A couple million in, counting coins on the way out.

Dayak got sold and it's not really a big story in my mind but I'm going write something about it because it is an example of a concept that initially sounds good but is riddled with issues at the core.

People forget sometimes that making placements is something that is not easy and when someone comes along and says they fixed it so it is now easy to make placements the right thing to do is turn the other way and laugh a little. Maybe some people are successful with it but clearly not enough of them. It's the same when Bullhorn bought BridgePath. Lots of noise but probably not a lot of placements.

This is what happens - A recruiter working for someone will from time to time think that giving away 50% of what they produce is too much so it is easy to buy into the concept that working for half and keeping it all to themselves is the same thing. Maybe the recruiter on a 20k placement in an bullpen gets a quarter of the total - 25% of the fee so maybe that recruiter thinks that by working a job order on Dayak for 5k is the same.

Let me ask you this, what company would have any respect for the talent and wisdom of a recruiter who spends their own time on a contingency basis working a 5k order when it should really be a 20k order.

So next time you hiring managers laugh at the recruiter who calls you and says I can fill all your positions, it's probably because they are part of some fancy recruiting network that does not work.

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Permalink Reply by Jonathan Goodman on September 16, 2009 at 12:49pm

You know, you make a really good point. Lots of companies have started in the hopes of "adding efficiencies" to the $8B (last year's number?) contingency recruiting market. I guess that means that they want a take at the expense of the third party recruiter.

Jason, what's your take? Is there a case for efficiency that does NOT take away from the earning potential of third party recruiters? I know you believe recruiters should have the opportunity to make lots of money - and I agree...

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Permalink Reply by Slouch on September 16, 2009 at 1:19pm

Hey Jonathan. Im not sure if "adding"efficiencies" is what these companies are looking to do. I think the language most of them use is that we have built this new system to eliminate the inefficiencies of how placements get made.

What they call inefficiencies I call beautiful and that is the dialogue and the artful communication that gets placements done. It's very attractive to some hr folks to not ever have to talk to a recruiter. Its a great thing to some recruiters to not ever have to talk to HR. When you try to eliminate this, it all goes to shit fast and usually often.

Jonathan Goodman said:

You know, you make a really good point. Lots of companies have started in the hopes of "adding efficiencies" to the $8B (last year's number?) contingency recruiting market. I guess that means that they want a take at the expense of the third party recruiter.
Jason, what's your take? Is there a case for efficiency that does NOT take away from the earning potential of third party recruiters? I know you believe recruiters should have the opportunity to make lots of money - and I agree...

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Permalink Reply by Jonathan Goodman on September 16, 2009 at 1:31pm

That makes senses. So, my next question is, is there a technology or a place for another party in that equation that supports, not obviates, that "artful communication?" Or, are such endeavors simply solutions in search of a problem where none exists?

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Permalink Reply by Slouch on September 16, 2009 at 3:42pm

for sure there is and I don't think the solution includes redefining how a recruiter does his job or redefining the economics that currently work. I think the opportunity is in motivating to a greater degree interest for all parties involved to be left with a successful hire. Integrating micropayments and escrow into the process is the first step.

Jonathan Goodman said:

That makes senses. So, my next question is, is there a technology or a place for another party in that equation that supports, not obviates, that "artful communication?" Or, are such endeavors simply solutions in search of a problem where none exists?

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Permalink Reply by Joe Stubblebine on September 17, 2009 at 9:39am

I think that many companies look less at the "talent and wisdom" of the recruiter who is doing the sourcing\screening\interviewing, than they do the potentially huge savings of a recruiting marketplace such as Dayak and Bountyjobs. However, it's all about the people.

There will always be new models that put downward pressure on pricing; Help-U-Sell is great example of a company that has been successful pushing down the average of 6-7% realtor fees associated with selling a home. However, although a discount broker may cut into the market share for traditional firms like ReMAX and Century 21, the agents at those firms quickly reacted and have been more open to accept reduced fees. The market will shake out these models to determine a business's viability. But, more importantly, the consumer wins.

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Permalink Reply by Gerry Crispin on September 17, 2009 at 10:53am

I think there are very different marketplaces evolving. One marketplace involves a firm (Large and small) with a strategy to support as few internal recruiters as possible. They want at least one "partner" (unless they have a good vendor management model) to coordinate the finding and presenting in order to maximize the relationship between the hiring manager and the external recruiter - as it relates to making a great hire.

Another marketplace is the firm whose investment in internal recruitment services emphasizes their responsibility for full cycle with, at the least, the pivotal positions that drive company performance. hey wan to monopolize the relationship to protect their interest and disintermediate external services.

Most firms, especially as they scale in size should be a hybrid and embrace both models and share openly where and how they work. It's in these gaps that most of the issues and problems are to be found. IMHO

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Permalink Reply by Jim Canto on September 17, 2009 at 12:31pm

Great topic coming out of this news piece. Thanks for bringing it up, Jason.

Jason.. you left me with a burning question though; What did you mean by "micropayments and escrow?" Can you clarify for me? As you know, I'm slooooowwwwwlllly working on something I hope will be of interest. And, of course, that's where my interest in this string comes from.

Again.. great topic. I'll be watching for your answer (and any other replies.)

Cheers.

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Permalink Reply by Lisa Kaye on September 17, 2009 at 2:26pm

How much did RecruitHire buy Dayak? I have some insight into the founders who have only been doing this for two years, raised some friends and family money and sold it in less time than it takes most companies to build a business? Sounds surprising and suspect to me given the market? No news on it anywhere when I google? Just curious.

Jim - medXcentral said:

Great topic coming out of this news piece. Thanks for bringing it up, Jason.

Jason.. you left me with a burning question though; What did you mean by "micropayments and escrow?" Can you clarify for me? As you know, I'm slooooowwwwwlllly working on something I hope will be of interest. And, of course, that's where my interest in this string comes from.

Again.. great topic. I'll be watching for your answer (and any other replies.)

Cheers.