A marketplace since 2006, BountyJobs shines for employers wanting one place to manage their contingent recruitment efforts
As a change from the previous two reviews in which I evaluated new players bringing crowdsourcing and gamification to the recruiting industry; this week I will evaluate one of oldest and most established players in the space: BountyJobs. BountyJobs was established in 2006 and is based in New York City. BountyJobs provides a marketplace for contingent recruitment by connecting companies with job openings with a network of over 10,000 recruiters. A privately held company, BountyJobs is backed by Accel Partners, Greylock Partners, and RPM Ventures. BountyJobs was named to the Inc. 500/5000 list of fastest growing private companies in both 2011 and 2012.
How it works: BountyJobs is an online marketplace that is intended to address inefficiencies in procuring recruiting services from third party firms and individuals BountyJobs’ calls “headhunters”. BountyJobs provides companies with a cloud-based vendor management technology that centralizes third party recruiter communications, performance metrics, and contracts into a single platform. While technology solutions have long existed for companies to recruit candidates directly, BountyJobs has distinguished itself as a top tool for corporate recruiters to manage effectively their third party recruiter relationships. In 2013, BountyJobs committed itself to improving its platform and technology. The updates included a major overhaul of the platform in order to help corporate recruiters and hiring managers more efficiently communicate and monitor several third party recruiters at once. The “Bounty Wall” provides a community forum for employers to communicate with multiple”headhunters” submitting candidates for a specific position. The “Candidate Wall” provides a private communication channel for employers and third party recruiters to communicate directly about specific candidates.
The Costs: BountyJobs is free for both employers and recruiters to join the BountyJobs marketplace. BountyJobs earns its revenue by taking a percentage of the fees paid to “headhunters” on the platform. 25% of the fee goes to BountyJobs if a recruiter is not on the preferred vendor list of a BountyJobs’ client. However, only 2.5% of the fee goes to BountyJobs if a recruiter is on the preferred vendor list of the BountyJobs client. BountyJobs clients are free to try to source candidates on their own and to post public advertisements on their own. However, they are obligated by contract to have all third party recruiter relationships transferred to the BountyJobs platform.
The Benefits: For employers, the primary benefit of BountyJobs is that it streamlines, manages, and simplifies the recruiter vendor management process. In fact, BountyJobs distinguishes itself in the marketplace as a great vendor management system for recruiting services. The company’s big selling point is the ease with which it allows employers to connect with and monitor recruiters as well as enabling them to control and track costs related to third party recruiters. Crowdsourcing job openings to recruiters on the BountyJobs platform has the possibility to be efficient; especially in specialized niches where the most difficult part of the job opening is simply finding quality candidates on paper. In addition, BountyJobs can save corporations time on negotiating contract terms, handling cold calls from several third party recruiters, due diligence, etc. However, these benefits are all a matter of perspective. Handling cold calls, negotiating contract terms, etc may indeed be a hassle, but also necessary in many cases if an employer wishes to properly and effectively recruit top talent using third party recruiters.
For third party recruiters, the primary benefits are that they can focus on researching, sourcing, and recruiting candidates rather than client and business development, contract negotiations, collections, arbitration, etc. Additionally, BountyJobs can be of benefit to small and independent recruiters, by enabling them to compete on even and undifferentiated terms with their larger, better known, and better funded competitors. On BountyJobs, what matters most is having the best candidate(s), quicker than everyone else. Therefore, if a smaller recruiting firm and/or independent recruiter has the better/best candidate(s), then they theoretically have an equal opportunity to win the “bounty” versus the competition if they can submit the winning candidate(s) first.
The Drawbacks: From both an employer and a recruiter’s perspective BountyJobs is not a true marketplace. A true marketplace is a free market involving voluntary exchange. Often times, the “headhunters” participation on the BountyJobs “marketplace” is involuntary. Employers as well are often involuntarily participating in the BountyJobs marketplace as the BountyJobs contract compels them to transition all third party relationships to the platform regardless of whether or not Bountyjobs played a role in introducing the employer to the third party recruiter. Essentially, BountyJobs often upends existing relationships rather than facilitating relationships between recruiting firms and their clients.
