Optimizing Talent Programs with Branded Marketplaces

[00:00:00] McLean: I'm going to turn it over into your more than capable hands to get us kicked off. Thanks so much.

[00:00:05] Bob Lucas: Thank you McLean, and John, Audra, thank you very much for joining, as well as all of you who set aside some time to listen today. Our topic is, a topic that we see prevalent in the marketplace today. And both of you, Audra and John, started down this journey a few years back. Audrey, you were most recently, but we see direct sourcing an engaging, highly skilled professionals as a process. It's not simply a one and done stand up program or stand up technology. Can you just give us a few minutes? John, we'll start with you. You know, what was the journey? Why did you even start going down this road and where are you at today? And Audra, if you could follow up after John?

[00:00:51] John Henkel: Sure. Thank you, Bob. KPMG, at least the advisory practice and even more broadly within KPMG, has utilized and leveraged independent professionals for a long time. In about 2016, the Chief Operating Officer of the firm had asked if there was a methodology or an approach that we could come up with where we could leverage the fuller talent pool. He wanted greater access to the entirety of the talent pool and his premise was we are under leveraged relative to the continuing workforce that we are disparate in the way we handled it. There was risk that was involved as a result of that as well, and we weren't getting our fair share of the full talent pool as well. And so he really was adamant about pushing us in the direction of getting an organized, structured approach with a great platform that would get us access to the cost savings, mitigating risk and the full talent pool like that. So it really was a concentrated, well-thought out effort from the CEO about 2016.

[00:01:56] Audra Nichols: Ours is a little bit different journey. I've been with the UnitedLex for just under a year, so when I joined late last year, one of the very first things I did, I would actually say probably the very first strategic initiative that we put in place was calling Miles and MBO Partners to set up what we call our liquid workforce program. So we started with this strategic intent with slightly different business drivers. A little bit smaller organization than KPMG. Not everybody can be a KPMG. So a little bit smaller than that. And we had used contractors at UnitedLex in various parts of the organization, but there really wasn't a unified strategy to understand our business a bit. We were going into the market with something that I think is wildly exciting, but creating a new space for legal. So what UnitedLex does is we work with organizations to kind of transform their legal department and digitize that through agility. So we knew that we were going into the market with something that actually offered talent and opportunity to grow a skill set. If you put those two things together, what we have historically in UnitedLex, that portfolio needed to be reshaped. And I knew that intentionally the best way to do that, the shortest distance between two points and to get access to the greatest talent who really wanted to grow their skill set, bring their legal acumen, but actually bring to bear their skill set in a way that's going to have a huge impact on the market that we put those two things together. So from the very beginning, we said, we're going to intentionally establish a strategic program that's going to drive the growth of our business. Now, I don't come from the HR background, I'm not an HR professional, I'm the Chief Operator here. And so I knew immediately that this would be a strategic differentiator, no matter how quickly we adopted it. And as the business person, I'm always thinking about the outcomes, right? So I approach most everything from a programmatic or a strategic perspective with a sense of urgency to achieve those outcomes. And I like to win. So I knew putting these two things together with MBO will do that.

[00:04:12 Bob Lucas: Miles, I'm going to turn to you just briefly. You've got some history doing this yourself before you came to MBO and you know, tell us a little bit about what got you to think about this, why you did it and you know where it landed.

[00:04:32] Miles Everson: Yeah, thanks. So it was the initial kind of thinking on this goes back to about 2013, and it was really looking at was there a way to drive up operational leverage and productivity? It's similar to what John mentioned. And could we drive productivity of the workforce up? And it's kind of as simple as if I have a good mechanism to measure productivity. If I can convert some of my full time employee base over to independents, then I can see what it does to my productivity. So that was the initial when I was running the P&L. That's what I was originally going after. And then it pretty quickly came to, well, there's not just a productivity lever, but there is a supply chain cost opportunity to take excessive cost out of the supply chain and sit with staffing firms and be very direct. And so we went after that piece, and now it's evolved to much more of can I get access to the hot skills that I need? Because as we know, increasingly very, very talented professionals are choosing to be independents. And by definition, if you are not accessing the world of independent professionals, there's no way you're going to have access to all the best talent on the planet. And so that was the evolution. And I think, you know, it's being recognized by lots of people today that there's many advantages. It's not a single threaded strategy benefit. There's multiple benefits here. 

[00:06:00] Bob Lucas: John, in the early days when you first started your program, you used a brand agnostic platform, right? As your marketplace. You migrated to branding that platform KPMG assignment select. Talk to us a little bit about, you know, what were the early days like and why did you elect to use and develop a branded marketplace? And what have you gotten out of that branding out in the market?

