Recruitment Tax: How Outdated Hiring Is Killing Your Profit Margin & The AI Strategy The Top 1% Use To Scale Faster

In this episode of Blueprint for Wealth, Wayne Zell sits down with Christine Nicholas, founder and CEO of People Science, to discuss entrepreneurship, resilience, talent acquisition, AI, and what it really takes to build a business that can grow beyond its founder. Christine shares candid stories about breaking through barriers, surviving major business disruptions, and developing her new technology, Hiregate, to reshape the future of recruiting and organizational value.

Key Points

• Christine Nicholas shared her journey of overcoming gender and workplace biases to establish her company, People Science, in 1997.

• She emphasized the importance of losing fear and adapting to challenges like the 2008 financial crisis and COVID-19 to drive business resilience and growth.

• Nicholas discussed leveraging AI and proprietary technology like Hiregate to enhance recruitment processes, making them more efficient and effective.

Timestamps

0:00 Introduction, Christine Nicholas’s background, and founding People Science

3:55 Overcoming business crises: 9/11, 2008 crash, and COVID-19

6:58 Strategies for overcoming fear in entrepreneurship

7:43 The recruiting continuum methodology

11:15 People Science’s services and the development of Hiregate

14:31 Evolving Hiregate: The role of AI

19:30 Toughest hiring and firing decisions

22:51 Managing key individuals and organizational mistakes before a sale

24:52 The impact and future of AI in talent acquisition

26:18 Adapting to AI in recruiting: Morph or Miss

27:18 Candidate challenges and the importance of narrative in hiring

Quotes

"If you can lose the fear, you become more empowered and things just progress in your favor."

- Christine Nicholas

"It's not all about putting people in a seat. It's making sure that they're comfortable in their seat and they're thriving and that the employer is happy with them too."

- Wayne Zell

"You need to position the organization so that it can function well without you."

- Christine Nicholas

"That narrative is really important, and as we become so transparent, right, so social media has us completely transparent, everybody can see everything that's going on."

- Christine Nicholas

Transcript

Christine Nicholas: I'm not going to be able to promote you. You have nowhere to go from here, and it's my fault. I'm a man, and I don't get along with women. I have issues with my wife, I don't get along with my sisters, and I'm going take the guy that you hired six months ago that's nine years your junior and groom him because we play Goblin's dad. I remember going to banks and them saying my husband had to sign.

I had a CFO, fractional CFO, said to me, you know, didn't have a good year, You need to just sell everything to go get a job.

Wayne Zell: Hi, this is Wayne Zell, and welcome back to Blueprint for Wealth, your videocast that's designed to help entrepreneur entrepreneurs and others realize their personal dreams of wealth and freedom. And today, I have a very special guest, Christine Nicholas. Welcome, Christine. Welcome to the show.

Christine Nicholas: Hi, Wayne, and thank you so much for having me.

Wayne Zell: Christine Nicholas is the founder and CEO of a company called People Science, which does talent acquisition advisory services and also recruitment process outsourcing, RPO. She established it in 1997 and has decades of experience in the recruiting industry, and she's widely recognized for helping organizations nationally, internationally to transform how they attract, hire, and retain, talent. First, tell me, how did you get from being a talent acquisition executive in a big company in to starting your own company? How did that come about?

Christine Nicholas: Okay. This is gonna ruffle some feathers. I remember it was '19

Wayne Zell: '97. '5. Oh, '95.

Christine Nicholas: Well, I started the company in '97. At the end of 1995, my position was Vice President of Franchise Development and the contingent and temporary staffing side of the organization. And one day, the president took me to lunch at a country club that we typically took franchisees to, and he started to cry over lunch and said, I'm not going to be able to promote you, you have nowhere to go from here, and it's my fault. I'm a man, I don't get along with women. I have issues with my wife, I don't get along with my sisters, and I'm going to take the guy that you hired six months ago that's nine years your junior and groom him because we play Goblin's Adams.

And I thought, Wow! Yeah, hello! And you know, the irony in this is that I worked for a woman owned company before I went there and I worked for that company, and was interviewed by the Philadelphia Inquirer about becoming a vice president at an early age, so I think I was 29. And I said, there's no crying in baseball. Like, man up, girls.

