This Week in Jobs: The Jobs Market Turns a Corner

The jobs report beats expectations, and the headlines scream “strong labor market,” but the real story lives in the messy details. We break down what a big payroll number can hide, why revisions matter, and how you should read the data if you’re hiring, job searching, or running a business that lives and dies by demand.

We dig into the uneven economy beneath the averages: healthcare continues to drive job growth, construction remains resilient, and everything else feels like a distant third. Then we hit the most concerning signal in the report: a massive jump in the share of people working part-time for economic reasons, including gig work and second jobs, which hints at inflationary stress and shrinking breathing room even when employment looks “good” on paper.

From there, we connect the dots between rising layoffs in the JOLTS data and the wave of tech cuts that seem driven less by recession fear and more by AI, automation, and the push for “efficiency” at any cost. We talk about the Coinbase “one-person team” idea, why early AI tools still fail to show clear ROI for many companies, and why leaders feel pressured to deploy AI anyway.

We close on hiring and recruiting: candidates distrust AI in the hiring process, scams and fake applications are everywhere, and AI-assisted interview cheating is real enough that anti-cheat features are becoming standard. If you’re trying to stay ahead without losing the human side, this one’s for you. Subscribe, share with a friend in staffing or HR, and leave a review with your take: Is the hiring recession actually over?

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Transcript

A Surprise Jump In Job Growth

Pete Newsome 0:00

Welcome back to the weekend jobs. I'm Pete. Peter's with me, of course. And our special guest from last week has returned, Ricky. Thanks for coming back. Thank you for inviting me back. I really appreciate it.

Ricky Baez 0:11

By popular demand.

Peter Porebski 0:12

Yeah, Ricky's Ricky's joining us again.

Ricky Baez 0:15

That's right. That means that uh either either I have nothing to do or there really was a popular demand. I'm good with the latter.

Pete Newsome 0:23

Ricky, for your sake, we'll assume it's the latter and we'll we'll proceed accordingly. But thanks for joining us again. This is the big jobs week. So first week of the month, all the jobs reports roll out, and that's what's happened. The jobs report just came out this morning, Ricky. I don't know if you have seen it yet, but let me put you on the spot. How many jobs did we add? We were supposed to add 55,000. That was the expectation. What do you think it came in at?

Ricky Baez 0:48

Okay, I have not looked at this report in I don't know. Did we come in at 10,000 less? Did we come at 15,000? Did we come in at 40,000 jobs? 115,000 jobs added. Wow.

Pete Newsome 0:59

More than double, yeah. Wow. Okay. All right. What what what was that push? So, well, last month 178,000 jobs were added. Although the February and March numbers, and this is going to come as a shock to anyone who listens with any regularity or play or pays attention to the BLS data, those numbers were revised down. So we can't get too excited about the 115 because this is what we know happens. But it's a good sign. Yeah, it's it's a good sign. ADP's payroll numbers came out this week as well, showed 109,000 jobs were added. So we're at a good trend right now.

Ricky Baez 1:39

Okay. All right. And even wow, and even with all the layoffs recently with AI and everything, that's still pretty strong considering what's been happening the past eight weeks.

Is The Hiring Recession Ending?

Pete Newsome 1:50

It it is strong, and it it's a it's a good trend. So we basically have added added no jobs last year. I mean, it was you know a bad year all around, but we're in a positive trend right now. And there was an article put out by CNBC this week, and they suggested that the hiring recession may be over. So what do you guys think about that?

Ricky Baez 2:12

Um from a recruiter's perspective, I mean, it you guys should know more than I do, but from my boutique recruiting style, I'm not seeing it. I'm not seeing it.

Peter Porebski 2:24

Well, it's it's interesting. Do they, you know, they're they're anticipating that over the summer and fall, the coming months, I guess that this is this trend is going to continue and that we're gonna have higher pace, you know. It's hard, it's easy to get caught up, I feel like, in in the the doom and gloom when you see like layoff after layoff AI. But you know, those numbers that we're getting, I mean, while they're you know, a thousand people is that that's bad and it sucks. That's you know, in the j grand scheme of things in the job market, maybe these flashy headlines are not reflecting the entirety of the job market. So I'm I'm gonna be cautiously optimistic about it. I mean, I have I've talked to a couple people who they think that you know May, June, July are gonna be good months. So we'll see.

Ricky Baez 3:09

Well, well, Peter, you own a staffing agency. I mean, Pete, you own a staffing agency. What are you seeing? Are you seeing an uptick in that?

Pete Newsome 3:15

That we're we're seeing a we're seeing positive trends. And I had a call this week with a peer group of staffing executives, and almost without exception, these are these are firms from around the country. It's a really good snapshot of how things are going. And and I've seen the feedback from this group for the past couple of years align very closely with the market overall. And almost without exception, everyone had a really good April, seeing positive trends, slowdown at the end of last year, and a steady increase. So I'm going to take this as a good sign. I don't necessarily trust the numbers, don't conflate those two things, but I do think we're heading in a good direction. So a lot of positivity out there right now, which we haven't seen recently.

Ricky Baez 4:05

See, that's awesome. I'm sorry. Go ahead, Peter.

Healthcare Drives The Whole Story

Peter Porebski 4:07

Well, I was gonna say, do you I know that the the article that that Pete's speaking about, and they flagged, you know, that there are cut there are a couple things, the caveats to it. There could be, you know, Iran should could be an issue, um, and that there's AI exposed industry. So do we think it's gonna be kind of all over the place, or is it gonna be, you know, like healthcare and construction we talked about last week being the huge ones that are driving everything? Is are those just gonna go up and then that makes the the you know the job market better while these other industries are kind of languishing?

Pete Newsome 4:38

Well, healthcare continues to carry the market. We we know that. And with construction in you know second place, and then everything else is has really been a distant third. So it is hard to get too excited about that because we know why healthcare is growing, right? We have an aging population. Yeah, healthcare is the place to be from a career standpoint. It's about as limited with AI exposure as you can get, where many other positions are. The the demand is not going away, it's only going to increase. So that's going to continue. It's the rest of the market that we have to worry about right now because we know that AI impact is happening.

