The world of recruiting has fundamentally changed.
Employees are now connected to opportunities via professional networking sites like LinkedIn and AngelList. A growing number of job seekers cite cultural characteristics as a reason why they chose to work at a company. Employees are staying at companies for shorter period of times, and many are opting to freelance. The importance of personal networks in getting a job in Silicon Valley has led to a diversity crisis among tech companies. Startups are expected to compete with the big budgets (and perks!) of the tech giants, and the tech giants are asked to give employees the type of impact and freedom of the startups. Recruiting is moving from inbound applications to sourcing candidates and building an outbound process. It۪'s a complex environment for everyone involved, and that's where Lever comes in.
Sarah Nahm, CEO of Lever, has been working with companies like Netflix, Lyft and KPMG to help them navigate the new world of recruiting. In this episode of Resources for Humans, Sarah talks about what she's learned in the process of building Lever, a modern applicant tracking system, and how companies should think about building a next generation recruiting function.
Jack Altman: Today, I am thrilled to be sitting here with Sarah Nahm. Sarah is the CEO of Lever, which makes, modern applicant tracking solution. And, Sarah, I'm so happy to be here. Thank you for having me.
Sarah Nahm: Of course. Yeah.
Jack Altman: So I thought to get started rather than asking you about the founding story, I'd really love to hear quickly what is Lever, but why is it important to the world?
Sarah Nahm: Lever's out to reinvent recruiting software. And really that's because the world of employment has changed. I mean, when you think about it, all the things that have, you know, in the past several decades changed how we approach our careers, how we approach work, how, you know, people get connected to opportunities, with the advent of professional networking, the rise of culture as a big factor for people and why they choose, certain companies to work for. And then I think from the employer's perspective, there's been a rise of really, really interesting issues, whether it's diversity and inclusion or, you know, essentially, like, the the changing nature of of work with freelancers or shortened job tenures.
All this is coming together, creating a completely different environment for, you you know, HR professionals, talent leaders, to think about how they're going to drive a talent strategy. And I think that's really what Lever is trying to do differently. We're trying to elevate recruiting out of the administrative work of yesterday and make it a core part of the strategy for a company. How, you know, you're going to grow, how you're going to attract talent, that's actually increasingly how you're gonna grow your business.
So Lever, in a nutshell, we're delivering a complete suite of products, all dedicated to talent acquisition. Our flagship product, LeverHire, it's reinventing ATS as a talent CRM that, frankly, your whole company is collaborating in to attract and hire talent.
We just last year launched two new products, Lever Nurture and Lever Analytics.
Lever nurture is a sourcing automation platform, so helping you go outbound, reach the talent that you want to attract, and get those people excited about opportunities at your company, getting your employees connected to prospective talent. And then lever analytics, of course, is a modern best of breed, reporting suite, that also is trying to help organizations actually get more predictable about their talent, really understand talent as a velocity.
And I think, really, all those three products, they're all about helping making recruiting more strategic.
Jack Altman: And so when when recruiting becomes strategic at these big companies, what does that sort of recruiting machine look like? In the in the sort of perfect world, what what do companies do to sort of build that engine that that does recruiting?
Sarah Nahm: Yeah. That's the magic question.
How do you build, you know, a a next generation high performing recruiting function?
Well, I think that this really drives a, you know, a a central kind of conflict in recruiting. I mean, I've worked with thousands of our customers and seen companies go from one stage to the next stage to the next stage, and there's kind of one dilemma that rises no matter what stage of growth you're in. And that's that, you know, year in and year out, the growth goals keep going up. But recruiting as a team, as a function, it actually tends to stay, you know, relatively stable. You know, of course, you may add heads or you may get more resourcing, but not nearly at the same pace that your growth goals increase. So, you know, ultimately, you know, what is a high performing recruiting function?
That's a recruiting team that actually addresses the fundamental problem here, that recruiting never scales as quickly as companies do. And so if you're going to actually keep pace with the growth of your organization, you need to be, you know, essentially driving talent as a function that every single person in your company is collaborating on. So what it makes the best recruiting teams, they're ones that drive collaborative recruiting and engage their entire company in a culture of talent acquisition.
