Recruitment agency Luminoso is aiming to shake up the recruitment category with an Afterpay-like offering that its founder believes will tackle churn in ad agencies.
Under the new model, Luminoso will no longer bill clients at the start of hire and will instead invoice recruitment fees over the course of the client's first year.
Luminoso managing director Craig Letham, who previously led recruiting at Y&R and M&C Saatchi, says the current business model encourages churn and dodgy practices.
“The candidate experience with recruiters is often talking you into a job that you're not interested in. I've had people come to me and say they took a job because their recruiter said 'take this for six months until I find you something better',” Letham says.
"There are many great recruiters who do a wonderful job, but there are many who don't. The current model promotes that behaviour.”
Luminoso strives to prevent industry churn by evolving the recruitment experience from a “risky, costly exercise” to a partnership where clients and candidates can succeed over the long term.
“At Luminoso, we work had to ensure we match the right talent to the right employer to last the test of time, and we’re happy to prove it by the way we charge for our services. If a candidate doesn’t stay, our clients don’t pay,” Letham says.
As a former client, Letham is concerned about the current industry standard and lack of confidence many businesses have in recruitment agencies.
“If you look at the creative industry, tenure is getting worse over time. We do a lot of work with corporates who have an internal agency structure. Those people can be really fluid and come with a great portfolio but not have the skills to back it up,” Letham says.
“If a traditional recruitment agency bills $100,000, they get a massive bonus, so they're going to do everything you can to get that bonus, even at the expense of the client.
“We're going to do $100,000 worth of work over a 12 month period, so we need to make sure it's going to be quality work and a good partnership."
To best accomplish hiring security for businesses, Luminoso plans to make its recruitment more personal by putting efforts into understanding clients' backgrounds and interests.
“What we do different is the really basic things like meeting people face-to-face. I know there are recruiters who don't. When I worked in house at M&C the first thing I asked people when they came in I asked if they had met the recruiter and only about half of them said yes. That is shocking.”
Luminoso follows up with clients to ensure the candidate settles into their new position with performance coaching by a panel of external, trained coaches.
“We are just hitting our strides, we're four years in and we have opportunity everywhere. There are peak and trough times in recruitment but by and large, we have more opportunities to work with clients that we can,” Letham says.
Though the business model will not see substantial revenue in its first year, Letham believes it will pay off long term to benefit both the agency and the client.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.