The competition for talent is fierce. Brought on by changing attitudes, the so-called Great Resignation, and a global lack of skilled workers, it’s now incredibly challenging for companies to make key hires. At the same time, job-seekers are struggling to find the right roles, finding it tough to stand out and get noticed.
The digital transformation of our world has reshaped most industries around the world. It’s left a heightened demand for highly-skilled tech workers, and companies are now battling it out to build the best teams amidst the context of changing work attitudes.
Getting hired and hiring has, for generations, followed a pretty similar process: you see the job ad, you submit a CV, maybe include a cover letter, and then have a series of interviews. Sometimes, you also do a questionnaire beforehand. In the modern world, this process is no longer fit for purpose. It doesn’t work for recruiters who are struggling to find the right talent, struggling to battle with competing companies, and, it doesn’t work for job-seekers, who aren’t standing out from the crowd, and aren’t accessing the right roles.
Alva Labs, founded in 2017, is a startup behind a possible solution. Its digital hiring platform helps recruiters objectively qualify and compare job candidates with psychometric testing. In 2022, the company raised €11.7 million as its vision for a bias-free job market picked up traction.
Its tests, created by a team of psychometricians, data scientists and talent acquisition experts, combine AI and machine learning with leading psychometrics and organisational psychology. The solution tests across logic and personality, saving recruiters time, money and resources, while also increasing the chances they find the right person for the right job.
In 2022, the Stockholm-born company built out its UK team and made a key acquisition of coding test startup DevSkills – aiming to become a lead player in the fiercely competitive dev-recruitment sphere.
We caught up with Co-Founder and CEO Malcolm Burenstam Linder to learn more about Alva Labs ethical recruitment approach, the future of developer recruitment, and how acquisitions can help growth.
What is Alva Labs’s purpose?
At Alva Labs, we are committed to making candidate assessments better for everyone. By combining AI and machine learning with established science and research, we have created a platform for recruiters and HR managers to find the best objective fits for their roles.
As a company, we’re working to fix what is a largely broken recruitment system that runs on bias and prejudice. It’s our mission to create a job market that is fair and efficient for all, saving both recruiters and candidates time in the screening process and ensuring that all applicants get an equal shot at a job.
We have created candidate-friendly assessments that help employers find the best talent, while also helping candidates find a job that’s right for them. With our tests, hiring managers are able to make informed, data-driven decisions about a candidate’s suitability, as our objective data can more accurately predict a candidate’s success in the role. We believe that inclusive recruitment is a science, so that means no more making hiring decisions based on biased judgments and ‘gut-instinct’.
What inspired you to start the company? And how has your entrepreneurial journey been so far?
Before founding Alva, I worked for two different companies, one in private equity, the other in ecommerce, both of which directly or indirectly grappled with the impact of poor hiring decisions, as every company does. I saw that, despite good intentions, the standard recruitment practices were simply not working, and were in fact hindering company growth. Hiring managers found themselves in a constant battle with the ‘revolving door’, whereby staff weren’t staying, because ultimately they weren’t the right people for the job.
This was when the scale of the recruitment dilemma clicked for me. I realised that for too long we had allowed bias to dictate hiring decisions. We had been hiring people based on ‘hunches’. Those offered roles typically shared a common interest or life experience with those in the interviewing chair, be it the same university or a love of golf. By allowing our own preferences to drive our definition of what ‘good’ looks like in a candidate, we hold companies back from reaching their full potential and candidates finding jobs that are right for them. As soon as this clicked in my mind, I was eager to come up with a solution to this global problem, and I knew that data and analytics would be at the centre of it.
My experience as an entrepreneur, like most, has had its highs and lows. Recruitment is a very saturated and antiquated space, and is even more reliant on CVs than many people – including myself at first – would initially think. In my opinion, employers are never going to find their next star hire by skimming a pile of impressive-sounding, and often exaggerated, accolades. It’s an outdated practice that breeds prejudice, exclusion and oversight. The ‘CV’ has become shorthand for a person’s entire career, which means it lacks nuance, negates potential and is susceptible to all forms of bias.
What exactly does Alva Labs offer to the recruitment tech marketplace? And what sets it apart from other companies?
In most cases, the recruitment process is the very first taste a potential employee will get of their prospective workplace. Our assessments are designed with this in mind, with a strong focus on the candidate’s own experience of applying for the job. This is something that sets us apart from our competitors, who by default tend to prioritise the experience of the recruiter.
Unlike most psychometric testing platforms, candidates that complete Alva tests don’t have to wait days, weeks or in some cases months to hear back about the outcome of their tests. Our team of psychometricians have created two industry-leading candidate assessments: logic and personality, and – as of 2022 – we also offer bespoke coding tests for developers. All of our tests take under 30 minutes to complete, and candidates have instant access to their results, which are identical to those seen by their prospective employer. Candidates are also able to use their test results for multiple job applications, saving them time and effort in what is typically a needlessly arduous hiring process.
Crucially, we present candidates’ results to employers and recruiters in a straightforward, digestible format, unlike many other tests. Rather than getting a PDF report that can take hours to review and analyse, Alva automates the interpretation of results, ranking all candidates in order of their role suitability. In doing so, our assessments create transparent and accurate results that look past ‘years of experience’ in favour of a candidate’s true role fit.
As well as streamlining the process, Alva helps hiring managers to hire with more confidence. Our assessments are more than twice as accurate in predicting job performance than CV screening, meaning that companies can reduce the number of interviews by up to 50%, while still making better hiring decisions.
