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Podcast

Podcast

Harvard Business School Professors Bill Kerr and Joe Fuller talk to leaders grappling with the forces reshaping the nature of work.
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  • 04 May 2022
  • Managing the Future of Work

Can Handshake’s endless college job fair democratize employment?

The pandemic has underscored the value of distance learning and remote work and bolstered the case for virtualizing the college-to-career connection. Over the past decade, Handshake has established itself as the dominant jobs network and recruiting platform. Co-founder and CEO Garrett Lord explains how taking the campus out of the equation levels the playing field.

Joe Fuller: For many, getting from college to career means navigating a sprawling, decentralized, inefficient, unequal, and anachronistic system rooted in the post-WWII economy. It’s a system that’s ripe for innovation and streamlining. Change has come relatively quickly. Social media and digital platforms have “re-intermediated” the connections between students and recent graduates, recruiters, career counselors, and skills providers. What distinguishes this new early-career jobs marketplace, and how is it meeting the needs of its participants? What role does it play in addressing inequality, the skills gap, and underemployment?

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. I’m joined today by Garrett Lord, co-founder and CEO of the employment website Handshake. Since its founding in 2013, the market-making jobs network and recruiting platform has amassed a user base of 18 million and connections to more than 650,000 employers. From the start, the venture has forged close ties with colleges and universities—more than 1,400 at last count. In place of on-campus career fairs and recruiting visits, Handshake provides an integrated set of tools to help students seeking work and prospective employers connect. Welcome to the podcast, Garrett.

Garrett Lord: Thank you so much for having me here, Joe.

Fuller: Garrett, I don’t think our many of our listeners, other than those who are in colleges or college in placement offices and career placement offices, know about Handshake. Could you tell our audience a bit about where the idea for Handshake came from, and how’d you get it off the ground?

Lord: I went a school called Michigan Tech in the Upper Peninsula of Michigan. For those of you that don’t know Michigan well, it’s actually pretty far north. One might almost say it’s in Canada, 300 inches of snowfall a year. Being so remote, it really led to many of my friends struggling to find internships and jobs while they were in school. My dad was in construction. My mom was a secretary. I went to community college for two years to pay my way through school. And then I finally made it up to Michigan Tech to study computer science. And I ended up getting extraordinarily kind of lucky through a professor, and it enabled kind of... introduced to work at Los Alamos National Laboratory and then went to go work at Palantir in San Francisco. I met students at my first internship at Los Alamos National Labs, and they went to MIT and Stanford, and they talked about Google coming to their campus. And I was like, “Oh my gosh, you’ve got to be kidding me. Google comes to your campus?” And then I worked at Palantir and was again surrounded by a lot of the top 10 computer science schools in the country. I met other students that said they were starting businesses when they were interns. And I was like, “Oh, awesome. Leaf collection, some lawn mowing, some snow shoveling. What’s going on?” And they’re like, “Actually, no. I’m dropping out of school to raise money to build a start-up.” And I was like, “Wow.” So I came back to my campus that year and started referring a lot of my friends from Michigan Tech to Palantir. And Palantir, they were paying referral bonuses—$10,000, $15,000, $20,000 per engineer. And here I was helping friends that never knew they could work in San Francisco that were struggling to find jobs go take huge starting salaries out in Silicon Valley. And I was like, “Maybe we can start a business that makes this a whole lot more fair kind of regardless of what school you go to. Here my friends are so smart on my campus, but because we’re in a remote geography and because many of us don’t have kind of expansive family networks and introductions in a lot of companies, how can we really level the playing field? So we got started building Handshake my sophomore year of college. And throughout junior and senior year, we would kind of drive down to other universities to try to get more perspective and do user research. And at these other universities, we would actually sneak into some of their career fairs and talk to employers. And what we realized was this kind of problem was actually really pervasive across many college campuses. Many students found the job experience super intimidating. Going to a career fair with 300 employers and handing your resume out was only fit for the most extroverted and kind of most driven students. And we only kind of further built passion that, “Wow, this could actually...” Milwaukee School of Engineering, Eastern Michigan University, Hillsdale College, these were schools that were historically kind of under-recruited from an employer population. And when we talked to employers, they would say that “We believe talent’s everywhere, but we don’t know how to access it.” And so we had this idea of turning Handshake into a network that would enable employers to increase the scale of the students they were able to reach. And we really wanted to do so with universities at the core of our business. So the business model of Handshake is, we’ve built a kind of what you describe in software speak as almost a system of record but for universities to help them—and many of them, by the way, have a lot of resource constraints. It’s small offices that are empowered with this mandate of helping students find internships and jobs. At my campus, we only had one person that was a career counselor. We thought like, “How could we build great technology for our career center to help them engage as many students like us as possible and connect them with more employers than were coming to our campus?”

