Week 4 Case Study 9.1- Paradox Olivia: The AI Recruiter

Week 4 

Case Study 2

Read “Case 9.1: Paradox Olivia: The AI Recruiter” and write an essay that answers the following questions:

1. How does Paradox Olivia address the logistical challenges in the human capital management sector?

2. What are the three key technologies that make up the AI application for Paradox Olivia, and how do they work together?

3. How does Paradox Olivia help streamline the hiring process, and what benefits does it offer to firms’ HR personnel?

4. How does Paradox Olivia generate revenue, and what industries has the firm had success with?

5. What is the cost structure for Paradox Olivia, and how is pricing determined for clients?

6. What are the key activities of Paradox Olivia, and how does the firm maintain Olivia’s relevance in the HR industry?

7. What factors contribute to Paradox Olivia’s success, and how can the firm ensure future success in its market segment? 

Requirements:

· There is no specific page requirement for your analysis. Instead, your work will be evaluated based on how thoroughly it addresses each of the questions that have been outlined for you.

· You must utilize proper APA formatting and citations throughout your paper. If you use any supporting evidence from external sources, it is imperative that you provide accurate citations for each reference.

· You must include a minimum of two sources from scholarly articles or business periodicals, aside from the course textbook. 

· Include your best critical thinking and analysis to arrive at your justification.    

 

 

 

 Case 9.1: Paradox Olivia: The AI Recruiter

Paradox Olivia has been a start-up success story. A company created in Phoenix, AZ, founders Aaron and Olivia Matos developed flagship AI Olivia in 2016 to address logistical hiccups in the human capital management sector. After three rounds of fundraising, Paradox Olivia is valued at $53.3  million. Olivia was developed as a 24/7 HR-oriented office assistant built to exemplify the firm’s mis- sion statement in mind—“we believe if you get the people thing right you can build teams that change the world. Our goal is to help you do it” (Paradox, 2021). The succinctness of the product offering and the firm’s value proposition show why the firm has received strong financial support from investors.

In dissecting Olivia, there are three key technologies that make up the AI applica- tion. Olivia functions from the support of three pillars: personality data genome, direct-messaging hiring chatbot, and search engine optimization. In 2021, Paradox Olivia acquired Traitify and Spetz, companies responsible for the germination and cultivation of the personality data genome and the direct-messaging hiring chatbot, respectively (Crunchbase, 2021). Combined with Paradox Olivia’s partnership with Google Analytics and its Search Engine Optimization (SEO) product, Olivia diver- sified its solution offerings. Olivia is able to manage hourly and salaried hiring, meaning the AI is able to differentiate the time characteristic of different positions when communicating with job candidates about the position they applied for/ recruited for (Paradox Olivia, 2021). To help support this communication, Olivia is functionally compatible with different text and mobile communication platforms (i.e., Facebook Messenger, WeChat, WhatsApp). As a part of Olivia’s recruiting solution, Paradox offers Olivia’s human-like messages as a solution to create a smooth dialogue between candidates and the human HR personnel. What these solutions ultimately develop is an overhauled hiring process that is streamlined for improved communication and lessened bureaucratic burden of paperwork. For a firm’s HR personnel, Olivia is an on-call 24/7 access point for candidates to ask questions and access certain documents. The AI also allows for the automatization of candidate search and outreach through tools like data mining.

Olivia’s ability to help firms with their human capital management (HCM) sys- tems targets what their clients value efficiency and effectiveness. As the main AI solution that Paradox Olivia offers, this 24/7 resource center and “middle person” has netted the firm an estimated $37.7 million in 2020 (GrowJo, 2021). This is an impressive revenue stream for start-ups. Another angle on Paradox Olivia’s impres- sive revenue stream is the firm’s approach to their customer needs and relationship. Paradox Olivia has identified a common issue among the four industries (restaurant and retail, financial services, health care, and trucking/logistics) the firm has had success with—high volume of information that needs to be processed (as docu- mented and filed) (Crunchbase, 2021). This reason answers the key purchasing cri- teria potential clients have—why should the firm employ Olivia? This has created a very favorable subscription-based contractual relationship between Paradox Olivia and its clients.

Like any AI offerings, there is a unique cost structure for Paradox Olivia that has a flagship AI. The firm incurs costs according to the type of software, level of intel- ligence, the performance of the AI, the complexity of the AI, and how much data the AI needs to consume. Depending on the services required and the scale of the need, Paradox Olivia would incur different costs, so pricing is based on the client’s need to affect the variable costs in offering Olivia. It is also worthwhile to note that some fixed general costs come from servers, software subscriptions, and salaries for specialized staff (e.g., programmers). The key activities of Paradox Olivia are cen- tered on two types of projects—updating Olivia with changes with HCM practices and policies and maintaining Olivia’s ability to work with new updates to mobile interfaces and HCM software. To achieve these activities, Paradox Olivia relies on servers and programmers who work with HCM partners like ADP to make sure Olivia stays relevant and useful in the HR industry.

Paradox Olivia has correctly identified the trend of technology in its market seg- ment. Olivia should be able to continue its current success if the firm keeps updating the AI to be compatible with the latest mobile communications app and strengthen its user-friendly interface.

Artificial intelligence is mostly used to aid hiring processes and has been able to help make the process more efficient and personable. There are topics of discussion on the actual impact of technology within this practice. Part of the role of new tech- nology focuses on screening the resumes of job applicants. There are complications sorting through them, as keywords within applications can become weighted heavier than if seen by a human eye. It may be easier for an applicant to cheat the system and input words and information to satisfy the AI. If artificial intelligence technol- ogy is used within an interview, such as a replacement for an interviewer, the appli- cant will receive less human cues and feedback on their performance. This can cause many interviews to have a less successful outcome, as being screened by technology can be intimidated and hinder typical performance. For most, it may be hard to judge performance when communicating with a machine or any non-human- like device. Understanding personality and judging how an applicant would fit into the culture of the workplace may also prove difficult, as training an AI to understand small movements along with phrasing is challenging given the state of technology nowadays.

A main challenge for the current technologies is the rigidity of parameters. Simply put, bots do not have the capability of making informed decisions if they have not yet been told to do so. While AI is a great tool to ensure accuracy and engagement, it may also hurt engagement because it hinders the human side of human resources. A typical problem with AI in HR is a lack of humanity. The tech- nology has not been developed to mimic full human behavior, which makes any sort of automated intelligence the next best thing. In human resources, the human rela- tional aspect plays a major role (Mittelstadt et al., 2016). Another thing computers lack is the ability to simulate human emotion. This is particularly important when looking at the way specific candidates embody the company’s values, mission state- ment, and other core beliefs. Personality and charisma play a huge part in whether one candidate outperforms another in a job interview, and there simply has not been any meaningful work done to make AI superior in this field. Another issue with AI is that it lacks the human morals aspect of the job. Applying morals and the human touch to an HR position is mandatory when performing their everyday duties.

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