Searching with Purpose
A Toolset for Modern Recruiting
At a time when competition for talent is higher than ever, companies simply can’t wait for prospective employees to come to them.
But finding the best candidates – many of whom are already employed and not actively searching for new jobs – too often means long, tedious and inefficient tasks such as scouring websites, compiling spreadsheets, and sending thousands of emails. While sales and marketing teams have long had access to sophisticated software that codifies processes, automates the repetitive tasks, and analyzes metrics, recruiters have been stuck cobbling together systems not tailored for them.
Steve Bartel and Nick Bushak experienced the pain firsthand when scaling teams at Dropbox and Facebook, respectively. So in 2017 they founded Gem: a CRM-like platform that enables hiring managers and recruiters to proactively pursue and manage relationships with passive candidates. They also provide valuable pipeline analytics that give companies visibility into a diverse pool of candidates, helping them build teams representative of the communities they serve.
Gem’s software has been instrumental in helping companies update their hiring practices for the modern working environment, and today they work with more than 800 companies across all industries. Customers include Shopify, Twilio, Lyft, and two of the country’s largest fast-food changes. In 2021, half of the biggest IPOs were from Gem customers.
Gem just announced $100 million in Series C funding that values the company at $1.2 billion. The Greylock team is proud to be among Gem’s investors and has been partnered with the company since 2020.
Gem has accomplished a lot in just four years, but the past year in particular was especially busy. The company tripled their annual recurring revenue, doubled their customer base, and boosted average enterprise deal sizes by 70%.
Steve and Nick joined Greylock head of content and editorial Heather Mack on the Greymatter podcast to discuss how Gem has tapped into an unmet need; how they were able to meet surging demand; the current talent recruitment landscape; and how the company is positioning itself for what’s next.
You can listen to the podcast here:
Episode Transcript
Heather Mack:
Steve, Nick, thanks so much for being here with me today and welcome to Greymatter.
Steve Bartel:
It’s great to be here.
Nick Bushak:
Thanks For having us, Heather.
HM:
First off, congratulations on all your progress. It’s been a big year for you guys.
Before we get into what’s going on with present-day Gem, let’s talk a little bit about how the company was able to get to this stage.
The product is resonating in the market so strongly, it doesn’t seem like you had to convince people there was a problem with the old way of recruiting and tracking job candidates. But what did that problem look like?
SB:
Yeah. Zooming out here: recruiting changed in a fundamental way. Companies realized they just can’t hire enough of the right people by sitting around and waiting for them to apply. And along with that, the competition for talent has just become harder than ever.
So what’s happened is, recruiting has started to look a lot more like sales and marketing, where companies are taking a more proactive approach and engaging with passive talent rather than waiting for candidates to come to them. It’s very much in the same way that sales and marketing teams engage with prospective customers rather than waiting for those customers to come to them.
This more modern approach is one that a lot of companies on the cutting edge have been using, companies like Lyft, Shopify, Dropbox, and a ton of others. They’ve been taking this approach for years now, even before they became Gem customers.
I think the other fundamental piece of the problem is when you layer on the long overdue emphasis on diversity, equity and inclusion – which was accelerated so quickly last year by things like Black Lives Matter – companies are realizing that their inbound application pool just isn’t as diverse as it needs to be. That has further driven the need to engage with passive talent so that they can build a more diverse pipeline of candidates if they want any shot at building a diverse organization.
Now, the problem is when you look at the HR tech landscape, it points to a really big gap. On the one hand, companies have LinkedIn, which is a great place to find passive talent that could be a good fit. On the other hand, companies have things like Workday, and Workday helps you track and manage your employees.
The problem here is that there just isn’t a great way to capture and track everyone a company wants to hire.
To manage recruiting today, most companies have what’s called an applicant tracking system. But as that name suggests, applicant tracking system software was for that old way of recruiting where you wait for candidates to apply. And while they do a great job of tracking the interview process, applicant tracking systems don’t help companies track all the work that happens before candidates apply. And that’s where the real challenge is and where recruiting teams are spending the most time, energy, and money these days.
To get one great candidate to apply, onsite recruiting teams are sending hundreds of cold recruiting emails, they’re going on campus, they’re nurturing passive referrals, they’re hosting recruiting events, they’re running branded email campaigns, spending money on ads,etc.
All in, companies are spending hundreds of billions of dollars engaging with passive talent, but there just isn’t a great system to manage and track all of this work. So that’s the problem we’re solving. And that’s why we started Gem.
HM:
And at a high level, how did this problem become so pervasive?
NB:
Yeah. So two other trends worth calling out: First, more and more companies are relying on people and technology to differentiate their businesses. This trend has been underway for a while, but Covid has greatly accelerated it.
For example, two major fast food chains recently became Gem customers to help fuel their tech hiring, to improve their apps, data science platforms, and other core operating systems. Similarly, healthcare has been a very fast growing industry for us due to similar shifts towards technology.
The other thing to call out is that most people aren’t happy with their jobs, and everyone’s hiring and it’s creating a reshuffling that someone coined “The Great Attraction”, which I think is spot on. In this environment, smart companies are looking for an edge to attract top talent. So they’re using Gem as a way to reach out to people and build relationships, as well as to monitor and forecast toward their hiring goals.
A great example is our customer Shopify, who recently spoke at our conference. They’re hiring over 2,000 engineers this year alone, and they’re using Gem to make it happen.
HM:
Can you give me some figures of what that looks like? What are the numbers here?
NB:
Yeah. So almost every month for the past six months, there’s been a new record for the number of job openings. And meanwhile, over 55% of people say they’re open to new opportunities. So yeah in this environment, the smart companies are looking for an edge.
HM:
Let’s talk a little bit more about this idea of passive talent. Why is it so important for companies to tap into this pool versus those who are actively looking?
NB:
Every company is of course looking through their inbound applications, they’re using all of the sort of traditional ways of hiring. But what companies are finding is that it’s just not enough in this new world and in this new knowledge-based economy, because a lot of the best talent just isn’t looking for their next role when they are approached for their current role.