Jack Altman: And what are the things that enable a recruiting team to scale its effectiveness with the company without scaling headcount at the same rate? So, you know, I imagine possible things could be technology, but what are the what are the things that go into making that that possible?
Sarah Nahm: Yeah. I mean, there is there's a long laundry list of tactical things, but I actually think the most important one is philosophical.
I think, you know, recruiting recruiting is often viewed as, like, a service function.
But today's talent leaders need to start kind of waking up realizing that they actually have to step up and demand a seat at the table and essentially be a leader of the entire company. They have to have incredibly strong partnerships to the rest of the business. They need to know, you know, the board level strategy just as well as the c suite. And I think really the the people that do this well, and I'm thinking of a lot of lever customers, you know, teams at Netflix, at Palantir, you know, really, I think, like, best of breed talent organizations.
These are ones that, you know, wake up and recognize that recruiting needs to be probably like a very present leader, from the moment that, you know, someone comes on board. You know, folded into your onboarding process, you're hearing about how important talent is. You're getting trained on how, you know, to interview, what a great referral looks like, and, you know, you're really investing in and maintaining tight relationships to the distributed managers.
That really is more important than anything else long term. But then tactically, you know, there's a whole host of things that can make a recruiting function more successful.
I think one is go beyond applicants.
Today's companies are seeing so much more exciting and high quality talent come in from, you know, atypical channels.
That is, of course, referrals. Referrals are the most efficient channel to hire, but, of course, they they don't scale as much. And so we see a lot of talent functions going outbound, essentially building up sourcing team, research teams, encouraging managers to be reaching out to people in their networks.
And, really, I think building up a strong sourcing function is how we see Lever customers succeeding the most. You know, for our customers, one in every three hires is proactively sourced. So it just goes to show, like, where are people finding results and hiring, like, the top tier talent? It's not by waiting for the perfect applicant to walk up to your door, because the best people never apply. It's actually building up the ability to take kind of your funnel into your own hands and reach out to prospective talent, nurture talent pools, and actually have that pre-engaged talent pool so that when you do have headcount open up or when you really need that role, you've already got people that are familiar with your company, with your story, with your vision, who already have relationships into your company and who for it may be the right time for them, to actually sit down, take a take a coffee date, take an interview, think about their next move.
Jack Altman: So now I'm imagining these companies, like you mentioned Netflix or Google or Facebook maybe that have these very sophisticated recruiting processes and these teams with lots of technology.
One of the questions I always wonder is, how does a startup of, say, fifty, a hundred, you know, whatever size people how does a startup like that compete with these with these companies in a world where they've staffed up, they've become incredibly sophisticated, they've got all the resources in the world? How does how does a midsize company compete with this today?
Sarah Nahm: Yeah. This is a fascinating challenge for for organizations of all shapes and sizes because, you know, unlike your core business where you kinda know your competitors, you're competing with everybody. And actually, you know, of course, the large companies, they have the edge on on resources, because small companies have the edge on speed, making a candidate experience really personal, making, you know, your recruiting process have your culture at the forefront. So actually, you know, I get just as many questions from large companies saying, how can we compete with these smaller, more agile startups that can deliver just such a high caliber on candidate experience? So I think the answer, on both fronts, no matter what stage of company you are, is just to realize, you know, what are your strengths and how do you make that, you know, what you lead within your recruiting process. And it all comes back to candidate experience.
So, you know, if you're a small company, realize that you can offer really unique opportunity to somebody. You can they can be part of the ground floor. They can actually be part of building something. They can have a really unique experience from a team and a culture perspective. They can contribute far beyond their role.
And at a large organization, it's impact. You know, you can demonstrate to people just how much, like, on day one, you can be reaching millions of users. You can be plugged into a mentorship network, career ladder opportunities from day one. I think everybody needs to really master, you know, that question of why should someone take an opportunity here?
