London recruiter heads back home to found start-up
A NORTHUMBERLAND man who quit a career in recruitment out of frustration with the sector has launched a start-up he dubs the “recruitment agency killer”.
Andrew Philipson and his family packed up their London life and moved to Alnmouth, where Mr Philipson grew up, before ploughing £50,000 of proceeds from the sale of their property into Jobba.
The start-up provides a platform that connects technology sector headhunters with hiring managers.
The concept, intended to “cut out the ugly bits” of the recruitment industry, has so far attracted £150,000 investment from a group of angels and stoked interest from an investor in the US.
Jobba’s verification process is designed to combat the “throwing mud against the wall” approach that Mr Philipson says has sometimes earned the sector a bad name.
“My theory is that recruitment agency business models have been the same for 40 years. You pay recruiters a low basic salary, give them a small slice of any fee they bring in - 10-20% - and attrition rates are really high.”
Jobba, which generates revenue by taking 20% of placement fees, is said to give firms a headhunting capability that no agency can match and gives recruiters the chance to go it alone with more lucrative returns. Advising its progress are a host of industry specialists including former Meta HR manager Rick Kershaw.
Mr Philipson added: “The average tech recruitment agency is 10 heads. So, if you’re Amazon and you’re looking for a software engineer with very niche skillsets, that one agency with 10 people in it - there’s probably only one of them that specialises in data. Amazon are usually going to be paying a 20-25% fee which is typically around £25,000. You’re paying a massive fee for maybe only one or two people to look for that needle in a haystack, nationwide.
“So, you’re putting all your eggs in a very expensive basket. Not only this but the recruiters aren’t really incentivised as they’re only going to take home about 10-20% of that £25,000. But on our platform the company can post a job, pick any fee they like, and when it goes live every data recruiter on the platform will be notified of that job straight away.”
There are hopes of taking Jobba worldwide, as Mr Philipson says the sector suffers the same drawbacks in nearly every market. He is now looking to raise £200,000 of investment through the Enterprise Investment Scheme as the firm looks to generate a profit within about six months.
Mr Philipson added: “Because everyone despises the recruitment sector, when I get them on the phone or a Zoom call, they love what we’re doing. People can’t believe it’s not been done before. We’re trying to create an ecosystem that empowers hiring managers by empowering good recruiters and it’s where the cowboys can’t operate.”