Fuller: So, Garrett, you have this concept. Many people have concepts and many college students—many of my students here at Harvard Business School—but they don’t know how to get it off the ground. They don’t know how to get those initial customers to test that minimum viable product and begin to start a virtuous cycle of learning and product improvement. How did you get this thing off the ground?

Lord: After college, when we decided to finally commit to this and not take jobs at Palantir and really kind of venture out on our own, we didn’t have much money. We were driving around, essentially, to bring it to life. My co-founder and myself, named Ben Christensen, my dad helped us buy a Ford Focus, because our car kept breaking down driving from school to school. We were kind of blown away by the kind of response from universities that they wanted better technology, but very few people were willing to take the risk on a start-up. Fortunately, we were able to sign up, in our first eight months after college, five university partners. We then had ourselves in a spot where we had the early beginnings of a marketplace that kind of was able to, we believed over time, really inflect the kind of fairness in this overall process, not just based on what your parents did or what school you went to.

Fuller: Employers like Palantir, a legendary company, were having trouble finding enough candidates. So they’re paying signing bonuses or referral bonuses. Colleges and universities are often dissatisfied with the number of companies coming to recruit, finding it hard to get companies to make matches for their students. That sounds like both sides of the marketplace had a big incentive to make it work better, but somehow the market didn’t clear. What do you think explained why this market was so inefficient and why it needed kind of a disruptor using an entirely new approach to get in better balance?

Lord: The reason that employers struggle to recruit at scale is because every university was so fragmented. Each institution required you to show up at a career fair, have an info session, and sit at a career fair booth in order to build a brand with students. And if you’re a Google or you’re Amazon, you get a lot of organic applicants. But even then, even if you do get a lot of applicants, you struggle to get enough women applicants for, say, engineering positions, or you struggle to get enough Black applicants for sales positions. And you don’t have a representative applicant pool. To bring it to life of how broken the system was, I know a particular automotive company that wanted to recruit more women and would drive trucks to campus, park the trucks on a big rock to get the suspension flexing a little bit, and then have women on computers around the truck. It’s just reflective of what you’d almost describe as like guerilla marketing—boots on ground, handing out flyers, kind of building word of mouth. And to do so at 20 different campuses meant you were driving trucks to 20 different campuses to recruit. Today, Handshake has 1,400 higher-education institutions. We power boot camps and community colleges. So 90 percent of the top 500 universities in the country, they now use Handshake. And so what that enables is, by aggregating all these fragmented institutions onto a common platform, you reduce the barrier to entry to connect with new talent. Goldman Sachs had a team in Salt Lake City that they had to manually log to hundreds of different schools with different usernames and different passwords. They called majors different names that they then had to get approved for in order to post a job at the school. So I would say fragmentation was the core. The cost of scale was just insurmountable for many large companies, let alone midsize businesses.

Fuller: Well, certainly something we’ve seen in some of our research here at our project is that the variable with a highest explanatory value about schools that companies recruit at is it’s a school they’ve recruited at previously. And they develop a history there. Maybe they learn how to break the code on the specific requirements. And then they get a privileged place at the job fair or privileged dates on the recruiting calendar. And then that whole process just ossifies. Let’s talk about both sides of your market. So you said you started off serving placement offices and universities. What were you providing them?

