Latitude_ Recruit Holdings CEO Hisayuki Idekoba

It's a 330 billion dollar business and it's at a crossroads connecting people with jobs at a time when I is on the rise. Generations are shifting and talent retention has never been more challenging. All developed countries are having less supply of labor force. That is the biggest trend. Now the staffing and recruiting industry needs to tackle these challenges head on. Enter Recruit Holdings Japan born globally grown parent company of the biggest job site in the world. Indeed dot com filling more than one million positions a month. But with pain points growing and pressure mounting from an activist investor will recruit and its CEO. He's a Yuki Dekko. It did. COBA need to reassess with a great resignation in the rearview mirror. The great job hunt is front and center as those who left their careers or are just entering the workforce start their search. But finding the right job with the right conditions has become increasingly challenging in such an overcrowded market. He's a Yuki. He did COBA who goes simply by the name Dekko hopes to cut through the crowds leading recruit holdings a technology company aiming to simplify the hiring process at a time of seismic shift in the labor market which includes thousands of layoffs from tech to media to finance to retail. Job cuts are starting to seem contagious. After the call bit we saw a lot of discrepancies between sectors and metro areas. For example tech engineering type of jobs are the number of job posting in these sectors are way lower than pre Kobe. But a total number. I don't think we're going to see a huge uptick of unemployment rate. Are you then saying that it will remain a tight job market for some time. Yeah. So the you know the biggest trend. This is also the long term trend is that we all developed countries are having less supply of labor force. For example in the U.S. 10 years ago 20 years ago U.S. had every year additional two million three million working age population. But 2018 2019 U.S. had almost zero additional working age population in Japan. Of course the number of working age population is decreasing. Recruit is the holding company of employee review site Glassdoor dot com and indeed dot com. The world's largest job search site which recruit acquired more than 10 years ago for one billion dollars. And with that acquisition comes a deep pool of data on the job market. Remote work is still strong from the job seeker point of view. So job seekers started to look for remote work jobs or flexible jobs. That's a big trend when we compare it before COVID and after COVID. But a number of job posting which is having remote work is shrinking a little bit. But it's still way higher than the pre-pandemic level. So that is a clear new trend. I would say like more workers don't want to do tough jobs. They prefer to have more work or flexibility. That generational shift of wanting more flexibility has made it increasingly challenging for employers looking to hire and retain workers. But it's not just demands of potential hires that are creating obstacles in job placements. Multiple layers of interviews intense competition and increasing focus on diversity and inclusion have produced speed bumps for job seekers. Job hunting is becoming increasingly challenging. It takes months for the process to get completed. Why is that so at a time when technology is supposed to help the process. To be honest like hiring processes have been basically the same for last 50 60 years probably. And what's happening is for example on a platform last year more than 30 million people applied more than 30 jobs. Wow. Right. The biggest conference we're getting from job seekers are hey I applied a job but nobody's responding to me because from employers point of view why they need to respond. Hey you're not qualified. Right. As a result that is the biggest pain point for job seekers. So what we are trying to do is how can we get more information from job seekers and how can we recommend better jobs. Not only like hey I want to just try to apply. I want to just try to apply. Right. Hey you know you might have to get this skill or experience to apply this job or vice versa. You know what we're doing is for example employers. There are so many jobs which is requiring a college degree. But is it really necessary to to you know to do this job. Are you getting traction. Are companies listening to you. Actually last year 800000 employers used our A.I. technology of automating job description writing. What we found is 16 percent of more applications are coming to these jobs. I think this is a good example how A.I. can support a human being's job incorporating AI into daily work. It's one of the messages Deco brought to Davos Switzerland where a who's who of business and political elite gather annually for the World Economic Forum. I think we should try to use more A.I. technology to augment our jobs or improve the productivity of whole jobs. How do we do that. How do companies do that. You talk about how some jobs would go. It's not just some. It's 40 percent of all jobs in the world will go. That's the impact of AI. So how do you come to that. How best to do it. I would. I just think that it will take time and it's not going to be like OK next year it will be gone. And also I'm more positive that human being itself will probably want to have human interaction. For example of course you know someday somebody will build 100 percent automated flying like airline or something. Do you want a lot on that. I just want to have just one pilot just in case. Finding a job is one thing. Staying motivated is another. If somebody said hey I want to quit my job. Sometimes we celebrate it. Coming up recruits unique approach to foster growth with its own employees when latitude retires across Japan. The daily race is on by foot by bike and by train for tens of thousands of office workers to arrive at their desks on