[00:06:30] John Henkel: Initially, we didn't know what we thought. We didn't know enough. We really thought we knew more than we really did. We were under the impression that we were KPMG and we had a certain brand and a cachet in the marketplace and that individuals who were independent professionals would just come right to us. And so we didn't think in our heads the value of having a branded marketplace, and that was a definite error on our part. And you know, to quote you, when you initially were working with us, the question was what are you trying to solve for? What is the problem that you're trying to fix? And we did not think that through really all that well, at that point in time, we were naissance in our functionality in our understanding in the marketplace. And we really, you know, took a step in the wrong direction. We were wholly relying on our knowledge of the full time space, and it is two entirely different marketplaces. Really, the talent pools are similar yet distinctly different in terms of engaging with that talent. And we didn't take that into account as fully as we should have. So we did go to a branded platform and we spent time investing in not just building our brand within that community, but having to understand what the independent professionals are looking for and you all were, MBO was tremendously helpful in helping articulate that to us and helping us flesh out what our approach ought to be. Where do the independent professionals sit? What is important to them? How do they want to be engaged when they are engaged? What is still critical to them? And it's a lot of the same things that you as a full time employee may want, and we weren't taking that into account as much as we should have. So the branded platform has been tremendous for us. We've gone to about 12000 or so, 13000 or so folks within our own individual platform. But the real benefit is, you know, being part of the MBO marketplace gives us access to the broader platform as well. And we're congregating with other similar organizations that are looking for similar talent. And KPMG had to get away culturally from a leadership perspective. The firm was very bent on, it's our talent, it's my talent, and that's a full time perspective. And they didn't realize that independent professionals are just that, they are independent. And so it's no harm, no foul. If we use some engaged with an independent professional for six months and then one of our competitors does heck if they found them and they weren't engaged and they're available. Well, that's great for us too. We had to let go of the ownership mindset, and that was really a bold step forward for us

[00:09:18] Miles Everson: If I can chime in. I mean, John, I think what's evolved over the last several years is, I think of it this way. You have really great talent that are independents. It's like saying you have Kobe beef. All the five star restaurants use the same Kobe beef supplier. It's how they package it and put it together to create a unique recipe for what their clients need. And that's a big piece of what this is.

[00:09:40] John Henkel: That's so right, and it took us a while, Miles, to get around to that because everyone was concerned about, are we losing our special sauce, right? And the special sauce is how KPMG approaches the market and goes and develops their solutions. A lot of the people, I don't want to say that they're not the special sauce in terms of just the, you know, how do we deliver the solutions right? That is a differentiator. Yes. And having the right people. But you know, ownership of that person, ownership is not essential. In order to deliver your services the way you want your services delivered to the capital markets, it's just not necessary.

[00:10:23] Bob Lucas: Audra,you started right out of the gate and you said, look, we're going to leverage our brand, and I think as you said, your brand isn't as widely known as KPMG. So you had a little bit more of an uphill climb as far as, you know, attracting that talent. What did you find from the start that says once you put your brand out there with the branded marketplace, what did you see the reaction from the talent, and how easy was it to attract that talent into your marketplace for projects?

[00:10:56] Audra Nichols: Not as easy as I would have hoped. So it's not. Listen, there are three components of this, right? So you've got the platform, which is what we brought in with MBO, and I was already a consumer coming from the Big 4, coming from PwC. I had already experienced the power of what a branded marketplace can deliver from an impact perspective as an executive consumer. I didn't set it up when it was at PwC, but I was a consumer of it, so I knew what the end game looked like. So I didn't have to make those decisions at the beginning, but I haven't gone through the process as the builder, right? So as the operations leader, I said, I know what we want to do. I know what my instinct is going to and what I want my end state to look like. And I knew that it would have an impact on things like Miles, you mentioned the operational metrics and the productivity. I already knew that's where I wanted to go. But getting the folks into the marketplace was something that I had not experienced, right? So what we did is we worked with MBO to say, okay, we're going to build these profiles. We're going to tell you the profiles. We have a very targeted market. We're in the legal industry, the legal space, not broad consulting. So by nature, our pool of who we're looking at is going to be smaller. So we identified at the beginning. All right. I want 80% legal talent, 20%, call it consulting programmatic talent. So we set up that ratio and then worked with MBO to say, I know that we can't do this internally, right? So I intentionally said, let's use the experts who have done this. We're going to build the profiles and then MBO partner to go actually fill my pool for me. OK, so that was the very first thing we did. We went from ideation to full execution and 700 people in the pool in 6 months, which I thought was pretty good. I don't necessarily have anything to compare it to, but I thought that was pretty good because we worked with you guys to actually bring that talent there, the talent to the pool. Now here's why I think that was important. Or at least what I learned from that is I started the adoption journey with our internal executive team and are what you would call hiring managers from the very beginning. How did that happen? Because I had to provide you with the profiles they had to come from my experts, my leaders. So from the very beginning, they had ownership. It's not like you don't have what we need in the pool. You've defined the profile. We're seeking this profile and then we would do kind of quality and spot checks. Does this work? What do we need to change? We bring multiple executives to the table that have varying conversations. So they were engaged from the very beginning, owning the type of folks we're bringing into our UnitedLex marketplace. So then when they become the consumers of it, once it's built, which we're in that phase now, it's not like, this isn't mine. So adoption, I think, is the hardest, right? When you're rolling out of a branded marketplace and a whole new kind of mental model. To your point, John, if I'm used to having my guys, my folks, my professionals, you've really got to begin that journey from the very beginning so ownership is a part of the build.

