Brin McCagg Disrupts the Traditional Contingency Recruiter Model

Norm Clausen on June 24, 2014 11:57:00 AM EDT

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Brin McCagg RecruitiFi

Brin McCagg, Co-Founder of RecruitiFi, is no stranger to disruptive ideas.  As a successfull serial entrepreneur, McCagg has been reinventing markets his entire career. Today Brin speaks with award-winning producer/director, TotalPicture Radio host, and HR industry luminary, Peter Clayton, about crowdsourcing and gamification, which RecruitiFi is using to revolutionize the recruiting industry.

Listen to the podcast in it's entirety on TotalPicture Radio, or read the full transcript right here.


Crowdsourcing top candidates and recruiters with RecruitiFi (full transcript):

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I first met and interviewed Brin McCagg several years ago when he was president and co-founder of OneWire, a leading career site for finance professionals that really goes way beyond the functionality of a traditional job board.  I actually still have my OneWire baseball cap! Brin, however, has been a serial entrepreneur guy with an MBA from The Wharton School and set out to solve a new problem in the recruiting industry and founded a start-up called RecruitiFi.  If you’re a recruiter in-house or third party or an employer looking to find great candidates, reduce your time to fill and reduce your talent acquisition costs, you want to have a listen to this.  

Welcome to an HR technology channel podcast on TotalPicture Radio.  This is Peter Clayton and joining me today from somewhere near the Grand Canyon is Brin McCagg.  Brin, that’s a pretty good set-up.  So how about a quick RecruitiFi elevator pitch; what is it and what problem are you guys solving?


Brin:  Good morning, Peter and it’s great to be here or good to be here out in the Grand Canyon, but great to be on your show.  What RecruitiFi does is it helps companies recruit more efficiently and helps agency recruiters, headhunters more efficiently place the inventory of candidates that they have.  What happens is that third-party agency recruiters do a lot of work, a lot of great work.  They go out and they vet candidates, they interview them, they background check them and they do a lot of work in selling them on open job positions.  And when they’re retained by a company, they end up usually placing one of those candidates.  But they often have several other great candidates or often a search is cancelled or they’ve been talking to some great candidates recently about various positions that they’re not currently searching for.

So good recruiters always have a large inventory of highly qualified and hand-vetted candidates that they’ve worked on, and what we do is we enable them to place them by allowing companies to send out to up to 250 expert recruiters in our network a what we call a job cast,  which is an announcement of an open-job position that specifies the location and the salary range and the job description and we match relevant recruiters to the job cast based on their location and based on their industry that they focus on and based on the level that they focus on.  Those recruiters can contribute up to four candidates that they have hand-vetted, so to speak, and they have to put in complete information.  They have to put in a résumé.  They have to put in a LinkedIn link and they have to put in full contact information of the candidate, and they have to put in a note about the candidate.  They can only put in four candidates because we want them to really think about who they’re submitting.

We have a very slick interface that allows companies to send a job cast in a matter of two minutes or less and recruiters typically respond within the first two or three days.  Most of the action happens right away.  We’ve been having a great success rate of helping companies fill positions and what they can do is they can swipe through those candidates very quickly and putting them in yes/no or maybe folders and we give the recruiter visibility as to the progress of their candidate.

So it also helps them avoid what we call that résumé black hole syndrome where they submit candidates and they don’t know what goes on.  So companies are getting the power and the reach and the value of third-party agency recruiters but in a much sort of faster format and also at a much lower fee because we charge one fee.  It’s one contract, the company uses our platform, our contract is the contract in place with all the recruiters.  They don’t have to deal with the recruiters.  The recruiters cannot contact them unless the company contacts the recruiters directly which they can do if they want but they don’t need to and they only pay a flat 14% fee when they make a hire and if they make a hire.  We collect that fee and then we split that fee in an interesting way.  We give 10% to the winning recruiter.  Either the recruiter that submits the candidate that gets placed and then we give 1% to the runner-up candidates, which I’ll talk about a little more later, but just to give them… what I mean by that is the recruiters that submit candidates that get put into the yes folder, and then we give a half a point to the candidate to confirm their start date and their salary and then we keep 2½ percentage points.  It’s a much more efficient platform for everyone to work in.