Ricky Baez 5:18

Yeah, it so so I agree with that. I do. I'm just wondering, you know, what the summer, you know, exactly what Peter was talking about, what the summer's going to look like. Uh, because I do know, I mean, contrary to what I have seen in the news this week, I do know more and more people have less and less discretional funds to spend. So, and with gas prices going the way they are and how prices are going up, I'm wondering how that's going to affect summer travel. And especially here for us in Florida, because us here in Florida, we rely on tourism quite a bit. And I'm wondering how that's going to affect the Florida numbers when it comes to tourism. Obviously, very different than the uh than the healthcare industry, but I'm curious to see what to what that's going to do to tourism this summer for us.

Pete Newsome 6:03

But Ricky, didn't you hear that the war is over? Oh, wait, hold on, hold on. Nope, nope, it's back on. It's back on again. It's it's over again. So you know what?

Ricky Baez 6:12

This war is like the relationship my brother has with his wife. Are they together? I don't know. It's it's it's it's 10 a.m.

Peter Porebski 6:20

I it that can change of anything. That's that's the that's everything that comes back to my mind.

Pete Newsome 6:29

So unless we're checking Twitter while we're recording this, we we won't know what the status is. We will not know. That's true. But but we'll see. I mean, look, there's some good signs there. Yeah, maybe we'll hope for the best, but I I I think that that's where I fall on this for sure. Is that depending on what happens with with that, I mean, I think the whole market is watching, waiting. And if that subsides, we've seen the tariff subside, so that certainly helped. I think we have some finality there. At least it seems I shouldn't say the word final. That's probably not the best choice. But temporarily, it seems like that is not the concern that it was. So we're close, we're close. We've been in this hurry up and wait stage for what seems like ages now, but maybe maybe we'll get there soon.

Peter Porebski 7:18

And and you know, with AI, we've talked, I know we've talked at ad nauseum about AI, and that's more of a even though it's a short-term thing and it's evolving really quickly, that's a that's a longer term than this. You know, it's not gonna, I don't think it's gonna drastically do anything in the job market, at least in the next quarter. Um, there will be changes, but I don't think that's going to like hamper anything. It seems like companies are getting a little bit of a handle on kind of where they want to go with this, so it's not quite so volatile. Uh, do you think that's gonna really affect anything in the grand scheme of things over the say until fall? I do.

The Alarming Rise In Part-Time

Pete Newsome 7:55

I do. I but selectively. Yeah. We'll talk about uh some big announcements in a minute for more AI-driven cuts that have happened this week. We've seen big announcements. So we'll pause that for a second because I wanted to bring up a number that was very concerning. So the top line, this is the way the jobs numbers have been for the past couple of years. We see this top line that gets a lot of attention. But what was most relevant to me in this report is that almost half a million more people are working part-time jobs because they need to economically. And that's a staggering number. 445,000 more people are working part-time in April than they were the month before. And that number is up to almost 5 million now. I think it's at 4.9.

Ricky Baez 8:42

Now, is that above and beyond their regular day job, their regular 40-hour week job? So this is a second job.

Pete Newsome 8:48

Well, or they can't find full-time work, right? So these are people who want to work full-time, can't for whatever reason, or have to work part-time. And so that number continues to go up. And that that is that's staggering. Almost half a million people in one month is a massive number.

Peter Porebski 9:05

Do you know if that's counting like Uber drivers and gig gig type work as well? Is that considered part-time, or how is that how is that factored into this? Uh, yeah, that should be yeah, that's considered part-time.

Pete Newsome 9:16

So um, yeah, this is and and thank goodness for those jobs, right? That those there's lots of stories that we've heard about people who find those opportunities as a way of bridging a gap, a much needed bridge. And what a great thing for for workers in America.

Ricky Baez 9:35

Especially when they find that niche, when they find that niche that really works for them. And you know, next thing you know, you go from making $200 a month to $15,000 a month if you find if you hit the right set of goal. Now, just real quick, it it's it's as far as those part-time uh positions that more people are doing, it's it's are those numbers included in this month's jobs report?

Pete Newsome 9:59

Were they doubled? No, though those aren't considered no.

Virus Rumors And Travel Anxiety

Ricky Baez 10:01

No, no, okay, got it, got it. Okay, yeah, so wow, because that's wow. See, I don't know if that's because they can't find exactly how you said, if they can't find new work, full-time work, or they're just trying to, you know, to to to fill that gap uh of trying to keep up with inflation and trying to because their dollars are not going as far as before. I think I saw a news story that made me laugh. I forgot where it was, but I saw it on social media this week. Some some analyst was talking about everything is great, people are spending so much money on gas, and I'm just looking at it like, yeah, they're spending more, but they're getting less for the same amount, they're spending more money on gas and and everything else. But it just it made me laugh how he tried to spend that as a positive thing. I mean, he was so excited about it too. But Pete, if I can just jump in real quick and and and this may derail it. If you don't want to go down this road, that's fine. But this one thing that a couple of the clients have been talking to me about this week, which which recent headlines, um, so they're getting a little bit of uh of um uh a hard reminiscing of COVID with what's happening right now with that crucial. And let me tell you, I wasn't thinking about it, but now I got some clients saying, hey, what are you hearing? Is this the big thing? And I'm like, I'm not the Department of Health. Ricky, you're in the CDC. What are what's going on? I don't know what that is.

Pete Newsome 11:33

So this is this is very reminiscent of of what we saw back in late 2019.

Peter Porebski 11:39

I was gonna say fall 2019, very early 2020.

Pete Newsome 11:43

I remember when the first report started to come out, and I I don't know how it's interesting. I I don't watch mainstream media, I get all my news from from Twitter, judge me as you as you will, but uh I can tell you the memes have been amazing. Uh for you know that that is I can clear that. Um but how serious is it? I I I I I don't know. I don't who does know, right, at this point, but it's a little scary. Um we're trying to plan a trip right now for for June with my family, with a couple uh graduates in uh in our house. And my wife just this morning said, Are we booking? I'm like, I I I don't know. I have no idea what to do with this.

Ricky Baez 12:27

Okay, Pete, I gotta tell you what happened. So we were supposed to go on an Alaskan cruise in March of 20, oh no, in uh in June of 2020. March 2020 started getting really bad. Next thing you know, Royal Caribbean's like, we're we're not doing it, we're canceling, we're giving you your money back. And let me tell you, it it's it's everything was canceled, right? You know this, we know this. So here we go again. Late last year, we book another Alaskan cruise because we never got to go for June of this year, and now this is happening.

