Last week I had all of 60 seconds to pitch the company I co-founded, Barrel of Jobs, at the Carnegie Library in Washington, D.C. I started by asking attendees to look to the left and look to the right. Those with a memory for TV trivia might have thought I was trying to channel my inner John Houseman from The Paper Chase. Remember when he famously told Harvard Law School students: "Look to your left and look to your right. Only one of you will remain by the end of this year"?
My message was not intended to be quite so jarring, but here's what I said: "If each one of you represents a small business of under 100 employees, one person on either side of of you can't hire the talent he or she needs to build his/her company to the next level."
I was speaking at Distilled Intelligence 2.0, a two=day competition put on by Fortify.vc where 100 companies from all over the world pitched their businesses and judges selected five per day as winners. I am delighted to share that Barrel of Jobs took fifth place on day two and Microsoft is sending us a Windows 8 tablet! Shout out to Cont3nt, Aquicore, Kahnoodle, and Bookend who took the top four slots!
But, back to my point, small businesses and hiring. Shouldn't it boggle our collective minds that in this economy we hear so much about the 12 million unemployed, yet at the same time we learn that there are over 4.8 million unfilled jobs? As my personal friends know all too well, I love to match-make. This mismatch between the unemployed and unfilled is breaking my business heart because it's hurting our nation.
Let's start with the hiring environment for small businesses. In short, it's hard. They employ 35 percent of the workforce, but are uniquely disadvantaged in hiring. According to a Wall Street Journal and Vistage International Survey, 31 percent of small businesses surveyed are having trouble finding workers with skill sets and experience for the job. Every month small businesses list about 1.3 million open jobs, but they do not get filled without an incredible amount of extra effort.
This extra effort is required because the act of sourcing candidates is broken and inefficient, wasting both time and money. Small businesses are paying on average $3,665 per hire whereas large companies are paying $1,949. One company in DC, LivingSocial reported it took five months to hire and cost them on average $5,000 for a tech worker and $3,500 to hire a non-tech worker.
So here's a thought. Just as many Americans are now meeting their spouses online through great matchmaking sites like eHarmony, OkCupid, and match.com (1:5 people who married last year met online), perhaps we need to rethink the matchmaking of people for great careers. If nothing else, let's at least acknowledge the perpetual and expensive mismatch. Better yet, let's utilize our country's competitive advantage -- technology -- to do something about it.
For the past hundreds of years our country has employed the same three models of recruiting talent:
- Direct recruitment
- Job advertisement
- Employee referral programs
Here are some of the issues and why they aren't working to fill those 4.8 million jobs.
Direct recruitment can be expensive and costing upwards of a third of the employees annual salary. If that's a rockstar employee it's likely well worth it to hire a recruiter but most companies will hire a recruiter for their top executive jobs only.
Job ads will attract active candidates, but it is too expensive to scale geographically. For example, if I need a stellar IT Developer with specific certifications, I might be willing to hire someone in Arizona but they might not see my job ad in Washington, D.C. or know that I am willing to hire a remote workforce.
With Employee referral programs SMBs are disadvantaged by small employee population with no incentives to share job opportunity beyond that one employee and no way to track or reward others who help in the process.
At Barrel of Jobs that we launched this month at DEMO 2012 we have decided to focus on small- and medium-sized businesses and revolutionize recruitment. We have devised a way to crowdsource jobs nationally and have a business only pay when they actually make a hire through the site. Many other sites charge $95-$495 to post a job, regardless of outcome. With Barrel of Jobs, if someone gets hired, the employer pays $500 and all the people who referred that person to the job are financially incentivized, not just the employee. We are able to track the act of sharing through our patent pending technology and through personalized URLS and build the chain.
So tracking all the wins:
- Employers get better candidates, faster and people will also refer highly coveted 'passive' candidates that already have jobs but might want to jump for a better opportunity;
- Participants earn money for helping a friend and they can keep that money or donate it to a charity;
- Friends get the help they need to find and land their dream job;
- Barrel of Jobs earns money for delivering a great candidate to the employer;
- The community builds a stronger economy and matches people faster with job openings;
- ... and for every job filled, Barrel donates a portion of the proceeds to community partners delivering job training to at-risk youth and veterans including NFTE, YearUp, and Wounded Warrior Project.
I walked away from Distilled Intelligence with my Microsoft tablet certificate and six business cards in hand from investors who asked me for term sheets at the event. Chris Hertz, my partner and our CEO walked in and we joked about who would get to keep the tablet (me!). We also decided to double down on our efforts to help small businesses thrive and do some serious speed matchmaking for our employers and candidates.