time. The country is known for its regimented work culture and grueling hours but hard work and long days don't always mean positive results. In fact Japan has the lowest productivity level among G7 nations according to the OECD. But Tokyo based recruit holdings is looking to change that starting with its own company where there are no assigned desks. Working remote is widely accepted and the dress code is far from formal. I have been doing remote work for more than 10 years and I love it. You know and it's better for my family at least from my point of view. I don't know my daughters how they're thinking about it but you know I can talk more with my family. I don't need to drive for our. That's obviously better especially in Tokyo. You know in Tokyo like you need to have like two hours to commute. That's obviously not a good thing for their life. It's not just commute burnout that recruit holding CEO. He's a Yuki. It is Koba is wary of its job burnout. One of the reasons the company has a unique approach to the problem. If somebody said hey I want to quit my job. We call it graduation. Sometimes we celebrate it. We saw many people came back to us again. I know the one person who quit you know three times and came back four times. That's the process. I decided that it's better here after all. You know I I think we're not forcing everybody to you know like stay longer. From what I understand you don't really encourage people to stay beyond seven years that you actually offer a payout at seven years to encourage people to explore if they don't find themselves in management position. I mean what's the thinking. I mean like whatever. What's that about. We're not forcing everybody to be kicked out. Right. But you encourage people to exactly. We encourage people to think about their you know because it's sometimes it's easier even for me if I don't need to change everything. It's easier. Right. Change is really tough thing for everybody. If I have to think OK should I do this job for the next five years 10 years or should I try a new thing. If I have to think that is a great opportunity to think about it. Also as an individual we need to think about kind of tolerance I can have for the next five years 10 years. What's the best way to contribute to the world. But for the next generation of workers who are concerned about having the skills needed in a world of rapidly changing technologies. Deco has one piece of advice that on passion. Needless to say there's a lot of worry about staying relevant in the future economy. If you were a 14 year old thinking about your future job what kind of skills do you think you need to develop. If you really just thinking about how can I secure my job or how can I have secure job. Probably you will be disappointed. So meaning like how how can you keep you being like your curiosity. What do you want to do next. What do you want to try next. What do you want to challenge next. Instead of like I don't want to lose this. I don't want to lose that. But you need to be able to code for instance. Many many resources are showing that actually tech jobs or coding jobs probably the easiest job to be replaced by AI. Right. I know there are so many challenges. How can we reskill with the digital skill. I don't know when I think about next 10 20 years. Is it the best way to invest to raise train our workforce. My father's job is a roof carpenter. But it will take 30 40 years to build automated robot to do the roof carpenter job. It's very difficult to predict what will happen next. But that's why we need to focus more on to each individual. What I want to do what I don't want to do. Right. So follow your passion. That's right. That's whether you're 14 or 40 years old. I think so. Because you know what's the difference. I decided to acquire indeed 12 years ago when I was 36. I couldn't speak English. But I decided to move to the U.S. with my family. OK let's study English. Let's manage this big American company. But I could do it. Ages are just numbers. If you stay being very curious to run new things you can keep doing that. So what we're trying to adjust is that our company should be the place to maximize people's ability people's talent and people's passion. Right. Our employees passion. So I we believe that if we can have the work or the vision people can be passionate and which is aligned with all what employee wants to do. That's the best way to maximize the people's ability. I don't know. We might be totally wrong. That's how we have been running this company for 60 years. Those 60 years have not come without controversy. In the late 80s the company was caught up in a bribery scandal a case that forced many high profile politicians to resign including the country's prime minister. At the time the founder exited in disgrace forcing the company to reevaluate its corporate culture and the remaining employees to take charge. I think you know people are making mistakes and people need to learn from mistakes. We had a big challenge. We had big debt. Well kind of we're forced to change. We're forced to run new things. We are forced to start new businesses. That was kind of a good opportunity for us to run from mistakes. As a result we're not hesitant to try new things. We embrace failures. How to learn from failures. The culture itself is built on top of many failures and mistakes. And I understand that from that incident employees are now empowered to make decisions on the part of the company. Can you elaborate a little bit more on that. Sometimes it's good to have strong leader but sometimes it's bad to have strong leader. Right. Because people tend to ask all questions. Hey strong leader can you give me this decision decision decision. Give me order order order. So sometimes people started to rely on strong leader. But I know we lost a strong leader. So as a result we built a culture. How can we build everything more like a bottom up type of culture. That's why I