But and when I went back to the office, I said to the HR person, look, he doesn't wanna do this. Dan doesn't wanna do it. Not a good idea. And she said, woah, you're not hitting a glass ceiling. You're breaking your neck.

It's not gonna happen for you here. We know that a large part of that is us, but this is the way it is. So I was writing another franchise product, and I just took it. I had found an accountant who hawked that business plan everywhere for me. I remember going to banks and then saying my husband had to sign, and finally it was actually turned out to be Sterling Bank, which turned out to be HSBC that actually Oh, I'm sorry, Marine Midland.

They gave me money and they made me buy these desks, so I had to spend $10,000 on desks so that they would lend me an additional 20. I still have those desks because I can't get rid them. I'd put them in my family room if I had to, but it was a really good move for me. But I think I came from entrepreneurs, I did not want to have my own company, always wanted to be the guy running it, I didn't want to be the guy owning it.

Wayne Zell: Really?

Christine Nicholas: I'm grateful every day now because I really found myself this way.

Wayne Zell: Was there a moment where you thought you made the wrong call?

Christine Nicholas: There are a lot of times. Like, you know, I've been through 09/11 and being headquartered in New Jersey, that was big deal, and I launched my first software two months before nineeleven, so I think that caused me to say, what the heck am I doing here? I had a CFO, fractional CFO, said to me, you know, didn't have a good year, you need to just sell everything to go get a job. Then the market crashed in o eight, right, the housing market crashing. But I think that was the game changer for me because I turned off every computer, I stopped watching the news.

When you're out of the country and something like that happens, you have the benefit of looking at it quite differently. So, I didn't pull down all my lines, I didn't do any of those things. Came back and said to my team, we're going to make this happen, We're going to ignore all these things. I don't want to hear about the markets. I don't want to hear what things you're doing.

Let's get centered. And I think that was like a maturity point for me where I'm like, I'm in this thing, I'm not getting out. I also have three kids in college at that point, was a major problem.

Wayne Zell: Sure, sure.

Christine Nicholas: That doesn't hurt, right? And then I think COVID, having made it through COVID, which we lost 75% of our revenue within two weeks. Wow. So that, yeah.

Wayne Zell: How did COVID positively impact you? I mean, obviously, you've survived and thrived since then. So how what what was the impact of losing 75% of your revenue? What did it do to change your thinking and how you approached your whole process and services that you were providing?

Christine Nicholas: You know, there's two things I think I didn't get right at the onset. The first one was to understand that I was the business because I've always worked on the business, Right? And I don't think I ever realized the influence that I had on the business. I mean, in a pragmatic sense I did, but not in a big picture thing. Going to COVID and realizing I can't control an epidemic.

There's nothing that I can do here. And I think that's when I like to say, I lost the fear. Right? When there's absolutely nothing you can do. Working harder isn't getting there, working faster isn't getting there, pulling every string that you have, and still not being able to control the circumstances really made me say, I gotta lose the fear.

There's no point. I can sit here and predict in my head what's gonna happen that's wrong, and then go the other difference. Losing the fear has changed everything for me. I'm grateful every day for that experience because I feel empowered all the time now. I think I used to be afraid I'm gonna lose everything if I don't get this done.

Mean, that's what entrepreneurs do, right? Or if it isn't money, it's space, it's having worked a lot of the FANGs in the last few years, at the top, what's going to happen here? The truth is, it's the fear. If you can lose the fear, you become more empowered and things just progress in your favor.

Wayne Zell: You know, that's great advice. How does one lose the fear?

Christine Nicholas: You just you negate it and negate it and negate it by thinking about anything but it and all the good things and have a lot of gratitude, and the more you do that, the more it dissipates. And you got to have a network that kicks you in the butt and says that's fear.

Wayne Zell: You got to have somebody,

Christine Nicholas: you know, I'm a great acupuncturist and she's helped me learn that, but I think, you know, and the thing is we're programmed, right? Our megula tells us fight and flight, what that really translates into is predicting the bad things. Yes. And I think as an entrepreneur, you've got to be able to predict what your market's doing, you've got to be able to predict where things are going, you can't get too caught up in it, Right? Because you can't really control it.

