Businesses searching for staff are increasingly turning to social tools such as LinkedIn to unearth the best candidates.
But what if a business could formalise this process and make itself some money along the way? That’s the thinking behind Yolpme, which launched in September.
Founded by Patrick Gallagher, Mike Costin, Meng Zhao and Roland Irwin, the web venture offers businesses the opportunity to find staff via referrers. The referrers use their social networks to identify and put forward the best candidates and are paid in cash by the recruiter for their trouble.
Gallagher tells StartupSmart how he plans to tap into the social side of recruitment:
How does your team dynamic work for your start-up?
We came up with the idea sitting at the pub kicking the idea around. We had all spent time referring jobs ourselves and we had the light bulb moment of taking this further and disrupting the industry.
We had Meng on board as a full-time developer which enabled us to get to market quickly. I’d worked on digital start-ups in the past, so I’m strong on business development, while Roland has great experience at businesses like News Ltd.
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Mike is strong commercially and obviously Meng has a tech background, so it’s a strong team. There are four brains all thinking about this, rather than just one person deciding to just give it a go.
Why does the marketplace need this site?
We spent a lot of time researching the market both here and in the US and it’s clear that LinkedIn and other social tools used for hiring are only really starting to take off now.
We want to be the first to market with another kind of way to find recruits for your business. At the moment, the mass market recruiters are slow and overly traditional and the market is massive, which means there is room for start-ups like us.
We aren’t looking to displace everyone; we think this service can be shared across people who use the mass market sites.
We’re not saying that this will be a revolution in recruitment and everyone will stop using the likes of Seek, but we want to be another cog in the wheel, another option for businesses to use.
The rewards businesses give to referrers are around 3-5% of a salary. So, for example, a $100,000 position will have a referral reward of $3,000.
We had one of our first placements last week and it was a 48-hour turnaround time. It can be quick and efficient.
We also have technology that can track where referrals are coming from and how many successful placements are made. That is ideal for socially savvy businesses that are looking for another way to source staff. It’s an untapped market for them.
What’s stopping people from deluging businesses with referrals in order to get the money?
Good point. There’s a second phase we’re about to embark on that is based on all the data we’ve collected so far.
Everyone will receive a ranking so that businesses can see referrers who rank strongly when it comes to putting forward good candidates who end up getting the jobs.
So you can pick people who have a strong record. We’ll also pick up keywords and scrape CVs to ensure the referrers are doing the best possible job to get the reward.
We want to cut off the spammers completely, basically.
How are you attempting to reach referrers? Who are referrers, exactly, anyway?
So far it’s been very organic. We’ve used Facebook and LinkedIn and have managed to grow our list of referrers.
We’ll look at doing a strong marketing push next year to go along with the organic connections we have.
Referrers are basically anyone aged 25 to 45 with strong social networks who like to share content. We send them regular updates to incentivize them.
What’s your cut?
A bounty is put out for a new hire, say $500. And then we take 20% on top of that.
What’s the response been like so far?
We’ve initially gone with niche recruiters and the feedback has been awesome so far. We’ve been going to road shows and other events for three months now and the response is incredibly positive.
It will take time for the big guys to come on board but we are in talks with other career sites to partner with. We are certainly open for a partnership of that kind.
What have been the main challenges so far?
Introducing something new to market and then getting it to scale. Luckily, we managed to quickly get to market but after that there is a strong educational element you need to conduct with recruiters.
We had our logo crowdsourced via 99designs, which is fantastic as essentially we are a crowdsourcing business too.
The main lessons we’ve learned is that you need to constantly review what you are doing. You need to regularly speak to your networks for feedback and be open with them and your team about the issues you have.
Do you have specific targets for the business?
Yes, we have strong three and five-year targets. Next year is all about consolidating and making sure the usability is the best it possible can be.
We want to have 250 businesses on board by July next year, which we’re well on track for. The barriers to entry are so low for businesses because it’s free to post, you only have to pay once you’ve got your referral.
Beyond that, we want to expand to Europe and the US within 24 months. We think there’s a good international opportunity out there.