[00:14:01] Bob Lucas: Good. Miles, I turn to you. We've got some new data. We collected some data points on the value people see in branded marketplaces and why folks are starting to do this. And the one interesting thing that I thought was cost savings wasn't high on the list. It really was about creating skills, density, you know, talent access, etc. And cost savings was sort of down on the bottom. When you were a corporate leader doing this on your own, what? What was the drive? I think you talked about early on, it really was about cost savings. But how did that evolve and how did your thinking evolve, which actually aligns with the data we're seeing today?

[00:14:47] Miles Everson: Yeah, well, I think I kind of commented on the evolving thinking, right, so it moves from, you know, just cost economics and leverage to can I strategically be more nimble and move faster? And can I get access to scarce talent? So maybe for just some data points, you're right. So the first one is the Bureau of Labor Statistics. If you're under 45 in the United States, you'll change jobs every 4 1/2 years. If you're under 35, you'll change every roughly, It's like 3.2 or something like that. Does anybody really have a permanent workforce anymore? Can you really rely on the permanent, I mean corporate america broke the promise when they got rid of defined benefit plans and created mobility for their employee base, which is fine. I say it's fine, it's good for society, etc. And these are not either-or strategies. It's like you need full-time workforce, you need extended workforce, you need consultants, you need independent contractors. It's the combination of your ecosystem that matters. This is just one of the under-levered assets in an ecosystem strategy, so I think about it. The other thing is, you know, we just finished our 11th year of the State of Independence, and it's the longest-running primary research on what's happening from a talent perspective with independents. Well, it's up 30% from 2020 for the number of people that are choosing to be independent. So that 30%, now it's over 50 million people. And the other thing that I think is really interesting in that data is that 68% of that growth came from Millennials and Gen-Zs that are choosing to be independent. And so you tie that again with another Bureau of Labor Statistics. And that Bureau of Labor Statistics, it's a small business registrations. Small business registrations in the United States in the last year at record levels and particularly the registrations for its new entities. And most of them said they were not going to employ other employees. Those are independent professionals. That's who is doing this because there is a correlation between remote work and independent workforce and the pandemic is probably accelerated remote work by, I don't know, at least 5 years, if not a decade, in terms of mass adoption. And so you see these macro trends that are coming, that are coming across that kind of the transom. And it's not just because companies want, it's because great independent professionals or professionals are choosing to be independent.

[00:17:24] Miles Everson: So, you know, I see that the scarcity is so high. So there's another report by a company called MCEMSI. You know, they published it called the "demographic drought." We're short 6,000,000 jobs right now. So all this talk about how automation and AI is going to eliminate jobs. We don't have a job problem right now. We have enough people. Our problem in the world is not enough people to do the right jobs. And so this scarcity of talent is really what's driving people now to say, I guess I should more strategically think about how I'm going to use my workforce. So, Bob, you've heard me say many times, it's when somebody is, you know, making $100,000, $200-300,000 a year being an independent. They don't want to be treated like a transaction by the enterprise. They want to be treated like a professional and a human being. And when you have your direct sourcing programs, you can do that because you can curate relationships with them. You know them, they know you. And that's much better than unknowing people coming together to try to do something.

[00:17:24] Bob Lucas: Thanks for that, Miles. John, I want to go back to something you talked about in the open and you talked about your COO wanting to create this vision of direct sourcing and, you know, creating a program. From the early days, it seemed like you had an inaugural. I'll ask you a similar question. Seems like you had executive buy it right that this was driven or at least sponsored at the very top. But, you know, I followed your journey now for 4 1/2 years. And while you have that buying at the top, that message may not have gotten all the way through the organization. Talk to us a little bit about sponsorship, how important it is, but even beyond sponsorship, the change management aspect of doing something like this.