Lord: Yeah, so we provided them an end-to-end platform to manage every aspect of their business as a career center on campus. And that generally is focused on three areas: student engagement, employer engagement, and then reporting analytics and some of the outcome reporting for institution. So Handshake students can book an appointment with their career counselor. They actually facilitate resume review workshops. We facilitate info sessions, virtual career fairs. We facilitate on-campus interviewing. And on the student side, the experience is really focused on relationship building, job search, meeting young people like myself at companies. It’s really focused on helping students learn from one another as they navigate this process.

Fuller: And so I think that also speaks to much of what we observed in marketplaces of different types. For example, I can be matched up with someone with my same profile, my same preferences. I can see things like user ratings and make it easy to navigate. Now, you mentioned partnering with a company like Google. Let’s talk about the company side of this. What does a partner give and get through Handshake that it didn’t have before?

Lord: Just to kind of share a backdrop of scale, today 650,000 companies use Handshake. Every single Fortune 500 company uses Handshake. So if you’re a student in America today, Handshake is just a verb. Everyone’s on it. And for these larger companies, these companies, there’s kind of a free version, which is really focused on reflecting the old world of recruiting—where you post a job and you pray the right people apply, or you facilitate an in-person event are premium products—of which today 70 percent of the Fortune 100 pay for. This has kind of become their version of LinkedIn. The premium product is really focused on, “How do I proactively identify and engage with talent ahead of the application experience in a way that’s authentic and matching the way that this next generation wants to network?” So a good example of this is like a large energy company. Compared to their closest peers, they, by switching to the premium product, saw five times the number of job views, three times the number of women applicants, five times the number of Black applicants, and 3x the number of Latinx candidates. General Motors would say that they reduced their cost per hire by 50 percent and that they saw the most diverse applicant pool they have ever seen before. And they did that by moving from recruiting at 18 schools to recruiting at over 700 schools. And so these companies are able to drive a more fair and inclusive recruiting process that is actually really popular with students in a way that reduces significant business costs. And I’d say, with what’s happened with Covid, this paradigm of virtual recruiting and engaging with students proactively across the course of the year with an always-on engine, I would say… like the seasonality of college recruiting has changed. It used to be just fall career fairs, and you hope the right students walked up to the booth during the fall. Now all these leading companies, they’re recruiting and talking to students all year round, and they’re building relationships—freshman, sophomore, and junior year—for internships ahead of the full-time opportunity. So I’d say that’s how companies use it today.

Fuller: Do the colleges and universities pay you as well? And do you get paid just a license fee or a seat fee like a lot of software products? Or is there something about actual placements and something related to the numbers of hires or what they’re paid or the types of ways that often job boards or headhunters are paid?

Lord: We’re approaching $100,000,000 of annual reoccurring revenue. We’re like many of our SaaS peers—SaaS meaning software as a service—or technology peers are a very high gross-margin business. And the reason that is is we charge an annually reoccurring license upfront for both universities that pay us, and then the premium product on the employer side, we charge an annually reoccurring license as well. And generally, what we’ve seen within our largest customers, for example, the Fortune 500, these customers are spending 46 percent more every single year on Handshake. Companies are honing in on the fact that this is where they’re running all of their talent recruiting.

Fuller: So, Garrett, you’ve been quoted as saying LinkedIn is focused on your past, and Handshake is focused on your future. That’s kind of amusing. What do you mean by that?

Lord: So when you log in on LinkedIn for the first time, they ask you, “What’s your job?” And I think this really illustrates why Handshake has been such a success on these college campuses. Most students don’t have jobs. So adding your uncle who drives a Buick to your professional network, students don’t really understand how that helps them when they can’t look awesome. So our profile’s really focused on, “What are the courses you’re taking? What are the skills you’re learning? What are the extracurriculars on campus?” And then we’re also leveraging all this kind of profile data around the students. And by the way, they’re like in charge of what they share to employers, in charge of what they share to their universities. But we make it really easy to build the profile, because we’re partnered with the school. And then we’re leveraging things like, from a machine learning perspective, “What are your behaviors on the platform? Are you interested in working in what locations? What industries are you interested in working in? Are you interested in smaller companies or bigger companies? Are you more focused on a company that is trying to make an impact on society? Or are you more focused on salary?” These things all come into play to help you explore and discover what’s happening on the network. What we hear from students is that, they’re like, “Oh, wow, here’s what the upperclassmen like me are doing. Here’s what people did after college from my major, from my campus organization. Oh, wow, I can schedule a video chat with them to speak with them about their experience.” All this information is going into trying to drive a more relevant experience in kind of context for where the student’s at in their process.

