CBREX is a tech enabled online split fee network built to help recruiting firm owners in different parts of the world communicate and transact with each other in an efficient and transparent manner. Built on JAVA, the technology platform has been designed to enable members to get the most relevant business opportunities sent to them and also communicate with other members through the exchange in a message board format.
Gautam Sinha, CEO and Co-Founder, CBREX in an interview with Techseen discusses the emerging trends in the recruiting environment today and shares his experience in running a recruiting firm. Excerpts:
Techseen: What changes do you observe in the modes of recruiting used today? How is CBREX positioned to tackle that change?
Sinha: Companies are cutting down on the numbers of external recruitment vendors that they use for hiring. This has been happening over the last 4-5 years and will accelerate further as companies realize that “more” vendors does not necessarily mean “faster hiring”. New Recruiting vendor empanelment will get more and more difficult as companies get choosy over who they choose to work with and enforce stricter vendor evaluation norms and so weed out non performers at a faster rate.
To stay relevant, recruiting firms will have to develop very narrow areas of expertise and collaborate more with other firms in areas that are outside this narrow band. In the western countries, the move towards specialization started early but was still limited to domain area specializations (like IT, Healthcare etc) but now it will become sub domain specialization like (IT security , Healthcare-Nurses etc) .
Digital presents a never before opportunity for firms to collaborate with each other and close positions faster for their clients. This is where a platform like CBREX that allows a firm to collaborate across the world and leverage off the expertise of other specialized firms comes into play.
Recruiting that is being done through job boards, social media, agencies and referral will now acquire a new dimension and that will be collaborative hiring.
We believe that more than 10% of the total global agency hiring (currently standing at $70B) will move towards collaboration as the advent of digital tools will make it easier to collaborate and the results will propel more and more recruiting firms to close upto 30% of ALL their positions through collaboration.
The ones who collaborate will stay relevant and grow and the ones who don’t will find it an uphill battle as markets get more and more competitive and companies become more and more choosy on who they want to work with.
Techseen: How do traditional recruiting models pose a barrier to international hiring?
Sinha: International hiring has 3 components to it:
1. Hiring internationally for your domestic clients i.e. the same clients for whom you have been doing local hiring decides to hire outside the country.
Problem: Presents sourcing challenges as most firms are not equipped to source candidates from another country
2. Hiring for clients who are NOT based in your country but who want to hire in your country (international clients hiring in your country)
Problem: Getting leads is tough here as most firms don’t have global sales or BD teams that scout the internet to look for specific leads of foreign companies wanting to hire in local markets.
3. Hiring for clients who are NOT based in your country in a “different” country (international clients hiring internationally)
Problem: Resources are an issue as for this the firm needs to open an office in the country from which it wants to source business. Opening an office in a foreign country is very expensive and limited to very large firms.
Techseen: With the advent job opportunities posted on social media, how is recruiting changing globally? Do they pose a threat to private recruiting firms?
Sinha: Social media today is what job boards were yesterday i.e. a store house of resumes! Social media gives recruiters a greater tool as it gives one an access to a database of candidates who are both passive and active job seekers while job boards used to give one access to only active job seekers.
This has changed recruiting as social media sites are cheaper to access as compared to the earlier job boards and so even single person firms can now use social media to hire from anywhere in the world. It has led to a reduction in the barrier to become a recruiter as costs are lower than what they used to be.
With regard to a threat, I am not too sure about that as recruiting still needs a person to person last mile connect and while social media sites and analytics can reduce the funnel, in end of the day someone still has to mail/phone/meet a candidate for a position to close at the lateral level.
I feel social media will provide a leverage to firms and firms who know how to use it will benefit immensely from it. Don’t see it as a threat to the industry as a whole, just a tool to increase efficiency.
Techseen: What kind of data analytics do you use to rate recruiting firms to get the best possible match for demand and supply?
Sinha: We use 9 pieces of data to rate every transaction on the exchange. Each stage is then calibrated through a weighted average to arrive at a rating for “that” transaction i.e. resume. As firms send hundreds of resumes on the platform, the final rating will accumulate all these resumes. The rating engine does this on a weekly basis to make sure that the rating is current.
Techseen: You claim to help building a global start up from day 1. What services do you render to a startup that is still in its development stage? How do you help it seek a global reach?
Sinha: Any recruiting firm that joins the exchange and gets engaged by signing the MOU with us is a global firm. It will have access to jobs that have been posted by firms from across the world (global clients) and it can post jobs from its clients that require sourcing from anywhere in the world (global sourcing).
Techseen: While collaborating with recruiting entities outside the home country, what are the challenges you have come across?
Sinha: Initially, there was an issue of trust as we were not based in these countries. We saw that as we built scale and more and more firms joined us and started posting jobs this became less of a barrier. Language was also an issue in some of the countries specially in Europe, Japan and China.
Techseen: When it comes to technical roles, where do you see the maximum hiring taking place globally today and in which industrial sector? Can you share some statistics about the same?
Sinha: The three biggest hiring verticals on CBREX are:
- BFSI (Banking, Financial services and Insurance)
This is where we have maximum jobs from the USA and UK (70% of our jobs are from these 2 locations). Within IT we see ‘Cybersecurity’ and ‘Data analytics’ as emerging areas of hiring.
Healthcare is a huge sector in the USA and we see lots of positions in all the 3 areas of healthcare:
- Hospital administration
Our recruiter survey in the USA suggests that firms in the USA expect an increase in mandates in 2017 and expect more positions to open up for them to fill.
Techseen: In one of you interviews, you had revealed plans of raising a pre-Series A or Series A round by the middle of this year. But you haven’t gone ahead with the next round yet. Why?
Sinha: We have faced valuation challenges for a Series A investment in 2016 and so have been raising smaller angel rounds across. We believe that our revenue traction should reach a level where we should get the valuation that we think we deserve for a Series A in the next 6-9 months . For now we are comfortably placed with angel investor rounds and revenue traction providing enough capital to ensure that we don’t compromise on our growth objectives.
Techseen: You have started your entrepreneurial journey in 1996, much before the startup boom had hit India. What are you major takeaways from this journey as an entrepreneur and what suggestions do you have for budding tech startups?
Sinha: My main takeaway is that one has to “keep at it” if one wants to become a successful entrepreneur. Despite whatever you read or hear, persistence is the biggest requirement for entrepreneurial success and that only comes from “belief”. Apart from that, the other trait is the ability to act, learn and then act again, again and again.
My suggestion is that if you have decided to become an entrepreneur then “don’t” limit yourself. It is not a career choice, it is a way of life and the biggest upside is that you can reach any level that you aspire for, there are no limits!
Techseen: Can you comment on your upcoming expansion plans geographically- APAC, MEA, etc.?
Sinha: USA and UK are our 2 focus areas for 2017 and that is where we will expand (hire people), acquire members (recruiting firms) and get more jobs from. As we are based in India , it will continue to be a country from where we will acquire members. There 3 countries are on our radar for the next year.
Techseen: What is your current team strength? Do you plan to go on a hiring spree anytime soon?
Sinha: We are 9 full time employees. We will hire across tech and marketing in India in the next 12 months. Some business operations hires will be done in the USA and UK. Being a product firm, hiring will be in measured proportions and will be more product focused.