Ep 42 Why Joe Cote Champions RPO As A Stabilizing Force In A Volatile Tech Market

A handful of $500 million-plus Series A rounds in AI highlight capital concentrating into a small set of hyperscale bets. Tech hiring pipelines expand at unnatural speed as AI-focused candidates flood postings, creating a volume shock that overwhelms screening systems. Recruiters confront shifting skill demands, hyper-competitive compensation dynamics, and application pools engineered by AI tools rather than genuine qualifications. Only a low single-digit share of applicants, on average, reaches true alignment with role requirements, exposing a widening gap that erodes capability, accuracy, and workforce readiness

 Managing this volatility requires organizations to redesign recruiting architectures that withstand rapid market swings. In this episode of the Time to Hire podcast, host Lamees Abourahma speaks with Joe Cote, Managing Director at ZRG, to clarify how technology companies construct scalable, resilient hiring engines amid AI-driven disruption. Together, they analyze how RPO models, outbound sourcing strategies, and skills-based assessment frameworks generate sharper decisions, stronger funnels, and more sustainable long-term talent outcomes.

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About the Podcast

Time to Hire is produced by the Recruitment Process Outsourcing Association (RPOA), the leading authority on recruitment process outsourcing (RPO) foresight and innovation, and the trusted convener for the global RPO community. Through conversations with industry leaders, the podcast explores the trends, insights, and innovations shaping the future of talent acquisition.

Learn more about RPOA and join the community at: https://www.rpoassociation.org.

Follow the host, Lamees Abourahma, on LinkedIn.

Transcript

Lamees Abourahma 0:00

What do $500 million AI funding rounds and sign-on bonuses that rival star athletes mean for your hiring strategy? In a world where technology outpaces tradition, the rules for finding top talent are being rewritten in real time.

Welcome to Time to Hire, the podcast from the Recruitment Process Outsourcing Association, where we explore stories and strategies shaping the future of talent acquisition. I’m your host, Lamees Abourahma.

Today, I’m speaking with Joe Cote, Managing Director at ZRG, who brings fresh perspective from the frontlines of tech recruiting. We dig into why recruitment process outsourcing is more than a trend for high-growth companies, what skill-based hiring really looks like when today’s must-have skills didn’t exist yesterday, and how AI is reshaping the art and science of recruiting.

Let’s dive in.

I'm here with Joe Cote, Managing Director at ZRG Embedded Recruiting. Hi, Joe.

Joe Cote 1:30

How are you?

Lamees Abourahma 1:31

Very good! I'm excited to be talking today about recruiting for technology and high-growth companies. Let's take it from the top. Looking at the market evolution over the past five to six years, we've seen significant shifts in the tech sector, from rapid growth to recent slowdowns. How have these changes affected the way tech companies approach recruiting from your perspective?

Joe Cote 2:00

Yeah, it's interesting. To give some brief historical context, you're absolutely right. There's been a shift over the last couple of years, particularly over the last five years. With the pandemic, there was a significant slowdown, if not a complete stop, in hiring—not only in the tech space but across companies in general. Then we saw a bit of an uptick towards the end of 2021 going into 2022; there was a significant surge that we almost called the "recruiter boom." You couldn't find recruiters fast enough; they were being compensated almost equally to software engineers at that time.

However, 2023 has been a tougher year. It was a period of rapid hiring followed by realizations that companies may have over-hired, leading to layoffs across several FANG companies. This trend trickled down into mid-market and SMB technology companies as well. Now, we're starting to see a bit of resurgence again, especially with the beginning of an AI evolution in the tech space. While companies remain somewhat cost-conscious, we are witnessing Series A funding rounds in the AI sector reaching $500 million—something we didn't see too often in the past. To call it a roller coaster over the last five years would be putting it lightly.

This historical context helps us understand how these changes have affected technology companies specifically. There’s been a big focus on ensuring that financial resources, particularly those coming from the CFO's office, are utilized effectively for a talent strategy rather than just for a hiring plan. There’s now a much more strategic approach permeating the rest of the organization, leading to more thoughtful hiring practices as we move into 2025 and 2026.