Peter Porebski 12:58

Oh, you're the harbinger, you're you're booking cruises, and that's what's caused your bad luck.

Ricky Baez 13:04

So my wife and I are like, Oh, I don't know, I really hope that it doesn't happen again, right? I really but anyway, it it's when my clients started calling me saying, Hey, what are you hearing? And then that kind of raised my antennas, and I'm like, I I don't I haven't heard anything different than you have, but now I know you're worried, and I'm wondering if anybody else out there has that fear because that taste is still in our mouth from six years ago, right? And now here we are again, and I love these job numbers, I love that we're creating more jobs, but I'm wondering how sustainable it's going to be if this thing becomes bigger than what it actually is.

Pete Newsome 13:40

Look, uh it would be disastrous, right? I mean, if that happens, who knows? I I don't know that we should spend too much time on that right now. It's so early. Could be look, we've we've seen these other alarms too. Let's keep that in mind of this this virus, this new strain, and it's much ado about nothing. I also think people are desensitized to this now, right? You know, that's where why the meme explosion happens, right? Everyone's like, sure, sure, this is happening again, right? We're not buying it. So there's a lot of people on the other side of COVID who uh who don't look back very fondly on how that was treated in terms of closures, how the governments uh reacted to that around the around the country, state, uh, federal, around the world. So it'll be interesting to see uh if as this plays out, if it is serious, people are gonna have a very difficult time buying into it.

Peter Porebski 14:37

So it even even if we were going into the exact same COVID, but in this current scenario, I think it would be handled differently just because you know this is the second time around, and like Pete said, there's uh there's a little bit of boy who cried wolf with everyone's gonna this is gonna be the new next COVID, the next COVID.

Pete Newsome 14:54

So well here, Ricky, I'll offer this. I I haven't ordered all uh you know a palette of toilet paper from Amazon. So there, that's how I feel about it right now, if you're wondering. That's the gauge.

Ricky Baez 15:07

So if you so if you want to know how America uh is worried about this pandemic, just take a look at toilet paper sales.

Pete Newsome 15:14

Yeah, I'll tell you quickly, my my daughter thought it was hilarious when when I did that six years ago and was sending posting the picture, sending it to her friends, look at my freak dad, you know, with this pile in the in the garage. Well, a month later, everyone's wondering if they can borrow toilet paper. I'm like, eh. No, no, you can't.

Ricky Baez 15:34

So you so in your neighborhood, you're known as the toilet paper dealer? No. I'm no.

Speaker 3 15:40

I'm the toilet paper boarder.

JOLTS Layoffs Complicate The Picture

Pete Newsome 15:42

Yeah, exactly. All right, so let's move on from this. We just lost anyone who was still listening at this point. Um, the uh the other jobs number before we move on is that the uh the job opening labor turnover survey came out this week. The Jolt's report, that's a month behind. It reports on March layoffs, and that number was huge. It increased by 272,000 year over year. So that's a that's a huge number. I mean, so we're seeing jobs added, layoffs are piling up, and I think that's probably a good segue to move into some big layoff announcements that we have. Ricky, I don't I don't know if you've seen those. I know Peter has.

Ricky Baez 16:19

I've seen them, but but the I I think that the thing it's important for us to to make a note of with this is I think it's important for people to understand these big layoffs numbers has nothing to do with the economy and everything to do with the progression of a of technology. Yeah, right. So so I think that's important to understand because if it was due to the economy, there's other things at play. And this has got nothing to do with the economy, and more about new technology being available uh and more mainstream where organizations are seeing they can be more efficient with this new technology.

Pete Newsome 16:54

And and that's a good point. You know what it doesn't get mentioned with this enough? When Elon came in and and took over Twitter, he immediately cut a massive amount. And this wasn't because of AI. This was because of inefficiencies that he identified. And you you yes, technology, this is a technology guy, needless to say, but he looked at that, and so you just wonder how much bloat there is in these companies, how much redundancy exists, and these are just executives following that playbook. Yes, many are are attributing it to AI, and I do believe there's truth to that in in certain circumstances. We'll never know unless we're in those conversations in the rooms. But I think this is just a trend. I mean, at this point, I I consider it a trend. Uh just just this week, right? Let's let's talk about those. But what do you guys think about that? Do you think they're mirroring that playbook that Elon shared publicly?

Peter Porebski 17:51

We see a lot of these companies, and most of them are in tech. We'll just use the giant tech umbrella. So, and like I said earlier, I mean 1100 1,100 at um at Cloudflare. Like that, we're talking about millions in the job market. 1100 is a insignificant number, effectively. It's it's just these are the things that hit the the headlines, and these are, you know, obviously those are people's lives, and I don't want to make light of that, but these are in a specific industry. It's not like we're seeing layoffs across every industry in you know, huge numbers, it's specific areas, and yeah, I think I agree it's a it's a tough trend, and it's just these companies, these specific companies making changes.

Ricky Baez 18:33

If they're doing the Elon playbook, I think that's kind of dangerous. Now, at first, at first, when Elon decided to cut, what was it, 80% of the employees? I don't know the number in front of me, but it was massive.

Speaker 3 18:45

It was I think it was sixty.

Ricky Baez 18:48

And I remember thinking, oh, Twitter's done, there's just no way. And then I started seeing, I'm like, no, they're they're surviving, they're working, it is working. But what I wonder is, are employees now going from eight-hour days to 18 hour days because of it? I wonder what their turnover is like. So I don't know if other organizations are taking a look at that. Yeah, they see what the results are, they see that Elon came in, and I do agree that some organizations are pretty bloated and they can be way more efficient. But I'm wondering what that efficiency is doing to the mentality of the employee who works there who used to work 40 hours a week, and now they're pulling lawyer hours, 80, 90 hours a week. I think a good telltale would be what the turnover has been ever since that happened, or burnout has been.

Pete Newsome 19:39

It's a good question, but yeah, these Silicon Valley companies know what each other are doing. Uh and so where where are you going if everyone else is in that mode, right? I mean, this is my my perspective on who has the the power right now, it is very much in the hands of employers, and employers know that. This is not you think so? Oh, absolutely? I do. Well, it's in all the data shows that employees, you know, the job hugging term that's been out for a couple of years now that was coined, I think, probably early last year. Uh we see that in all the data. Our own survey data shows that people are happy, but they're also afraid of the market as a whole. And that seems to come out in every survey I see where job seekers, the perception is the market's bad. The data shows that it's not really bad. Certainly not bad historically. So it's a confusing time. But I but I definitely believe that employers hold the cards right now.