So

Wayne Zell: just adapt.

Christine Nicholas: To kinda go with it and and just have the faith that you're gonna figure it out.

Wayne Zell: Tell me about, the recruiting continuum methodology. It's the intellectual foundation of people science and connecting talent acquisition directly to business outcomes. Most competitors of yours, I think, just sell headcount and speed, you know, they wanna place people. How did you develop that framework, and why do you think so few firms in your space have been willing to operate that way? Because to me, it it's so logical what you're doing.

Christine Nicholas: Yeah. Well, I won't say that they don't operate with it because the continuum is you can see it behind me, but the continuum really is what happens in recruiting. Right? And it it happens all the time. All the factors of the recruiting continuum happen.

So if I wanted to recruit you, Wayne, I would define it. I'm talking looking for, you know, an attorney who also understands a lot about business selling businesses. And then I meet you, and and then I tell you about my opportunity, and then you say yes, and then you start, and I say, there's the men's room. Here's your laptop. Off you go.

That is really the recruiting continuum. So what we did is take that entire process and really respond, like, in year three, we were working with Lucent Technologies. And they said, we don't understand why you can do this and we can't, so tell us why. I actually had that happen with US Healthcare too, which is now Aetna. Right?

And it kind of kept me up at night. I'm like, well, let's document it coming from the franchise background. Like, let's look at the process. So laid it flat. You can you can see it over there.

And said, how do we how are we doing this? And it was by looking at every factor, really just applying really good business science. That's why the name people science, we rebranded it to that name. Managing the continuum allows you to get better results. Like, not a little bit better, but extremely good results.

And in talent acquisition, it has always been, here's a job, find a person. Here's a job, find a person. And everything in between is just kind of minutiae and none of it's managed. Because it's very difficult to control those factors. But when you put them into the continuum and you can say, how am I defining?

How am I attracting? Where do I go from there? And now how am I executing the recruiting? And how am I and really can measure your ability to do those things, then you can tweak it, then you get a much better result.

Wayne Zell: And it's not all about putting people in a seat. It's making sure that they're comfortable in their seat and they're thriving and that the employer is happy with them too. Right? I mean, that's part of the continuum.

Christine Nicholas: Well, the continuum results in hires that are a better fit. Just learning the continuum helps you so, you know, I mentioned China earlier. We were part of a an expansion that a large international advertising house was doing in China, and they bought three three different locations in China of a small firm. But it was they were very prosperous. But the turnover in China is much higher than it is in The US period.

It's like 200% for everything.

Wayne Zell: Wow.

Christine Nicholas: At that point, it still is very high. Same thing in India. But what happened is they could not afford to lose these account executives who were bringing millions and millions of dollars. And then at that point, they have, like, a 78% churn. Just teaching them that a continuum.

And four months later, when I arrived in China, their turnover started to drop. Two years later, their turnover was down to 45%. That may not seem like a good number, but comparatively to 72. And in that space and in China, it's amazing, and it saved millions and millions of dollars.

Wayne Zell: So people science does advisory services. You do RPO, you do placement, and you also have a proprietary platform called Hiregate, and that's a lot of surface area for a firm that's still growing. Were there moments when you were expanding into this new platform where you thought it was a mistake, where it diluted the focus or potentially broke the company?

Christine Nicholas: Well, there's two things that happened, right? So Hiregate was our internal software that we were using. And the reason that we developed it is because the technology was not and still is not out there for us to do the work that we need to do. Most of the time, talent acquisition is very reactive. You get a rec, you fill the job.

We just said that, right? At People Science, we work on it to make it better. So while we're putting a fire out and getting you the candidate, we're also saying, how is this working? How can this get better? Most organizations, as soon as that position is filled, gone.

Comes up again later, now we work on it. So the loss of time, the loss of money, the loss of effective hiring that takes place there is pretty significant. And I really attribute that to the applicant tracking systems that are out there. If you have an HRIS system and it has an applicant tracking system in front of it, the applicant tracking system ignites when the candidate applies. Today, that's only one small fraction.

