00:00:07 Importance of recruitment and retention for modern companies.
00:00:34 Radu Palamariu’s background and role at Alcott Global.
00:01:52 Challenges of hiring in supply chain industry and importance of right people.
00:03:43 Competition for top talent and the need for investment in recruitment.
00:05:18 Attracting the best talent and the contrast between traditional and modern companies.
00:08:02 The importance of recruiting top talent in the tech industry.
00:09:23 Retention strategies for millennials and the younger generation in the workforce.
00:11:18 The role of leaders and the impact of talent acquisition on company attractiveness.
00:12:57 Comparing the value of working for companies like Google to their contributions to society.
00:14:31 The importance of competitive salaries and benefits in employee retention.
00:16:02 Importance of perks in attracting and retaining talent.
00:17:34 Remote work and flexibility in the supply chain industry.
00:19:55 Skills shortage in the supply chain industry.
00:20:54 Importance of writing skills in the supply chain world.
00:22:00 The need for a quantitative mindset in supply chain professionals.
In this Lokad TV episode, Kieran Chandler discusses recruitment and staff retention in modern supply chains with Joannes Vermorel, Lokad founder, and Radu Palamariu, Alcott Global’s Managing Director. They emphasize the importance of human capital and the challenges of attracting and retaining top talent. The pandemic has influenced remote work, with flexibility and trust being crucial for productivity. Both guests underscore the significance of writing and quantitative skills, which are often undervalued in the supply chain industry. Writing enables communication and coordination, while quantitative skills aid in analyzing complex systems. The discussion is ongoing, with no clear conclusion.
In this episode of Lokad TV, host Kieran Chandler is joined by Joannes Vermorel, the founder of Lokad, and Radu Palamariu, Managing Director of Alcott Global, to discuss the importance of recruitment and retention of staff in modern supply chains and how companies can attract top talent.
Radu Palamariu starts by introducing Alcott Global, a headhunting firm focused on executive recruitment in the supply chain industry. They work with clients ranging from major shipping companies and logistics providers to manufacturers and supply chain software companies. Radu has a background in management consulting and has been in executive search for about eight years. He emphasizes the importance of human capital in business success, stating that the right people can make or break a company.
Joannes Vermorel highlights the challenges that supply chain companies face in hiring. Supply chain businesses tend to be large by design, and as they grow, there is a danger of reverting to the mean, or average performance. This is a difficult problem to overcome, especially since companies operating in supply chain management need to be large to leverage economies of scale. Modern technologies can help amplify the talents of a few individuals, but the challenge of avoiding regression to the mean remains.
Radu agrees that the importance of people in a company cannot be overstated. He acknowledges the increasing role of artificial intelligence, machine learning, and robotic process automation in replacing mundane tasks. However, he strongly believes that it is ultimately people who make or break a company, not technology. The so-called “war for talent” might be an overused term, but it reflects the reality that attracting skilled professionals is crucial for business success, especially in fields like software engineering.
The discussion progresses to highlight the importance of hiring the right people in modern supply chains, with both guests agreeing that attracting and retaining top talent is crucial for success. As the conversation continues, the host and guests are likely to further explore the challenges faced by supply chain companies in hiring and retaining skilled professionals, and the strategies that can be employed to overcome these challenges.
One of the main issues discussed is the increasing demand for skilled coders, with companies like Google and Facebook competing for the best talent. This has led to a focus on attracting highly skilled individuals who can act as multipliers and implement change within the company. Vermorel emphasizes that modern tech companies look for qualities such as creativity, analytical thinking, and an ability to challenge the status quo. It is difficult to find people who are both highly disciplined and creative, as these qualities can be in opposition.
Palamariu compares the competition for top tech talent to the battle for elite football players like Cristiano Ronaldo and Lionel Messi. He notes that successful companies can be built with small teams of highly skilled individuals, as exemplified by WhatsApp’s acquisition by Facebook. Retention, however, is a significant challenge, particularly for younger employees who tend to switch jobs more frequently than older generations.
Palamariu believes that the key to retention lies in good leadership, including listening, challenging, and supporting team members. He suggests that for younger employees, it is essential to offer new tasks or change the scope of their work every 9-12 months to prevent boredom. Regular heart-to-heart conversations with staff are also critical in order to understand their goals and provide the support they need.
Vermorel agrees with Palamariu’s points but also highlights that there can be contradictions in employees’ choices. While people often claim to seek meaningful work, they may still be attracted to companies like Google, which primarily focus on online ads. This suggests that the factors influencing employees’ decisions may be more complex than commonly assumed.
