means. This is what I do. So about half of my time is spent on trying to look at macro conditions, whether it's the economy, whether it's Silicon Valley Bank and what impact that might have, whether it's the war in Ukraine, whether it's chat GPT, whether it's fire that we used to call Twitter? I mean, what is this? 

How does that impact our company, our employees, our customers, our the candidates that use us? So the economy, the job market, this is still a really, really strong job market. So normally, there are about two job seekers for every job opening. Now, even though a lot of people are concerned about the market and people are kind of down in the dumps about it. Some people are. Now we have two job openings for every jobseeker.

It's still inverted. So it's not as strong as it was coming out of the worst of COVID when it was four job openings per jobseeker. So there's no doubt that it's softening, but it's not soft, with one very notable exception. And that is tech. So a ton One of the companies invested a ton of money during COVID to automate a lot of what they had been doing manually. And that work was done by tech workers. And so they were in very high demand and they were able to command very high salaries. 

God bless them, they deserved it. And why shouldn't they have taken the money? It was there, they earned it, go for it. A developer that four years ago might have been making 80 grand and the last couple years was making 250 grand is now suddenly finding out that they're going to be making 120 grand. If they look back at where they were four or five years ago, if they go, hey, in four or five years rather than making 80, I'm going to make 120, I think they would have been happy. But it's like half of what they were making just a year ago and they're having trouble finding those jobs.

So their pain is real. I mean, far fewer prospects, far less choice. They might have to go into the office now where before they could stay at home if they wanted to. And they're making a lot less money than they were over the last couple of years. But almost every single other sector, the world is still your oyster. And so

I'm still very bullish on the labor market. For our business, this is actually better than it was a year ago. because a year ago, when there were four jobs for every job seeker, an employer could run an ad and not get a single application.

If you don't get anybody applying, you're not going to hire anybody. If you're not going to hire anybody, why spend the money on advertising? Where now, they have a good fighting chance to hire somebody. So now they're more willing to spend that money on advertising. So I think in the long run, this is better. The overall economy, are we not in a recession? Are we heading to a recession? Boy, I wish I had a crystal ball. I'd like to say that barring something really significant, something that we can't really foresee, this is what's gonna happen. I think the reality is we're in this new world where there are constantly big new things that we can't foresee. So we kinda have to expect the unexpected. And that makes me nervous.

I was fortunate to spend a few weeks in the UK in the fall. And the doom and gloom there was so different from the sense of optimism here in the US. So I kind of feel like what we're gonna have is some sectors are gonna be more like the UK where there's gonna be doom and gloom like in the tech sector, some countries, maybe even some regions of the country, like California with all the natural disasters that are going on right now. how they are going to have a very good year. There's so much disruption, there's so much destruction, that's going to really hurt that economy. The California economy is like, what is it like 10%, 15% of the US? So that's going to bring us down. What happens in Ukraine?

Josh Becerra:
Mmhmm

Steven Rothberg:
You know, things like that. I guess I'm cautiously optimistic. Chat GPT, I use that multiple times a day. I'm a big fan. Some of the results are amusing. I've never run across anything that would scare me other than just what I've read in the media. It does a pretty darn good job. If I was a lower level copywriter or somebody who says English isn't a first language, like a writer in the Philippines who's writing articles on the cheap, I would be looking for a different profession.

If I was a software developer who just sort of like was a grunt and banging out line after line after line of code and not Really doing anything high-end. I would be looking for a different profession because I think those jobs are about to leave the impact on our industry on the Lape on the job boards and stuff like that. I think that there are are going to be, when chat GPT really becomes real time, using real time data, I think you're going to and other systems like it, you know, Bing's equivalent, Google's equivalent, you know, when they kind of get their shit together, I think you're going to have job seekers going to Google like they do now, running a search, I'm looking for an HVAC job near me, and that their equivalent of chat GPT you know, here are the three jobs that seem to match your interests. Would you like me to apply to them for you? And you'll say yes to job one and three, but not to job number two. I don't like job number two because it doesn't pay enough. Can you find a job that pays more than that? And then he'll come back to you with three more results and maybe you'll apply to those three also. That's going to really speed up job hunting. And if employers are ready for that, that's gonna be highly disruptive to the job board industry.

But if the job boards continue to be a better resource of the job postings and treat candidates better, make it easier to apply than employers do on their own sites, then Google will send those candidates to the job boards. It won't send it to the employers.

Google's gonna send those candidates to wherever it's best for the candidate. And I think are assuming job boards are getting cut out. I don't think that's necessarily the case. If you've ever applied a job at a big company, it's excruciating.

Josh Becerra:
Yeah. Well, I also think that it's the data set that it gets trained on. And my presumption is it's way easier to say, go train yourself on collegerecruiter.com's data versus go to 50 different Fortune 1000 websites and try to train yourself on their data. You have structured data.

Steven Rothberg:
Most employers never upload their data at all. And so Google has to come out to the employer's site. So yeah, but I certainly don't think that it's gonna be the death of our industry, but I do think it's gonna force some pretty radical innovation. Not such a bad thing.

Josh Becerra:
No, not at all. So you're talking innovation. You got visionary in your title. This is the last question that I always ask all of my guests. And that's like, who's kind of inspiring or challenging your kind of mental models today? Authors, podcasters, thought leaders. Do you have anybody who you've read recently or heard and said, man, that's really interesting?

Steven Rothberg:
Yeah. So the two people that over the last couple weeks, I've had some really great engagement with them. And I just love who they are, what they stand for, how they freely share their thinking, their thoughts. They're just so both so giving. So one is the founder of a company called Recruits. He used to work at Indeed. Recruits is sort of an advertising agency and also a programmatic job ad company. 

He's the first person that I know that had the job title chief visionary officer and I pretty much shamelessly ripped it off from him. After verifying on LinkedIn that it wasn't just him by the way, but anyway. So his name is Tim Deneen and Tim and I were actually joking on LinkedIn the other day about sort of teasing each other about like who's been in the industry longer and he teased me and said that I'm the programmatic and I teased him and said that he was the big bang of programmatic that there was nothing before

Josh Becerra:
There you go.

Steven Rothberg:
On like a thought leadership basis is a guy named Jim Durbin and Jim works for PSG which is a big RPO a recruitment process outsourcing company and His nickname is the indeed whisperer if you ever want to know what's happening at Indeed, why are they doing this? Where are they going? Why is it something work this way? Why doesn't it work that way? You talk to Jim.

Josh Becerra:
All right, well, we'll have to look them up on LinkedIn. Hopefully they got tons of fun content.

I really appreciate this. This has been fun. I hope people think this is fun content. So Stephen, thank you so much for sharing your thoughts in this episode of How I Work. I really appreciate it. I hope you enjoyed it.

Steven Rothberg:
Awesome Josh, I owe you a beer downstairs outside your office at 612 Brew.

Josh Becerra:
Yeah, that sounds good. I'll take you up on that. We'll say goodbye for now.

Steven Rothberg:
Cheers, man. Thank you.