[00:19:21] John Henkel: Sure, you are spot on, correct? I mean, we had executive leadership support, but this quickly became an endeavor and change management more so than anything else, right? So yes, we needed to execute. Yes, we needed to find the talent. Yes, the talent needed to be the right talent for everyone. But then getting the buy-in and the practice to change their mindset was a real difficult task. It was really fundamentally a different mindset from how consulting has operated for many, many years, right? So I'm a partner. I need to hire a whole bunch of folks and I just they're part of my team and I charge ahead, right? But now, you know, and then Miles had made this point just before, its skill density. It's not cost savings. The first couple of years, everyone was concerned about cost savings. How can we disintermediate 3rd party vendors? That was really the main goal. It quickly became that there aren't enough human beings to fill our jobs and we will take we want access to the totality of the available talent. And that was something that we needed to start educating the practice with and educating the line partners, the partners who were the end-users, the executive users. And so being able to share with them. Here's what the talent pool looks like. Here's what the full-time pool looks like and being able to show data and analytics. And KPMG is an accounting firm at its core right, and it's real core data speaks.

[00:20:51] John Henkel: And we were able to show that, hey, look, this is the total size of the workforce for workday professionals. It's 8,000 people in America, 6,000 want a full-time job, 2,000 are engaged currently as independent professionals. Hey, maybe you ought to have greater access to that population and don't worry about how much money it costs to get access to that population. So change management was really hard. Every time you had to look at it, it was hand-to-hand combat, each engagement, every time we, you know, promised somebody that we would look and find talent for them. We needed to deliver on that talent and we were being evaluated each and every time, and it was watercooler talk. "Hey, assignment select is doing great." "Hey, assignment select is having a hard time finding my talent." You don't want to use them. And so it became this marketing roadshow internally of us, you know, snuffing out where things were going great and where things were going poorly and then getting the executive sponsorship of the users to say, Hey, I'm a use case. I did a really great hack. We created a couple of internal like animated videos of partners and said, Hey, John Henkel has a problem. He can't find talent. How would he do it? And we went through it and it had some of the biggest viewership of videos within KPMG in years, right? People were really interested in the solution and how it could work for them. So it really was terrific.

[00:22:16] Bob Lucas: I'd like to see one of those videos one day. Audra, same question back to you again. Smaller-scale, you had experience in doing this. How difficult was it to, you know, talk to your management? You're new to the company, right? How do you convince them that this is really something of value that they want to invest in?

[00:22:38] Audra Nichols: I think actually the direct answer to that question is probably easier than you would have thought because we knew we were in a place, right? So it wasn't driven by. It was driven by executive leadership. Rather, it came in and said, this is a strategic program we need to put in place for these reasons. So there wasn't as much old school and new school, but we're in a different place, right? So we're taking something really, really important to market that is new, that is exciting, that is in an industry that is a legal industry. I would say that our business drivers, we never thought it was never about cost, where they came from, where that was along the journey, but it was about access to talent at the point of need. So in an organization that's not a multibillion-dollar organization, you can't carry a bunch, right? And if you and actually nobody can carry bench these days because everybody wants to be productive and useful and like, let's be honest, the talent has choices. I use the analogy that, you know, it's no longer just the talent wants to get married to an organization. Miles you've quoted that time period. It's like a dating app at this point. Right. And it's a competition. And now they're choosing us. And every day is a competition for the best and brightest. So that part was kind of an easy sell. But then the other thing is that I can't carry a badge, so I know that my business is going to ebb and flow. I'm going to get really big engagements and small engagements, my pipeline has both types of work, right? So as my work ebbs and flows, how am I going to know that I've got the right people with the legal talent because we're across multiple domains, right? And every lawyer is not the same. The type of work is not the same. It's not general consulting. I needed something that allowed me to have access to that talent during the ebbs and flows of the business and help me manage the risk. We don't have an enormous infrastructure to manage risk as it relates to when you bring in independent contractors on a 10-99 and the infrastructure that you need to have to make sure you're not creating risks for that talent or for yourself as an organization. So that in and of itself is like, listen, we don't have to carry a bench. We're going to have MBO's going to address that risk for the compliance process throughout for us. They've got the infrastructure to do this and now I can go in the ebbs and flows with my business and not carry a costly infrastructure or have exorbitant headhunting or recruiting fees every time I needed somebody. Plus, that runway is impossible based on a growing business with the ebbs and flows, not multiple different types of work.

[00:22:38] Bob Lucas: As you leverage the brand, your brand, your company's brand out in the market and you put up a page with your logo, and what's important to your brand. Audra how, I mean, how have you seen the response to that be? I mean, when folks go into the marketplace, is it the brand that's attracting them? Is it the types of jobs that are attracting them? Is it the culture of the company? Talk a little bit about what's actually attracting the talent.

