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Job Referral Business Model
June 29th, 2009 in Random musings | 2 Comments »
We are currently looking at ways to evolve the business model to something that we think will work in this current environment and when things pick up again in late this year and 2010. An option would also be to shut down the current operations and regroup to a hybrid model that would involve elements of traditional headhunting and job boards.
As part of our research, we surveyed the current state of the competition around the world. Quite a number of sites launched in late 2007 when we first started evaluating this business and its a good time to check in with those sites to see where they are currently. Unfortunately the landscape does not look good. With the exception of xpertize.be (which is a hybrid model), all of the sites have shut down altogether or shifted to a software as a service model.
1) Zubka (2007) - one of the first referral sites that launched the second wave of e-recruitment. The founders started focusing on selling the platform as a software service in late 2008 and have recently been rumored to have closed shop. The company received $2M in funding in 2007 from Benchmark Europe.
2) Xpertize (2007) - a hybrid of traditional headhunting and a job referral board, this business seems to still be alive and doing reasonably well with 15 employees. Although the activity on the company’s blog and news on the company is scarce, we think that the company is still alive and kicking and has expanded to other countries in Europe outside of their Belgian homebase.
3) Yellojobs India (2007) - This was one of the more promising sites when we first researched it in late 2007. The Indian operations has recently shut down due to lack of funding in this difficult environment.
4) 2vouch (2008) - This Australian site launched at almost the same time but has recently closed its public site to focus more on a SaaS offering.
5) Others - several well-funded sites in India that launched in 2007 have also shut down.
Another job exchange model that lets traditional headhunters/recruiters bid for jobs from companies seems to be doing a lot better in this environment. This model seems to work well in the US, where the SME segment is the target market with recruiters around the country bidding for these recruitment jobs. The size of the US market (in terms of SMEs as well as physical size of the country) makes this model more attractive. It does not challenge the traditional way of recruitment, it acts more as a marketplace to allow small recruiters to bid for jobs with SMEs/employers around the country. We looked at this model but didn’t think it would work in a small market like Singapore/HK etc where there is easy access to employers by the recruiters and where the SMEs do not really want to pay for headhunting services.