Today I’d like to talk about the business of hiring. My focus will be on knowledge workers, my perspective comes from experience in the digital and tech market, other industries might have different habits.

Here comes the controversial thesis. An ideal match between a candidate and a job is more than unlikely. And value creation for sourcing talents for companies is unfair.

Let’s start with the latter — the unfair value creation. Many companies offer employee referral schemes in which they offer a referral fee of 500–2k€ to existing employees if they refer a candidate who gets hired. At the same time, these companies pay 15–30% of first-year base salary to recruiting agencies and independent sourcers. Basically for the same outcome. In the mentioned industries this is easily a provision of 20–50k€. I believe this is unfair taking into account that inhouse-referrals have more commitment.

Now that we understood how external recruiting works for most companies, let’s face the first part of the thesis: ideal job/candidate matches are unlikely. The typical supply/demand dilemma. On the buyer end, hiring companies can not maintain endless sourcers/agencies, and thus get access to only a fraction of available talent. On the seller end, sourcers/agencies have limited access to clients, therefore can offer only a fraction of available jobs to available candidates open to new positions. Chances that seller and buyer meet on this market — especially since moving remote/global hiring — go to zero if you assume an ideal match.

It is time to transfer the headhunting / external recruiting business from the last century into 2022. It helps to see talents as an asset class traded on exchanges. Where hiring companies are the buyer and sourcers/agencies the seller. Candidates are the asset to be placed. With rising value over time that all three parties participate. Very similar to how the professional sports talent & transfer market works.

So how does this look in practice?

Think of a hiring company wanting to place a position. The in-house recruiting manager creates a search order incl. all relevant details (position, compensation, location, etc.). A new search order automatically creates a longlist that gets crowd-filled with candidates by sourcers/agencies (notifications, auto-suggestions/fills, and reminders improve operations here). After a certain time limit in-house recruiting manager reviews and filters the longlist (Tinder-like yes or no) automatically connecting approved candidates to a standardized recruiting process. After process execution, the (job)winning candidate signs the contract, and the sourcer receives the provision from the hiring company (fixed). On top, there’s a variable provision, paid upon duration + salary increase of the candidate over time (invest angle).

Talents becoming assets both buyer and seller invest in creates mutual incentives for long durations and career growth between candidate/job. This is strongly aligned with what candidates and companies want. Sourcers doing sales and companies doing sourcing become redundant. The hiring process becomes much faster. Supply and demand actually meet. In a future web3 world the infrastructural layer (currently heavy due to contract, invoicing, wiring, transparency, and tracking) can be simply solved with wallet sync (a good analogy of how this could solve the more heavy cap table management is Mirrortable by Balaji).

As mentioned, an interesting opportunity is to build this in the web3 community from day one. A hiring DAO based on the concept of contributor mining for bringing supply (sourcers) and demand (hiring companies) on the platform. Zora delivered a protocol that could be a good fit for building an early infrastructure. Inform yourself about sell-on shares, instant on-chain royalties, and finder’s fees which are core parts of the protocol.

To conclude. The hiring market is enormous, building a platform uniting the market and changing its dynamics of it is a big challenge. To improve matching and find better-fitting jobs for everyone is a powerful and honest mission. Understanding a platform’s threats and risks is crucial before starting. As always code and UX are here to help fix areas around time & volume limits for sources, the threat of candidate drain, solving exclusivity, generating trust for future earnings, and getting a transparent overview.

To finalize. If you are interested to connect around this idea and build something please write a mail or respond here.