Cheap & Easy Splits.
Craig: We use the term recruiting exchange. We help recruiters who are trying to find people for their clients to network with other recruiters who might have those candidates.
Most recruiters only place one or two percent of the people they come in contact with. What do you do with all those other resumes? Well, a recruiting exchange enables you to work with other recruiters who can put those people to work.
Animal: Now the vehicle for communication between the members of your exchange is called Talent Trader. But you've also got something called ALEX which is a resume parser. So when people join up to the exchange, do they dump a bunch of resumes into a common database that ALEX analyzes to make them easily searchable for everybody?
Craig: They have the option to do that if they like. ALEX is built into Talent Trader so you can just push a button and import resumes. ALEX will parse them which breaks them out and puts them into a Relational Database. We run nearly 30 million processes on our resumes in about a second. We aggregate data on the fly. It makes the information far more retrievable.
Animal: Alex is like a search engine.
Craig: ALEX is not a search engine. We licence this software into job boards and Applicant Tracking Systems. We read files in any format and convert them on the fly by auto-populating all the....
Animal: You're losing me, Craig. I've got to think about my listeners so let's dumb it down a bit. Someone signs up to Hireability and becomes part of a network of recruiters who want to exchange candidates. How do they negotiate that deal?
Craig: Typically recruiters will talk like we are, on the telephone. And the first thing they want to decide is this a person I want to work with?
Animal: How do they identify another recruiter to talk to?
Craig: You can do a search on the system by niche or geography. For instance, you can look for all of the recruiters in Cleveland, Ohio who focus on filling sales positions. Or you can search for candidates and then see which recruiters have posted those resumes.
Animal: Is there a standard fifty-fifty split?
Craig: Most deals are fifty-fifty. But let's say all you focus on is IT and you get a job order for a CFO. That's not an area you work in. You need more help so you might want to provide a bigger incentive for specialists in that area to help you. So you might offer 75% to the person who supplies the winning candidate.
Animal: Now, you have a new payment system. You used to take a percentage of the deal. But now you don't. You just charge a subscription fee.
Craig: We've always had a subscription fee but we also had a transaction fee also called a brokerage fee. But we have eliminated that charge.
Animal: It seems like you guys are giving away a huge part of your income.
Craig: The way to profit the most from using our service is to do more deals. But people used to see the transaction fee as a barrier to doing deals on Talent Trader because they had to pay us every time. (Let's say six hundred dollars out of a ten thousand dollar fee). Now that we've removed that barrier we see an opportunity to build our membership on the subscription side substantially.
Animal: This is a big strategic decision for you. Who made the call?
Craig: Ultimately, it was agreed upon by the executive team which includes myself, our CEO and our SVP Operations. But, really, it started with our sales guys, our feet on the street, who talk to recruiters all day long. They came in and made this recommendation. Then we took the idea to a focus group of recruiters and got a lot of support there. We took our time to make sure that we were really doing the right thing. And we think we've come upon something that is going to be monumental in our space.
Animal: You've got a social network associated with this. Was that always a part of the system?
Craig: We made the decision a year ago to start incorporating social networking into our kit. What we've just released is an open platform version of Talent Trader. It's free of charge to create your own profile and become part of our recruiting community.
Animal: Can't people sidestep you then? If they come in for free and make contacts, they can do deals with them without paying you.
Craig: Yeah, you can but you could do that on LinkedIn too. We think that by bringing thousands of people into the social networking side of the open version of Talent Trader we will see lots of people who will say "What else are you guys offering?". We tested this out for the last six months on our ning.com site called The Recruiting Network and the response has been phenomenal in terms of traffic to our site and the amount of people making the decision to come on board.
Animal: Do you want to talk about prices?
Craig: Sure. To become a Professional Member is $40 per month and to become an Executive Member is $85 per month. That's not a huge fee so people are asking "Where are you going to generate your revenue, Craig?". Well, when you have ten thousand members at a thousand dollars a year, you run the numbers.
There is a functionality difference between the Professional and Executive membership. So they get are job postings and resume database access and discounts on special offers from our partners when they are in the Executive Membership.
Animal: Are there any industry sectors or geographic areas where your business is concentrated?
Craig: We made a decision not to focus on any industry or geography. This is very heavily focussed in the USA. And we have a nice distribution in all of the major metro markets in all of the major staffing niche areas.
Animal: I mean, let's say someone is in Minnesota, are they going to find other people in Minnesota to do business with in your network?
Craig: Definitely but a lot of the people in Minnesota already know people in Minnesota. They want to know who we know in Phoenix, who we've got in Dallas and who we've got in Atlanta.
Animal: Someone just sent me a message. How many deals happen on the Hireability network every day?
Craig: Dozens of deals happen every single day. Now some are getting closed and other things are in process. Historically we had to keep track of all these things but now we're out of that. We don't have to deal with the transactions of the recruiter to recruiter thing any more.
Animal: [Missed follow-up: So you guys aren't tracking your stats anymore? No concrete record of success?] If people want more information where should they go?
Craig: They can go to Hireability.com; The Recruiter Network section does a really good job of really explaining. We have a Live Chat capability so they can ask a question and one of our people will jump on answer questions live for them. But it's not a huge decision to make. it's almost a no-brainer. Everybody in the recruiting industry should be on the open Talent Trader. Everybody.
Source: 30.00 min mark. The Recruiting Animal Show, 07.10.24