[00:25:48] Audra Nichols: Okay. I will be honest and say, this is where we are in our journey, so I don't have a million use cases for this yet, right? We are in adoption and I'm really trying to focus on if something we're calling an Engagement Campaign. We've got more work to do in actually building a relationship with the talent that comes into the pool. So I mean, when the talent first comes into the pool, I think what we're doing in the market, we've got a ton of thought leadership in the market. We are known as the best out there from a digital legal transformation perspective. So that, but that's only step 1. Now you've got to bring people in and they need to be staffed. They need to have an opportunity to work on engagements. Otherwise, they are nascent. That actually becomes the hard part. So our Engagement Campaign is we want to build a relationship with these folks. So at the point of opportunity or readiness, they know as much about UnitedLex as our clients do and as we do. So I think our client base is quite impressive, too. I think we do have a reputation because we're the best in the market in terms of what we are doing and we're pulling together elements. There's a lot of stuff being published about the legal world today. Just think about it, right? If you think about large organizations, we've transformed finance, we've transformed H.R., we've transformed the supply chain, right? That's John. That's what our businesses grew up doing. But legal is the last to be touched, right? So if you come from that world, you may have had an experience just like "I would like to fix that. I would like to optimize that part of my business." Those people are the people who are coming into our marketplace to actually work with us because they have a passion about what it means to be in-house or to be in an organization where they sell those opportunities.

[00:25:48] Bob Lucas: John, you're in a bit of a different situation. KPMG Assignment Select is the brand that you guys are using out in the market for your marketplace in your program. Your direct competitors have their own branded marketplaces and you know, they're out there promoting what they do and how to attract talent. What's your view of the assignment select brand and how talent is responding to that brand and what you guys are putting forth vs. what they're doing with the competition

[00:25:48] John Henkel: Sure. We really have spent a good little bit of time determining what our brand ought to be to this population. And we've leveraged a lot of the research that we've done across just the talent platforms in general, across all the different platforms. KPMG has a very large, robust recruitment branding marketing organization, and we've spent a lot of time doing deep research and we've started to apply those same methodologies to the contingent workforce. And so, for instance, we most recently have engaged, gosh, we sent out a survey to the entirety of our engaged resources. If you had been engaged by KPMG, we would reach out to you and we want to get information back so that we could further refine our marketing and our branding to that population. What went well? What did not go well? How were you treated? Where do you normally look for work? What sites do you go to just in general? And what we're trying to do is really, you know, find the right combination of the specialization of KPMG and why culturally you want to work with us and how our work is compelling. Our people are compelling. We engage with you as if you are a, you know, a true professional and don't treat you as if you're just somebody who's coming in and you're going to be a contractor for us. We recognize your value and your contributions to the engagement. And so we've spent some time, we've got about a 33% response rate, which is unheard of with regards to, you know, doing surveys. And so it's really robust data taken at a very high level. We've found some really interesting aspects of what they really liked about KPMG and how they were treated. And we're going to reinforce that in the communication to, hey, join our pool. But then, hey, you're part of our pool. Here's what you can expect when you do engage with KPMG. And it's that stickiness and there's that engagement that we want to continue to push.

[00:30:10] John Henkel: We've got 12000 resources, and I think at any one point in time, maybe a 1000 or 1200 are engaged, right? And some are, you know, repeaters and we churn through regular interactions with them. And some have never been touched by us and haven't had the opportunity to engage because their skill set is X and we're looking for Y on a regular basis or whatever it may be. And so we want to elicit a response from that population to some of what we're thinking about is how do we engage with them? What is a good way we think Mindsumo may have some depth, right? We've been engaging with Mindsumo a little bit. How do you work out some degree of challenges or connectivity with that organization so that they see that KPMG is an organization that's looking to be involved, that's looking to develop that relationship? And it's cool and interesting too, right? It's something different that other employers are not doing. Having those challenges and having that outreach, we think is going to be material and differentiating between us and other organizations. Hey, KPMG is doing something that's really cool relative to, you know, crowdsourcing or whoever you may want to put it. So, you know, and then furthermore, and I'll make one more point is the majority of the population, yes, within the independent workforce is concentrated in LinkedIn. But in a lot of instances where they're looking for work isn't necessarily LinkedIn, and where you can touch them isn't necessarily LinkedIn the best way or where they're going to be most responsive. And so we think that there's opportunities within other social media platforms. In particular, we think podcasts are really neat spot that is totally unexplored. And so we're working through how we get in contact or get a voice in some of those podcasts and some of them are podcasts that I would never think would know we should advertise on or that we would do outreach on. It's really very, very interesting stuff.

[00:32:04] Bob Lucas: Miles, I'll turn to you real quick, I just touched upon the fact that a lot of the consulting firms in recent years have come up with their own branded marketplace, if you will, to attract talent. We're now starting to see it outside of consulting. What do you see as the future of branded marketplaces and what else are companies going to brand to change the way they either attract talent or do work?

[00:32:04] Miles Everson: Yes, so I'll start with the point that Audra had commented on, which we referred to as talent is looking for companies that view that they want to be "the client of choice." In other words, I believe the balance of power has shifted to the worker in a very dramatic way. And I say the balance of power, who gets to pick who? And the worker gets to pick who they go work for in a much more mobile fluid way. And so just the way you ask the question, Bob, is it's the branding. It's not just the direct sourcing branding, it's all the things you do to let the talent know who you are. So you become more known to them and you view that independent pool of people as a real asset and part of your workforce. And so, you know, John commented about doing podcasts, but you're out there in your branding saying, we are open for business as a provider of demand to independent professionals.