Throughout the interview, Vermorel and Palamariu emphasize the importance of attracting and retaining top talent in order to stay competitive in the fast-paced technology and supply chain industries. Adapting to the evolving expectations of the workforce, particularly younger generations, is crucial for companies to ensure long-term success.
The discussion touches on topics such as the importance of salary, perks, and hiring strategies employed by companies like Google and Facebook.
Vermorel argues that while tech giants have attracted a significant share of talent, investing in thousands of engineers to optimize click rates may not be a net gain for humanity. He cites the example of Facebook hiring Yan LeCun, an influential AI researcher, to head their AI department. This strategy of hiring prominent figures in the field has been effective in attracting other researchers and engineers.
Palamariu, on the other hand, believes that while salary is important, it is more of a “hygiene factor” that needs to be on par with the market. He mentions the term “golden handcuffs” to describe companies that pay significantly above the market rate, making it difficult for employees to leave. For smaller companies and startups, he suggests offering share options and other perks to encourage commitment.
Vermorel also addresses the topic of perks, noting that visible perks, like the ones at Google, can be appealing, but they may not be the primary factor in retaining talent. He believes that more subtle aspects can be more important, such as the absence of arbitrary deadlines and unnecessary pressure. He shares that at Lokad, they have successfully hired top talent from the finance sector by avoiding these negative practices.
The interview touches on the strategies employed by tech giants to attract and retain talent, the role of salary and perks in the hiring process, and the importance of considering more subtle factors that can contribute to employee satisfaction and retention.
They discuss the importance of avoiding toxic elements in company culture to retain talent. Due to the pandemic, many companies are experimenting with remote work, with varied success depending on the industry. In software and supply chain optimization, flexibility and trust are key to productivity. Both Joannes and Radu highlight the importance of writing skills and quantitative skills in the supply chain industry, as these skills are often undervalued. Writing skills facilitate communication and coordination, while quantitative skills help analyze complex, distributed systems. The interview concludes without a clear resolution, as the discussion continues afterward.
Kieran Chandler: Today on Lokad TV, we’re delighted to be joined by Radu Palamariu, who’s going to discuss with us why the recruitment and retention of staff is so important to modern day companies and what our supply chains can do to attract the top talent.
So Radu, thanks very much for joining us today. To start off, you could just tell us a little bit more about your background and also your role at Alcott Global, where you’re the managing director.
Radu Palamariu: Thank you for having me. Pleasure to be with you today. Alcott Global is a headhunting firm. We recruit executives in the space of supply chain. What we mean by supply chain is basically companies that move things on one side or produce manufactured goods on the other side. Some of our clients are major shipping companies like Maersk or logistics companies like DB Schenker, all the way to major manufacturers of the world, whether it’s from healthcare or FMCG. We also work with some software supply chain companies, similar to you guys, that look to optimize and create solutions from a technology perspective. That’s what we do on a regular basis. As for myself, I come from a consulting background. I’ve done many years in management consulting before going into executive search about eight years ago. The reason why I went here is because I strongly feel that the human side of the business is the make-or-break of the business. You get the right people, you’ll have a great business; you get the wrong people, you will get a faulty business. That’s my passion; people are my passion.
Kieran Chandler: Brilliant. Joannes, today our topic is hiring in modern supply chains. What is it about the supply chain industry that makes hiring so interesting?
Joannes Vermorel: There are some challenges in supply chain companies. By design, they are fairly large companies. Obviously, if you’re a tiny company, you don’t really have a supply chain per se. So it’s a problem that is of interest to companies that are usually sizable. When it comes to hiring, there is this big challenge: how do you avoid reverting to the mean, which is kind of the curse of getting large? It’s a very difficult problem, and the larger you are, the more challenging it is to not revert to the mean. This combination alone makes it very challenging because companies operating in supply chain don’t have the option of just staying small to avoid this regression to the mean pattern. They have to be large to basically leverage economies of scales that have nothing to do with people, just the process and channels. And if you compound on that, the talent of a few people gets completely compounded.
Kieran Chandler: Radu, would you agree with that? Companies are pumping so much money into HR departments and the whole recruitment process. Why are they placing so much importance on the people they recruit?
Radu Palamariu: I cannot argue with the fact that people are crucial. In one of the sessions, I had a recent presentation, and it was all about artificial intelligence, machine learning algorithms, robotics, robotic process automation, and all of that to replace humans. And that is coming for the mundane tasks, but ultimately, it’s not technology that makes or breaks a company, it’s people. I strongly believe that. So, it’s about people. Companies are investing in it. We’ve had maybe an overused term, the “war for talent,” but it is indeed like that
Kieran Chandler: And coders are rare, there’s not many of them, and then you have everybody, literally everybody, fighting for them, right? From the Googles, the Facebooks, and the whatnot, right through different software providers and so on and so forth. So everybody’s trying to attract them, and then it’s normal for companies to invest the same amount of money in terms of doing this. I mean, putting these strategies and talent acquisition options in place to make sure that they get the best. So, let’s look more into that approach of how we actually find these right people and what kind of companies do to attract the best talent.