Peter:  I’m interested in the acceptance of recruiters to this process that you just described, Brin.  I mean, you’re asking them to give up the company jewels, so to speak, when you’re having them input all of the contact information of their particular candidates.  Have you found resistance to this type of a situation?  Tell us a little bit about what kind of guarantees that recruiters get that all of this contact information that they’re providing you will not get abused within the network.


Brin:  The reaction we’ve been getting from recruiters has been incredible.  Recruiters have been signing up in droves.  They see this as a real game changer.  For them, it’s the ability to basically turn more of their candidate inventory and do it faster and easier.  They’re not doing sort of half the work, they’re not going out and getting the company, we are, and it’s a really easy interface for them to interact with.  

We definitely have a lot of protections.  We obviously are working together with the recruiter to help on collections.  We collect the money but we’re collecting the money for the recruiter and we’re tracking that company and we can track the candidates as the company not only looks at the candidate when they open up the contact information, when they put the candidate in a yes or no or maybe folder, we can track all that information and bill the company when they’ve made a hire.  We also pay the candidate to come back and confirm their hire date and salary.  We’ve got a lot of ways to protect collecting the fee, and then when we collect the money, we obviously pay our recruiters.  

It’s a transactional site.  It’s not a site candidate database in the sense that we’re looking to drain a recruiter’s database into a company’s ATS system.  It’s just the opposite; we’re trying to bring back the human element to recruiting and help third-party agency recruiters get back in the game and place more candidates because there’s nothing that can replace their value in the way that they can vet a candidate, sell a candidate on a position and that handholding is something that I don’t think the technology can ever really fully replace.


Peter:  I certainly understand and appreciate the value you’re bringing to recruiters because as you said, they go through a lot of work to find these candidates and they often times present four or five candidates to their client and the client is going to hire one and then they’ve got these other three or four people whom they’ve established great relationships with obviously because they presented them, they vetted them, they’ve gone through all of the work that a recruiter goes through before presenting a candidate.  So this is, I think, a great concept.


Brin:  We’re very excited by it.  We definitely think we are on to something pretty big and we’re definitely getting some great results.


Peter:  I heard you talk about recruiting being an easy business to enter but a hard business to be successful in, and I think that’s been especially true over the past five or six years going through this recession that we’re now finally coming out of.


Brin:  I think that when people look at the recruiting industry they think of fees anywhere from 20% to 33% of first year’s compensation or salary and they think, oh my gosh, if I just place a couple of guys at $200,000, I’m going to make a very significant income, and in a sense anybody can open up a recruiting agency.  So I think it’s an easy business to enter.  I think it’s very difficult to be good at it and that goes for companies too; I think a lot of companies are finding over the last five years they’ve in-sourced their recruiting effort and they’ve struggled with that in many cases because it’s a difficult task to go find the right talent that is not only right for your company from a skill set point of view but also from a cultural point of view and also getting that talent at the moment that they want to make a change.  Anybody could find anybody on LinkedIn at this point.  That’s pretty easy.  That game is sort of over the candidate database and what you need to do is find the candidate that’s ready, willing, and able to move to a new position and that’s the value a great recruiter provides.

And it’s more difficult than it looks.


Peter:  Yeah, exactly.  To that point I think a lot of people think recruiting is really easy.  You just go onto LinkedIn and you find some people who have the skills and you get a hold of them, but there is a lot more involved and it’s a profession.  It’s a real profession.  If you haven’t been trained, if you aren’t really passionate about doing that, it’s not going to work for you.


Brin:  Yeah, I totally agree.  A great recruiter does a great job and can deliver great candidates.  So I think we believe great third-party agency recruiters that are in our network are hungry, they’re motivated, they’re agile in a sense that you can dial them up and dial them down when you need them from a company’s cost perspective and most importantly, they’re highly skilled at what they do and they can read the nuances of a situation and get the right candidate at the right time.


Peter:  I want to return to this split fee arrangement that you’ve created for recruiters.  It’s almost sort of a gamification, if you will, of the process.  Can you go a little bit more in depth than that and unpack that for us exactly how this whole thing works?


Brin:  A lot has been written about gamification.  A lot of great companies like Google and others are using gamification to motivate people.  We think gamification is perfectly suited for our process on the RecruitiFi platform because what we do is we award points and cash money to recruiters that in a sense provide value and what we could do is as a recruiter submits candidates traditionally in a recruiting process, it was a winner take all market from the beginning of time, so to speak, and that was great for the winner, i.e., the recruiter that submitted the candidate that got hired.  What happened was all the other recruiters get very demotivated because they get nothing.  