Peter Porebski 20:41

And when we talk about like you know, employee sentiment, do you think, and I this is something I I had talked to a couple of people about um last week? Um, these large companies, yeah, I'll just use Google or Microsoft, for example. They they do layoffs. I mean, we always know, like you work at a large company, they say that you're just a number. Like these these companies don't, it's very transactional compared to small companies, which we talked about last week, are have huge amounts of openings that are out there. Um do you think that's affecting the employee sentiment that you know the cynicism where these companies care about profit over people and they're just gonna churn and burn. You go put your time in, you make your money, and you don't have to care about the company, they don't care about you at all. And that's kind of the sentiment, especially in these, you know, in IT. Um, I have a friend who works for a very big IT company, and he's like, Yeah, you make a lot of money here. He's like, But I tell you, most of my coworkers do not like their job, do not care about their job. They come in, they do the bare minimum that they're paid to, and then they try to get out and go to a smaller company where they actually can make a difference, feel like part of a team. It's like you basically just put your time in there.

Ricky Baez 21:48

So I mean, very different today than what it was 50 years ago, right? Because 50 years ago, there was a sense of loyalty in both ways, right? There was a sense of loyalty from the employer to the people watch, you know. Working there your whole lot and a pension, right? And and and we talked about the P word last time. And now it I mean again, it's it's I I think we talked about this last week. That meme that's that's going around in social media, it's been around for years, that says, work is not for you to make friends, go in there, make your money, and go home. I don't like that meme because I'm like, if you re you spend most of your waking hours at work, why would you not want to build relationships that are meaningful for you? And if you do it the right way, you will get that promotion that you want if you do it the right way and it and it's the right environment. So to think that every employee right now, the only thing they care about is going in, making the money and and and going home. Again, I don't have any data to back this up, but just from what I have seen personally with my business and my clients, I don't know if that's 100% true based on what I'm seeing.

Pete Newsome 22:53

No, I no, that's not the point. So separate a couple things. One, I think employers, when it comes to hiring, retention right now, due to market conditions, have hold the cards. Right? So but when we're talking about how employers treat their team, how employees feel about the environment they work in, I think it's all over the place. I think there are companies who absolutely don't care about anything warm and fuzzy. It's transactional, right? I'm gonna pay you to do a job, you do your job. I don't expect you to love it necessarily. I need you to deliver. And then there's other companies who feel very differently. And we have lots of examples of those too. I can tell you my sister is the one I always point to. She's worked for Hilton for more than 30 years. I think she's at 32 years. It's insane how much this woman loves her job, loves it. I mean, I've and and that is indicative of that organization. Um so I, you know, I think it's I think it's all over the place. It is it depends on the company and and depends on the individual too. I there are lots of employees who don't care about that. They're they see it as transactional. So I don't I don't think there's there can be a one-size-fits-all answer.

Peter Porebski 24:09

You think that's kind of like, I mean, we know that the job seeker sentiment is is generally there's anxiety about the job market. Do you think that kind of plays into it that they that they feel like while there are obviously there's both extremes, they think most people think that there's going to be the company is going to tend more to care less about them or more about them. Because it seems like, you know, it seems like in in the in a lot of these surveys that we're seeing, and even our own survey, that there's a there's this trepidation trepidation in the market because of A, outside forces and B seeing all of these layoffs. That's a really good question. You know.

Pete Newsome 24:44

Yeah, I just I don't think it's that linear, right? I think there's there's multi-faceted things going on. Do you like your job, right? Do you like the people you work with? Yes or no. Do you like your compensation? Yes or no? You could love the environment, you could love the team, you could love what you get to spend all day doing, but if you don't like your comp and it's not me uh helping you achieve the lifestyle you want, then you maybe would be willing to sacrifice those things for more money. And that that's okay. So I I I again, I think everyone has to make an individual choice on what the right fit is for them. I mean, that's something we learn in recruiting. We don't try to make assumptions ever, at least you shouldn't, if you're recruiting, about whether this is a good fit for you. You have to tell me that. Whether you can do the job is one thing, we have to assess that, but then let's see if it's a right fit. Do you like working in the office? Do you like being remote? Do you like hybrid? Right? Do you like someone, you know, I I'll tell you guys quickly, and I won't ramble too much on this, but I took a test years ago, it was a personality test for a job that I was considering. And one of the questions was do you like working as a team or do you like working autonomously? And I've thought about that question for 30 years now because depending on the day, I may give an entirely different answer. And I don't remember I do remember how I answered it actually. I said I liked working as a team because I thought that's what they wanted to hear, right? But the truth of the matter is that's not all sometimes I really like working autonomously. So I I I I I think it evolves over people's lives as their situations evolve. I I think it's all over the place. And companies have to make those individual decisions, right? Some don't look for that kind of loyalty, and that's okay too.

Coinbase Bets On One-Person Teams

Peter Porebski 26:28

Well, that makes me, I was gonna bring up the uh the Coinbase article talking about one-person teams, you know.

Pete Newsome 26:35

Perfect segue, yes.

Peter Porebski 26:36

Yeah, so how how do you how do you feel about how about the uh Coinbase's announcement about you know laying off people and then introducing one-person teams and downsizing their staff?

Ricky Baez 26:46

It it I haven't read that article, so um I'm gonna assume here are they saying that this one-person team, whatever team they used to have, is not being replaced by AI agents? Yep.

Peter Porebski 26:58

Yeah, so one person is now the developer, the designer, and the project manager all at the same time.

Pete Newsome 27:04

Oh, wow. They laid off 14% of their staff, sent a put posted a letter about it publicly from Brian Armstrong, their CEO, and they essentially said we're gonna let non-technical people develop code. And last night, uh some of their service was down, by the way, I think for a very time. So but that's an interesting concept, and I don't think they're alone in pursuing it. Uh, that you know, this idea of project managers also writing the software, like Peter just said, I think this is companies are trying it, whether it works or not, is to be determined.