Lamees Abourahma 4:17

With this boom of AI technology and adoption, as you mentioned, this phenomenon is not unique to the tech sector. I assume there's competition for these kinds of skills and talent from other industries as well. For technology companies, are there any particular challenges or unique opportunities specific to the industry?

Joe Cote 4:36

Yes, I think so. For specialized AI talent specifically, that skill set is highly sought after and relatively new—developing large language models (LLMs) from scratch is one example. Hiring for such specialized talent requires a different approach; it's not just about posting a job and hoping for applicants. Instead, it requires an outbound strategy in which recruiters actively reach out to candidates with hyper-customized messaging.

We’re hearing stories—whether true or not—of outrageous compensation packages for top-tier talent at certain FANG companies. For instance, there have been reports of $2 million sign-on bonuses and even rumors of $500 million sign-on bonuses for top individuals moving between companies like OpenAI. This situation creates an outbound recruiting strategy that needs to be well thought out.

Moreover, compensation packages and benefits play a crucial role in attracting specialized talent. There are various variables involved in bringing on hyper-specialized talent. However, internal talent teams often find themselves bogged down with day-to-day recruiting operations—scheduling candidates, extending offers, and managing offer letters—which can limit their ability to focus on outbound sourcing. This is where recruitment process outsourcing (RPO) companies may find a strategic advantage as we move into 2026.

Lamees Abourahma (Zoom) 7:05

As technology companies build their recruiting capabilities, they have options: they can either do it in-house or work with recruiting specialists and external experts. This is where Recruitment Process Outsourcing becomes strategic for companies. Can you help us understand what makes RPO a more effective and sustainable solution compared to doing it internally?

Joe Cote 8:20

That's a really good question. I’ve been discussing this more lately and am quite passionate about it—perhaps I'm a bit biased, being part of ZRG Partners. The strategic value of using an RPO partner lies in risk mitigation when building out your talent acquisition function.

You have three options when you need to bolster your talent acquisition team. The first option is to hire a corporate full-time recruiter. This process typically takes anywhere from 30 to 90 days due to multiple rounds of vetting. After hiring, there’s onboarding and training involved with your tools and ATS system. Additionally, there’s the HR piece and benefits administration that comes with hiring full-time staff, which can be quite costly.

Option number two is you bring on a direct contract recruiter. Right oftentimes, what will happen is a tech company will put out a posting potentially on LinkedIn and say, "We're looking for a contract recruiter over the next six months," and they'll bring them on 1099. Now, if you bring on a contract recruiter directly 1099, can you find them quickly in your network with the availability of recruiters today? Sure. I think that's totally fair to say.

However, if we circle back to the risk piece a little bit, if you bring on that contract recruiter directly, you have to pay for their tool sets. Oftentimes, this includes tools like LinkedIn Recruiter, HireEasy, Indeed, and other resources that cost money. Because they're a 1099 contractor, there is a bit of risk that they'll leave for a full-time opportunity if they get one with another company. For example, you're not offering them benefits.

So that's bucket number two. Then, bucket number three is the strategic RPO partner piece, where you get a recruiter who works directly and supports a corporate recruiting function. A lot of the time, they come equipped with the full tech stack and tool set—HireEasy, LinkedIn Recruiter—and they probably have experience working within your ATS and tools like Greenhouse or Ashby.

On top of all that, there is usually another layer —some sort of project management layer. Specifically with ZRG, we call our project management layer Talent Operations, which acts as a recruiter success piece that holds recruiters accountable to metrics, ensuring that they're making hires and supporting them along the way. This accountability layer is the biggest difference between having an RPO strategic partner and maybe a direct contractor.

For example, if you know you're a Talent Acquisition Manager or VP of Talent and you're looking to bring on a contractor—whether it's a recruiter or sourcer—and you're going out on maternity leave or paternity leave in three months, do you want that peace of mind with an RPO recruiting partner? Or do you just want that direct contractor that you brought on 1099 to make a couple of hires and hope they're doing their job while you're gone?

