In 2011, Manchester-based Hiring Hub set out to streamline the recruitment process and help companies fill their positions faster. The opportunity, it felt, lied in giving a hand to the 10,000-plus micro-recruitment agencies (defined as up to four employees) across the UK, rather than the major players perched at the top of the £35bn-valued recruitment industry.
The company’s online marketplace lets employers post job vacancies for the consideration of agencies, who can then put forward their most suitable and best candidates for the role. By assigning its customers a ‘Relationship Manager’ to communicate role requirements in detail, Hiring Hub saves companies from the hassle that accompanies dealing with multiple agencies.
After seven years and several funding rounds, Hiring Hub’s decision to focus on its market appears to have been a savvy move. In a blog post on the company’s website, CEO and founder Simon Swan notes how 3,855 independent recruitment agencies with fewer than nine employees existed in the UK when the company started out. By 2017, that number had almost tripled to 10,045.
The company put together a new board in September 2017 following its latest and biggest investment round. We spoke to Swan to find out more.
What is the story of Hiring Hub?
Simon Swan: Back in 2010 we started to talk about the idea of consolidating (or trying to bring together) smaller agencies on a platform that would make it easier for companies to find and work with them. It was just a conversation at the time – we weren’t starting a business. We then saw what happened with aggregators – from car insurance to flights and hotels – and it we thought that putting a platform between agency and employer would be a potentially neat solution that made sense.
We felt that in doing so we could not just streamline the process, but also improve the relationships between partners and use data and customer reviews to influence behaviour, therefore taking out some of the things that employers don’t like about agencies.
How did you know that smaller agencies would grow in numbers back in 2010?
I can’t claim to having had a crystal ball back then, but I suppose we subconsciously predicted it. It’s great that the market is coming with us and there’s a real kind of energy in the business at the moment.
What’s the problem with larger recruitment agencies?
Our view is that they deliver a slower, expensive and more commoditised service than the little guys who know every Java developer in town and care a bit more about who they put in what company. Those independent agencies represent 80% of the market, so you can’t dismiss them, It’s just been difficult to find them because they’re all over the place.
How can Hiring Hub help scaling companies hire in a short space of time?
Speed. They benefit by having access to hundreds of recruitment agencies across the UK, but it’s ad-hoc – they deal with one vendor and have one point of contact from Hiring Hub – there’s no contracts or suppliers’ agreements. You can post a job at 2pm on a Wednesday and by 3pm have five agencies working on it if you approve them quickly. In a couple of hours you’ll have candidates. There’s no finding multiple agencies and negotiating separate fees, which we do in a rush as we’re British and we don’t like doing it!
Saving time saves cost as you’re getting people into seats sooner. We don’t actually measure that for our marketing but perhaps we should. It’s how we win most business – employers come to us as they’re struggling to fill a vacancy, and the opportunity to see candidates quickly matters to them.
And then, we are a marketplace platform with a layer of customer service on top – we always answer the phone and give customers a single point of contact called a Relationship Manager so they don’t have to have the same conversation with six different recruiters. It’s little things like that which keep the customer.
The tech industry is so specialist that it almost speaks another language at times. How do you ensure that your Relationship Managers both understand technical roles and can spot when a candidate would be a good cultural fit?
It’s a good question. Many of our team are ex-recruitment consultants who were perhaps a bit jaded with the industry and felt like the way we do things now was the way that it was going. And we’re a tech business ourselves, so they’re naturally included in conversations between our tech teams and CTO during stand-ups each morning – they understand the difference between Ruby and Python, etc.
We do our best to understand the industry, but ultimately we qualify every vacancy and take a really thorough briefing so that we can pass that info onto agencies and get them started on their candidate search
And it’s the same culturally – we ask the right questions and go out all the time to visit clients after placements and find out what they’re all about. Are they a small startup with six people in Liverpool or a fast-growing 250-head company who we’ve helped recruit 50 roles in the last year? It’s understanding what journey our customers are on and relaying that to an agency so that they can relay that onto the candidates, and vice versa.
Talk us through your investment journey to date
We got going and were bootstrapped for two years while building a good profile locally in the North West through PR and then awards. After a few years we raised some angel money, but the actual investment didn’t go well and we had to reverse out of that cul-de-sac after a year. It was a challenging time for the company and we nearly lost the business.
It took another year to trade out of that hole, but we got the business to profit throughout that period. Late 2014 we were able to do an equity fundraise with Venture Founders, ending up with 22 investors putting in £450,000 which gave us a platform to push on and we grew on average 50 percent year-on-year. Last year we raised just shy of £1.4m which enabled us to scale our tech teams and invest in marketing. That came from Maven Capital, which invested £600,000, and VentureFounders in a follow-on round.
We previously had a good business with real tangible value that was growing organically through word of mouth and referrals, but we couldn’t fuel that with a significant campaign or sales effort as it wasn’t churning out enough revenue to incrementally grow a sales team or put thousands into marketing. The investment is now allowing us to do that, which is exciting. Hopefully we’re at the next level where we can scale en route to a bigger raise and amplify everything in the next 12 months.