When you're hiring, and we're just getting I'm just getting ready to launch the new ecosystem because it's very different. When you're gonna hire today, step out of the job description and look at the work. Look at the work. Where is this work better served? So I'm no longer a recruiter.

I am now a work architect. I take that back and I look at these six factors. Should I post the job? Should I source for candidates for the job or in in that case use a contingent firm to get there? Do I look at my internals and do I train up for my internals?

Am I looking at all the referrals, which is, like, 48% of hires come from referrals, by the way? Am I looking at at contingent staffing companies, and am I looking at the the the effectiveness of maybe outsourcing this work to someone else, a contractor, another entrepreneur. And then where's my agenics? Where's my AI in here? So then I look at the position quite differently.

And when I look at the work as compared to the individual, then I can decide which one of those six or how much of each I need to execute the work.

Wayne Zell: It's leading into the the the key focus, I think, of where you're headed and where I'm headed and where most of us who are forward thinking are headed and that is Hiregate was a software, internal software platform that you used to to help do your job better and do a better job than than your competitors. Now we've got AI which has changed everything in the last five, six months and it's causing exponential growth across all aspects of entrepreneurship, all aspects of business. How have you, utilized AI to build and morph Hiregate into a product that people will have to use?

Christine Nicholas: Not only is technology like the ATS is kind of crippling organizations, you gotta have it, but it only captures that one portion when an applicant applies. Well, everything that happens around it is big. So Hiregate's capturing that data.

Wayne Zell: Okay.

Christine Nicholas: In 2020 or late twenty twenty or early twenty one, I was part of an entrepreneurial group that also did advising to new startups, and I was starting to hear more and more about the development tools in AI. I was able to use that with our development tool. Now Hiregate's a critical component of people science. We really can't operate without it because we augment 40 some different applicant tracking systems that still don't give us the data we need. Our customers don't care.

And we go back and say, well, you don't have the data. They're like, well, that's not my issue. Fix this. Right? So we have to keep making Hiregate better anyway.

But at one point, I had two of our largest clients, both Fortune one hundreds that said, I wanna use your product. And I was like, I don't know how to be a tech company. And I had somebody say, well, you didn't know how to have your own company, period. So figure that out. So I've been working on that for a while.

Talk about picking everybody's brain that you can. And at the time, we had signed Facebook before it was Meta. And so I was spending a lot of time in the Valley. They had a big interest in it. So I was like, I've gotta I've gotta do this.

Very shortly after that, we walked into 2020, and now I'm like, what am I gonna do here? So I made the decision to take this to our lead developer and our director of of development and said, let's see what we can do with AI. What was interesting and and one good example is we had General Motors said, we'll buy your tool if it can create a candidate profile very quickly. K. So we took the tool, and I told or we took the lead. I I I told our development on thurs developer on Thursday afternoon. Midnight on Saturday, he sends me it's done. That was on that was on like a two year road map. It was done. We here's the reality of this. We piloted it on Monday. We ignited it with our full teams on Wednesday. The following week, it saves us on average now four hours a week per recruiter.

Wayne Zell: Oh my goodness.

Christine Nicholas: That's how fast that can happen. Now that same tool, most ATSs don't even have that tool. Right?

Wayne Zell: Right.

Christine Nicholas: And that's not where they're going, But

Wayne Zell: Where are they going? Where are they going? Where where

Christine Nicholas: I think they're trying they're trying to figure out how to put point systems, and also the the big guys are just buying other systems.

Wayne Zell: Oh.

Christine Nicholas: Right? And Okay. But the systems that they're buying are somewhat dated to begin with because to your point, you know, and truth out, if you if you were using Claude on the March 22, which was a month ago, it's a different Claude today.

Wayne Zell: It's 4.7.

Christine Nicholas: Right.

Wayne Zell: It'll be 4.8 next week.

Christine Nicholas: So any point system that you're going to buy point system meaning non platform. HiredGate is a platform. It's a very robust platform, and it has point systems that plug into it. But I think a lot of the ATSs are trying. Everybody's trying to figure out what's going on.

