HR startups with new ideas change the recruitment game
Hiring managers who grind their teeth because they can’t find the right talent might want to examine their strategy for searching, if the business models of several human resources startups hold up.
Collectively, the startups in this space argue there’s been little innovation in recruitment since companies adopted applicant- tracking systems in the late 1990s. That technology proved useful by relieving humans of the onerous task of sifting through resume stacks. But now investors are in keen pursuit of what comes next.
“Nothing’s changed in that market and that’s why it’s totally ripe for disruption,” said Relay Ventures partner Alex Baker.
Employers can’t rely on a hiring process that’s little more than a casting call, but frequently their hands are tied when it comes to implementing a system- wide overhaul.
At the same time, it’s no secret that attrition is a time waster and it’s expensive, too. On average, it costs between $ 33,308 to $ 42,000, and takes 85- 97 days to replace managers and executives, a survey done by The Conference Board of Canada last year showed. Some HR consultants say the cost is even higher: the equivalent of a year’s worth of salary when the loss of productivity is factored in. And, not surprisingly, the Conference’s Board’s survey showed the cost per hire rises the higher a vacancy is on an organizational chart.
Clearfit, a Toronto- based startup in the sector, aims to save clients money by getting them to narrow down the candidates from the start. Ben Baldwin, the company’s founder, said the problem with job posting aggregators such as Monster is that they focus on volume. When employers post ads on all the popular job sites, the same pool of job hunters is browsing on most of them, meaning there’s very little distinction in the results they get back.
“The majority of the talent is the same. ( Employers) aren’t reaching unique applicants,” said Amit Chauhan, founder of Recroup, a Thunder Bay, Ont.- based job posting site. “They have a set of tools they’re using regardless of what kind of candidates they’re trying to attract for those jobs.”
Richard Tuck, chief executive of Vancouver- based Riipen, thinks the inherent flaw in recruitment starts with the resume. Panicstricken university graduates can’t distinguish themselves from their classmates, so he says they embellish their skills on paper to get an edge, which “gamifies” the hiring process.
“Somehow you’re supposed to distil that down and find the perfect candidate. It’s left up to chance,” he said.
Toronto- based Kira Talent goes even further back on a career timeline, with a tool designed to give universities more control over enrolment. They achieve that by having prospective students respond to a questionnaire with a recorded video.
Emilie Cushman, co- founder of Kira Talent, said the technology, which corporations can also use, lets a school scour the world to fine- tune the composition of its classrooms. She says this reflects positively on a university because, in theory, it will churn out more employable graduates.
Recroup’s strategy, curiously, gets clients to bypass active job seekers altogether.
Instead, it places banner ads where prospective talent is likely to spend time online. Chauhan’s argument is that the best candidates are already employed. He isn’t discouraged by the challenge of luring them away, or by the notoriously low click- through rates of online ads.
“We don’t mind if people don’t click on it, because we want interested people to click,” Chauhan said.
While Recroup shuns the job search engines, Clearfit negotiates premium listings for clients on dozens of them. But the company distinguishes itself by identifying candidates whose attributes match the profile of existing staff, a technique Baldwin calls “cloning.”
Relay Ventures’ Baker insists the fund isn’t straying from its mobileonly mandate by investing in both Clearfit and Kira Talent.
“It is where they’re heading. No bones about it,” he said.