The staffing and recruiting in the US alone is a $100B+ revenue generating market annually. (1) Of that technical recruiting, defined as staffing for industries in which a technical skillset learned through higher education like software engineering or life sciences, is a large majority. In fact LinkedIn generates ~$3B annually from their software to help technical recruiters identify talent on the platform. (2)
The vast majority of technical recruiters, many of whom are on the HBS campus regularly, identify talent and present them to a set of employers who are clients. Clients review the candidates, interview them, and if they hire them – they pay recruiters 15-30% of the hired candidate’s base salary as a fee. To avoid this hefty fee, many larger technical companies have brought in in-house recruiters to mine LinkedIn, university campuses, and other networks of talented individuals to hire.
Hired.com, an online marketplace for technical talent, aims to solve this problem but threatens the jobs of several outsourced technical recruiters. Currently, the experience for talent is terrible and technical recruiting is very inefficient. Recruiters many a times use a ‘guess and check’ process by cold-emailing dozens of engineers, scientists, lawyers, doctors, etc. to ask if they are interested in interviewing with one of their clients. Most of the times, the candidate is not even looking for a new job, but in the few times they are – the recruiter instantly blasts their resume to many clients to see which return positive feedback. The candidate then goes through several interviews with each client, many of which are the same test of technical skillset. Several interviews in, if successful, compensation is discussed for the first time and roughly 30% of processes are halted given lack of alignment on this point – wasting 5+ hours of the company’s and the candidate’s time. And if it proceeds, the company faces a hefty recruiting fee, normally between $25000-50000.
Hired aims to make this process more transparent, efficient, and aligned for the company and the candidate. Every week, candidates looking for a new position apply to be part of a week-long marketplace specific for their industry and geography of interest. The application is simple and involves plug-ins to their social networks and example of prior work. The top candidates are then fully featured (education, where they have worked, etc) in a week-long marketplace to the head of engineering, or other relevant technical lead at 1000+ companies of various sizes and growth levels.
Companies who are interested in a candidate can make a transparent indicative offer pending final interviews with them. By doing this, compensation is aligned prior to the first interview and technical skills are gauged to a high level by the hiring manager him/herself.
For outsourced recruiters whose position circles around ‘guessing’ which candidates are interested in a new opportunity, and making the connection between them and companies, Hired presents a threat by allowing candidates to directly interact with the company. Furthermore, Hired charges a 10-15% base fee upon successful hire and retention of the employee, leading to a financial preference more than just transparency.
There are several massive industries that will be disintermediated by technology that aim to make fundamental processes more efficient with less middlemen. There is no reason in the technical recruiting world to have large fee-charging individuals between a candidate and a company. In fact, online tools can begin to automate even more of the processes involved in recruiting, besides sourcing. Creating a digital CRM to help in-house recruiters track future candidates, automating much of the interview process, and making onboarding and payment set-up easier are such examples. While these may not automate a separate industry, it will definitely replace current jobs.
- Interview w Linkedin Product Manager