Why Southwest, DHL and United do their hiring with software created by this Philly area company

In the years since the pandemic, Southwest Airlines had to find thousands of extra flight attendants, machinists, pilots, and other staff, doubling its usual hiring pace.

To rebuild its routes and avoid the chaos that at times threatened to overwhelm the business, Greg Muccio, managing director for talent acquisitions, says he relied on tens of thousands of leads and analysis collected by Phenom, an Ambler firm that helped pioneer the field of hiring automation software.

Phenom, which counts 700 of the 2,000 biggest companies in the world as clients, has grown by offering digital, rapid response to the labor shortage Muccio expects is here to stay. “There’s a talent war. You could see it coming,” said Muccio. Twenty years of decreased birth rates has reduced the labor pool and shifted power to job candidates, he said. Companies have to sort and reach them faster.

Muccio and other clients talked about their hiring experiences with Phenom’s software applications during a break at the company’s annual user conference, attended by about 2,000 last month in Philadelphia.

Muccio’s team first hired Phenom in 2018 as it sought to make its hiring website — which he described as the “DMV of career sites” — less process-oriented and easier to use. Southwest wanted better analysis on how employees might fit the airline’s “people-first” culture, and it wanted the data quickly so managers could act fast.

“We don’t have to tell them what to build. We tell them what our problem is. They solve it,” Muccio said. “And that solves a big problem for us.“

Phenom employs 300 at its Pennsylvania headquarters and 1,200 at offices in India, the Netherlands, Israel, the United Kingdom, and Germany. It has been collecting data from applicants to big companies like Southwest, Hewlett Packard, and MasterCard, since it was founded in 2011 by CEO Mahe Bayireddi; his brother Hari Bayireddi, president and chief operating officer, and Brad Goldoor, chief employee experience officer.

“Phenom was one of the first to catch on, and they are adding products fast,” said Jess Von Bank, Minneapolis-based head of the group that advises clients on “human-resources transformation and technology” at Mercer, the largest corporate HR consultant.

“They have been automating 90% of the work of attracting, managing, and onboarding” employees, she said.

“All the practical steps — screening, interviewing, feedback, recommending interviews to managers — all the hand-holding. Especially for frontline jobs, you may never have to have a human hand involved,” Von Bank said. “The cost savings are incredibly attractive. And as you automate, you develop incredible information on candidates that companies desperately need to foster and develop future talent.”

CEO Bayireddi says “humans replaced by robotics is not our belief.” Managers still have to direct strategy and make major workforce decisions, he said. Automation frees staff from administrative chores to spend more time planning and leading.

In its early years, Phenom raised over $160 million from investors including multinational venture firm B Capital, France-based AXA, India-focused WestBridge Capital, and Rudy Karsan, who sold his Wayne HR software company, Kenexa, to IBM for $1.2 billion in 2012.

Bayireddi says Phenom is now large enough and making enough money that it hasn’t needed to solicit outside investors since 2021, when its last round of venture funding valued the company at $1.4 billion.

Sales have grown more than 25% a year since, he said. The company won’t confirm sales, which industry sources estimate could top $300 million this year.

On any given day, two million online job listings use Phenom’s platform, CEO Bayireddi said at the three-day user conference in Philadelphia.

“Their tool is good. Other tools are fairly good, too,” Muccio said. “But everyone else wanted to sell us their system like it was a box and plug it in. I didn’t want to just buy a product that would need [updating] in three or six months. Phenom was the only one that gave us a road map” to keep fixing and adding features, and dedicated staff to help it grow.

Phenom offers “amazing analytics,” Muccio said. “We can see every day how many people go onto our career site, where they are, what devices they are using, how long did they stay, what’s in their profile, if they create one.”

Muccio figures Phenom “bots” automatically answered more than three million questions from candidates, saving recruiters over 50,000 hours last year — counting just a minute per answer; some saved a lot more.

One thing that surprised Muccio to learn from Phenom data was the rapid response digital-era job-shoppers have come to expect.

“Most candidates would rather get rejected in 24 hours, than get the ‘Yes, I’m moving forward!’ message after 14 days,” he said.

Of Phenom’s top 20 cities, 10 are in the United States, six in Europe, two in India, and two in China.

The company maps employees globally from job to job, Bayireddi said. “We see so much: where manufacturing is hiring, where logistics is growing.”

DHL, the Germany-based global shipper with roots in that nation’s postal service, had a web of job-applicant tracking systems — three in the U.S. alone — when Meredith Wellard, its Australian-born vice president for group talent acquisition, learning and growth, decided to streamline hiring for DHL’s express delivery unit 2019.

“We need 34 languages in a single global site,” she said. Nobody but Phenom said yes.

Wellard liked that applicants using Phenom didn’t have to formally register. Once a person scrolling job sites showed interest in a DHL post and gave the company permission to collect information, Phenom software built a profile and began sending targeted help-wanted invitations to a potential candidate’s Google searches or LinkedIn job boards.

“The system starts knowing them and responding in a way that is increasingly personal,” she said.

By retaining candidate data, updating it with facts gleaned from the internet, and freeing recruiters from storing interview videos and taking notes by generating automated summaries, Phenom “changed the game,” said Jessica Austin, director of talent acquisition for United Airlines.

“The information they collect adds to what we know about where we get talent, who needs to be in the role, and where we [should] spend money on outreach,” Austin said. “Their algorithms and calculations learn from you. That’s artificial intelligence.”

But human recruiters have to evaluate those responses, she said, which “are only as good as the input. We have to give the system constant feedback.”

Sometimes the problem isn’t a lack of applications but too many.

United needed tools to sort 15,000 yearly flight-attendant inquiries, Austin said. “We had multiple systems doing that job before Phenom. We called it our ‘Frankenstein Systems,’ there were so many [software] patches. Phenom brought all them together.”

It became easier to quickly process applicants from hiring events and identify likely candidates. Phenom data also guided event advertising by tracking who applied after seeing an online ad.

“AI is good about putting potential [hires] in front of you, and sending no-thank-yous so recruiters don’t have to,” Austin said. “Automation saves time for everybody. But human feedback, you really need. I love recruiting. Giving a person a job is a beautiful thing.”