Developer Recruitment – a global goldmine?
While the demand for developers continues to soar, the developer hiring process remains outdated, replete with bias and error. As with the majority of the tech industry, employers are still overly reliant on judging candidates based on experience and previous achievements instead of real-world competencies and job suitability.
In a time when companies need the best engineers, I’ve noticed hiring decisions become reliant on ‘FOMO’ (fear of missing out), with employers competing for the same highly-sought after talent from far too small a pool, instead of properly assessing a candidate’s ability and potential. That’s why last year Alva acquired DevSkills, a startup that creates coding tests for evaluating technical competence of developers, to address this issue. The acquisition, which gives Alva customers access to market-leading coding tests through our platform, is a step towards giving the developer recruitment space the revamp it so desperately needs to match the industry’s increasing demand.
Right now there is a gap between dev supply and demand – do you agree? why or why not?
In the face of a competitive job market, it’s easy to become discouraged. But even as the demand for developers rises, I think there will always be a supply of skilled tech talent out there, especially as the looming recession and mass layoffs encourage people to upskill in order to remain relevant in today’s job market.
I firmly believe that when it comes to hiring, there can never be a mismatch between supply and demand, but rather between the talent pool that employers are looking at and the talent that is actually available. That’s what we’re seeing right now: the supply of talented developers is out there, but it’s by diving into a wider pool of candidates, focussing on key behaviours, capabilities and skills, rather than experience, and being open to offer additional training, that companies can increase their chances of finding the right developers for them.
Where has the talent shortage arisen from?
While there are multiple factors at play, ultimately this shortage is a result of an unwillingness to broaden your search and tap into untapped sources of talent. As a CEO, I understand the frustration of a tight job market and the perceived shortage of talented professionals. This feeling of scarcity was accelerated in the past 2-3 years, with government stimuli and as many central banks adopting a loose monetary policy with low or even zero interest rates. In many instances, this environment put the economy on overdrive, and that led to many companies drastically over-hiring, creating an artificially high hiring demand.
However, underneath all of this, as the economy is cooling off and to some extent reverting back to normal, I believe that the feeling of a “shortage” is mostly a reality for those who are fishing in the same small pond of candidates, which gives the perception that there aren’t enough candidates to go around. Companies who think outside the box, actively seek out talented individuals who may not have as many years of experience or the same professional credentials, and are willing to invest in their growth, will inevitably be in a better position to source the talent they need.
How can companies overcome developer talent shortages?
One crucial question for companies facing shortages to ask themselves is whether they are looking for a needle in a haystack; i.e. someone who has ‘everything’ on paper. In the face of talent shortages, we need to be realistic about job requirements and consider candidates who may not yet meet every single criterion, but have the potential to grow into and thrive within a role. Rather than demanding the impossible from candidates with clear potential, companies should seriously consider which skills and abilities are absolutely necessary to start off in the role, and be open to training and developing new competencies where necessary. On top of this, companies struggling to recruit or retain talent should consider how best they can harness the power and potential of remote workers. Talent is equally spread across the globe, and so going further afield to find the right fit for your team often pays off.
Recently, Alva acquired DevSkills – how can acquisitions help Alva Labs grow? Where do acquisitions lie in Alva’s wider growth plans?
Our mission is to create a fair and efficient job market for all. To accomplish this, our goal is to build the best candidate assessment tool, with which we help candidates find jobs they’ll thrive in, and support companies in hiring based on the right skills and behaviours for the role. Adding skill-based assessments and structured interviews to Alva’s existing psychometric tests will help us with this mission, and is a natural next step for Alva’s product strategy. Our acquisition of DevSkills is the first key building block in becoming an end-to-end candidate assessment solution.
What is your outlook in the wider recruitment space in Europe, especially now as companies make budget cuts and start to scale back on hiring? Do you see any knock-on impacts?
As we enter 2023 – a year which will likely be financially challenging for many – hiring well will be more important than ever, with an emphasis on quality over quantity. Companies able to attract and retain top talent will be in a far better position during budget cuts, the global recession and a general hiring scaleback.
The narrative of the employment sector in recent years has hinged around talent shortages. However, we can now expect a ‘correction’ of sorts, in which there are more candidates looking for employment. This brings its own set of challenges, with recruiters now under more pressure than ever to swiftly screen more candidates, and efficiently make the right hiring decisions, both of which are instrumental for company success.
The first quarter of this year will be a crucial time for companies to set the tone for their 2023 hiring efforts. Those who take the time to examine and refine their hiring processes will be better positioned to weather the financial crisis. By contrast, those who fail to do so will make an already difficult year even more challenging. While it’s hard to find positives during such a difficult time, budget cuts and hiring slowdowns can be an apt opportunity to reflect on current hiring practices and make the necessary changes to build a strong, efficient, sustainable and resilient workforce.
What are the long-term plans for Alva Labs?
As a company, our long-term plan has always been to lead the industry in data-driven hiring with our best-in-class tests. This starts with building out our suite of products, so that we can provide exceptional quality and accuracy to talent acquisition managers, recruiters and hiring managers worldwide. We’re working to help hiring practitioners filter out the noise, shorten feedback loops, and ultimately deliver candidates who are a far better fit for the roles in question than traditional methods would be able to find.
We want to show employers that using data doesn’t have to mean the death of personalised hiring. Instead, we want to illustrate how it can be used to make the hiring process more efficient, effective and equitable for job seekers. By creating a job market that is fair and efficient for all, we’re changing recruitment as we know it. And we’re doing it one candidate assessment at a time.