And I think the best way to do that is to look at where talent acquisition is going. That's, you know, this was keeping me up for a year and a half. But now, I feel like I have I have a grip on where things are going enough to say this is where the product's going.

Wayne Zell: So it's it's interesting that you say that because it seems like everybody's trying to figure out where things are going, but it seems like you've figured it out. And

Christine Nicholas: I think I have.

Wayne Zell: Yeah. You made a comment a few minutes ago about, I I guess it was somebody suggested, why aren't you thinking of yourself more as a tech company than as a talent acquisition company, RPO, etcetera? Why not?

Christine Nicholas: Part of our secret sauce is that connection. This this system is written by developers, but it's written by recruiters. Our chief product officer is chief talent adviser. So our our CEO straddles both. By the way, I've had the same management team.

Okay. Sorry, guys. Fifteen years. You're getting old. Not as old as me, but getting old.

We've been together a long time.

Wayne Zell: Yeah.

Christine Nicholas: And the layers underneath them we're not a terribly big company, 50 employees, but the we're able to layer differently our our leads to keep supplying information back to us. So

Wayne Zell: Any technology company that's just building an app or technology is limited by the lack of experience in what vertical they're trying to service, right? So you guys are the experts and you're bringing your experience in talent acquisition to the technology and the technology is morphing to allow you to do things faster and more profitably and more effectively for your clients, which is, I mean, that's just, that's the future.

Christine Nicholas: That's everything.

Wayne Zell: For all of us. It's everything. You're right. You're a founder, you built a talent acquisition company. There's sort of an irony in in me asking you this, but, who was the hardest person you ever had to hire and who was the hardest person you ever had to let go inside your own business and what did it teach you about leadership that no client engagement ever could?

Christine Nicholas: At one point, I hired I like people I call give me a shot because I'm a give me a shot guy. Right? Like, you don't have to be a rocket scientist. If you're smart and you're committed, you're gonna you're gonna do well with us. Right?

But you have to have both those things. Right? And you can't afford to be smart and not committed or committed not smart.

Wayne Zell: That's just

Christine Nicholas: a train wreck. Right? So trying to find those individuals, like, down and and dirty, that's important.

Wayne Zell: How do you evaluate that? I mean, whether somebody's smart and committed.

Christine Nicholas: No. It's a good question, and there's lots of ways in the interview process, but mostly, you know, the the first person who started me in the industry, she used to say, you can't be hired you can't be faulted for hiring the wrong person just for not firing them at the right time. And I hated that statement. And she did this presentation in front of a lot of her clients and they hated that statement too. Fast forward thirty years, I'm like, Damn, she was right.

Like, you have to understand, I think first before you hire, you have to understand who you are, and you have to understand who your organization is. That's where the miss takes place, and it's hard to do. It's like dating. Like, Wayne, who will really value working with you? And you're Oh, that might not be true. Maybe you need somebody to advise you to tell you that, right? So, I think it takes a while to understand who you are. But back to your original question, I had hired somebody, she relieved so many of the daily pains that I had. It was during that time period, now I have four kids in college, major breadwinner, signing these overseas consulting things, still running the RPO side, trying to look at higher gate, maybe take it to market or not. And she was running the company for me, so I won't say that I abdicated, but I kind of walked away.

And she was pushing to retire, but I was noticing, and I actually had a customer say to me, something's not right. And then when I dug in, I wound up flipping out almost all of my team and all of my other managers when she left. There was a narrative there that was not good about me, it was not good about the company, and I missed that. Right? Because I had a comfort level, because she was running the show, and many of the frontline plug ins liked her.

It was the bigger, the larger decision makers that were like, staff was reflecting what they were hearing, what they were saying. So we wound up to flip that out, and I got back into the trenches much more so than I had been before.

Wayne Zell: Have you been able to get out of the trenches?

Christine Nicholas: Oh, yeah. And

Wayne Zell: how were you able to get out of the trenches? What was the the key decision point or inflection point that allowed you to do that?

Christine Nicholas: When you build an organization, even though it's about you, it's not really about you. Right? It is and it isn't. This is, you know, I almost went too far on the other side, but I've always looked at what are the processes and who can I hand this off to? Document the process and who should be doing that.