You know, if I were in their shoes, like, what really is the, you know, kind of compelling reason to choose this opportunity over others? And here's the thing that a lot of people never do, but it's incredibly powerful if you can unlock it. You really have to take that story and transmit it to every person in your organization. This is collaborative recruiting in the day to day is actually taking the time to sit down with your hiring managers, with your interviewers, and have them ready to tell that story to candidates.
And if you've done that, then a candidate coming in for their their interviews, they're actually hearing this incredibly compelling picture get painted for them and they're hearing it from everybody that they talk to. And essentially, that's when a candidate at the end of a day of interviews walks away saying, wow. This is a place that knows their culture, that values, you know, candidates and and employees. This is a place where I can really grow and learn. So I think actually, you know, again, don't just stop at knowing the answer yourself as a recruiter or as a talent leader.
Take the next step and empower your organization to be part of talent, and welcome them to the strategy. Invite them to being a part of it. And you'd be surprised actually at how, managers, interviewers, employees, people who just, of course, went through that amazing candidate experience, they're super receptive. They really wanna help. They wanna build a great team around them. They wanna come in every single day looking around at the people that are on their team and saying, this is why I get up in the morning.
Jack Altman: Definitely. And, you know, one of the things that I think you you got exactly right in my experience is that culture is something that is so special at a lot of these smaller companies.
One of the things that people often talk about in recruiting when it comes to culture is how can we screen candidates for culture? I'm actually also interested in the reverse, which is how can you communicate your culture to the candidate to sell them? Like, what are the things that companies can do to not just tell the candidate that we've got a great culture, but to show that to them in in the right way?
Sarah Nahm: Yeah. Recruiting for culture is an incredibly controversial topic internally at Lever, both in how we think about our own recruiting, and we think about recruiting a lot. I think it comes with the territory being a recruiting software company. But in particular, our product team, when we think about the decisions that we can make in building out a platform that helps thousands of companies run their recruiting, you know, what really is the best way to think about recruiting for culture? Because there are pitfalls.
You know, I think nowadays, with the rise of diversity and inclusion as topics for HR leaders, recruiting for culture is pointed at as one of the biggest pitfalls that you can fall into because culture tends to be self propagating.
If you have, you know, a certain culture, if you're relying on people to evaluate against that existing culture, you're you're naturally, you know, selecting for a certain type of people and then that selection bias, so, like, continues. So culture can be a real obstacle to building diversity within your team. It can also introduce a lot of blind spots, unconscious bias even, where, you know, certain types of, like, people of of of, like, modes of approaching work are, you know, reinforced.
Jack Altman: And what is unconscious bias? Like, how how does that how does that factor in?
Sarah Nahm: Yeah. I mean, unconscious bias in a nutshell, it's, you know, when you're making decisions about, you know, your culture essentially without necessarily making that intentionally.
So I think, in conscious bias, it's when people can't quite put their finger on why something's important or why it's relevant to your company and instead act on it, without it being something that you as a group of people, are choosing with explicit intention. It's actually not a bad thing to have things that you want in your culture or out of your culture. You should be including and excluding things, because that's, I think, what makes strong workplaces.
But you have to kind of decide and talk about it as a group.
You know, you're going to naturally figure out who you are and hopefully, who you are and what you value and what you reward, they're not things that, you know, I guess are are sort of things that people can't choose about themselves. Like, I think a lot of the criticism and unconscious bias is that people latch onto things that, you know, aren't chosen by somebody, their gender, their race, maybe their background, whether they've had privilege in the early part of their careers.
And they use those as heuristics for success as opposed to actually talking about, like, what are we choosing to be inclusive and exclusive about?
I think great things to be exclusive about is, you know, like, why people how they channel their passions or how they communicate internally or how they want to run an r and d process or what their approaches to, you know, a go to market strategy or product road map development are. You wanna actually have things that you're very, like, clear about, like, no. This is who we are and this is who we're not. But hopefully, those aren't things that, you know, people don't get to choose about themselves.