What we do is when recruiters submit candidates in our platform, when a company looks at those candidates, they have to swipe the candidate into a yes/no or maybe folder to get to the next candidate.  So every candidate has to be put in to a folder.  It’s a very fast process to look at the candidates.  All the information is there and then you can categorize them in yes/no or maybe and then you get the next candidate.  And what we can do with that is we can calculate a recruiter… we can give a score to a recruiter because a recruiter that submits a lot of great candidates that get put into the yes category we give them points and we also will give them cash award; we split that 1% of 1 point out of the 14 percentage points we give to those recruiters who submit candidates they get put into the yes category.  So what we do the end result is recruiters are building up award points and getting cash even if they don’t make/submit the candidate that gets hired but those points enable us to start to score recruiters.

What we do is when a company sends out a job cast and typically about 20 recruiters on average submit candidates back, the question is how do we stack rank those candidates?  We stack rank them based on the score of the recruiter.  So if the recruiter behind the scenes has done a lot of great work in previous job casts and submitted candidates that have either gotten hired or have gotten put into the yes folder, they’re going to have a higher score than say a recruiter that submitted a lot of candidates that got put into the no category and therefore, that recruiter’s candidates are going to be stacked at the top of the pile.  

The company is not only getting the benefit of the human element of recruiters, it’s also we’re able to score them and give them the best results of the top.  And what that does for the recruiter is it gives them a high degree of motivation because they see their score and, by the way, they can redeem their points for various awards that we’re developing – they see their score and they obviously get cash awards for candidates into the yes category and that motivates them to really submit only candidates that are highly qualified and to not waste anyone’s time, so to speak.  So often recruiters will submit one or two candidates.  They can only submit up to four.  So we’re getting great results from that.


Peter:  Let’s jump over to the employer’s side of this equation for a minute, Brin and talk about what the advantages are beyond obviously an attractive commission rate for employers to use your platform.


Brin:  We just published a white paper on the best practices of sourcing candidates which can be found on our blog at and when a company goes out to search, I mean just think about it, there’s only a couple of ways they can do it.  The best way and the first way they should always do it is look internally for redeploying their own people or looking internally for referrals from their own employees at their own network.  That’s a no brainer.  It’s fastest, it’s cheapest and it usually gets the best cultural fit.  

But after that then they face the choice.  If they’re a company with an  established internal recruiting team they can start to go use job boards which have had less and less good outcomes.  They could then go look on LinkedIn which is a great resource but it’s a tremendous amount of work and you get a lot of unresponsive candidates and you really have to know how to work that platform to get great results, and it’s fairly expensive.  But if that doesn’t work where they don’t have the resources, internal people power to do that, their next choice is to go to a third-party agency recruiter either on a retained or contingency basis and typically pay anywhere from 20% to 33% the first year’s compensation.  We’ve really put a new category of recruiting into the mix and it’s sort of after you’ve looked internally, after you’ve potentially used job boards and if you’ve got the resources poked around on LinkedIn, RecruitiFi enables companies to leverage again that power and reach and value of third-party agency recruiters in a much easier to use application.  It’s one contract, it’s one fee, it takes minutes to try and you get back results almost instantly and within a few days.  Usually a job cast has produced finalist candidates. 

If that still doesn’t work, they can always go out and take the next step of hiring a third-party agency recruiter, but we believe we’ve  created a really efficient new category that benefits both recruiters and companies.

I might just add one thing that what the platform does is it creates a serendipitous matchup.  It’s the matchup between your job opening and a recruiter that happens to  have a candidate at that moment.  It’s not a platform really to go out and retain a search firm to go do a search on a linear basis.  It’s just creating that job cast.  Recruiters get it and it’s the recruiters who happen to have done a similar search or happen to have known candidates or spoken to candidates recently that are applicable that submit those candidates and again they usually do it in the first two or three days, and it’s just a very quick and rapid platform to get results.


Peter:  You bring up an interesting point here and I’d like you to… this is something that you explained to me offline.  The difference between what you’re doing and what an executive search or retained executive search firm does, so can you kind of explain to us what the difference is between the RecruitiFi platform and what typically a retained search firm is going to do for an employer.


