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Betting that the Network Works

Company Updates

Betting that the Network Works

Feb 20, 2020 / by  Miles Jennings
Miles Jennings

Our Network of Recruiters

Recruiter Network

When you're starting a business, you start with a theory. To be more accurate, since you are usually extremely far from a proven theory, you start with a hypothesis. Or, we could be even more unforgiving, and call it an educated guess. You usually start a business with an educated guess.

I remember in April of 2019, almost a year ago now, putting together a presentation deck centered around what was still little more than an educated guess.

We guessed that with an extensive network of independent recruiters, brought together under a technology platform, Recruiter.com could outperform a traditional recruiting firm and be more efficient in terms of our internal headcount. We were betting that each one of our full-time employees could make more placements (do more business) than a "normal" recruiter at a regular recruiting firm through the power of the network. We were betting that a network-approach to recruiting could make for a better long-term business model.

The Network Works

network

As Ferris Bueller says, "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it." So about a year after writing that deck centered around an educated guess, let's look around, figure out if we're on to something here, and make sure not to miss anything.

We were betting that the power of a network would beat the traditional approach to recruiting. But were we right? I examined our January 2020 results, and this is what I found.

If you look at our internal talent delivery team, we are shockingly small. We only have 4.5 full-time staff resources dedicated to recruiting. That half-a-person, much like the 1.93 average kids per family, is a bit of a funny thing, but we looked at how people were spending their time at the company. In January, we had only 4.5 full-time staff resource months employed by the company that were focused on finding and delivering talent and engaging with recruiters.

Traditional recruiting firms often measure their success by "starts per head" or "average placements per recruiter," meaning the number of filled jobs per employee. In January, we filled 42 various positions for our clients, which represents 9.3 starts per month per dedicated recruiting resource.

Specific metrics on average ratios are hard to come by, but industry norms are reasonably well established through lived experience and discussed intelligently at length. At a typical recruiting and staffing firm, your average recruiter will have about three placements per month. Another way to think about it, an independent recruiter doing just one placement per month can earn $120,000 per year by successfully delivering one $10,000 placement per month.

So overall, I think our bet on the network is working - or to put it another way, the network works. While we have not yet fulfilled our vision of being the "largest recruiting firm in the world, except with no recruiters," our approach to recruiting appears to be paying off. Everyone wants to "build a better mousetrap," and it seems like we're on track to do so.

Perhaps more unique than volume is our ability to deliver to diverse roles. From recruiting whole teams of customer support specialists to recruiting specialized civil engineers, our team recruits on an extensive range of positions. For people who know the recruiting industry well, this capacity alone is very unusual; traditional recruiting firms tend to specialize and focus on one area and geography. Using the network of recruiters, I look to a future where we can immediately deliver talent effectively for any specialized position, anywhere in the country.

The Network is Accelerating

Screen Shot 2020-02-17 at 8.41.06 PM

So our overall thesis seems to be working. The network of recruiters is providing efficiencies above and beyond a traditional recruiting firm. Our actual network growth is currently accelerating. Although we recently doubled the network, the number of new recruiters signing up is increasing per the above chart. We can't tell if this trend will continue, but data from the past sixty days below shows a clear trend in the right direction.

If this acceleration continues, one would think that if our current network is enabling nine placements per internal resource, a doubly expanded network would enable 18 placements per internal resource, and so on.

While our overall vision is to be the "the largest recruiting firm in the world, except with no recruiters," our mantra is to make money with and advocate for recruiters. We want to support the idea that specialized professional recruiting is best done by people, and that attempts to cut people entirely out of the equation will ultimately fail.

If these early trends continue, we are well on our way to proving that our educated guess was right - that the network works - and that we will succeed through and because of our community of recruiters.

 

- Miles Jennings, CEO of Recruiter.com

 

Tags: update, metrics, recruiting metrics

Written by Miles Jennings

CEO of Recruiter.com