So, you know, I think that advice that I give to people on hiring for culture, because I think hopefully this establishes that it's a good thing if you do it right, is instead of asking, you know, is this person a culture fit?
Ask, are they a cultural contributor? What are they going to add to our culture? And that actually can be a really provocative question for your hiring managers and your interviewers. It makes them get really specific about articulating, you know, what they're looking for in terms of culture value add.
It can spark all these fascinating conversations about assumptions that people may be having about their culture, and it gets managers and executives in particular thinking about where where does the culture need to go because culture evolves with scale. The culture you have at twenty employees doesn't work at two hundred employees, doesn't work at two thousand employees. And great HR leaders cultivate that discussion, that evolution, that foresight on where the culture needs to head. And the talent you hire in can actually be some of the most impactful ways that you actively evolve that culture.
A dynamic 10x person who's a great cultural contributor and helps a team get from here to there, you know, that's what everybody's looking for. So, you know, I think in that standpoint, the best talent leaders out there, they're thinking about cultural contribution more so than cultural fit.
Jack Altman: I love that.
Sarah Nahm: Yeah. And and we at Lever, I mean, a lot of people ask us, you know, how do you technologize that? How do you get people to have really good judgment on culture? Well, one thing we do on our platform that, you know, I think anybody can choose to do is we actually don't let people we discourage people from having culture fit as a disposition reason.
Instead, you know, our, you know, team, our customer success folks, working with customers on their implementations, we say go deeper, Define that. Instead of culture fit, like, what does that really mean? What are the attributes that you're looking for? And so, you know, what's a really simple thing you can do? Ban culture fit as a reason you disposition candidates and get more specific.
Jack Altman: So how did you build sort of a diverse workplace here? When did you start thinking about that? How did you go about it? Like, what what took you from when you started the company to the sort of diverse workplace that you have now?
Sarah Nahm: Great question. Diversity has been such a big part of Lever's journey. For two years, I was the only woman at Lever. And to get from there to where we are today, you know, we've reached a fifty fifty gender ratio. We're forty three percent women in technical roles, fifty three percent women in management and leadership, forty percent women on our board, actually.
We are now moving beyond gender into, you know, talking about richer aspects of of diversity and more importantly, inclusion. How we actually make the culture that we have a great place for retaining diversity by making sure that the way that we're evolving our culture, is one that's inclusive in all the right ways.
So, it hasn't always been the case. I mean, we didn't get to where we are effortlessly.
I think, you know, summing up, the journey to date, we started early, which I would definitely recommend to everybody. We're probably the only, you know, ten person startup at the time, that we were, you know, getting off the ground that, like, had a regular diversity and inclusion task force, which was pretty much the whole company.
We experimented a lot. I think we relentlessly tried to challenge our own assumptions about diversity. We invited lots of people in the company to contribute to it. I'll be the first to say that, founders and the c suite at Lever, I think, like, made less of an impact than some employees that really stepped up to the plate.
And then I think the third thing that we did that was really huge was we got really specific about what diversity goals we wanted to tackle for ourselves.
You know, the media around diversity, the conversations happening publicly, it can sometimes be really overwhelming.
And, you know, I always tell, you know, people that that are looking to get started, get started on something specific and something that means something to your company, which could be different. You know, it may not be gender. It may not be race. It may be, you know, sexual identity. It may be just actually, you know, communication or work style.
So by setting really specific goals and explicitly prioritizing something and explicitly deprioritizing something, then all the sort of, like, ways that teams already know how to solve problems start kicking in. So break it down, get to a goal that's really specific to your organization. In our particular case, it ended up being women. And we actually started with women on our engineering team, and that led to a whole host whole host of goals, strategies, things that naturally shook out that let us start acting on it. And, you know, I think that sometimes companies need that clarity, and HR leaders can be huge accelerators in driving tangible, actionable next steps in diversity.
