Liquid HR

Notchup.com: hockey stick or hokey shtick?

Notchup.com is a new website with a cool idea. Recruiters pay members to interview them for jobs. It targets more senior professionals and sleeper candidates who already have a job, not the desperate jobhunters who are giving their CV away. This will mean that recruiters do more groundwork and prequalification before calling upon the candidate for the interview. It will therefore also mean that a higher percentage of these "calls" will translate into job offers.

Given the business model and the target audience, discretion is pretty important. So there are some less-than-airtight features designed to protect you from over exposure: you can be invisible to recruiters who use certain domains (e.g., mycurrentcompany.com) - a way to keep your current company from seeing you. Also, you can preclude recruiters from seeing you altogether -- and be visible only to hiring companies. Furthermore, you can indicate that you are "Happy, but will listen at the right price" to a pitch - a statement that's a little less offensive should your current company's HR rep find your profile on notchup.

Well, I gather notchup.com has just begun to experience exponential growth in first time users. According to an insightful business week article, they went from 200 users to 70,000 users in a few days, who then invited 900,000 more. Having read a little bit about it in techcrunch.com, I received an invitation soon after from an old B-school classmate who works at Bain consulting. This would indicate a pretty high profile average user. Of course, when I found out that I get 10% of the interview cash generated from colleagues that I sign up, I shamelessly invited my entire linkedin.com contact portfolio. (Hopefully, my contacts that are senior have developed quick and painless methods of filtering out invitations in which they have no interest.)

My Analysis:

Hmmm. At first glance, I really like this idea. Companies pay recruiters for their services already, so simply redirecting a bit of that cash to the candidates shouldn't be too hard. Professionals who ordinarily wouldn't interview are tempted to do so - tempted by money. But I think the market is a bit smaller than one might think when you look at it. Various things chip away at the business model:

1: The cash-up-front problem. Companies generally hire recruiters on a contingency basis, which means recruiters will have to pony up the cash in order to talk with a candidate. Recruiters will do more groundwork and prequalification before calling upon the candidate for the interview - which means a higher placement rate and less candidate time wasted. But it will also shrink the candidate pool and the number of transactions.

2: The dearth of pay-me purists. People that are working but open to hearing about new jobs may not want to put up a money-barrier for potential recruiters. Really, we have to ask the fundamental question: who is the buyer and who is the seller? Who has the power -- the candidate or the hiring firm? It depends on the job market - but note, we're heading for international recession right now. Candidates who have the power are generally pretty senior, and there's a headhunting market already in place for them which offers more discretion than a Web 2.0 site like notchup.com. And a little bit of cash aint much to the most senior people - certainly not worth risking their reputation.

3: The classic network leakage problem. If I see someone on notchup.com, can't I just contact her via linkedin.com, and avoid being asked to pay her cash? It depends on how tough that professional is -- how much he or she adheres to using the notchup.com website. Interestingly, notchup.com allows you to import your profile and contacts from linkedin.com. This implies that users on notchup can often be found on linkedin - leading to network leakage.

And there's no way for notchup to really respond to this. If notchup were to launch social networking features, it would dilute the website's singular purpose and eat away at the privacy and discretion of its (already-employed) members, not to mention put notchup in the hyper-competitive social networking market. Furthermore, what's to stop Linkedin.com from adding a "pay me to interview me" feature?

Well, notchup is something of a fit for the Web 2.0 Liquid HR economy -- it is helping to standardize HR information by utilizing Linkedin profiles. But this just in: apparently there may be legal constraints put on the model as well -- apparently, linkedin is angry that their user information has been mined by notchup in violation of terms and conditions. Notchup is not providing new information to the mix -- it's just another place with regular member profiles (often imported from linkedin). Therefore, it's not an Information Provider. Nor is it a Conduit for information (linkedin is the conduit in this story). As a Matchmaker, it is providing some service by adding new incentives to bring people together, so I guess that's the notchup play. I think this company will make it, but won't have stellar growth: its market is too vulnerable.