Ricky Baez 27:42

So talk about the pental and going the other way. I would hate that. I'm an extrovert. I have to work with other people in order for me to really enjoy my job. So for people who are extroverts, they're I I'm speaking for me, that's gonna be hard to do. I love working with a team, I love talking to other human beings. Now, I am getting a little bit worried because I think I I shared with you guys last week that now I'm using Claude, and now I'm using something called um uh Whisperflow, which I now have a full-fledged conversation, and I'm finding myself arguing with Claude now. And I'm like, what am I this is a machine? What am I doing? So I mean that's more a testament about me needing to be with an another human being. So I don't know how that's going to work out. Now that said, just my own experience, what I have seen in the past, people who love to code, who love to be in a room locked away, not talking to people and just work on code. This is gonna be great for them. It's gonna be great. But Pete, I I I kind of want to put you in the spot here. I want to go back to to um what you were saying about your sister. She was with Hill, she she is or was it?

Pete Newsome 28:53

She'll never have another job.

Ricky Baez 28:54

So she believes Hilton.

Pete Newsome 28:57

Very much so.

Ricky Baez 28:58

Okay, so you as a business owner, you've had a lot of uh you have a lot of employees. Is that what you want?

Pete Newsome 29:06

Absolutely. Okay, sure, of course. But that's not necessarily relevant to every business's success, was my point. Okay. I got you. Um yeah, and I and I and I think some companies don't care. And look, if you're making announcements saying we're laying off 50% of our staff or 40% of our staff, we've seen some of those lately, because we found uh the robots can do your job better. Do you you're not the company who cares about that? And it is it does bring up an interesting thing to consider, though, is as technology continues to improve, AI evolves, and it's evolving rapidly. At what point does that become a problem for you from an operations expense standpoint? Right? I mean, this there's gonna be every company is going to have to face these questions in the years to come.

Ricky Baez 30:04

And I think go ahead.

Peter Porebski 30:06

I I was just gonna say, you know, yeah, thinking about these AI expenses, and Ricky, you talked about well, the developer who wants to sit in the room and just code, this is great for them. But if you're the developer who's also now the project manager, I mean, every project manager I've talked to, and I have several friends who are the hardest part and the biggest part of their their their job boils down to dealing with people on different teams. And if you're not, I mean, the person who's great at understanding the technical might not be the best at solving interpersonal conflict. And I know I guess you could say, well, is if AI takes over that, then you know everyone's AI and you don't actually have to worry about that. But as long as there are people, and there's that, those are two completely different skill sets in my mind, is being able to organize and deal with people and being able to you know understand all the technical.

Ricky Baez 30:52

And there are people who can do both, but it's not they're not dealing with people, they're dealing with AI bots, right?

Peter Porebski 30:57

And so as long as they don't have to talk to anybody on any other teams, you know, any other humans, then I guess they're good if you're one person at a company.

Ricky Baez 31:05

And I think that's gonna change too, because what what you know, as as as you guys are talking about this, I'm thinking, wow, how is that going to change human resources now, right? Because it's right now they're age i bot AI bots, but as time progresses, as it learns from us, it's going to emulate human behavior. At what point do we, HR, have to step in and deal with a dispute between a human being?

Pete Newsome 31:28

Well, it's I can't remember the name of the company, Ricky, but there was a report that came out, it was a large, it was a household name has already started assigning employee IDs to AI agents. So you're gonna have to deal with that in the near future. Yeah, Ricky's gonna be doing uh robot and okay see three PO.

Ricky Baez 31:49

So what happened? No, because I laughed because I think it was Anthropic. I saw a story by 60 Minutes, I think it was 60 Minutes, where they were Anthropic who owns Claude. They they set up this fictitious company and they set up this AI bot, the agent that worked for the company, and they were having conversations, doing emails left and right. And when the guy, the human person, tried to shut down the company, shut down the bot, it depends, it defended itself. It looked through all the fake emails and it said, if you shut me down, I'm gonna send everybody this email about you having an affair. It was fake, right? But he threw that in there, it defended itself. If it has that kind of capability, at what point is it going to sexually harass somebody? Could you imagine? You know, your butt looks good. I'm like, here we go. Okay, now I have to do that kind of an investigation.

AI Cuts Without Clear ROI Yet

Pete Newsome 32:42

Hope let's not we don't have to deal with that today. That's that's really but but there, but there look, we'll get back to the the cuts and then we'll move on. Cloudflare announced 20% workforce cut today. So these are again household names, Cloudflare Flare, Coinbase, Freshworks, all this week. So that this is happening, it continues to happen. However, Gardner put out a report this week that said the headline of it was essentially that AI doesn't deliver ROI. So there's that going on. They said that 80% of companies deploying autonomous tech have cut workers, but they have found no correlation between workforce force reductions and higher return on investment. What do you think about that?

Peter Porebski 33:28

Not now, but later on it will.

Ricky Baez 33:42

But isn't that with any brand new toy, right? Once you implement it, you have to work out those kinks. At first, you're not going to see an ROI, but once it goes from theory to application and we start seeing how we can use it, then you will start seeing an ROI. So I don't know if that's a good statement to make now, given how quickly these things can evolve.

Peter Porebski 34:02

And that does, I mean, that requires a leap of faith to say, all right, well, we're not gonna see ROI until 2029. Okay, okay. I I guess we're gonna let keep laying off people, and then if we're wrong and we're too far down that road, you know, we're gonna have to backtrack all that and all that money that was spent. So it's a it's an interesting thing uh article because it's basically going against a lot of what these companies are saying.

Pete Newsome 34:24

But we're seeing that in you know, there's multiple reports that have come out recently with numbers like 90% of executive survey. There was a 6,000 um uh person survey uh done a few months ago of all executives, and they nine out of 10 who took the survey said that they're not seeing a productivity gain and they're not seeing uh uh return on their investment so far from AI. And the productivity gain is interesting to me because my own experience with it is yes, it creates great efficiencies in some areas, but it is currently creating a lot of work to get there. So to your point, Ricky, not yet, right? And that I I find myself saying that a lot when the AI discussion comes up. Yeah, yes, it hallucin still hallucinates, or it's not 100% correct. Yeah, not yet, right? But wait six months, wait a year. And and and that's where I think uh we see a lot of people who are dismissive of it because of their early experience or that uh experience of having to spend a lot of time and effort to do something that they could have probably done just as easily on their own. But it's the lasting effect that um hasn't really been realized yet.