Fuller: So, Garrett, you’ve got all this individual data, and you’ve got a lot of data about both what companies are looking for, and also you’ll have increasingly rich data about what matches were made. When you think of it in the abstract, when you look across at aggregated data, what are the interesting trends you’re seeing?

Lord: The preferences on remote work and geographies have changed since the pandemic, given the fact that I think many students are going through a very hybrid educational experience and are really interested in hearing stories from young professionals that are working remotely around the flexibility that drives in their life.

Fuller: And you mentioned geographic preferences is, we read articles in prominent periodicals about exodus from Northern California, or everyone’s moving to Idaho or Montana, where the air is fresh and the housing is cheap. In fact, no longer so cheap, because so many people are moving. Is that more myth or reality?

Lord: What we have seen is that students are exploring jobs that historically would’ve required relocation and now no longer require relocation. So Handshake as an employer and many employers are actually adopting a more remote-first approach in managing their companies.

Fuller: Do you see Handshake helping people navigate challenges of things like reskilling or changes of career in the future?

Lord: What we’re seeing is there’s this unbundling of career paths and really unbundling of educational providers that create pathways to knowledge-worker work—folks that are trying to quite frankly jumpstart or restart their career. These are students that would not attend a traditional four-year institution, who are trying to attend a boot camp to learn data science or a boot camp to learn advanced manufacturing given the advent of more robotics in the manufacturing environment, or to learn sales and break into, say, tech sales. These are many different pathways that our employers have been talking about for years and is growing in their interest in finding students from boot camps, community colleges, large skill-building programs like Coursera or other online learning providers. And where we’re taking our platform is around helping those people to find jobs, because so many of these learning institutions that are nontraditional, non-four-year, non-bachelor’s degree seeking institutions don’t have employer networks and don’t have those ingrained employment pathways. And so where Handshake can be very valuable is in our 650,000 companies, many of which that are interested in finding these different credentialing programs through Handshake. And so we’ve been expanding dramatically—sideways, I’d almost call it—next to the four-year degree into more boot camps, into more certification programs, into more professional skill-building programs. Like Amazon is trying to teach people AWS skills. Salesforce is trying to teach people Salesforce skills. PwC is trying to teach people different skills. And we think we can power, and we are in active conversations and empowering many of these programs, pathways to employment, and more positive outcomes.

Fuller: Is it more challenging, or is it basically just the Handshake model, but you’re dealing with a coding academy or you’re dealing with Amazon as a purveyor of knowledge and the purveyor of skills?

Lord: I’d say the biggest reason it’s different is because a four-year degree gives you a credential that is respected very clearly by employers. Employers know how to think about a mechanical engineering degree, and they trust a brand-name institution. Some of the most advanced industries in the planet, they are rapidly wrapping their heads around and are already recruiting from non-traditional credentials. And I would define a non-traditional credential as a certification or a badge that proclaims a certain level of mastery of a skill. And they are figuring out how to build an inclusive interviewing process, because they’ve seen that when they hire these students, they’re having exceptional success at retention and upward mobility, and they’re great employees. But the hardest part about it is, how do you explain the taxonomy of skills, and how do we help be a market maker for what employers are looking for? And a great example of this, if you look to the future, is Cisco. Cisco produces a certification called the CCNA and CCNP. These are skills that discretely describe a mastery around computer networking skill set. And companies are looking to find those certificate programs. We think this is the way the world’s moving, to more skills-based hiring, where you’re able to clearly articulate what skills look like for career paths and then more effectively match supply—which is students—with demand—which is companies on our marketplace through data and algorithms.

Fuller: So let’s go back to that question about the relationship after someone gets that first placement and how you see that unfolding with satisfied Handshake users.