[00:33:45] Miles Everson: So I'll give you an example where I think we're going to see just a massive surge. John probably has forgotten more about this than I know, which is the world has become much more accustomed to doing asynchronous communication. So if you want to attract, let's use a big number just to make the point. I want to interview 100,000 people in the next year. If I do that synchronously. It's what? 500,000 hours of time, 5 hours for each, for each candidate on average? If I do it asynchronously, I can probably cut that down to less than an hour in total on average. Because asynchronously you can get, I'm saying asynchronously with video. So you can drive up the productivity of your sourcing functions and I think it's going to be more efficient for the talent too cause the talent could do an interview with 10 companies in the time that they would have taken to do it with one if they had to go, you know, physically just to go physically visit an office and do an interview. How much time does that consume? For both sides of that interaction? You do it, now you can do it by video and Zoom and you can do asynchronous but it hasn't been mass adopted. Mass adoption is going to occur in asynchronous interviewing. Because the other thing is that it ties to Bobby, we've talked about this many times. In the world of contingent work, there's been a massive amount of energy focused on how we help people write the right resume. I just wish there would be as much effort put into how do we write a good requirement for job req? Because if you don't have both well done, you will spend a lot of time in these tremendously inefficient and that transaction of trying to get a match and get to know this stuff. So I just think that's another area where branding is going to really come up. You know, you see KPMG is a good example. You go to their website and you can see that they are expressing that they're interested in independent talent. You don't have to look for a needle in a haystack, it's right there in front of you on the career stage.

[00:36:05] Bob Lucas: Let's talk a little bit about success, John. I'll start with you. The more mature program, I would assume that your measurement of success has evolved with the program. How are you guys measuring success today? Is that number of independents you engage? Is it a reduction of permanent workforce? Is it cost savings? What are your key success metrics that you use?

[00:36:05] John Henkel: Well, we're KPMG, so we love metrics. So we're tracking everything as much as we can and even more, right? We can't help ourselves, but there is a, you know, initially the real point that everyone was really trying to drive towards was how much cost savings can we bring out? We would have spent a dollar now we only spent 90 cents. Congratulations. It was more cost avoidance, right? And everyone was very thrilled and excited by that. And then it transitioned into other key areas, too. So then it was the number of people that were engaged. Then it was how many were repeatedly engaged. Then it became time to engagement. How quickly can we get somebody from posting the need to getting them deployed right to getting them actively put on a client? And then finally, we're getting around to and this has been important throughout the while. But this is becoming really important is the number of hours of engagement. And what they're doing is they're translating that into the economics of their engagement and talent channel and delivery model. And how do they look at, you know, and Miles far more eloquently talked about it than I do. But as you look at the different available channels of talent and what the cost is affiliated with one. So full time is maybe 50% of your engagement and 30% is maybe contingent. And then another onshore resources that are low cost and offshore and all the other components and tying it together into what is your operating income and how were you able to deploy a team that is even more effective than all full-time resources with the cheaper overhead cost to it, right? And how do you then and that's translating into how many full-time people do we truly need? Are we overstaffed? What businesses should we have more full time and less full time and know that our contingent workforce has totally changed the dynamic of some of the businesses? And they have intentionally said, "We're going to have 50% of our full-time workforce going to be in this business." Everything else is contingent. It really has evolved into workforce analytics at this point in time.

[00:36:05] Bob Lucas: Audra, much smaller scale I'm sure, but are you tracking along the same things that John's looking at, or is there anything different that you guys look at in particular?

[00:36:05] Audra Nichols: It gets where you are in the process, Bob, so certainly that's one state. I think you need to have some scale to be able to see how it's going to affect operating income, right? We've again started with the strategic intent we have on our list. We want to get to a defined delivery mix based on a type of worker engagement that we're doing. We know that will drive profitability, etc. But crawl, walk, run, right? So not everybody can. Not everybody is going to get there at the same pace where we are today. So you've got a build phase. So we've built, right? Once you start to move into the usage phase, what we're measuring today is do I have the right profiles in my UnitedLex marketplace because it's going to be really real and really applicable. And what you measure at the very beginning has got to be around adoption. It can't be around compliance of the strategic program you set up because then you screw up your adoption, right? We want this to be something that people want to and need to be a part of. So are we getting people? How many resumes do I need to look at to see if I've got a profile of people I even want to talk with, then something that is very meaningful today is how long does it actually take to get the right independent talent onto my engagements? One of the ways we've solved this, which actually I'm quite proud of, is that you've got to make it easy to achieve success in the minds of the hiring managers, the line partners who are going to want to use the independent talent. They have to see success in their engagement at that time. That's what they need to see. So we've actually automated everything that we're doing internally to cut down our cycle time, eliminate errors and stay in communication between MBO and UnitedLex. Every single step of the way, like we did that ourselves, we didn't hire a group. We didn't have an I.T. department. I literally said to my team, you've got three weeks, go teach yourself power, automate. We got to make this simpler because we've got to shorten our cycle time to get these people on. So I think your metrics change based on your level of maturity as you go through the crawl, walk, run cycle. So today, I'm just happy when we've got like, I've got one group who has maybe they've just done 10 or 12 folks in the last two weeks. That's huge in our world, right? And they're like, okay, they are now going. I said from the very beginning, I want this to be self-service, which again, is something too hard to get your mind around because they're used to working with a recruiter, right? So they call the recruiter, can you go into the marketplace? Can you find the person? This one manager who is now brought in 10 or 12 folks. He's in the marketplace doing it himself. This is the person I want to talk to. To me, that is a success measure when you're in the crawl, walk, phase.

