High-tech Companies’ Secret Weapon in the War to Recruit Employees: Israeli Startups

Finding new employees involves enormous expense just to fill a single position, so startups have moved in to fill the vacuum.

Young employees working at a high-tech company.
Bloomberg

Recruiting new talented and high-level employees is the main challenge facing the managements of startups and development centers of large and multinational companies in Israel. The shortage of experienced workers, along with aggressive fund-raising by Israeli startups over the past year, which filled their coffers with money meant to expand their businesses, has exacerbated the situation and prompted their human resource managers to think creatively.

Organizations have used social networks to reach candidates directly and headhunt relevant staff from their competitors. But the response rate from these “passive” prospective employees, who are approached by recruiters through such sites as LinkedIn, is rather low, usually just few percent.

“It’s not that employees are not interested in receiving job offers,” says Liran Kotzer, the CEO of startup Woo.io. “Research from around the world shows that 80% of employees would be happy to consider new career opportunities, and they even have specific aspirations, such as relocation or a promotion. But because the information on these aspirations does not exist, recruiters are forced to aim in all directions and approach many candidates who are not relevant.

“Today, only a small number of employees – 21% – are actively looking for work when they are unemployed or suffering in their workplace. The reason is that no one likes to be labeled a job-seeker, and they cannot always do it openly while employed at another company. Also, some of us don’t even know what the possibilities available to us are on the outside and what the demand is for workers like us.”

The Woo.io platform tries to avoid these pitfalls and bring the passive job-seekers and recruiters desperate for high-quality talent together by aligning the two sides’ expectations. Here is how it works: Users of the platform define what would be an attractive offer for themselves, for example a higher salary, promotion or work with innovative technologies. Their professional profile is presented to companies that are recruiting, and can use the system anonymously. The candidates’ name and details are not disclosed, nor are the names of the companies where they have worked, although the employers are described in general terms regarding their area of operations and size. When prospective employees receive an offer, they decide for themselves whether to reveal their identities to the companies making the offer, or to turn it down.

Kotzer and his partner, Ami Dudu, are veterans of the Israel Defense Forces’ central computer unit and know about finding employees. In 2008, they founded the manpower recruiting company SeeV, which was sold last year to Matrix. In 2009, they founded DoNanza, a search engine for jobs and aggregator for the freelancer community, which was closed a year ago and its assets bought by the Australian website Freelancer.com.

Woo.io serves as a gatekeeper for job candidates and ensures that they only receive offers that interest them, leading to a high response rate from the candidates – 75%, says Kotzer.

This is just one solution out of many from startups established in recent years to improve the job matching process and make it more efficient for high-tech firms. Another firm, Workey, compares the professional resumes of its users to those of millions of similar workers in a wide range of high-tech jobs, to develop a recommendation regarding their most appropriate next job. At the same time, Workey surveys the candidate’s network of contacts on social networks and tries to locate acquaintances in a company that is recruiting. Similar to Woo.io, recruiters see only an anonymous professional profile, and the prospective employee can then decide to whether to make contact or not.

“The placement world is based on keywords in resumes,” says Danny Shtainberg, vice president of marketing and business development at Workey. “This is a very narrow and subjective perspective that rules out many candidates and misses out on high-quality candidates.”

Workey’s system looks at all the employees of the companies it works with and tries to understand the DNA that characterizes the company.

Recruiting is one of the fastest growing markets for big data platforms and evaluation systems. Various platforms, such as PeopleAnswers, analyze hundreds of personal parameters of candidates and compare them to those of employees in the company that is recruiting to help them predict who is most appropriate to hire for the specific company’s culture.

Other platforms, such as Knack, create video games designed by brain scientists, psychologists and data researchers to predict the professional potential of candidates and to serve as a go-between.

Tens of thousands of shekels to fill a job

Avishag Elbaz, head of human resources at the Israeli IT giant Matrix, has 20 years of experience in recruiting technology workers. “It was never easy to find technology people,” she says, “but in recent years it has been even more challenging, both because of the accelerated pace of growth in the industry and the short time intervals between the entrance of new technologies, which creates a gap between what the market is training for and what it demands.”