Lord: What we’re really seeing is that companies, like one of the largest global technology companies, they’re actually staying in touch with every student they met their senior year, whether they won them or did not win them for full-time employment. How do I pick them off 18 to 24 months after college? Historically, what ended up happening is, all of a sudden, if you missed them in college, it was up to your full-time recruiting team to pick them up at 28. What we’re starting to see companies do is actually retain that relationship and pull students back into the product and back into recruiting experiences after college. And the reason we’re seeing that is because we have way more students using Handshake than LinkedIn or Indeed. We’re the largest kind of profile network for this early talent population. The average student transitions jobs three times in their first five years. And they transition industries twice. They studied history, and they go into freight sales, and they go from freight sales to recruiting, and they go from recruiting to tech sales, or they change career paths and go back to learn a new skill. That’s where Handshake can be uniquely valuable, because the network in one industry isn’t helpful for the network in the other most of the time, where we can help you build relationships, understand what skills you need to navigate the early parts of your employment. If you can get a user early—and for us that means at the start of their knowledge worker career—you can be build trust and you can build affinity and you can add value in a differentiated way.

Fuller: Well, that’s an exciting vision. Although I must confess, I cringe a little bit about the amount of work it would be, because there are a finite number of degree-granting institutions in the United States. And while their taxonomy is different, at Harvard, we have something called the “government department,” which would be the political science department at another university. When you start getting tens of thousands of employers, where a “director” means one thing at a company and something else at another, a “program manager” means one thing, and there isn’t a common ontology for skills, you’re talking about a geometric expansion of the matches you have to make. So that’s going to be a formidable challenge.

Lord: Where Handshake’s really focused is, when you’re actually trying to figure out, to explore, to discover, to build relationships when you don’t have a network in that industry or that company, to understand what skills you need to actually transition industries. we think there’s a huge void in the market for really directive and intuitive experience to help people do that, to help you meet the right companies, to help you build relationships with folks that help you get an edge on your career, regardless of whether you’re a first generation college student or you went to college or not.

Fuller: Does this mean inevitably you get into the digital credential business, where you can validate that that sales level five at Salesforce actually has a background that’s going to match up for the job at Workday? Or do you rely on the Credly’s of the world for that type of data?

Lord: Today, we’re really focused on more of the early career skills. And a lot more of those are easier to build a taxonomy around than mid-career professionals. We’ve been hiring a lot of folks that are excited to kind of rebuild the stack with modern technology from the ground up based on the shift toward skills-based hiring in the future. And we talked about skills, but maybe just an extension of that question is relationships, because if you look at a lot of the way that these conversations happen, it’s really focused on who you know. It’s like, you meet with a friend of a friend who works in an industry, and you’re lucky enough and ambitious enough to potentially reach out to them and ask for 30 minutes of their time over coffee. Or you grew up in a high socioeconomic status family, and you ask for your uncle’s friend who works in the industry to give you a primer around what it means to do a great job there. You think about just how inefficient that is and how unfair it is. And I think that we can democratize, really access this information and help you build relationships regardless of who you know. And I think so much about it is not only the skills and matching component, which there’s a huge component of that, but it’s also this is buried information, an asymmetry of information that people have, especially in the early career.

Fuller: Now, this is an era where companies are I think not only expressing, but sincerely embracing a desire to significantly and sustainably improve their performance on diversity and inclusion. What are you seeing in terms of the effect you can have on making that market more efficient and causing companies to realize this ambition? Because many companies I talk to, when you first ask them, “How are you going to go about achieving this noble purpose that we all want to see?” they frankly start talking about their standard playbook. And it doesn’t seem to match the magnitude of the challenge and the level of their ambition with some innovation and some novel thinking.