Peter Porebski 35:38

So then do you think you're saying you know these companies are jumping the gun and that they shouldn't, they should be, you know, maybe just training their people and using it alongside them? And then maybe, you know, say three years from now, it's truly autonomous, then you kind of deal with that, and that these companies laying off right now, maybe, you know, maybe they don't need to be doing that.

Pete Newsome 36:00

Well, consider this, right? I'll I'll there I was in a discussion with five other staffing companies, uh owners the other day, and we were talking about who's implemented AI and who hasn't. And so I'm of course talking about the great things that we're doing, and the tool that we're using is creating incredible efficiencies, right? But at the same time, what I'm doing on my own, trying to implement it, Peter, what you're doing, we're we're seeing that we're it's creating work we didn't otherwise have, but we're doing it because we see where it's gonna lead, right? But the nature of the discussion was about the things that we're doing. And so two of the five haven't started really doing anything at all. I can almost sense their anxiety level rising as a result of this conversation because they feel like they're not keeping up with the Joneses. And I know that that is going on. Now, at the enterprise level, it's different, right? Decisions are made differently, but small to medium businesses are absolutely feeling pressure to get in the game. They are compelled to do it, and the and people are running at a full speed because it's kind of hard to go slowly in that world. Yeah, and and there's a lot of fumbles happening.

Ricky Baez 37:12

So that's a surprising number to me, Pete. That that that that many uh business leaders are not are are not using it. I understand employees, but I'm talking about business leaders, the people responsible for the income and the expense of the organization. And I would be not to if they're listening, I'm sorry, but I would be worried. I would be worried, and it's it's I would be I would if I was there, I would be like, you should have some kind of anxiety, and you have some homework to do this weekend. Because every single day you don't pay attention to it, it gets smarter and you get farther away to where you need to be to be effective. And I think that's a part people need to, business leader need to understand. Now, going back to what Peter said, are are these organizations jumping the gun? Maybe, maybe they are really depends on on if they were on the brink of doing of uh of of losing some kind of market share or or not hitting those goals, and this was a perfect opportunity to see what they can do to keep that that valuation up, right? Maybe that's what it is, but I think we're going to see a lot of organizations that are going to get some bumping and bruises walking, learning how to run. This is where we are right now. We're walking to learn how to run.

Pete Newsome 38:29

But company, but our companies are running, right? So, I mean, if you have a board right now, I guarantee you they're asking about your AI plans. Of course, what's your strategy there? Uh, and if you're a small business and you're paying attention, and I get messages from friends on a regular basis in my personal life who are know how much we're using it, know how involved we are, and they're like, tell me what you're doing. And I'm like, it's not that simple, right? Well, what works for us is vastly different than what may work for you in your particular industry with your business. And we've had a lot of bumps along the way. We've had false starts. The first we've invested a lot of time, Peter did. I say we, it was really him and a couple other people on our team invested a lot of time in our first iteration of trying to implement an AI screener and recruiter, uh, recruiting software. It just wasn't very good. And uh it wasn't really you, Peter. You spent a lot of time.

Peter Porebski 39:25

Yeah, I mean, it wasn't as good. It and I we had this conversation internally. Yeah, it just it wasn't where we needed it to be because we're I mean, we some staffing companies they just want high volume turnover. We we put a lot of emphasis on the personal relationship and making sure you know everybody feels like we're being thorough and whatnot. Um, and this what was not at the level that you know we wanted it to be, but we learned a lot from it, and then when we implemented our current tools, it made it that much smoother. I knew you know, going into it what to expect, a lot of the features. I was like, oh, well, is this here, this here, this here, the questions to ask. So I I mean it was a learning experience, and I think that's kind of how all companies they treat it like a good, you know, a true tool, a new tool, and not like I'm I'm of the mindset it should be a tool, not a not a replacement, uh complete replacement, but train people how to use it. Um, and these efficiencies that you can have are really great. If you if you look at it like each iteration is just a learn, it's it's learning, it's learning, it's learning, you know, how to how to take advantage.

Teaching Kids AI Before School Does

Ricky Baez 40:26

And and start teaching people early, right? Start early because here's what I'm doing. My son's about to be 13, he's in middle school, and then I was having a conversation with him a couple of weeks ago. I'm like, hey, do you want a summer job? He's like, Doing what, daddy? I'm like, you're gonna go clean up my email inbox, you're gonna help me out with my business, but I'm also gonna train you how to use AI. Now, if any of his teachers are listening, I know they're gonna be upset right now because they're not teaching this at school for a good reason, because they don't want kids to use that to cheat. But my my pushback to that is we if we don't teach our kids to use that right now, how to prompt it, they're gonna be way behind. So the commitment that I'm making is I'm gonna have him work for me um uh 10 hours a week, but all he's going to do is learn AI. And I ask my AI thing, uh Claude, to create a uh a two-month training program for him where a 12-year-old can understand it because I want him to be ahead of the curve when he gets to high school, college, and then he gets a job. Now, what I have to do is I have to make sure he doesn't use that to do his work, right? At school. Yeah, yeah. So I have to be more vigilant to that. You're shaking your head, no.

Pete Newsome 41:36

Yeah, he's gonna use it. And you're not gonna try it. Trust me, he's gonna use it. It's but it's crazy not to, right? My you know, my my high school senior is about to graduate, and he is at the the finish line, you know. I think he's I don't think he has any any more tests to do or anything, but they had a a a PowerPoint, and he was. I said, Why are you why are you doing this manually at all? Right? Like, and he's like, Oh, we're supposed to, and this and that. And I said, That's that seems crazy to me because you're never going to have to know how to put together a PowerPoint slide. That is no longer a function that a human needs to know in the professional world. And yeah, it's in a few, and I get why teachers do it. I I understand you want kids to have to do things, you want to understand math, right? Even though we can have all the calculations done for you. So I understand the need, but the education system needs to evolve, and I suspect by the time your 13-year-old is 18, like my youngest is, he's going to um the education system better have embraced that a lot more than it is right now. I I think everyone's uh this is a blanket statement for all of AI, educations included. Everyone's trying to figure it out as they go.