As a large company that employs 7,000 people, Matrix’s recruiting staff is a few dozen people. Their job is to locate the most appropriate prospective employees – who will last and develop inside the company. Matrix has hundreds of open jobs waiting to be filled this year, in areas including big data and cyber. The company invests major resources in recruiting, and the cost of hiring a single employee can come to tens of thousands of shekels, so it is no surprise that the company is interested in trying out the new tools to support and improve the process.

“Talent acquisition” in the United States is a $120-billion expense annually, says research and consulting firm Bersin by Deloitte, and the software solutions market for supporting recruitment is worth $1.5 billion annually in the U.S.

The replacement and addition of new technologies changes the routine of the recruitment team’s work. How common is this at Matrix?

Elbaz: “Very common. In the recruitment department we have a unit whose job is to find and examine such new tools. In the last 15 years we have replaced three computer systems to manage recruitment, and integrated quite a few technological tools that support the process. Matrix was among the first users of Tomigo, which helps in recruiting through the ‘friends bring friends’ method, and over 30% of the hiring is done this way. We use the Webcand platform for video job interviews, and now we are in the midst of a process with a startup called Mypath that focuses on a system for employee training and offers a solution for professional testing for candidates.”

Lots of job offers for every candidate

The growth in demand for high-tech employees is great news for engineers and programmers and has caused salaries to rise. Their bargaining power has improved and they can choose between the best paying and most interesting jobs for themselves.

“The job market has become an employees’ market,” says Galia Bachar, vice president of human resources at the online advertising agency Matomy Media. “The candidates come for interviews with a number of offers in hand, and the competition for experienced [employees] is enormous.”

For employers, the hiring process has raised new challenges, such as the need to work more efficiently and give a faster response to retain the most desirable candidates. But because the hiring process today is a multi-factor process, it no longer belongs just to the human resources department, says Bachar. “The professional managers play an important part in the selection process and in choosing the most appropriate candidate for the team.”

This is exactly what motivated the founders of the startup Comeet, which is intended to provide transparency between the various groups involved in the hiring process within the company. “We found a lack of congruity between the actual processes of hiring and the technologies that support them,” says Omer Tadjer, the CEO of Comeet.

“The hiring process today is very cooperative, but most of the existing systems provide service mostly to human-resources staff, so that much of the process takes place in the hallway, between the recruiters and the team or department managers. The information is not retained and not collected by the company for future use, and a lot of mistakes are made because of ineffective tracking.”

Comeet is an internal application that includes profile pages for candidates that are linked to available positions, collating all the relevant information on the candidate. Everyone involved in the hiring process is linked to the appropriate pages and can view and add information at any time.

Matomy began using the Comeet system at the beginning of this year, and Bachar says she can now follow up easily and efficiently on the hiring processes being conducted all over the globe. “We used to rely on emails and periodic status reports. With the Comeet system, we no longer have this obstacle,” she says.

The interview took too long, out of politeness

The Israeli startup Webcand seeks to shorten the hiring process using video interviews conducted at the candidate’s home – without the need for an interviewer from the company. Webcand’s system allows recruiters to open a page of available jobs, enter relevant questions both about character and professional issues, and distribute it to job-seekers. The candidates receive a link to the site and a cellular app that allows them to take a video of themselves answering the questions.

In order to simulate a traditional job interview as much as possible, the candidates cannot stop the filming in the middle, and they cannot see the questions in advance. They are asked to answer all the questions in order, and when the interview is over, it is sent to the prospective employer.

The hiring manager can watch the entire interview or skip between questions, show it or part of it to others in the company and rate the candidate. Acceptance or rejection letters are sent out through the system. Today, after more than 40,000 interviews, Webcand hopes to make use of the enormous amount of information it has collected and draw conclusions to provide feedback to the candidates at the end of the filming.

Some people will say the video interview makes the process less personal, less respectful, but Adi Miller, the CEO of Webcand, responds: “That’s a mistake. The hiring process is long, exhausting and filled with a waste of resources for both sides. The interviews are held during limited hours. They are not always convenient for the candidate, who is also required to spend on travel. Face-to-face interviews are longer, and they create a slow process that is bad for both parties.”

The people hiring can conduct at most three to five interviews a day, but video interviews can produce many more, he says. In addition, the interviewer sometimes realizes within a few minutes that the person is inappropriate, yet the interview continues because of social norms and politeness. Many candidates who get beyond the stage of the human resources department are ruled out once they meet the professionals whom they would work for because of inadequate technical qualifications, and this can be avoided too, says Miller.