Monster.com Spam

For your entertainment: there is a reason why monster.com is an easy target for people. It's because people like you and me receive emails like the one below, which I received today (note, the subject was "Asbestos Surveyor"):

We have found your cv at Monster and we would like to offer you a job. It is a part-time job that consists of receiving payments from customers (through bank transfers) and then making further payments to our main office or to one of our regional affiliated departments, depending on the customer's location.

 

Your commission as an agent is 6% of each transaction. For example, if you receive £2000 to your bank account, you will withdraw the money and keep £120 for yourself. The salary is commission based only and you will earn approximately £12000 per year. The hours for this work are flexible and can be combined with any permanent or other part-time job, with an average workload of up to 10 hours a week. All additional money transfer fees and money transfer-related charges are covered and paid for by our company. Therefore you will only be responsible for making the proper payments in time (within 48 hrs of successful receipt into your account). Each transaction will be transferred only after prior notification, which will sometimes be a notification by phone call. Please note that you can work from home but this job cannot be done online, you need physically withdraw/send money from nearest branches.

 

Our company's principal business is based on a peer-to-peer type payment network, this business model heavily employs all the latest internet technologies. We are one of only a few companies that use regional representatives in its business operations. This avoids high foreign taxation and cross-board acquisition fees. If you are interested in our offer, please feel free to ask for details of the general provisions of the contract.

 

Best regards,

Rita Widmer

Ha! What a job this would be! I'll be a peer to peer payment middleman taking a commission -- with a job title of Asbestos Surveyor. Sounds like a great way to launder money. I'll forward it on to abuse@monster.com . Maybe send them a link to this post.

...I did just that. Here's the response:

Thank you for taking the time to bring this to our attention. The email you are inquiring about is called an 'email spoof'. This e-mail spoof uses the Monster name to add credibility to the fraudulent offer. Please be aware that this is not a Monster authorized email. It was not sent by or through Monster.

This email is attempting to engage unsuspecting individuals in a money laundering scam. It is in your best interest to disregard the email. Do not engage with the entities! If you did begin correspondence and have started the required financial transactions, it is recommended that you contact local law enforcement immediately to request the appropriate steps to absolve yourself from any wrong doing.

Open the Data: The Impact of Social Networks on Recruitment

Not long ago I “linked” with a recruiter on Linkedin.com, only to find that he had precluded me from seeing his network contacts. I questioned him about this Internet faux pas, and, not surprisingly, he replied that, as a recruiter, he had to protect his asset: his contact list. This behavior seemed a bit ironic considering that Linkedin.com is a Web 2.0 website.

 

The idea that recruiters can maintain exclusive control over their networks is increasingly unrealistic. There are a couple of different factors behind this. First, the Intranet and Internet of the HR world are merging. This is leading to the more liquid flow of CVs between Internet sites and internal systems of recruiting companies. Second, the Internet is becoming Web 2.0. This is empowering Internet users, often job candidates, to manage and control their own professional information (i.e. CVs), and encourage the flow of this information among websites and recruiters of their choosing.

   

IDC predicted that U.S. spending on automated hiring software will rise from an estimated starting point of $750 million in 2006 to $1.7 billion by 2009. This spend will benefit vendors such as Bullhorn, an interesting case study. With Bullhorn’s software, a recruitment firm can create an open position, then use their “Dragnet” feature to pull candidate resumes (or CVs) from places like monster.com and careerbuilder. These resumes are parsed, written into the Bullhorn database, and then matched against the open job, ranked by suitability. Recruiters can then email or contact the candidates about the open position.

 

Let me summarize: Bullhorn’s software sits in the recruitment firm’s Intranet, and reaches out into the Internet for job candidates. It pulls those candidates back onto the Intranet and then turns them into a CRM (Intranet) task. It gets more interesting still: Bullhorn utilizes software from Resume Mirror, owned by Talent Technology (staffed with upbeat employees, it would seem). Resume Mirror’s software performs resume parsing – and is compliant with HR-XML. HR-XML is a standard for both Internet based HR information (jobs, resumes, and CVs) and for Intranet information regarding billing and staffing. Oh, and by the way, monster.com is one of many members of the HR-XML consortium. That is, CVs and resumes are becoming standardized data -- data that can easily flow between the Intranet and Internet world of recruiters, job boards, and companies in the liquid HR market. Reiterating Point 1: The Intranet and Internet are merging in the HR world.