Ricky Baez 42:55

Yeah, it's uh and this is where we are right now, right? I I think in 10 years looking back, we're gonna laugh at how we're trying to figure this out, right? Because right now we're knee-deep in it. We're knee deep in trying to figure out what this new relationship is going to be like. Am I gonna marry this thing? Am I not gonna marry this thing? Am I gonna be single for the rest of my life? I don't know. I don't know why I brought that analogy into it, but it makes sense, right? But but right now we're trying to figure each other out, but I don't see it's I think we're all agree here, this is not gonna go away. It's only gonna become more and more ingrained into our lives. And again, I'm really excited because as a Star Wars fan, I can't wait to have my Arthur Eat to follow me around, help me out everywhere, aka my son.

Why Candidates Distrust AI Recruiting

Peter Porebski 43:34

Pete, this makes me this kind of bleeds in. I wanted to bring up the SIA um study with about candidates distrusting, you know, AI in the hiring process. That's a good way to close.

Pete Newsome 43:44

Yep.

Peter Porebski 43:45

Yeah, so I mean uh there was a study by us uh staffing industry analysts that only 21% of candidates believe that employers are using AI responsibly, and that 57% think disclosure should be legally required as part of the hiring process. So Ricky, we talked about that. Only 18% said their employers have clear AI policies about usage. Because it is very much, I guess, the Wild West.

Ricky Baez 44:09

So so hold on. And Pete, I know you two had a question, but I'm trying to understand that. 21% say organizations are not using AI responsibly.

Peter Porebski 44:18

That means only 21% believe that AI that AI is being used responsibly at companies.

Ricky Baez 44:24

Responsibly. Okay.

Peter Porebski 44:25

Yeah.

Ricky Baez 44:26

So what does that mean? That means the majority of the folks thinks they're not using their responsibility. What does using it irresponsibly look like? What does that mean?

Peter Porebski 44:35

So from what I understand, it's the it's specifically in staffing and hiring and the hiring process. Um so 79% of people believe that companies are making irresponsible decisions, rash decisions, quick decisions. Got it, got it, got it using AI and not thoroughly thinking out the process or how it's affecting the jobs, job seekers or employees.

Pete Newsome 44:58

Yeah, it was an article that uh that SA published a survey was was done by uh an independent company, but that uh the the part about recruiting and trust was so interesting to me to see that um you know recruiters are uh candidates are skeptical, I think, of pretty much anything involving an employer right now. And and I understand why to a significant degree, but AI the right AI tools are a candidate's best friend, they just don't necessarily realize it yet. Yeah.

Peter Porebski 45:30

Well, I've I've I mean people in my personal life that I know, like one of my one of my friends is um he's getting interviewed at a at a company and he's like, uh, he's like they called me and they they I had an AI agent that reached out to me. He's like, I thought it was a scam initially. And I'm like, so that's that that's just the default, it seems, of mindset is like people being extremely apprehensive or not trusting of like the process. And I wonder if that's also just not understanding. I mean, he this is his he's my age, so it's my what fourth, fifth job like ever. So he's not on the job market constantly. They don't know like what the advances that are being made. So it's it's it is weird to like hear from an AI agent when you're used to having a conversation initially with a recruiter calling you to kind of feel you out.

Ricky Baez 46:14

Okay, now I know I know I know you guys are trying to close here, but I have to ask this because I want to get your perspective on it. Um, I was having a conversation with a student about a month ago, and like off the record, I'm not gonna mention his name, but he's like, Hey, Ricky, what what do you think about this? I did an interview, I had an AI on my phone off to the side, and was listening to the conversation, and on another screen, it kept giving me answers. How how he was asking me how I felt about that, and I'm like, no, you are mis you are misres, you are misrepresenting who you are and what you do. And if I found out about that, I would not hire you. But the question is, how do you find out about that until you bring the person on the case?

Peter Porebski 46:58

Until they come to work for you and realize that they can't use it.

Ricky Baez 47:03

Right? So it's have you guys dealt with that before?

Pete Newsome 47:08

Yeah, I mean, we it's not not too much. Maybe we weed a lot of that potential out when we talk to candidates about how we're gonna check their professional references, if we do, and talking to their former managers. I mean, it's it's part, it's always been the way we operated. Surprisingly, few staffing companies operate that way, which is which seems crazy to me for for that reason. So there's a lot of fraud on both sides right now, um, that that we know is the case, and that's its own long conversation. But um yeah, it I mean, it's a problem if you're not thorough in your screening and assessment on the front end, and even too. So shocker, people lie.

unknown 47:54

Yeah.

Ricky Baez 47:55

No, I I've built some kind of way because I'm like, you've learned nothing in my class. I teach you how to be authentic, be authentic, do not cheat, right? Be yourself as much as you can. And if you don't know how to do anything, make sure you communicate that because there's nothing worse than wasting somebody else's time and to making them believe you are at the skill level that you're saying you are, only to come into work after spending all that time, money, and effort to bring you on board to find out you were completely way off base. I would be very upset as a person hiring you.

Peter Porebski 48:25

I'll tell you one thing just to kind of go the tool that we use does have a feat has features built into it that are anti-AI cheating features because so it must be prevalent enough that they've built a feature for and it's it I I've talked to the user groups for it, and it seems to be, like I said, prevalent more in high-level IT. Um, you know, if they're giving you a problem, you've got Chat GPT giving you the answer on the side, where they'll they'll have it kind of running in the background while while an interviewer is doing it, and it'll I I guess it's like mapping their eye movements or or whatnot. But it basically tells you if this person is a high probability of their reading off the screen.

Pete Newsome 49:03

Oh, wow. That capability's been in place for why I mean it star and I know I first heard about it when COVID hit, and my kids were having to do online tests, and I can't remember the name of the tool that all the education systems were using, but it would if there it would know if there was someone else in the room, if you were making eye contact with the other. It was very sensitive and very effective. And so, yeah, so seeing those things implemented, like our own AI tool, um is it's necessary, it's unfortunate state of the world that we're in. But yeah, there's a lot of ghost jobs, there's a lot of fake resumes, the numbers are staggering when you look at that. But um it's it was so much volume going on, you have to have tools, right? You have to, it's as unfortunate as it is, you have to it's like guilty until proven innocent almost.

Peter Porebski 49:54

Does it surprise you at all that you know that many people in you know the study don't trust that employers are using AI responsibly or that they think it should be like disclosed that they're gonna use it you know as part of their onboarding process?