[00:36:05] Bob Lucas: It's interesting, so you crawl, you're walking. Let's get to the marathon. So, you know, Audra, looking into your crystal ball, 2025, where are you at your program and now do you evolve from just I've stood up a direct sourcing program. I'm going direct to talent. Are you really looking at optimizing your workforce? Are you looking at? No, this is a strategic part of how you get business done. Talk a little bit about where you think this is heading.

[00:36:05] Audra Nichols: Again, I think platform, process, and program, right? So long term, sustainable strategic intent where I think we're going to be in 2025 is we'll probably never have the volume of some of the large consultancies because we've got targeted talent we're going after. What I see as success then, is we do have the dashboards. We understand what our delivery mix is. But probably most importantly, we've got that repeat talent and it's not only about are we bringing the talent in who we need to serve our clients, but are we providing a benefit to the independent talent that allows them to innovate, that allows them to add to their toolkit that then we're attracting more folks? Because when you come in to work on what we're doing from digitizing the legal industry, this isn't like everybody else is doing it, right? So there is a benefit for us and a benefit for that talent. So 2025. I'm going to have the best of the best that I can select from. Some of those people are going to want to be our FTE's. We'll know when they do the repeat engagements right and some of them will be. But some of those people may just want to choose and select. They may want to choose different industries. But based on what we're doing in the market today, I want to feed back to that talent pool and I want to be known as the place to go to upskill myself and do things that are really cool.

[00:43:47] Bob Lucas: So we have a few questions. McLean, do you want to run through them?

[00:43:51] McLean: Absolutely. I'm happy to hop in and just get these questions taken care of because I want to make sure everybody gets their value out of this, as this is very enlightening. So the first question says, Do you think success is contingent on being location agnostic and how much do you think success is based on your business as being a services business? So part one, how much is location agnostic? Part two? How much is it because you're both service businesses? So I'm going to let Audra and John both jump in on that one.

[00:44:21] Audra Nichols: I guess I'll start. I would say I can't comment on services or not. I do think that's a key part of it that I can absolutely see, you know, the need to attract, you know, engineers who are building products, etcetera. I think about some of the stuff we do in our intellectual property space. I've got, you know, guys and centers breaking down iPhones, determining what's in there, that type of stuff. So while we are a services business, there's a lot of hands on that goes with that. I don't think it's location agnostic. That would be my instinct because, you know, after what's happened in the last 18 months in our world, I'm not sure there's a difference, whether you're an employee or an independent contractor. I actually think people in general, human beings have shifted their mindset like I believe other territories. Like right now, we're wholly focused on the US. I think we've got an enormous opportunity in parts of Asia, where traditionally the work approach has been to go into an office or go into a center. Those folks have a whole new view of the world. There's some of the brightest minds, most innovative people, and I think we collectively have enormous opportunity to change the way things work in other parts of the world as well.

[00:44:21] McLean: Thanks, John, do you have anything to add there?

[00:45:42] Bob Lucas: I think we are almost at a location agnostic point in our evolution here. A lot of it is being driven by the pandemic. It has changed so much of it and has made us more force fed us to be more agnostic relative to location. However, as things are becoming a little more open, we're feeling some of the, you know, well-thought out decisions being made about where does talent need to reside for specific clients? Certain clients have requirements where we must be on site and that's being re-evaluated at some levels. But there is some component that I think will return where location is going to have some key ingredients as to whether or not it will, you will be an effective resource for us. So I don't know if we're going to step away from it entirely, but we are making some well thought out solutions relative to that. How do you approach location in a better, more thoughtful way as a car?

[00:45:42] McLean: Absolutely. Miles, do you have a thought there?