An additional drawback, from the “headhunter” perspective, is that recruiters can not counter offer the “market price” or terms of engagement on the job requisition, or compete by offering differing value propositions than other “headhunters” on the platform other than their track record on the “BountyJobs” platform. From the perspective of a recruiter with a pre-existing relationship with an employer, BountyJobs is often regarded as being akin to mafioso demanding “protection money” of 2.5% for the “privilege” of doing business on the BountyJobs platform.
A third drawback of the BountyJobs is that relationships on the BountyJobs platform are strictly transactional, one sided (in the employers favor on their preferred terms), not aligned,and not vested. This creates a lack of trust, thus commitment on both sides of the marketplace. Trust, rapport, and solid relationships are critical to the proper functioning of a marketplace. Before entering the BountyJobs marketplace, it is important for an employer to ask how motivated and able are recruiters to do their best work if they are brought to the marketplace involuntarily under terms they did not negotiate. Unfortunately for Bountyjobs and their clients, many large and top recruiting firms won’t work on BountyJobs at all and/or won’t ever do so for 25% fee of the “bounty” to Bountyjobs. Some recruiters will tolerate the 2.5% fee if they are placed on the BountyJobs’ client’s preferred vendor list, but most recruiters will simply disengage from the marketplace entirely rather than pay 25% of their fee to Bountyjobs. Top recruiting firms do not like the one size, one set of contract terms, fits all nature of the BountyJobs marketplace as it attempts to commoditize the entire industry from their perspective.
Lastly, BountyJobs distorts marketplace expectations for recruiting services, operationally and philosophically (through its marketing and sales efforts) by conflating headhunting with recruiting, consulting, staffing, sourcing, and screening when they are all separate services and a separate value proposition depending on what suite of services is being offered. For example, most top executive search firms, top recruiting agencies, and top individual recruiters resent the term “headhunter”and BountyJobs corresponding treatment of them as some sort of undifferentiated necessary evil who can and should compete on price as if they were selling widgets. Ultimately, the problem for BountyJobs is that a great recruiting process and great management of the recruiting process via a vendor management system such as BountyJobs is not the same thing as great recruiting. BountyJobs, unintentionally, often diminishes rather than enhances the delivery of contingent recruiting services.
Conclusion: BountyJobs is a great idea that showed strong promise from 2008-2012 when it was on the Inc. 500/5000 list and received backing from a top group of venture capital firms. At that time the market seemed determined to lower recruiting costs at all costs. However, since that time the market has changed and the market has improved. Employers are increasingly focusing on true value to be delivered by recruiting firms rather than the nominal costs.
To thrive and grow over the long term BountyJobs must find away to get the buy-in of top individual recruiters and recruiting firms. BountyJobs’ true value to the recruiting marketplace lies in its potential to become an expert of the experts. One possibility is to adjust the terms of the BountyJobs participation to a standard 2.5% fee for all top agencies and recruiters identified by BountyJobs. Those recruiters and recruiting firms not making the cut can apply by arguing and proving their value proposition. An undifferentiated mass now becomes a diverse marketplace with competing value propositions and fees. It must become more than just a great VMS, as it is facing increasingly steep competition from up and coming companies in the space such as SmartRecruiters, Recruitifi, and Scout.
There will always be a place for BountyJobs as there is always a place for good vendor management systems. However, it is becoming an increasingly narrow and competitive space. There will be fewer opportunities for BountyJobs to grow due to a lack of repeat business and employers having more options in the market. There is a place in the recruiting services marketplace for an honest broker. Unfortunately, BountyJobs would face a lot of headwind in this effort as it has lost a lot of its good will in the marketplace by seeming to be a polemic advocate for the employers at the expense of the third party recruiters. Within the recruiting industry BountyJobs is often derisively and jokingly regarded as being “a really great tool for really great companies to connect with really awful recruiters under really awful contract terms.” This reputation is bit of an unfortunate and undeserved stereotype, but then again all stereotypes are based, in part at least, on reality.
In the marketplace, perception is reality. Unfortunately, BountyJobs has a lot of work to do if it wishes to change its perception in the recruiting industry. The good news is that with its solid technology, excellent reputation as a VMS, and access to top venture capital investors, BountyJobs certainly has the potential with a solid public/marketplace relations campaign and slight business model adjustment to restore the mojo it displayed from 2008-2012. We wish them well in these efforts as the recruiting industry could benefit from the availability of a truly transparent, efficient, and effective marketplace for top employers and top recruiting firms (and individual recruiters) to connect.