Australian startup RecruitLoop.com has built an employment exchange based on a novel business model that promises to slash the cost of recruiting new staff.
Many companies struggle to find good staff in tight labor markets, particularly those with technology skills, or in specialist disciplines like HR and finance.
Recruitment agencies can do the work for them but typically charge about 12 to 15 per cent of the annual salary as a fee. These commissions can scale as high as 25 per cent in some quarters. For an $80,000 job that leaves the employer anywhere from $12,000 to $20,000 out of pocket, plus advertising costs.
On the RecruitLoop service though, employers post their roles and the recruiters who pitch for the work do so on the basis of hourly rates. Rather than being driven by the commissions they operate more like a professional service provider, for instance a lawyer or an accountant. In our $80,000 example the cost of fulfilling the role can drop by as much as 90 per cent, saving the employer thousands.
RecruitLoop claims it has already saved its clients $1.3 million dollars in costs compared to a 12 per cent commission.
CEO Mike Overell said, "The recruiters in our network tend to be independent operators, not so much the larger recruitment agencies. We deliberately target the independent shops and one or two man recruitment agencies."
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