   

Point 2: The Internet is becoming more open and user-controlled with Web 2.0, and social networks are driving this openness. The Web 2.0 buzzword was already getting old in San Francisco two years ago. We’re now on the second slope of the S-curve – companies are gleaning real, not imaginary, benefits from Web 2.0. Xing.com, a business networking company, has successfully gone public. Facebook is well known as an open platform with support from many application developers. A host of networking sites are standardizing to the Open Social API, and also creating additional "application programmer interfaces" (APIs) – they’re opening up access to data about their users to other websites. The benefits of this are not imaginary: Plaxo has utilized Linkedin's API to balloon its active user base, and there are recent rumors that Xing might buy them for it.

   

Can you imagine a recruiter that grew its base of contacts from 200,000 to over 1,000,000 in 1 month? I can't. Yet.

 

Where did Plaxo get this information? By getting current members to invite new members via an API from places like Linkedin and Yahoo address books. That is: by taking advantage of an open stream of data about people.  What's the impact? Plaxo can garner contacts far faster than recruiters who choose to be exclusive. More importantly, professionals know that if they create an image of themselves and their professional network on a site like linkedin, they can transport this image and network to other websites. Candidates will feel less inclined to type that information into a recruiter's website, and more inclined to tell the recruiter: "Get with the program. Integrate your website via an API like Open Social or get my details from my online profile somewhere. I don't feel like typing it into your website."

   

One issue that has long plagued candidates is that of managing their own data on a multitude of corporate websites, including websites of recruiters and hiring companies. Traditionally, every time candidates wanted to apply for a job, they would have to key in or upload their CV into a company or recruiter's website, at which point they began to lose control over that information. Social networks are member-driven websites that members often visit; members have total control over their own information, and actively maintain it. This contrasts with recruiter websites, where members create a profile once and are then inclined never to return - particularly once they find a job.

 

Interoperability among social networks via standards and APIs ultimately gives users that much more power to control and encourage the flow of their own data. If you add recruiting and job posting capabilities on these websites (as Linkedin, Xing, Jobster, Liquid-CV and many others have already done), you begin to solve the woes of the candidate who cannot or does not want to manage his or her own data on yet another recruiter's website. Furthermore, social and business networking sites integrate features such as professional references into the online job hunting arena, which are crucial for many recruiters.

   

What does this mean? It means that for job candidates, it's easier to use online social and business network websites to manage their own professional data and networks. It means that recruiters can improve their performance by using one platform for both CV browsing and reference checking.

 

Recruiters are already online, and not just entry level recruiters: executive recruiters are online as well, and beginning to adapt to the Web 2.0 social networking environment. Though there is still debate about the quality of online candidates, social dynamics (references and personal networks) are being used to pre-filter candidates, and various websites have developed that cater to niche and more senior professionals, like asmallworld.net and theladders.com. How long before these sites develop a way to maintain exclusivity and high standards while leveraging the Open Social and other API data exchanges? Not long. Consider the case of new upstart Notchup: candidate users import their profiles from linkedin to get started. Notchup's business model is built around passive, high-quality candidates who companies will actually pay for an interview.

   

The impact upon recruiters

All of this means that the traditional recruiter's world of closed databases is shrinking, and in some cases, ending. Recruiters are becoming power-users of social and business networks, rather than proprietors of their own candidate databases. Companies like theSkillsMarket have been working on the Intranet side of business to improve the flow of data among recruiters, and are discussing the launch of more Internet (Web 2.0) facing features. Recruiters are beginning to understand that tapping into this open data exchange -- the flow of CVs and resumes -- can vastly increase their pool of candidates (remember Plaxo), and that the focus will shift from the acquisition and retention of basic candidate data to acquiring deeper information about candidates, and matching candidates to jobs.

 

This is a positive development: it means finding jobs faster and making a better match with hiring companies. It means some recruiters will have the opportunity to truly add more value to the process, as people who can read deeper into CVs, understand candidates, as well as the jobs for which they are applying. But those that wish to horde a list of job-seekers will increasingly be left out in the cold.