And if it isn't me, I've to get out of the way, get the person in there. But not advocate, right? But manage and watch it. So, working on the business at the same time that I was working in it until I could learn that that's what's needed in that position well enough to get out. So, I've done that now, and have these three key individuals who've been with me for fifteen plus years, and they're able to do that so that I can do other things.

What I'm doing now is teaching them how to do that for themselves, and they're really getting good, and now they have a layer underneath them that's doing the same thing. So it's doable, it's not easy, but it's doable.

Wayne Zell: It creates transferable value so that when it comes time to transfer your value and your business, you're not necessarily required to be there to continue the transformation.

Christine Nicholas: That's No, really I like to say that you can have a practice or you can have a business, but they're not the same. If we look at doctors, that's a practice. The doctor leaves, even, you know, if the processes are in place, that's great.

Wayne Zell: Attorneys too.

Christine Nicholas: Recurring revenue may not. Attorneys too, right? So you can have a practice or you can have a business. I always wanted a business.

Wayne Zell: A lot of your clients are companies that are trying to scale they're become, you know, to become acquirable themselves. And from everything you've seen inside hundreds of organizations that you've worked with in big and small companies, what is the biggest talent or organizational mistake that quietly destroys a company's value right before a sale or a transition, and what should an owner be doing now to fix it?

Christine Nicholas: So, you need to position the organization so that it can function well without you.

Wayne Zell: Very simple, and very good advice.

Christine Nicholas: Well, to do that, your processes have to be really buttoned up. You need to have everything documented, and it needs to be a well oiled machine, in my opinion.

Wayne Zell: Yeah, and AI is having an effect on that. Mean, Hiergate, you built Hiergate to enhance what ATS applicant tracking systems can't do on their own, right? And now AI is reshaping every corner of talent acquisition, I assume, you know, not only from resume screaming to predictive hiring analytics. Where are you taking Hiregate next, and where is people science going next?

Christine Nicholas: So, that new ecosystem that we're talking about is what we're looking at, and I think

Wayne Zell: Without revealing your secret Yeah,

Christine Nicholas: the secret sauce. I came into the end of last year like this with robotics and talent acquisition. I call it robotic or agentic. But the more I look at it, and the quicker it's evolving, recruiting is going to be replaced eventually by that entire- any process that's repeatable will be- can move to AI.

Which in our experience, this is not just theory, having done this, I see the elevation of our recruiters. To no longer be recruiters, but to operate recruiting, To have it. I'm not saying their jobs are going to go away. You know, the name of our new presentation is Morph or Miss.

Wayne Zell: Say it again?

Christine Nicholas: Morph, m o r p h, or Miss, m I s s. Morph or miss. Either you get in it and you morph with it, or you got to get out. And we did have a recruiter quit over this. Look, I'm not saying take the people out of But the what I'm saying is make it easier for them to do their jobs so that when they are engaged with a candidate, they can really be engaged with a candidate and not worrying about the next call or what's going to happen or And all these tiny by the way, it's terrible for candidates looking for jobs. It is horrible.

They go into a black hole, they're waiting and waiting, they don't hear. And from a recruiting side, you know, we've been bombarded because candidates have a lot more access to AI than organizations, right? So, where you may have been getting 60 resumes for a position, you're getting two and three hundred a day. And some of that is just AI generated.

Wow. And imagine having to weed through that and make the best decision.

Wayne Zell: To let AI do it for you.

Christine Nicholas: It does, yeah, does a great well, and to get, you know, have AI start to put the preventatives up. But more importantly, especially if you're a B2C customer. So if you're in a company, if you're in a market and you have a hotel, and you have, and I apply to work there, and you turn me down, what are the chances I'm going to go there for my wedding?

Wayne Zell: Zero. Or I went into

Christine Nicholas: a black hole, now I don't know what you think of me. Yeah. Which is, you know, more than likely what happens. So, that narrative is really important, and as we become so transparent, right, so social media has us completely transparent, everybody can see everything that's going on. Those are the things you can control. You can't control where technology's going. Ultimately, you can't control the decision a person's gonna