There's again that risk piece and risk mitigation that RPO brings to the table, along with the technology layer as well. I'm pretty passionate about it, as you can probably tell. That's why I think an RPO strategic partner going into the future here with more of these scaling companies is a really good option because you have all these things built into one solution. It's an RPO partner; it's not just a kind of lone gun recruiter contractor.

Additionally, it’s also not a potentially more costly option as a corporate recruiter. When you hire a corporate recruiter, usually it's a fixed cost to a somewhat variable problem that we are facing today in our market, which goes up and down repeatedly. I would much rather have the flexibility of an RPO partner to flex with me along the way.

Lamees Abourahma (Zoom) 13:20

Oh, that was outstanding. I've been with the RPO Association for many years, but I love your explanation of the different three options. That was fantastic, and you answered many of the questions I wanted to get into, including that flexibility piece. This is also why RPO has been gaining more popularity since the pandemic; it's that scalability piece for technology companies. I would love for you to comment on this as well. For technology companies, it's more pertinent, right? Because of the pace of change in their hiring volume.

Joe Cote 14:05

Yeah, absolutely. I think the technology space and the speed of innovation in the tech space right now is significant—especially with the advent of AI. The evolution of AI allows you to bring a minimum viable product to market in a day or even in a couple of hours with today's technology. It’s a beautiful thing. Once you find the right product fit and market fit, all of a sudden, you have something you're selling and pitching to VCs or private equity. Before you know it, you have a $500 million check in your back pocket.

Well, what do you do with that? Oftentimes, not only are you taking that product and making it better, but you're also starting to hire a team of experts to further that mission for your company. The flexibility piece of RPO fits in really well with this speed of innovation within the technology market because all of a sudden you have a big hiring surge or ramp-up. You can use an RPO partner to help you with that.

And then you know, when you're done with that surge, you can take that RPO partner and say, "Hey, thanks so much for helping us with this surge. We're probably going to have another one when we get another round of funding. Let's use you guys again." We're going to hire maybe one or two corporate recruiters to be our founding recruiting team, and we'll use you guys again in the future to augment and support that internal corporate recruiting function.

And that's, I think, the beauty of it: there's this easy on, easy off, very flexible piece to RPO that is super beneficial to growing technology companies along the way. Another strategic advantage of certain RPO partners, at least with ZRG Partners, is that we look at hiring on a quarter-by-quarter basis. Oftentimes, that's just the way that companies will operate as well as we operate—Q1, Q2, Q3, Q4. We're not necessarily locking you into a year-long contract.

I think it's much better to look at it from a quarter-by-quarter perspective because hiring, especially in the technology space, changes that quickly, even in some cases on a month-to-month basis. Nonetheless, I do believe that understanding your hiring might be surging in Q1; for example, in Q2 it may pull back. Q3, right after Labor Day, for instance, sees a big sprint towards the end of the year. In Q4, right after the Thanksgiving timeframe here in the United States, it may shift back a little bit before kicking back up again.

It's somewhat cyclical a lot of the time, but it's not constant throughout the year. That’s again something I think bodes well for this flexible RPO model, where hiring fluctuates quarter by quarter over the course of a calendar or fiscal year.

Lamees Abourahma (Zoom) 17:13

So I want to shift us to something I'm curious to hear your perspective on: the recent trend into skill-based hiring. A lot of the data coming out from Indeed and others shows there is this shift toward a greater focus on skills versus education and experience versus college degrees. For technology companies, this is particularly relevant due to the emergence of AI as a technology with a very unique set of skills.

What's your perspective on how technology companies hire for skills that don't even exist today?

Joe Cote 18:09

It's an interesting question and a bit of a conundrum. Skills-based hiring in the past often started with the very beginning of the process—it's a piece of paper, a PDF, a resume. You look at the resume, read the skills, and try to determine whether these skills match the job description. That was kind of the first pass to assess whether a candidate is a good fit for a certain AI or technology position.

