why I believe technology will reshape the staffing industry

After I graduated Vanderbilt University in 2005 after 4 years of football, my first post-college job was with the San Diego Chargers as a rookie fullback. Shortly after, my 18-year football career came to an end, and I found myself sitting in a cube at a staffing agency as a rookie recruiter. I had no clue what staffing was or how it worked, I just needed a job.

Fast forward to 2010 when I launched my own staffing firm. In 2014 we recapitalized the company with a NYC Private Equity firm, and I resigned my position as CEO and agreed to sit on the bench for a while. Timing was good and the business was in a great place and growing rapidly. I was tired of the industry after a 9-year sprint and decided it was time to try my hand at something different. I tried a few things, including launching a construction business with my father. No matter what I did to keep busy during that period of time, I couldn’t escape thinking about the industry that had been so good to me, and how I could make it better.

Relode (Research. Locate. Deliver.) was an idea that that came to me after I made a $140k placement fee within my first few months on the job as a rookie recruiter in 2005. I reached out to my college alumni network for referrals and offered a referral reward. Within hours, someone in my network referred a qualified candidate who was hired by our client. My agency made the bulk of the money, and the Vandy alumni received the least from my pocket ($1,000). I couldn’t help but realize how broken the system was. How could an agency charge $140,000 (and a rookie recruiter make $14,000) for only a few hours of work? There had to be a better way to get great candidates to customers without the agency overhead, sales commissions, recruiter commissions, company cars, and the massive partner salaries. I made a vow to use my experiences to find a way to give back to the employers, all of whom are desperately seeking a new way, savings, and value from their staffing partners.

Staffing Industry Analyst forecast that in 2019 temporary staffing will reach $132B and $21B in direct hire/retained search fees. Industry veterans are rolling in the profits and have no urgency to change their models. Why risk a good thing and change when you are printing money? Private equity groups and shareholders demand that firms create more and more EBITDA and just don’t have the appetite to innovate.

Nearly every other industry has been or will be disrupted by new models and technology. Travel agents have been replaced by online platforms like Expedia and TripAdvisor. Big box retail is scurrying to innovate as Amazon eats into every part of its business. No one would have predicted the end of Sears or Blockbuster. Realtors are being upended by new models like Redfin, Zillow, and Opendoor. Yellow cabs and taxi drivers have been displaced by ridesharing platforms like Uber and Lyft. AirBNB which launched its platform in 2007 is now valued at nearly $25B, doesn’t own a single property and has created more enterprise value than Marriot which launched in 1927 and owns more than 6,000 properties. Get the point?

We certainly haven’t figured it all out here at Relode. We’ve struggled at times, pivoted many times and invested heavily in technology. We fail often, but we learn from our mistakes and get better every day. The number one question I used to get as a traditional recruiter was, “what makes you different than the other 100 sales reps calling me”? These days I love getting that question. My answer typically is, “instead of filling buildings full of high cost sales reps and recruiters and charge you a fortune, we’ve built an online platform full of recruiters and a crowd of everyday people who send thousands of referrals to us each month without the overhead and costs traditional firms have. “

Will it work? Only time will tell. But we’ve filled hundreds of difficult positions for our clients, created millions of dollars in savings, and created hundreds of virtual jobs for talented folks who would otherwise be stuck recruiting in a cube. We’ve signed up nearly 40,000 peer-referring agents on our platform and counting. We’re nowhere near where we want to be, but we’re on a mission to reshape staffing. We are nipping at the heels of an industry which isn’t interested in changing. When it happens, it will happen very quickly. Relode!

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