Hiring is one of two things: either a huge time suck if you look for and interview talent yourself, or painfully expensive if you use a recruiting company that can charge upwards of 30 percent of a new hire's first year salary.
One startup thinks it offers a better option.
Shunning the term "recruitment company," NextHire calls itself a "digital hiring solution" and launched in January with an interesting business model. Instead of garnering percentage-based fees from clients it charges a flat fee of $4,000 for its service, which uses a mash-up of webcam interviewing, online skill and behavioral assessments, big data analysis, algorithms and social networking to vet candidates sourced from all the usual places, such as traditional job boards, Craigslist, and LinkedIn.
Do you get what you pay for?
You might wonder how much effort the company is going to expend for so little money but CEO Bob Myhal says the bulk of NextHire's actual work is done upfront--helping a client develop a competency list and a thorough and accurate job description. Once that's done, the company uses data to streamline the applicant filtering process and quickly identify top candidates. Applicants click on a link within a job posting, upload a resume, and answer questions relevant to the job. Those that filter through NextHire's algorithms proceed to take online behavioral and skills assessments, eventually doing a recorded video interview that's included in a sort of digital dossier that gets handed off to clients.
Myhal says the way the company relies on data removes personal bias, which can lead to hiring the wrong people who may interview well or candidates who have great experience on paper but can't perform in the job.
"So what we're looking for at NextHire is a way to take out some of that bias and to say 'This is a real profile of these candidates. These are their strengths, their weaknesses. These are areas if you make this hire... that you need to be aware of in order for them to perform extraordinarily well at this job,'" he says.
Clients get a handful of candidates to choose from and NextHire gets paid whether you hire one or not.
But does it work?
Myhal points to social polling app 2Cents which hired NextHire to help it find a CEO, a process he says typically takes five or six months and costs in the ballpark of $50,000 with a traditional recruiting firm.
"We did the whole process for them in five weeks. They ended up with four spectacular candidates which they got to choose from. They hired their favorite and actually their runner up is now being considered to come on board on one of the other companies in their investment portfolio," Myhal says.
Other clients that have gambled on NextHire's less-expensive offering include early-stage venture capital firm Launch Angels, New Hampshire-based McClellan Automation Systems, apartment search platform Rental Beast, and consulting and ROI firm True Impact.
Whether NextHire can prove itself as a viable alternative to traditional recruiting remains to be seen, but given its price tag the business model could be disruptive if the company gets more traction.
Assuming it will, Myhal plans to expand the Boston-based company's territory outside of New England.