The challenge now is that you have an AI-centric job posting out there and suddenly receive 1,000 applicants overnight. In the past, maybe 5% of those applicants were somewhat qualified on paper. Now, with the advent of AI tools and technology, candidates are leveraging platforms to make their resumes as close to the job description as possible. This can be accomplished using tools like ChatGPT in a matter of seconds—“Can you take my resume and spruce it up nicely to align with the job description? I at least want an interview.”

As a result, what used to be 5% qualified candidates has now ballooned to 70% based solely on matching job descriptions. This influx has increased inefficiency and heightened the level of detail required throughout the process to identify the best possible candidates for these roles.

The hiring process is also utilizing AI tools to find AI candidates. There’s this push and pull of technology being used back and forth throughout the hiring process to recruit these niche skill sets that are quickly becoming part of our everyday searches on LinkedIn for AI engineers and ML engineers.

As we sit today, there’s much more in-depth testing of candidates using video technologies to ensure that candidates are indeed human beings. It’s quite amusing, Lamees; part of our internal discussions with recruiting teams revolves around how many bots are out there now. You cannot easily discern who is human and who is a bot until you get on a video call with them. Even then, it can be challenging because video AI technology has advanced significantly.

So, it's interesting—cyber fraud, is it? Absolutely. Companies are starting to figure out how to leverage strategic partners to sift through all of the noise at the top end. They aim to find qualified candidates after conducting a 30-minute phone screen, likely followed by a video phone screen, as this has become the best way to weed out candidates in today's market. From there, it is essential to test skill sets using various platforms.

There are probably many more tools available now than I have used in the past, but platforms like HackerRank come to mind. We have seen other companies utilize the Carrot Assessment for technical hiring as well. These types of assessments will be crucial for the future of AI-specific hiring and machine learning recruitment. They help filter out candidates who may be bots versus real human beings, allowing us to work through a funnel of qualified candidates.

You might be surprised to learn that this process is more challenging in today’s market than it was even a year ago. There are several challenges along the way, but that is just part of the problem. Technology is working on both sides, and we are trying to find a happy middle ground.

Lamees Abourahma (Zoom) 22:44

One of the themes we are hearing from our members this year relates to their concerns and excitement about technology and AI. To wrap up our conversation, Joe and I really enjoyed discussing hiring specifically for technology and high-growth companies. What’s your outlook? Let’s end on a positive and hopeful note here—what's your outlook for recruitment and hiring in this industry specifically?

Joe Cote 23:30

In the tech space, I love the tech space. It is fascinating to see new technologies emerge that genuinely help people along the way. We are at the cusp, probably at the tip of the iceberg, with much more beneath the surface that we have yet to explore. This is exciting for many reasons, particularly concerning the RPO industry and recruiting in general.

If you look across LinkedIn, you will find that some people are concerned about the state of recruiting while others are not. Personally, I believe we are in a world where AI will not necessarily replace recruiters or recruiting; there will always be a human element involved. Recruiters and recruiting companies must adopt AI technologies quickly to stand out and differentiate themselves in the market.

Over the next five to ten years, we will see a series of supercharged recruiters armed with technology that enhances speed, efficiency, and quality in hiring amazing people for technology companies. Regarding the future of RPO and recruiting process outsourcing, I believe that with this ongoing AI technology boom, more companies will seek specialized talent. They will want to build better-qualified funnels of candidates, and filtering those down will require a strategic partner to assist them through the ebbs and flows of the next five to ten years.

I maintain a very positive outlook for the world of RPO and recruiting process outsourcing. I am a glass-half-full kind of guy, so I also have an optimistic view for recruiting in general.

Lamees Abourahma (Zoom) 25:37

Thank you for concluding our discussion on this positive note and outlook. Like you, I am hopeful for the future with increased AI adoption and for recruitment process outsourcing, which we proudly represent as an industry association. Thank you so much, Joe.

I hope you enjoyed this episode of the Time to Hire podcast from the Recruitment Process Outsourcing Association. Give us a review wherever you listen to the podcast. And always stay connected, stay engaged, and stay informed of what's happening in the talent and recruiting world by tuning into the RPAA, the place to go for RPO™.