Lord: I’ll tell you right now, if you think an effective recruitment strategy for hiring more Black college students is showing up at the AUC career fair, or one HBCU one time per year, you’re very wrong. We have 1,400 higher education institutions. There are Black students at almost every single school that we power. And what we’re seeing from the best companies is they’re reaching out and they’re building relationships early. They’re reaching out sophomore year. They’re offering opportunities for internships junior year. The advent of virtual recruiting really allowed companies to reach a wider net of students. I’m talking to somebody that is at a business school. You have a funnel. If your funnel doesn’t have 50 percent women and men at the top at the applicant stage, shocker, you’re not going to see 50 percent women get hired. There’s already a lot of unconscious bias that comes out in the process. So you have to actually have the right up funnel representation in order to see the outcome down funnel. And so large companies—a good example, we helped a premier tech company last year connect with 1.6 million candidates with a special focus, a very large technology company, special focus on hiring more women and more underrepresented candidates. And through broadening their net, they saw a 3x increase in applicants from a historically Black colleges and universities and Hispanic serving institutions and a 2x increase in women applicants. They wanted to be an employer of choice, because they viewed this student population as the opportunity to shift brand perception happening in college. And that would then be dividends for them 2, 4, 8 years after college, where they were still viewed as an employer of choice, and they could then pick them off at the right time then. So this kind of future workforce strategy and narrative of building relationships with underrepresented students and filling a fair pipeline is top of mind for many employers.

Fuller: Certainly something we’re going to be watching for is more companies actually building a second bridge, which is a bridge between how they found and recruited candidates and what happens with that candidate’s career linking the recruiting process much more explicitly to the performance management system, so you can see that we shifted our mix of sourcing talent and who’s viewed as being productive right away, who’s getting promoted. Garrett, you’ve mentioned consistently through the conversation business customers. I’m curious, are governments at state level, at the federal level, using Handshake?

Lord: Yes, we partner with government institutions as well as many of the kind of larger defense contractors that surround the government who are looking for niche skills, both for government roles and around the nonprofit space. And we’re really excited about the outcomes we’re seeing in helping more tech-enable these programs.

Fuller: Well, certainly governments at all three levels—local, state, and federal—have had a tough time attracting tech talent and very gray workforces. Also I’m hopeful that on a sustained basis, governments understand they need to adopt new ways to find talent and attract it in the same ways your corporate customers are. Garrett, another big and growing talent pool—it’s certainly noticeable in the tech space—are these two-sided marketplaces that we often think of powering the gig economy. What are you observing about that, maybe in terms of your own data about where the people are being served coming out of college by Handshake are going? But also, is that a type of talent pool you can imagine trying to harness in the same way you’re harnessing people who are making the transition from education to employment?

Lord: Yeah. Well, the scale of the problem with this kind of underemployment or gig economy work after college is really real. Forty-eight percent of college students graduate underemployed, meaning they’re working a job that didn’t even require a college degree. What we see in the gig economy work is many employers post part-time and contract roles and gig economy roles. Many students engage in those roles during college to pay their way through school. But many students are looking on Handshake. Their primary intent is to establish a career and dive into a profession.

Fuller: Well, Garrett, the story of Handshake is really fascinating and so consistent with so many of the things we’re interested in here at our project about. What are you thinking about for the next five years of Handshake?

Lord: We’re really excited about the opportunity to create pathways from nontraditional educational institutions and large content providers. We think our network of employer demand can really bolt onto these content providers and help students achieve more fair outcomes. That really also involves building a more complex skills-based hiring marketplace, which we think is far more fair and the way the future’s headed. We’re super excited about our international ambitions, and we’re growing very fast.

Fuller: Where are you focusing, and are you able to translate the Handshake model successfully to other geographies?

Lord: We have been expanding very quickly in the U.K., partially because of the role the government plays there in helping try to drive toward more effective outcomes and the kind of quantifying how the institutions are doing, and then grading them against it. And we have very ambitious plans to expand into broader Western Europe, Continental Europe, over the coming years. And then I’m really excited about our team. At the beginning of last year, we had 250 people working at Handshake. Fast-forward a year, we have 500. At the end of this year, we’ll have almost 1,000 employees across the country and globe, helping people start, jumpstart, or restart their career, regardless of what their parents do or what school they go to or how lucky they are.

Fuller: Well, Garrett Lord, co-founder and CEO of Handshake, it’s been such a pleasure to hear about your company and to hear your sense of the market. And thanks for joining us.

Lord: Thank you so much, Joe, for having me.

Fuller: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.

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