Joannes Vermorel: If I take, you know, the archetype 20th-century mega company operating a mega supply chain, you want to have an army of people that are very disciplined, with very long-term commitment to the company, adherence to company values and everything. And if I take in contrast, what I would say more modern players are looking for, you know, if you look for what companies like Google, Amazon are looking for, that’s absolutely not the sort of prime qualities they are looking for. Again, it boils down to the fact that they have technologies and those people will be acting as multipliers. And the way it works when you start thinking about, especially software technologies, is that it’s very counterintuitive in many ways. So what sort of qualities do they look for? And then there is maybe the other question, which is why? And usually, they want to have people that are very creative, that are going to challenge the status quo, that are very analytical, that don’t necessarily value discipline as much. Because the problem is that it’s very hard to have people who are very disciplined and very creative. It’s pick one; you can’t have both. If you have intense respect for hierarchy, it’s very difficult also to disrupt the status quo because your natural inclination is to actually enforce and preserve the status quo. So those tech companies have been precisely looking for people that could implement the change that they need, and it’s a different type of profile and a different type of skills. The amount of nerdiness, which involves dealing with layers of software and vast troves of data, requires people that have certain tastes in terms of numbers, even programming, coding, even if it’s not your day job. If you are completely ignorant about that, that’s typically going to be a challenge for you if you want to deliver large-scale optimization for any supply chain. So things have been shifting, and it’s very interesting.
Radu Palamariu: To my understanding, and maybe that’s a question for you, what I wanted to point out and say, on one side, I agree fully with you, is that it’s becoming like a fight if you want the Cristiano Ronaldos and the Messis of the world, right? In football terms, as football is an analogy that everybody understands, you have these geniuses, these coders, these very creative minds, and pretty much they have offers from five different clubs, I mean the club being a company or ten. So the question is, how do you make sure that you are the one that ultimately makes the cut? When we think about WhatsApp, a few years ago when it was acquired by Facebook, I remember exactly the number of employees it had, but it was somewhere between 50 to 70. I can’t remember exactly how many it was, but it was a multi-million-dollar sale right there, and it originated with a small team of people. So, to your point, you don’t need to have massive amounts of people, you need to have quality
Kieran Chandler: About the mindset, it’s about the attitude of those people that will ultimately create a good company. Joannes and Radu, we spoke a lot here about the recruitment process, but obviously recruitment is only half of the picture. If you look at Millennials now, they’re hopping between jobs more frequently than ever. So, looking at the retention side of things, what can companies do in order to keep hold of the staff that they recruit?
Radu Palamariu: I think that’s a million-dollar question. It’s true that Millennials and the younger generation have a different way of perceiving things. They’re not as motivated by money or status as perhaps Generation X or Z, so you need to motivate them differently. They tend to get bored faster. I think the retention piece boils down to the fundamentals of leadership. If you’re a good leader, it works whether it’s a Millennial, Generation X, or Generation Z. You need leaders that listen, genuinely care, talk to their team, try to understand where they’re going, what they’re trying to achieve, and help them get there. Challenge the team in good ways, set objectives that stretch them – these are all part of being a good leader. On top of that, for the younger generation, it’s crucial to give them different tasks or change their scope every 9 to 12 months, as they can easily get bored. I think that’s also key in terms of retaining them. It’s a forever journey, so every 6 to 12 months, if not more often, you should have open, candid, and heart-to-heart conversations with your staff just to make sure that you’re still supporting them and what they want to be doing. Walk the talk, don’t just pay lip service.
Kieran Chandler: Joannes, would you agree with that? In your role as a CEO, what do you see in terms of what your staff should expect from you?
Joannes Vermorel: It’s puzzling because if we look at the world at large, you have massive counterexamples. Take Google, for instance. Google has been ranked as one of the most attractive companies for many years. As far as I know, 95% of their revenues are just from online ads. So, it’s difficult to claim that you’re going to make a difference in the world by optimizing clicks for a company like Google. In my rank of values, it’s fairly low. Yes, there is this popular opinion that people want to have meaningful work, and if you do a survey, that’s what people will answer, and maybe that’s what they genuinely believe. But when you look at what people do, they will flock to companies like Google, where, frankly, the net good for the world is debatable at best. I’d be hard-pressed to think that investing thousands of engineers in optimizing click rates is an absolute net gain for humanity at large. What these companies have done to attract an impressive share of talent, even if it’s not politically correct, is they follow market forces.