Ricky Baez 50:08

I don't know how that would change my perception if it's disclosed or not. I it's how's that gonna help? That's the part I don't understand. Um, how is that gonna make me not interview now?

Pete Newsome 50:19

Because I mean, you see numbers. I mean you the the stats are all over the place of so I don't think there's any consistency um or any uh agreed upon number of what it actually is as far as the number of candidates who are unwilling to be recruited with AI. Some people think it's extreme. We think it's relatively minimal based on our own experience.

Peter Porebski 50:40

Peter, do you know off the top of your head what our I mean we have like our opt-out rate is like less than 10%. So and also I wonder like, is it just I mean, I go on you know recruiting subreddits and and whatnot, and I'll see a lot of the times people just don't understand how like ATS you know screening works. They're like they don't understand that like resumes are read by you know things matching keywords, whatnot. Um, if you have a skill that's important to the job, it should be on your resume. Like it's crazy how how often you'll see job seekers that just don't understand how modern recruiting works.

Ricky Baez 51:15

Hold on, Peter. Are you telling me that when you screen resumes, you don't have a human being looking at one resume, spending 45 minutes on one resume to make sure that's the right person for the job?

Peter Porebski 51:26

The average recruiter than five seconds, you know, looking to a resume to tell you if this person is a general fit or not for a job. So it's crazy to me that we still, even in 2026, have candidates that are missing major skills listed on their resume that are clearly on the job description. So I to tell you, recruiters are well still have to go back to candidates, say, you worked with X Technology at this job. Why is it not on your resume? Make sure put it on your resume and send it back to me.

Bias Risk And New Transparency Laws

Pete Newsome 51:54

So, Ricky, I do want to bring up uh what you brought up last week, which was disparate impact and your concern about that. And I did a little research and found out there's really hasn't been any lawsuit. So in in 2017, I think time frame was when Amazon was recruiting based on zip codes. So remember, we were we were we were talking about well, how what is it screening out, right? You don't know someone's race uh when you look at a at a resume. So it couldn't be that. What was zip codes? And those zip codes were primarily a white demographic, and so that, if not exclusively or near, so that was the issue in that case, and it really hasn't been anything since. And our um software, so I had this conversation with the CEO of the company that makes our tool, Tenso AI, and their audit, they have a monthly audit to make sure that there's no chance of anything happening. There's certain certain states that require reporting. So that's also one of the advantages of using the right third-party system. If you try to build this on your own, as many companies are doing, at least small businesses are and maybe some big ones too, are building their own AI tool to screen resumes. There's where you're putting yourself at risk, right? But when you use a company, the right company that knows the laws, knows what they should and should be doing, it it is it removes bias. It doesn't add any to it. So uh they just wanted to circle back on that from last week.

Ricky Baez 53:21

So it it it it's it's not if they're doing an audit, that means there's a concern, right?

Pete Newsome 53:26

It's it means it's no, it means it's a requirement. So by the state. So I think it's California, New York, Pennsylvania require that. Let's see. Let me quickly see. I'd actually kind of written that down. Oh, sorry, California, Colorado in New York, so not Pennsylvania. Colorado? Colorado. So yeah, so I I was following the California laws as they were trying to implement this. So it's it's a bit of a moving target, but yeah, so those so it's not a concern, it's just as proof that it doesn't happen because they're required to show it.

Peter Porebski 53:52

These states have passed, you know, law, transparency laws.

Ricky Baez 53:56

Where where I was firing from is it because I'm on a lot of uh uh legal boards and they're like, this is an issue, watch out for this. And I'm like, oh my god, I get it. From from the spirit impact perspective, again, my opinion is the laws just have to catch up to it. The law has not catch up to it, and it's it's we just have to wait. Because the the lawsuit I referenced was workday, and it was back in 2017, that one guy that applied to all these things, but a lot of uh attorneys are are are saying if you don't do this and if you don't get ready for it, you don't wear that seat belt, this could be you later on. You don't want to be the next version of that that you know that you don't want you don't want to be the one that it's made an example of and now Allah's name after you.

Pete Newsome 54:38

Yeah, right.

Ricky Baez 54:39

You don't want that.

Final Takeaways And Weekly Wrap

Pete Newsome 54:41

That's not what you want. No, you no, you don't. No, you don't. But all right, well, I think I think we've covered uh covered the week. So not a huge, well, some some big layoffs, yeah, big big jobs numbers report, but nothing really shocking or different than what we've seen recently. That's what Peterson and I discussed earlier. He's like, ah, this is gonna sound a whole lot like last week. And that's really been the theme lately, is that we're not seeing any big any big movement, but the trend is good. I mean, I think we can walk away from this week saying we're heading in the right direction based on everything presented to us right now, um, overall for the market. But again, check your Twitter account to see it's been an hour, haven't looked at it. We may be World War III may have started by now.

Ricky Baez 55:26

I think it started already, it just hasn't been named that yet, isn't it right? So it's I just want to see something before we close. I want to give Peter kudos because at the beginning of this call, for those of you who who have seen this show before, that Peter's background is not AI. That is real. That's not that is real, and how you can tell is that lava lamp he has there, you can see the reflection on the fish tank. Right? So, no, I just wanted to say because anybody who doesn't see this show regularly will would be like, wow, that's a really good filter. That's his house, folks. I've known him for a couple of years, I've seen some uh some uh some teens videos, and that the only difference I see there is the lava lamp. That lava lamp hasn't been there for a while.

Peter Porebski 56:12

I moved some tables around, so yeah.

Ricky Baez 56:14

And then Pete Pete, I think going forward, you should just have two AI people and sitting in those chairs just dogs back there. Yeah, the dogs aren't aren't in here today for some reason. So who knows? Yeah, mine's still a mess. Is all right? Let's just put the blurring thing on it.

Pete Newsome 56:29

And I got you've been promising to clean that up for three years now.

Ricky Baez 56:32

Because I got that thing right there. Yeah, you can't see him, right? But that is my HR generalist who does nothing, right? Uh actually I need to write him up for sexual harassment.

Pete Newsome 56:41

He he humped my leg yesterday and I got on that note, we are gonna say goodbye for the week. Thank you for listening, Ricky. Thank you for your last time being here based on that, and uh we'll see you next Friday.