Jack Altman: One of the one of the things I think I've heard consistently from you in this conversation is to the extent possible, try to convert these gut feelings into a tangible conversation where everybody agrees and turns those kind of impulses into, into something that's that's tangible. And so when I look at what you've done, you basically it sounds to me as though you said, you know, there there's a lot of different types of diversity, but we chose to focus on, women first. And I I assume that you also think about other types. But I I would love to dig more deeply into how you actually did that because I know that, you know, gender is one of the ones that people that people care the most about, and and and it's very important.
And so particularly in engineering, how can companies find, where how should companies go about finding candidates to if, you know, if they want to have fifty percent women on their engineering team, what are the tangible steps that companies can take to start working towards that goal?
Sarah Nahm: Yeah. I mean, this is kind of the magic of being a true leader in an HR role. You have to take these abstractions, things like culture and motivation and performance and engagement and convert them, translate them into actual road maps, initiatives, results.
And so, you know, I actually think that first and foremost, HR leaders need to be reminded that they're amazing at that. That's what they do every single day. That's what they come in and, you know, tease out of the fabric of an organization and every initiative that they do. So step one, keep doing it.
But, yeah, I think step two, it's, about, you know, reminding, you know, everybody in the organization that, you know, that if you tackle something and nail it, something small, then the momentum that you get, the buy in from the rest of the company, the proof points that you could bring to other functions or other leaders within the company, it's this kind of snowball effect. So I think, like, you know, tactically, the first thing you should do is, you know, go easy on yourself. Find one person, one manager, one small team that cares already about something and work with them. Get, you know, one small goal, one initiative, something off the ground, and get results.
Use those results to go shop around to other people in the organization and, like, show them how how you built out this proof point, how, you know, this went really well for somebody else and expand it. So I think what does that mean? It means, you know, instead of considering this to be this gigantic initiative, something that's company wide, something that has to be perfect on day one, you know, give yourself the license to, you know, work with people that already care and, like, you know, get that snowball effect going. So in the example of Lever and how we got to forty three percent women on our technical and engineering teams, you know, the the story really started with, there was already an organic movement there.
And so, you know, that was really obviously the first place we should start on diversity because there are people passionate about it. There are people who wanted to invest time in it. It really was about, like, acknowledging that, validating that, and giving those people license to actually yes. This is important to lever, and we're going to spend time accelerating this.
From there, we actually first started by setting a really, really concrete goal, which was let's get to two.
Two women on our r and d team, which, you know, I think part of that was the recognition that it's lonely being the only one.
And this is actually a practice that we we use even at the scale Lever is today. On any little function, on any little team, or on any new definition of diversity, let's get to two. Because then, you know, there's not the spotlight on you being this poster child of diversity. You're actually now, like, a a team. So we started with that goal. And once we achieved that goal, we set new goals.
Then it became like, oh, can we actually, like, make sure that all of our job descriptions, all of our job postings, we actually ran a pass on them to make sure they were as inclusive as we wanted them to be. And so the the topic started shifting from, like, diversity as, you know, people and percentages to an inclusive engineering culture. And there are a whole number of projects and initiatives that that went from there to, you know, essentially taking that engineering team focus and expanding it to other teams. Actually, our sales team was a really, really, you know, big, area for us us to think about diversity. You know, we had actually gotten to the point where compared to our eng team, that was the one we saw the biggest, you know, gender discrepancy.
So then translating engineering to sales. And then I think, obviously, you can see where at where where we're at today, where nowadays, like, diversity and inclusion is is a big part of our culture. It's why candidates, come to Lever. It's why employees stay at Lever.
It's a huge part of the culture that that people are now really passionate about. And it really started with just, you know, let's just get the people that are already passionate about it activated.
Jack Altman: That's great advice. And I'd love just, you know, a a couple more thoughts on, you know, what what are those advantages? Because I think so often companies chalk diversity and inclusion up into one of the areas of we're supposed to do it. How can how can companies realize that it's really important to their business to do it as well?
Sarah Nahm: Yeah. Well, you know, when I go and talk to our employees, you know, a mix of, you know, give me feedback. What can we be doing more on diversity and inclusion? And then also, you know, what impact has it really have?