Kieran Chandler: Joannes, you mentioned talent acquisition and having a great leader who is also talented. For example, Facebook hired Yan LeCun, a brilliant AI researcher, as the head of their AI Department. This person alone has been like a magnet for thousands of AI researchers. Google has also been using similar tactics, hiring prominent engineers. Radu, you mentioned that millennials are placing diminishing importance on salaries and benefits. How important are salaries and benefits from your perspective?
Radu Palamariu: Don’t get me wrong, nobody wants to work for free, and it’s important, but it’s more of a hygiene factor. It’s a given that if you pay on par with the market, there will be a level of friction. I would say that it’s not the main factor, but you need to be on par with the market. If you pay better, then it’s even better. There is a term called “golden handcuffs,” so companies like Google and Facebook tend to pay really well. It’s also very difficult to leave these companies when you’re paid 50 percent or sometimes even more above the market. For the rest of the companies, you need to make sure that your pay structure is on par with what your competition is paying. If you’re in a startup world, you might want to consider offering share options or other perks that would make people committed to the company for longer. It’s not only in the startup world; most tech companies have some sort of scheme that would do that. Let’s not completely dismiss salary, but from my perspective, it’s not usually the main reason why people choose company X versus company Y.
Kieran Chandler: Joannes, can you share your thoughts on the perks that Radu mentioned and their impact on hiring talents?
Joannes Vermorel: When it comes to hiring talents, people see perks, especially the visible perks like at Google, where you have baby food or a tennis table lying around. These visible perks look good on TV news, but in my experience and understanding, it’s not so much those perks that really attract talents. It’s more about the subtle things and what the companies are not doing. You should look at what is missing instead of focusing on what is visible. For example, at Lokad, we are lucky enough to be able to hire people who were traditionally considered top talents in the finance sector. Banks, for example, have practices that are a recipe for getting rid of your talents. One such thing is having people work on constant arbitrary deadlines that reflect nothing but management’s desire for more pressure, even though the employees are already talented and thoroughly committed to their jobs. The idea that by giving them semi-impossible deadlines, they would do better is slightly flawed.
Kieran Chandler: Very good companies, like Facebook for example, have practices where they are very careful at avoiding toxic elements in the culture that are adverse to the acquisition and retention of talent. One of the other benefits we’re seeing a lot is this idea of working remotely. Now obviously, location is an important factor, but how important is that from your perspective? We’re faced with the largest forced experiment of work from home because of the coronavirus pandemic. A lot of the companies in the affected areas have already asked their staff to work from home. But in normal situations, in industries like shipping, logistics, or manufacturing, a lot of things cannot be done from home.
Radu Palamariu: If you talk about software on the other hand, where you’re talking about supply chain software and platforms, it obviously matters if you have that flexibility. I think people appreciate it. There have been clear studies, like the one Microsoft did in Japan recently, where it was very clearly documented that shortening the work week to four days actually increased productivity compared to working five days. I thoroughly believe it is good to give people flexibility and trust that they will do the right thing. We have startups in this world that literally exist remotely, with people working in different parts of the world, coming together every so often, but most of the work is done remotely.
Kieran Chandler: Joannes, from what you’ve seen in the supply chain industry as a whole, are there enough skilled people out there or can you see a skills shortage coming up in the next few years?
Joannes Vermorel: I would say there are two types of skills that supply chain companies should pay more attention to. One is writing skills. Supply chains are inevitably complex, made up of tons of arbitrary decisions. At Lokad, when we see most of our clients, there’s a lot of oral tradition which is a blocking factor when you want to really optimize anything. When things are not written down and motivations are not documented, it’s very hard. So, the first step is to improve writing skills, which becomes even more important when people start to work remotely. If you look at companies that have put an enormous emphasis on writing skills historically, like Amazon with its memos, or Procter & Gamble decades ago, you see the value in that. The second skill is having an affinity for numbers. In supply chain management, you have large distributed systems made up of machines, people, and software, and it’s hard to see a supply chain in action, especially when problems are like moving bottlenecks that can pop up anywhere. So, you need people who are very analytical and at ease with large quantities of numbers. I think these two broad skills, writing and a quantitative mindset, are underappreciated in the supply chain world.
Kieran Chandler: Thanks both for your time today. That’s everything for this week. Thanks very much for tuning in, and we’ll see you again in the next episode. Bye for now.