Is Danny Cahill Right About BountyJobs? ("Bounty will do well in a recession. Their members, unfortunately, will not.")

Received the following in an "According to Danny" email this morning and completely agree. Any thoughts?
(P.S. As Danny Cahill's training is built into Bullhorn [an RBC advertiser], and BountyJobs is not an RBC advertiser, I figured this was a valid question to post here.)

* Ask AccordingToDanny *

HR wants me to go through bountyjobs.com

"Hi Danny,
Like numerous recruiters, I was pounding away on the phone doing my morning marketing and like many people was directed to HR by an admin assistant. Attempting to build rapport so that I could get the hiring authority on the phone and not have to deal with HR, it was also communicated to me that the HR director would probably ask me to set up an account at bountyjobs.com. I did a quick check on the site as I was listening to her and red flags starting going up in head immediately. Am I naive? Has this type of thing been around for a while?

AccordingToDanny Replies:
Bounty is very similar to other online models designed to be your competition. Only a search firm unable to get fair market value fees (Bounty charges 22% and you only get 75% of that), would do business on such terms. It is clear why HR would want you to work that way, they pay less. The impact player/candidate who is not actively looking is not posting here, and only the weaker search firms would take refuge here. Why take less unless you don't have the client relationships, or the skill set required by clients who do pay premium fees for talent they have no other access to? Bounty will do well in a recession. Their members, unfortunately, will not. The model has been around in several incarnations for a decade."

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Replies to This Discussion

Permalink Reply by Jerry Albright on April 28, 2009 at 2:18pm

Any time the world's only Industry Guru who also runs an agency speaks - we should listen. In this case Danny is right on the money.

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Permalink Reply by Salvatore Petrara, CPC on April 28, 2009 at 4:38pm

Like others I too had a long-term client request I work through bountyjobs. I do not think the client pays less money, the recruiter only gets less. 25% goes to the house. I also think that recruiters that are "requested" to join bounty also pay a reduced vig to the house, in my case it was 3% not 25%.
1.Still this is a smart practice by bounty since they corral experienced recruiters onto their platform, in turn (these recruiters) will view other jobs submitted by other companies and possibly obtain a 25% take on those potential placements.
2. Large companies "may" see value as adopting a temporary (or not so temporary) free ATS and staffing agency VMS. This may also free up time for the HR department.
The prospect of building a relationship with a client is hampered by the bounty platform.
The finer aspects of recruiting require the phone.
Value is relative, prices are not...

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Permalink Reply by Craig Silverman on April 29, 2009 at 2:49am

I have to agree with Jerry and Danny on this one...When Danny speaks, recruiters listen. All I ever head about bounty is that people have a hard time getting a call back from them and that they have received lots of VC money. After reading dozens of posts it is rare to hear success stories and that should tell you something...

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Permalink Reply by Steve Levy on April 29, 2009 at 8:59am

Have to disagree on this one: Bounty will be hard pressed to do well in any part of the cycle.

We've discussed the leadership element on RBC ad nauseum so I won't reconstitute it for this discussion.

Guru or not, there are assumptions here that I believe are flawed:

The number of really good recruiters stays constant during a recession
The bountyjobs communication system works (read old posts about it on RBC)
The number of companies with real openings who use bountyjobs (and actually hire using bountyjobs) stays constant
The Sal Petrara Principle of Experienced Recruiters going around the system is not in effect

More but I need to catch a train...

As Craig wrote, success creates buzz and the buzz we hear is not conducive to doing well in any part of the economic cycle.

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Permalink Reply by Karen Bradford on April 30, 2009 at 10:38am

I am not a fan of BountyJobs. I feel that it diminishes the recruiters relationship with their client and that it is better to put my efforts into other potential placements and retained work. For the client, I feel that they are working with less dedicated recruiters because of the type of relationship. The recruiters are less likely to thoroughly understand the ins and outs of their search and less likely to submit on target candidates.