Brin:  Basically, what RecruitiFi does is it’s one platform, one contract and one fee and it’s leveraging sort of the power and the reach and value of hundreds of recruiters at a time that are very specific to the position that you’re searching for.  So it’s really simple and fast to use.  It takes just a few minutes to send out a job cast and you don’t have to deal with the recruiters.  So you’re not negotiating contracts, you’re not communicating with the recruiters.  They cannot see your contact information on our platform, and it’s obviously roughly half the fee of a traditional search and it’s much, much faster.  Again, it’s creating that serendipitous matchup.  It’s looking for the recruiters that happen to have candidates at that moment. 

What we found is we limit a company to sending out a job cast up to 250 recruiters at a time and we’re finding that about 10% of them respond which is about what we initially anticipated and they typically respond with anywhere from 1, again up to 4 candidates, and the end result is is that right away you’re getting great candidates.

With a third-party agency recruiter, whether it’s retained or contingent which we encourage if companies want to go that route, there’s no substitute for the value and the handholding and the vetting that a great third-party agency recruiter could do but it does come at a fairly expensive cost.  First of all, you have to go out and find them and you may know a great recruiter but you may choose the wrong one and so how do you find the right recruiter that’s right there in and of itself a challenge.

Number two, you’ve got to go out and negotiate a contract with that recruiter which takes a lot of time back and forth negotiations not only the fee but all the guarantees and all that go around placing candidates in the companies.  And then you’ve got to go and obviously convey the job position to that recruiter and then they go out and do what I call linear search.  They’re going out and looking for candidates in their database, on LinkedIn, and other resources that they use and they’ll bring back candidates to you.  That process can take literally a month, two or three easily.  You’ll usually get great results if they’re a good recruiter but there’s a lot of work and a lot of cost in that process.


Peter:  Let’s talk about candidates for a minute.  Can they upload their résumé or CV into your database?


Brin:  No.  We’re not candidate database at all.  In fact, our job cast lasts for 30 days and when they’re over, that’s it.  A company can renew the job cast and look at candidates if they want but we don’t view ourselves as a place for candidates to build a profile.  I believe that LinkedIn has sort of won the day on the candidate database.


Peter:  Right, they sure have.


Brin:  And also everybody has an ATS now so there’s plenty of databases of candidates.

What we do is candidates are submitted only by third-party agency recruiters that know them and have vetted them and have all of their information.  Again, you can’t submit a candidate without all of their complete information.  Right now there’s not a lot for candidates to do on the platform.  We are about to launch an ambassador program which allows professionals or individuals to refer companies into our platform and they can make money from doing that.  But other than that, there’s not a lot for candidates to do except to get jobs.


Peter:  You brought up ATS so obviously we have to get on to this topic because every company today with, I don’t know, over 100 employees I would guess has an applicant tracking system and many in the enhance talent acquisition services such as what you’re offering, the ATS quite frankly becomes a bottleneck for the recruiters because they don’t talk nicely to one another.  How are you addressing that situation with integrating what RecruitiFi is doing within an applicant tracking system?


Brin:  I’m really impressed with what’s happened in the applicant tracking market.  There’s been a whole host of new players Greenhouse is a great one, Jobvite, Smartrecruiter, Workable and others have come into the market and have grabbed significant market share from fast growing companies, and then you have obviously the traditional players like Taleo and Successfactors and Kenexa.  But what we’re doing is we’re integrating with them and we’re integrating with a whole bunch of them very quickly.

The ability to integrate with them more and more of these platforms are open, and a great applicant tracking system is only as great as the candidates that they can attract into it.  Applicant tracking systems have sourcing tools where they can obviously push the job out to job boards, Indeed and LinkedIn and other resources, and when they integrate with us, they gain the advantage of having a new category of sourcing for their clients to source candidates from our pool of expert network recruiters.  

So they’re loving what we’re doing and in fact, next Tuesday on July 8, I believe, we’re co-hosting with Greenhouse, a top applicant tracking system a panel on sourcing.  The applicant tracking systems, we’re working with a lot of them.


Peter:  One other thing I need to bring up here because as you know every conference you go to these days in the recruiting or HR world, there are two main topics.  One is big data.  The other one is mobile.  When you go to RecruitiFi’s website the first thing you see is a big smartphone.  Tell us about your integration on mobile platforms.


Brin:  I was just reading a report by Mary Meeker who works now at Kleiner Perkins and her calculations were that almost 30% of internet traffic is now coming from mobile devices and anybody that uses these devices knows that they do more and more of their work on their smartphones, on their iPads and other mobile devices.  

