In the world of human resources, recruiting experienced hires has long operated in two ways: Companies blindly advertise new openings through third-party job listing sites, or pay high fees to headhunting firms to seek out viable candidates for a particular position.
But one South Korean startup has set out to disrupt this paradigm by introducing a new mode of recruiting with a proven track record of success -- hiring through personal referrals.
Wanted has built a recruitment platform that relies on personal referrals to find suitable candidate for new job openings. It is based on the idea that while highly qualified people may not be looking to change careers, they might know another equally qualified person who is.
“Think about it like this: If you’re making a big life decision, you seek advice from friends and family. If you’re making a big career decision, why wouldn’t you speak to people in your professional network?” Wanted’s founder and CEO Lee Bok-kee said in a recent interview with The Korea Herald.
Launched in 2015, Wanted is a referral-based recruiting platform here that allows people -- namely professionals working in a relevant industry -- to recommend potential candidates for a position.
The service model was born from the observation that Wanted’s founding team members themselves had come together via personal referrals.
In case of a successful hire, Wanted pays both the recommender and hired candidate a financial reward totaling between 100 million won ($895) to 500 million won. Client companies pay Wanted a 7 percent placement fee, only if a candidate is successfully hired through the platform.
“A big advantage of using Wanted is that companies get to interview candidates who another reputable person has ‘pre-certified’ as being a good fit for a particular position,” said the 39-year-old CEO.
Privacy is strictly guaranteed as well. The identity and opinions of the recommender are shown only to the hiring company. It differs from Western-oriented recruiting channels like LinkedIn, where employment and recommendation activities exist in a more public format, Lee pointed out.
Wanted began testing its business model by posting job openings on a Facebook Page. Three years in, the startup’s online and mobile recruiting platforms serve a clientele of around 2,500 companies ranging from small startups to conglomerates like Hyundai Motor and LG Electronics.
As of now, Wanted has handled 200,000 job application cases. Internal data showed that a candidate who applied through a personal referral was around eight times more likely to get hired compared to a regular applicant. For companies, using Wanted reduces hiring cost by 75 percent, Lee said.
Leveraging its experience on home turf, Wanted is now out to seek new growth overseas. The startup launched its services in Japan last year, and opened three new offices in Hong Kong, Singapore and Taipei this year.
Korea currently makes up around 90 percent of Wanted’s business, with the global side accounting for the remaining 10 percent. This year, the startup hopes to raise the global business portion to 30 percent, Lee said.
“We’re neither a head-hunting firm nor a traditional recruiting service provider, but a newcomer that has begun to create a dent in the recruiting market.” he said. “We want to continue to match suitable candidates with new jobs in a more effective manner.”
In efforts to further improve its matching efficiency, Wanted is employing artificial intelligence to build a real-time algorithm that informs applicants of positions with the highest likelihood of hiring success.
It analyzes key information about an applicant -- including his or her academic background, work experience, employment field, information provided by the recommender, previous hiring records and more -- and picks the top positions.
Seoul-based Wanted has raised around 11.7 billion won ($10.44 million) in Series A and Series B funding from venture capitals including KTB Network, Stonebridge Capital, Mirae Asset Venture Investment and the Industrial Bank of Korea.
By Sohn Ji-young (firstname.lastname@example.org