With BountyJobs the fees vary and you can pick and choose which positions you wish to work on. There is one area of opportunity that I have yet to hear mentioned in this discussion and that is the "Flier". A recruiter can use this option as an alternative to a split. In this case you would try to match up your existing qualified candidate pool with open "Bounties". In order to exercise the Flier option you have to pay a minimal fee. I think it is $25.00. If your candidate is hired it can be more lucrative than a split.

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Permalink Reply by pam claughton on April 30, 2009 at 2:00pm

Karen,

How is it more lucrative? You still have to pay the 25% fee to Bounty, plus $25 just to sub the resume, right? Or have they changed things? I agree with you that it makes the process more difficult overall and doubt that many experienced recruiters spend much time here.

Karen Bradford said:

I am not a fan of BountyJobs. I feel that it diminishes the recruiters relationship with their client and that it is better to put my efforts into other potential placements and retained work. For the client, I feel that they are working with less dedicated recruiters because of the type of relationship. The recruiters are less likely to thoroughly understand the ins and outs of their search and less likely to submit on target candidates.

With BountyJobs the fees vary and you can pick and choose which positions you wish to work on. There is one area of opportunity that I have yet to hear mentioned in this discussion and that is the "Flier". A recruiter can use this option as an alternative to a split. In this case you would try to match up your existing qualified candidate pool with open "Bounties". In order to exercise the Flier option you have to pay a minimal fee. I think it is $25.00. If your candidate is hired it can be more lucrative than a split.

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Permalink Reply by Karen Bradford on May 1, 2009 at 4:44pm

Hi Pam,

With a traditional split each recruiter keeps 50% of the agreed upon fee. So, on a 30% fee agreement you would keep 15%. With BountyJobs you pay/risk a $25.00 fee. If the client hires your candidate they pay the agreed upon fee, let's say 25% of the salary to BountyJobs. You keep 75% of the 25% fee or 18.75% and BountyJobs keeps 6.25% of the fee that the client pays. Of course you risk the initial fee.

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Permalink Reply by Slouch on May 1, 2009 at 5:22pm

It's the dumbest thing I have ever heard of (referring to the flier fee) and I told Jeremey that before he started the company. Fanciness in this business gets you now where. It's not easy to make placements.

Karen Bradford said:

Hi Pam,
With a traditional split each recruiter keeps 50% of the agreed upon fee. So, on a 30% fee agreement you would keep 15%. With BountyJobs you pay/risk a $25.00 fee. If the client hires your candidate they pay the agreed upon fee, let's say 25% of the salary to BountyJobs. You keep 75% of the 25% fee or 18.75% and BountyJobs keeps 6.25% of the fee that the client pays. Of course you risk the initial fee.

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Permalink Reply by Steve Levy on May 2, 2009 at 7:34am

Regarding the flier, it is a mechanism whereby a recruiter, believing they have a can't miss candidate, can directly send the posting company a resume without being engaged on the search. The privilege of doing so will cost the recruiter $25. The rationale is that it prevents recruiters from "resume flooding."

If by some chance the flier is hired, the $25 will be "returned" to the recruiter. The flier has NO BEARING on the fee structure.

Karen Bradford said:

I am not a fan of BountyJobs. I feel that it diminishes the recruiters relationship with their client and that it is better to put my efforts into other potential placements and retained work. For the client, I feel that they are working with less dedicated recruiters because of the type of relationship. The recruiters are less likely to thoroughly understand the ins and outs of their search and less likely to submit on target candidates.

With BountyJobs the fees vary and you can pick and choose which positions you wish to work on. There is one area of opportunity that I have yet to hear mentioned in this discussion and that is the "Flier". A recruiter can use this option as an alternative to a split. In this case you would try to match up your existing qualified candidate pool with open "Bounties". In order to exercise the Flier option you have to pay a minimal fee. I think it is $25.00. If your candidate is hired it can be more lucrative than a split.