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Mumbai: The recruitment industry has traditionally been served by staffing agencies and career websites. Yet, human resources (HR) departments continue to struggle with the lengthy hiring processes. It’s here that many young online hiring companies are pitching in. Mint has profiled four such start-ups that are in the hiring space and backed by private equity and venture capital investors.

Enterprise: GrownOut Solutions Pvt. Ltd

Entrepreneurs: Sumit Gupta (25) and Harsimran Walia (26)

Founded: 2013

Location: Gurgaon

Brand name: Grownout.com

Sumit Gupta studied computer science engineering at a university in Delhi. Having grown up in a small city in Rajasthan, he was well aware of the job opportunities in any big city. In December 2013, he decided to start a company called GrownOut Solutions and developed an online hiring product software named Hirestar. However, Gupta realized there were flaws in his product. The product works thus. When a company puts out a request for a job placement to employees, most employees don’t actively involve in the referral hiring process. The technology solution gains access to the employees’ professional social network, currently LinkedIn, and identifies suitable candidates through that network. Once the information about suitable candidates is passed on to the company, a notification is sent to the employees whose network helps shortlist candidates. The employee is rewarded according to the organization’s referral reward system. According to Gupta, referral hiring is 51% cheaper, 67% shorter and 70% of the time more effective in hiring candidates that fit a company’s culture. GrownOut works with over 100 companies, plans to have a presence across the country by end 2015 and is looking at global expansion in 2016. The company raised its first round of funding (series A) from Matrix Partners and OutBox Ventures, an early-stage (seed) fund. The amount is estimated to be $3-6 million.

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From left to right: Nikhil Vij, Raghav Jain and Mayank Jain.

Entrepreneurs: Mayank Jain (26), Nikhil Vij (26) and Raghav Jain (26)

Founded: February 2013

Location: Bangalore

Brand name: Talentpad.com

When Mayank Jain founded Zobtree a year back, the company accepted online applications from candidates and matched them to suitable opportunities. But Jain found it difficult to scale up this model. So he “repivoted (changing strategy) the business model and launched TalentPad in January this year."

He and his team decided to replicate the college campus placement concept as an online solution. Helion Venture Partners invested in the company in October this year, said Jain over the phone. Candidates can register for free and submit a detailed profile for approval. Talent Pad’s team evaluates the candidature and only candidates (usually the top 10 % of the applicants) who get selected, participate in the auction called “Talent Fair".

During the seven-day fair, the chosen candidates are assessed by various companies where they have the option to apply and share their information with only those employers that interest them. A candidate can receive up to 10 interview offers. After that, the candidate decides where to be interviewed and the interview process starts.

At present, the firm conducts one fair in three weeks. This model allows candidates with work experience between 1 and 10 years to apply for technology-based jobs. The team decided to conduct online talent fairs, where over 150 companies are looking to make offers. “If the company is able to hire a candidate through the fair, we get 10% of the annual CTC (cost to company—the overall compensation of a candidate) the company is paying as salary to the hired person," said Jain. The company has conducted 11 fairs and shortlisted 80 candidates for final interviews till date. The firm now wants to focus on team expansion, branding and marketing.

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From left to right: Roshan Singh, Avnish Anand, Lalit Bhagia and Kashish Bhagia.

Entrepreneurs: Lalit Bhagia (37), Kashish Bhagia (32), Avnish Anand (34) and Roshan Singh (28)