The stories that come back are pretty astounding. And we've definitely seen at Lever that the productivity gains, the employee engagement, and the retention that we're seeing because of investing in inclusion in our workplace and in our culture, It's one of probably the most profound and impactful things we've ever done from, like, an HR program standpoint.
The kinds of things that we hear from people is by being able to bring my whole self to work, I can focus on what really matters.
Because Lever is a place where, you know, my work style, my communication style, you know, we do a lot of investment in in in explaining that there's no right or wrong answer, that the way we run meetings, the way that we make decisions, it has to be supported by inclusive framework. We're allowing a lot more skills to actually come out in the open, a lot more talents to be surfaced.
We're not, you know, the type of company where the loudest voice in the meeting is the one that has the most sway. And I think that's led for a lot more types of decision making of judgment to surface, and so our decisions get better. I see this a lot on my executive team where, you know, no matter what happens in in a fast growing startup, a lot of stuff happens.
I can always rely on the fact that the diversity of even just, like, problem solving approaches helps us, you know, service what is an increasingly diverse and heterogeneous team that depends on us. And so to that extent, you know, what is the impact of diversity ultimately? I think you're building up in the short term, the ability for people to focus on work and productivity.
And in the long term, you're building up a capacity for resilience and smarter decision making. And as a CEO, I can now count on this organization to react and adjust to whatever problems may come our way because we aren't just reinforcing one mode of decision making, one mode of operating, one mode of seeing the world. And so we're serving our customers better. We're being more nuanced in the way that we think about our competitive landscape.
We're, I think, folding in a lot more, types of, I don't know, I guess, like, strategies and experimenting a lot more. So you see a lot of studies that are published about, you know, quantifying, you know, the the the improvements that diversity can bring to decision making. And I can say firsthand that we see it every single day in every part of the business.
Jack Altman: That makes total total sense to me. The one last question I'd love to ask you is, what is something that you know now, now that you've been running Lever for for years? What's something that you wish you knew at the beginning that you didn't?
Sarah Nahm: You know, I think one thing that's super clear, after a few years is you really can't over invest in people, and I think specifically in onboarding.
So, you know, like any other company when we first got started, people would join and they just kinda tumble into the day to day.
Actually, at Lever, we've seen incredible results come from truly investing in the onboarding experience a candidate has. You know, some people call it the first ninety days. I think it starts the moment they sign their offer.
Now we have a whole host of practices that are just about welcoming that person into not just the work, not just the team, but really the culture and the history of the company. So the moment you sign your offer, our team creates a gift. Like, we get, you know, a webcam, we get the whole team together, and we make a welcome message in a gift form for every single person that signs their offer and send it to them. And everybody in the company piles on to that email thread to welcome them before they're even here.
When they start, their whole first week, we onboard in classes. So they're part of a cohort of people that are all starting Lever at the same time across all the different functions of the company. And they go through what we call ramp camp, which is, you know, a whole week long, like, training course that not just onboards you to your function, like, not just sales or not just service and support, but actually the full three sixty of what's going on and how every part of the business contributes to what we're doing.
And then, you know, after that, we actually give people, kind of an invitation to get started to have an impact right away. We give them a starter project, something that they can't do on their own, something that they have to go and set meetings with people, ask questions, learn more, do research, excavate, so to speak, the institutional knowledge here so that we break down those barriers of like, oh, can I ask for help? Can I ask questions?
So I think, like, you know, what's one thing that I've really learned? It's that you can't over invest in people, that, you know, not just the first ninety days, but the first minutes of somebody being part of your team, are opportunities for you to get them excited, to get them motivated, to get them inspired. And so I think that's something that, you know, even today, we're we're constantly thinking, how can we do more? How can we innovate more on that?
And, it's something that, you know, anybody that's getting started on today, you know, think about what, you know, the experience of a new hire. Like, what is your aspirations there? What could that be? And challenge yourself to exceed those expectations.
Jack Altman: It's great advice. All about the people. Sarah, thank you so much for doing this with me today.
Sarah Nahm: Absolutely. Thanks so much.
