The Oracle HCM Users Group (OHUG) is pleased to introduce Scout, a company that runs the only marketplace for specialty recruiters where our partners harnesses the power of performance-based matching to sift through a vast marketplace of agency recruiters to fill each and every job. Out of its partnership with Oracle’s Taleo, Scout leverages big data to save both companies and recruiters money and time. By combining a vast online marketplace with its proprietary performance-based matching software, Scout ensures companies find the specialty recruiters that offer them the best return on investment and opportunity to quickly make the best possible hire. In this interview, Scout’s president and founder, Sean Bisceglia (pictured left), discusses how Scout uses analytics to change the face of specialized recruiting and improve opportunities to connect small and medium-sized businesses with third-party recruiters, enabling them to better compete with their enterprise counterparts.
OHUG: Can you tell us a bit about Scout’s background and how the business got started?
Bisceglia: Scout grew out of a partnership with Taleo, creating a marketplace that connects employers and third-party recruiters using proprietary analytics. Last year, companies spent $6 billion on recruiting fees. Yet despite the huge investment of capital, this is an industry that remains largely untouched by the greater efficiencies technological innovation provides. We have worked to change that by combining the concept of a specialized online marketplace with our performance-based matching software, which easily allows companies access to specialty recruiters that offer them the best opportunities to find the right talent for the positions they need filled.
OHUG: How would you describe performance-based matching? How was the system developed?
Bisceglia: Our matching analytics is the heart of our product. This system came about via a convergence of me and my partners’ respective expertise. I have been involved in the recruiting industry for many years. My partners, Ken Lazarus and John Chuang possess deep recommendation software experience having created Angie’s List. With these two drivers, we were able to develop algorithms to match job orders with the third-party recruiters best suited to fill those jobs. Traditionally, companies have tried matching resumes to jobs, but that really isn’t the best way to fill a position. To solve this problem, we provide analytics on a job order, then, using our algorithms, we feed it to the correct recruiter based on the jobs they filled successfully in the last six months, their geography and a number of other metrics. During our pilot, surveyed recruiters reported a 92 percent match rate, meaning that 92 percent of recruiters felt the job we sent them was in their wheelhouse.
OHUG: What is Scout’s value proposition for small and medium-sized businesses (SMBs)?
Bisceglia: Our unique value proposition is our ability to use data from third-party recruiters to match them with companies. At a macro level, Scout allows SMBs to compete for the same level of talent as their larger counterparts by giving them access to a marketplace of third-party recruiters that houses vast amounts of data about those recruiters to find the highest quality specialized talent they need. Other benefits SMBs and medium-sized businesses get from working with Scout include lowering their time to fill and recruiting costs. In addition to our matching capabilities, the Scout marketplace offers bidding features that significantly reduces costs. Companies suggest a placement fee for any position they post, and recruiters respond with their bids. We have seen fee savings anywhere from 25 to 30 percent.
Another of our biggest advantages is our highly integrated partnership with Taleo, which dramatically improves efficiency in the recruiting process, not just for companies but for the recruiters themselves. Unlike a lot of other recruiting systems, Scout allows companies to access all of the data available on different recruiters in one place.
OHUG: What about the recruiters? What incentives does Scout offer them?
Bisceglia: Users find that our system limits the solicitation they receive from third-party recruiters, because Scout already offers them a better way to connect. For the recruiters, we limit the number of cold calls they have to conduct to grow their business. Connecting through Scout vastly increases their chances of working with companies and markets that they might not have previously been able to access.
Currently, 180 recruiters join us every week. They do so because they gain that access to new clients and see vast reductions in time to fill. The average fill rate in the industry is 86 days, but Scout is able to virtually cut that in half with an average fill rate of 42 days. We also handle all the billing, the invoicing, the remediation and the guarantees, meaning recruiters don’t have to spend time on those processes.
All recruiters sign the same agreement in the marketplace, allowing them to become approved vendors without going through procurement or HR for every company they want to work with. That said, our system does screen recruiters before entering the marketplace via their use of Bullhorn, Sendouts and PCR. All of those systems have accreditation and compliance standards and require monthly subscription fees, providing us with a built-in vetting process for recruiters before we even start analyzing their performance.
OHUG: We’ve discussed Taleo and Bullhorn, can you give us more detail on those and some of your other partnerships and the benefits they offer Scout users?
Bisceglia: On the company side, we are integrated as part of the workflow for Oracle’s Taleo and Taleo Business Edition as well as IBM’s Kenexa. Between these two systems, they processed 7.2 million full-time positions in 2012. They are very robust, providing much of the fuel for the applicant-tracking market, particularly on a global scale. That international reach is of interest to us, as we hope to be in the U.K. by the end of the first quarter of 2014 and be in the rest of the E.U. and in Asia before the end of next year.
On the other side, we have Bullhorn, Sendout and PCR. Their systems have about 30,000 specialized recruiters. By integrating applicant tracking with the recruiters, we’ve created a marketplace that is unique in the industry.
OHUG: How do you expect the continuing economic recovery to impact your business and your customers going forward?
Bisceglia: Assuming that the economic recovery continues at this slow pace, we need to think about the very low unemployment in specialized skills. These potential employees are in extremely high demand. However, as we recover the jobs will come back, but they will come back in those specialized areas, meaning that companies will face heightened competition for top talent. Those companies with smarter, more strategic recruitment strategies will be the ones poised for success in the new economy. I think is Scout is very well positioned to capitalize on companies’ need to attract that talent.
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