know to be a CEO of this company is one of the easiest job. A bottom up culture that emerged following the recruit scandal giving DECO a distinct perspective in leadership. I want to be the most powerless CEO in the world. Coming up he's a Yuki in a Cobra's unique approach to leadership. Austin Texas not the first place that comes to mind when you think of a Japanese company. But it's here where recruit holding CEO. He's a Yuki in a Cobra. Now spends most of his time. I'm just supporting everybody. Keeping watch over the company's job matching and hiring platform indeed dot com a platform which sees three hundred and fifty million unique monthly visitors. But it is in Japan where he was born and raised. DECO opens up about his childhood and the influence it's had on his management style. I'm already from a really countryside and everything is in nature. It's very relaxed countryside. Tokyo is different. Is that part of the reason why you're a relaxed personality. Maybe you're quite an outdoorsy person. Yeah. Yeah. Yeah. What sports do you do. You play golf. I play golf. Handicap ball for. I should be better. But yeah actually I'm thinking you know maybe you know if when I feel it's enough to do this job I want to try to be a professional golfer professional. Wow. Before he hits the green he hits the cell on booking an appointment using another one of recruits products. Hot pepper. A Japan beauty services booking app with nearly 200 million annual appointments. An app built after a conversation with his wife DECO the hot pepper app. It's your baby. Yeah I love it because it's my baby. But yeah. Yes. So how did it come about. You know my wife told me that you know she hates calling to hair salons all the time. So there should be some kind of online service to book it. So we build it. And it must have been quite difficult initially. What kind of numbers then versus now. Yeah. At the very first month when we started online booking you know we only had like 80 hair salons. But now we have I don't know 30000 40000 a lot. Hair salons. Anna's grown beyond her salons. Hot pepper is now one of the top restaurant reservation apps in Japan. Part of a holistic approach by DECO and his team to provide digital solutions for small business from recruiting to reservations to ordering and even payments. Small businesses need the best solution to run their businesses in a better productivity. So you help them stay relevant. It's difficult to hire for instance. Right. So you've gone with a digital system. It's very important for us to provide solutions for small businesses to improve their productivity. Otherwise we cannot eat these great foods. So we don't want to miss it. Right. It's casual dinners like this one with your hero Kitamura recruit holdings executive vice president where ideas are born. Is this where decisions are made. Do you make decisions over a drink over the food. That's a great game. We don't decide anything here. It's probably you know we should not be brainstorming. But you know exactly you ideas. A bunch of new ideas are coming from the atmosphere like a loud discussion. I think that's true. I want to talk about your management style. Are you more casual. I mean this is how this is where you discuss challenges and strategy for the company. Casual maybe but leading a company with a market cap of over 60 billion dollars and one that has an activist investor piling on pressure. Value Act took a one point one percent stake in the company late last year saying recruits value should be doubled. I think it is not only activists you know the investors in general. They're so smart. They're giving a good opinion to us. And I'm having a good conversation with them. You know sometimes there are some really good eye opening type of opinion. And it was good. We're trying to constantly learn from everybody all the stakeholders. And so investors are very important for us to run from it. And only activists. I think the company went public about 10 years ago to raise funds to make acquisitions. Yeah. Always not doing any. The only one tricky thing about you know the M&A situation. Not only us but not only me is that you know we had 15 years of free money and the things changed a lot. Now 5 percent interest rate. And people are saying like maybe in the next five years it's not going to be zero. So there's a huge kind of discrepancy of the pricing range between sellers and buyers. We'll see how it goes. So it's a matter of price. There are so many good companies but I rather want to invest more into my our own business with a new technology. It seems that's the best bet from my point of view right now. It seems like you can do more than that. You have a war chest of about five and a half billion dollars. You can do that and acquire some companies. What would make sense if you were to look around to make acquisitions. I think there are some niche companies which are focusing on like niche technologies. And I think as a more like we're becoming to be like HR human resource matching platform. And there you know there should be some opportunities which is something like you know platform plus bolt on type of acquisitions. And yeah I've been talking with many startups. So within the next 12 24 months you may make a move. Perhaps I want to do that. Doing it his way the recruit way which may not fit the business norm especially in Japan. But for DECO and the team at Recruit it works. We have to be creative. Our business requirement is we need to produce more innovations to the world to do that. I don't think like hey you have to walk seriously for many many hours. Is that the best way to be creative or to build a new innovation. What I'm thinking is I want to be the most powerless CEO in the world. And my job is how can I facilitate everybody. And how can I give good like vision. You know this is what we want to solve. And I don't know how to solve it. Please everybody think about it. How to solve it.