First of all, our platform is fully mobile compatible, meaning it’s the right size for any mobile device so that you can access it on a mobile device and our need to deliver our service to people in a mobile format I believe is essential.  I think a lot of people are going to want to send job casts when they’re on the train commuting or look through candidates and swipe through 20 or 30 candidates while they’re commuting in and out of the office or travelling.  So right now, we’re mobile compatible and we are going to build a mobile app soon.  That’s high on our priorities, I can tell you.


Peter:  We’ve been speaking mainly about kind of the big picture  kind of things.  I love to get personal stories in these interviews if I can.  Can you share with us maybe one or two real world stories that you know of with people whom have used your platform and how that has been successful.


Brin:  We’ve had incredible results.  I mean, right now most of the job casts have been fairly recent because we’re a very new application, but on the job casts that have been sent, we’re usually getting anywhere from 15 to sort of 40 candidates again, in the first couple of days it usually takes, and the results have been incredible.  

A midsize, well-known, boutique investment bank recently sent a job cast where they were looking for a third year associate and an MBA associate position and we were able to deliver them candidates that went to schools like Wharton and Harvard Business School that worked at companies like Morgan Stanley and Blackrock.  In fact, one of the kids was president of their class at Princeton and had worked at a top firm and had gotten an MBA from Wharton’s.  They were sort of blown away at the results.  Again, it all happened in the first few days.  It goes from those kinds of finance positions over to tech positions.

Another midsize tech firm in New York that had about 250 employees was looking for a chief technology officer and again, the same sort of results.  Within a couple of days we got them incredible candidates for one of the toughest positions to fill probably across the country which is chief technology officers.  

We’re getting great results at sort of all levels for both big companies and small companies, and so we’re pretty excited about that.


Peter:  Given the data you’re seeing and the conversations that you’re having out there with recruiters and with employers, do you think the employment picture is going to continue to improve throughout the year?


Brin:  I’m not a macroeconomist but I am an optimist and a believer in the US economy and I do believe that people, there’s probably a lot demand still emerging from this last recession.  I do think there is a incredible technology innovation wave that’s happening with new applications, like Uber or Airbnb, that are creating incredible results in this shared economy, so to speak.  I think that we’ve got quite a ways to go in terms of growth in this economy because technology and innovation create employment and more efficiency, so I think that there’s a ways to go before we have our next downturn. 

We’re seeing companies hiring that’s for sure.


Peter:  That’s great.  We love to hear that.  Brin, thank you very much for taking time to speak with us today.  One last thing, is there anything we haven’t discussed that you would like to share with the audience?


Brin:  I appreciate that, Peter.  Just that we’re excited about what we’re doing.  We think that we’ve really created a sort of a new category of search.  Again, when you’re looking at how to go about searching for candidates as a company is always a challenge.  We recommend sort of that you look internally and then potentially at job boards and LinkedIn, but that we fit very nicely as the next category before you might go to an agency recruiter.  We’re excited about creating the results that are getting third-party agency recruiters back in the game, and that’s really ultimately what we want to do and what we’re developing is additional ways for them to make money and to be sort of re-engaged.  We’re going to come out with additional services and features for third-party agency recruiters beyond just being able to submit the job cast candidates but other ways for them to make money because they’ve had – due to the recession and due to companies in-sourcing their recruiting departments and using platforms like LinkedIn, third-party agency recruiters have suffered over the last five or six years and have had a tougher time, and we think they add a tremendous amount of value.  They’re experts at what they do and there’s no replacement for sort of that human element and that we can create ways for them to leverage their value and make more money with additional resources.  So stay tuned for that.  We’ll be announcing some of that soon.


Peter:  Again, Brin thank you very much for taking time to speak with us today here on TotalPicture Radio.


Brin:  Great.  Thank you, Peter.


Peter: We’ve been speaking with Brin McCagg, Founder at RecruitiFi.  Visit Brin’s show page for a complete transcript of this interview resource links, and more information available in the HR Technology Channel of TotalPicture Radio that’s  While there, sign up for our newsletter.  It’s quick, easy and free.  Connect with our TotalPicture Radio community on Facebook and follow me on Twitter @peterclayton and @totalpicture.  I’m happy to connect on LinkedIn to our listeners; just be sure to indicate that you listen to TotalPicture Radio when sending the invitation.  Thanks for listening.