[00:45:42] Miles Everson: Yeah, of course I do. So, McLean, you know, from the work that we've done in the research on digital nomads, which we define as being location agnostic, the highest increase in digital nomad occurs with full time employees versus independents, interestingly enough. Okay, that could be a, you know, a session like this on its own in terms of the implications of that. The second piece is. I think it's too general of a question for the following reason. Our own research shows that while the enterprises are comfortable with talent working remotely. They would prefer that they have the flexibility to be on site if needed. More often than not, so it's kind of like, yeah, you don't need to be here every week, but if we needed you to come in for three days, it would be nice if you could do that. And that's probably over half. Now, having said that, we are already seeing a normalization of global wage scales and certain wage classes. And what I mean by that is, let's say, you're a JavaScript developer. Because remote work has become more acceptable if you're sitting in a low cost territory, which just an example, so you make $20 an hour doing JavaScript development in a low cost country. And that same price in the United States is one hundred dollars an hour. A five percent decline in the price point, the United States is $95 or five dollars. That same increase in low cost territory is a $5 increase in 20 to 25 percent wage increase. So we're going to see a global normalization of wage scales. I'm not saying they're going to converge 100 percent. What I'm saying is the gap is going to narrow as people are more and more comfortable utilizing remote workers.

[00:48:43] McLean: Excellent. Thanks so much, Miles, I really appreciate that point. A couple of very quick ones. Has either of you faced any challenges with co-employment risks with this workforce?

[00:48:56] Bob Lucas: That's a definite concern, but we rely on MBO, right? MBO is clearly the 800-pound gorilla of co-employment risk in the world, and that's the reason why we're partnering with them at some levels, right? That's one of the real great things that they bring to the party. KPMG is a tremendously risk-averse organization. We want to avoid it at all costs. And therefore, you know, we have to factor that into a foundational sort of level of the program. How do we ensure that we are mitigating co-employment risk as best as possible as a foundational thought for us?

[00:48:56] Audra Nichols: I agree that my exact answer and one of the key business drivers or expectations that I had in setting up this relationship.

[00:49:48] McLean: Wonderful. Thank you both so much. And we're happy to see that. Last but not least, are you guys planning to expand these programs outside of the United States? And have there been any issues if you've tried to do so directly?

[00:50:03] Audra Nichols: Yeah. I actually kind of mentioned it, but the answer is absolutely yes. Right now we're working with the team to go to the U.K. so it's outside the U.S. I think it's critically important. So the answer is absolutely yes.

[00:50:03] Bob Lucas: Yes, I agree. Global is clearly the destination. At some point in time, we're going to have to get there. We're not there yet, at least within our own current program.

[00:50:03] McLean: Sure. Why thank you both so much, we had a few sort of general things coming in, but I'd like to just wrap by asking, are there any last thoughts about this topic or just general hopes for the future work that you guys would like to share today?

[00:50:03] Bob Lucas: Audra, would you like to go first?

[00:50:03] Audra Nichols: I would just say, don't build for and think about today, build for and think about tomorrow. I actually think that the success of our effort in our program today is far greater than what I even intended, even though it began with the end in mind because I started in December. And who would have known in December that there would be the great resignation and that right? You heard a little bit about it, but like now, with this program in place, like we're prepared in a way we never would have been. So you can't don't work to the end of your nose. Think strategically about where your business is going and make some innovative decisions about how to get there.

[00:51:29] Bob Lucas: My comment would be to be considerate of what you're trying to accomplish and how far you may have come because you're always going to see the warts that are on your program. But your program is probably so much better than a lot of other folks programs, right. And we, you know, I could point out all the things that are wrong with my house. Oh, the paints are no good there. That window needs a little bit of fix, and I could do that with our program here. But it is really a nice house we've got going. And so give yourself a little bit of credit for it. It's never going to be perfect and you got to keep working towards that.

[00:52:03] McLean: I like a good house analogy. You both have beautiful homes. Miles, any last words to clear us out today?

[00:52:03] Miles Everson: Well, I'll just pick up on what I just said about the great resignation. But I think what it’s really about is a great realization, which is that so many professionals have realized that they can take control of their own destiny by being independent professionals. That's and I'm saying that it's not just a theory receding in the numbers. They're leaving, and they're not just going to other full-time appointments, they're leaving and they're going to venture out on their own. So look, it's an exciting time. Independents, we know, are happier, they feel more secure and whatever we can do to help the world be a better place by restructuring the way work gets done and is good for it for all of us, and so got a lot of passion around the future of work here at MBO.

[00:52:57] McLean: Wonderful. Well, thank you, everybody so much for joining the panel. Thanks, Bob, for your leadership today. Just a quick reminder that in fact, we will be sending out the recording and the messages in the coming days. You should receive it early next week at mbopartners.com/events for future events. And I certainly encourage you to check out our state of independents, as well as visit Audra and John's respective client programs. We look forward to working with you again soon. Thanks so much for joining us today. Have a nice afternoon, everyone.

[00:53:26] Bob Lucas: Bye all. Thank you.