Hiring is harder than ever for startups. But Madrid-based recruitment startup Circular has a new answer to the tech talent shortage.
Its platform allows internal recruiters at tech companies to share candidates with each other. The idea is that recruiters who haven’t been able to place a strong candidate in their company can recommend them to other hiring managers.
Candidates who don’t get the job get ‘a second chance to be hired by another company’ while helping to ‘maintain the flow of talent in the tech industry’, founders Pedro say Torrecillas and Teo Ruiz.
“In our previous jobs in a recruitment market, we noticed that recruiters started dividing candidates into small groups or recommending candidates to their ex-companies. We believed this behavior had the power to transform the industry if we could make it work at scale,” says Torrecillas.
Circular, which was founded in 2019, today announced that it has raised $10 million from LocalGlobe, Point Nine and Kibo Ventures. It also announced its expansion into London – where it already has a roster of startups and companies on board such as C-stage fintech FORM3 series, another startup backed by LocalGlobe, Echobox, and global news publisher Dow Jones.
The founders believe that Circular is the only company in Europe to offer a large-scale talent sharing platform. Some companies such as Berlin-based Sompani offer talent sharing, but only with private talent pools. Sompani targets VCs and its talent platform allows VC portfolio companies to share candidates.
Currently, Circular has more than 5,500 active internal recruiters on its platform and 19,000 candidates.
Sloppy seconds?
Torrecillas says Circular is inspired by Airbnb: both rely on the community to gauge interactions to build trust.
But just like Airbnb customers have complained about the quality of reception, Will Circular end up with substandard recruiters and candidates alongside superstars?
Torrecillas says recruiters must have their profile approved by Circular once they sign up, or be invited by a recruiter already in the community. Circular’s “reputation system” rates recruiters based on how many applicants they share who are successfully hired by another company, much like guests can rate a host on Airbnb.
Currently, 50% of recruiters who register on the platform come from “word of mouth” and “recruiters recommending recruiters”.
“It is very difficult to break into the industry if you are from a minority or a junior candidate with less experience”
But what about the quality of the candidates? How will Circular ensure that those referred through its platform are always the best candidates?
“Quality is a matter of different metrics for different companies,” says Ruiz. “The candidate [that didn’t get hired the first time] may not have been good for one business, but that doesn’t mean they can’t be good for another business.
“In addition, you have to take diversity into account. It is very difficult to break into the industry if you are from a minority background or if you are a junior candidate with less experience. Junior candidates in particular struggle to get hired because companies “just don’t have the time” to train people, he adds.
The circular does not give recruiters a diversity quota for the hires they make.
Monetization?
Circular hasn’t made any money yet. It does not pay recruiters on its platform or offer them a commission like traditional agencies, nor does it charge candidates to have a profile.
It is more focused on increasing its recruiter network and “growing rapidly” in its current markets of Madrid and London rather than immediately monetizing the platform.
Ruiz adds that sourcing candidates typically costs companies thousands of dollars a month because it is “labour-intensive work” for recruiters themselves, making Circular’s platform such a win-win.
Miriam Partington is Sifted’s Germany correspondent. It also covers the future of work, co-authors Sifted Startup Life Newsletterand tweets from @mparts_
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