Founded: 2013

Location: New Delhi

Brand name: Myrefers.com

Lalit Bhagia was the former vice-president and head—digital at Star India Pvt. Ltd where he helped create digital solutions and mobile applications. It was while working on Satyamev Jayate, (an Indian television talk show on social issues hosted by film actor Aamir Khan) that Bhagia learnt how to keep the audiences engaged. “For better engagement and better results, one has to provide incentives. We decided to replicate this (the model) to develop a hiring solution," said Bhagia over the phone. Bhagia and the other co-founders began researching on creating incentives for a hiring process and launched the company. The technology solution works thus. It posts all the available jobs across various organizations on its website. Candidates interested in applying for jobs, or in referring people, can sign up through their social and professional networking profiles. The person who has made the reference is awarded two types of rewards. The first is an intro reward which is given for giving a lead to a company (a lead is suggesting a suitable candidate that the company can screen and interview). The second is given when the company actually hires a candidate that was suggested. “These rewards would be between 1,500 and 5,000, depending on the kind of job, positions and the company that has hired the candidate," said Bhagia. His company gets a commission of 25% as mark-up on the referral money. The company provides job postings for 150 jobs a week for 25 categories, and has 30,000 people registered. Creative Living raised a series A round of funding from Noida-based Bedrock Venture Management Pvt. Ltd in October.

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Clockwise from top left: Jobin Jose, Subramanian K., Tom Jose and Sanjoe Tom Jose.

Entrepreneur: Sanjoe Tom Jose (29), Tom Jose (29), Subramanian K. (27) and Jobin Jose (29)

Founded: 2012

Location: Bangalore

Brand name: Talview.com

While studying at the Indian Institute of Technology-Bombay in 2009, Sanjoe Tom Jose would seek advice from his seniors and alumni regarding resumes and interviews with large companies and job placement agencies. He received many inputs from his seniors but passing on the information was a challenge. Similarly, while he was working with KPMG India Pvt. Ltd, he “realized how the company struggled to hire people...The process was long and it was an expensive and a time-consuming affair", said Sanjoe over the phone. Along with his team, he decided to launch Talview, a solution which assists organizations in screening candidates before a face-to-face meeting. The firm raised seed funding of 60 lakh from Venture Nursery in early 2013 and was funded by Mayfield in July. “We tie up with companies that use our technology solution to conduct video interviews and other types of processes related to hiring," said Jose. The company has provided its solutions to companies like Cognizant Technology Solutions India Pvt. Ltd, Wockhardt Ltd, ABP Enterprises Pvt. Ltd, and claims to have over 100 clients. Jose is looking to raise a second (series B) round of funding in the next three-six months and may launch services in other South-East Asian, European and Middle Eastern countries by end 2015.

Industryspeak

According to data by Matrix Partners, the recruitment market in India is worth about $800 million and is growing at 20% annually. “We are witnessing the second generation of online hiring firms now, a decade or more after the emergence of Naukri, Monster and JobsAhead. These start-ups are attacking the next set of problems in the space," Ritesh Banglani, partner, Helion Venture Partners said in an email.

Banglani pointed out that the emergence of these sites in the last two years is “hardly coincidental", since young entrepreneurs who entered the job market realized that there has to be a better way of looking for good opportunities.

“HR heads of companies still struggle with a barrage of unsuitable resumes, long recruitment cycles and candidates that are a poor fit with the company culture. We believe there are several opportunities to solve the hiring needs of Indian small businesses and will make multiple investments in this space. Referral hiring has led to shorter hiring cycles, lower hiring costs and higher employee retention," said Tarun Davda, director with Matrix Partners over an email.

However, these hiring start-ups also face many challenges, according to Banglani.

“Many of these next-generation businesses are targeting specific problems of a niche set of customers. It will remain to be seen whether they can expand beyond the niche to access the mass market that Naukri and Monster operate in. Many start-ups are trying to dis-intermediate recruiters, who form the backbone of the recruiting industry in India. They may need to co-opt the recruiters into their business models to gain traction with corporates," he said.

Banglani cited the example of professional networking site LinkedIn that has “emerged as the gorilla in the market" and has “access to accurate, socially validated CVs and connections between users. Start-ups will need to figure out how to leverage this existing career network to build their business."

Key statistics

• Employee referrals have the highest applicant-to-hire conversion rates. Only 7% apply but this accounts for 40% of all hires.

• Applicants hired from a referral begin their position quicker than applicants found via job boards and career sites—after 29 days compared with 39 days via job boards and 55 via career sites.

• Referral hires have greater job satisfaction and stay longer at companies. About 46% stay over one year, 45% over two years and 47% over three years compared with 14% through job boards.

Source: theundercoverrecruiter.com

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