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An exciting milestone in the Shortlist journey…
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We’re thrilled to announce our recent seed investment, an exciting milestone that will allow us to continue unlocking professional potential across India and East Africa.

When we started the fundraise process, we sought to partner with investors who share our passion for smarter hiring and who represent the global diversity of our business and team. The group we assembled includes institutional and individual investors from India, Kenya, and the US, each who bring deep expertise from their respective markets. We believe this gives us an incredibly strong foundation on which to grow, with insight and networks in all the places we want to be.

We want to thank each of our investors — University Ventures, Samir Shah of Sattva Capital, Zephyr Acorn, Farm Fund at Impact Assets, Bodley Group, and a handful of individuals who wish to remain private. We are humbled by their faith in us and their excitement about Shortlist’s potential. We have already benefited so much from their tough questions, thoughtful suggestions, and helpful pushes throughout the process — and we’re eager to continue getting their ideas going forward.

So what lies ahead?

A lot! We’re going to use the money we raised to take our data-driven talent screening product and technology to the next level. We’ve learned so much working with nearly 100 employers in the last 18 months, and want to build these insights into a brilliantly intuitive screening platform that will help growing businesses hire even better. We have a rich product roadmap encompassing new and improved assessments, a model for easy assessment customization for each job, and more features for both employers and job-seekers. The end result will be even easier and more targeted hiring without the pain, and with the promise of higher quality, better-fit candidates and employees.

We’re also starting to harness the power of our data. Each candidate who applies on our platform (and several hundred thousand candidates have engaged so far!) shares great detail about her professional experience and aspirations, while the competency-based assessments we deliver allow us to gauge skill, knowledge and potential beyond a CV. We are starting to use this data to better predict who an employer will select to interview, who they’ll hire, and who will actually be great in the job. We’re also starting to look at where candidates might be happiest. These predictive loops will get stronger and stronger as we increase our “hiring reps” with particular roles and particular employers.

It’s an exciting time for our business, and once again we thank our investors for their faith and support. Now: back to work!

Be sure to check out our new website, www.shortlist.net, to learn more, and follow us on Twitter (@Shortlisthires) for hiring tips and other updates!

 

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4 Hiring challenges and opportunities facing Indian companies today
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At Shortlist, I’ve had the chance to get to know dozens of fast-growing companies in India spanning sector and stage — from 6-person startups to a multinational advisory firms — and learn what’s working for them, what’s not, and what hiring challenges they are facing on a day to day basis.

The sheer scale of India’s market is overwhelming. Not only is there a staggering one million people coming into the job market every month, but there is also a lot of turnover — according to LinkedIn, India has the highest percentage of the workforce that is “actively seeking a new job”. Clearly this is an extremely liquid, massive market — but one that also has many frustrating inefficiencies.

These are the top four challenges that I’ve seen companies face when it comes to hiring. If these issues go unaddressed, they could seriously impact economic growth in India. But with every challenge comes an opportunity for improvement, so I’ve also included some potential ways that we can shift our thinking and practices to address these challenges head on.

Challenge #1: Separating serious candidates from the pack

In April, with the new financial year, professional across India gear up for the bonus and increment. Many professionals apply for as many jobs as possible leading up to their review, hoping to get an offer with even a marginally higher salary that they can leverage during negotiations with their current employer. It’s not hard to take this “spray and pray” approach, given that applying to a job typically entails nothing more than uploading your CV to a job board post, hoping that some employer somewhere will see it.

This system is detrimental to hiring practices in India for two reasons. First, it makes it nearly impossible for hiring managers to discern which applicants are genuinely interested in the role, and which have no intention of accepting an offer. It ultimately slows down the entire hiring process and leads to a whole lot of frustration for growing companies.

It also changes the mindset of recruiters. With the assumption that a candidate may not even interested in the job, recruiters find it hard to invest the time in reviewing each application thoroughly, let alone give a thoughtful response to each applicant. This perpetuates a vicious cycle: Candidates are used to employers not responding, so they do the only rational thing and apply everywhere they possibly can.

The opportunity: To separate serious candidates from the pack (or in this case, stack — of CVs), use applications that force candidates to have skin in the game. If a candidate is genuinely interested, they will invest the time to write a cover letter or complete a case study. Assessments like this not only weed out the applicants who aren’t truly interested, but are also much better indicators of ability and fit than a CV alone.

Many top corporates have built their own application portals with a structured system of qualification rounds. Companies like Belong, Shortlist, and Entelo (in the US) are using social media and other data streams to identify and engage “passive” candidates. Those who engage back consistently and proactively, particularly through multiple rounds of assessments, are most likely to convert into employees.

Challenge #2: Making sense of candidate CVs

There is no standard CV in India. Instead, when reviewing CVs for one job you’ll see everything from a Western-style, one page, achievement-based resume to 20 to 30 pages of everything a candidate has ever done — including primary school achievements! Partly as a consequence of the high volumes of applicants for any opening, candidates will often stuff their CV with as many keywords and buzzwords as possible in hopes of being picked out of a database or catching the eye of a recruiter.

What’s more, many people don’t even write their own CV — there’s a whole business for this here in India! You can walk into any internet cafe in Bombay, give someone your qualifications and target sector and they’ll whip a CV for you. This practice makes it really hard for any differentiating details or personality to shine through on the page.

The opportunity: It’s no wonder that we think the CV is dead! Unfortunately, asking a workforce of 100 million professionals to reformat their CVs will be really tough. But what companies can do is stop relying on CVs in their own hiring processes. Instead, decide on the mandatory qualifications and core competencies that are absolutely necessary for success on the job, and use a standardized method to screen based on these factors.

Challenge #3: Knowing that candidates can do the job before you hire them

Most of the hiring happening in India is experience-based recruiting (“Does the candidate have at least two years’ experience in solar industry?”) rather than competency-based recruitment (“Can the candidate perform the tasks that the job entails?”). Sure, sometimes past experience indicates that you’d be great at a job, but you might be surprised to learn how often it doesn’t match up.

We saw this firsthand during a partnership with an international management consulting company. They were working with a number of recruiters, and as expected, some of the candidates that went through the Shortlist process were also brought to the client by other recruiters. Many of the candidates who had impressive experience were being advanced by the other recruiters, but when they took the Shortlist assessments they didn’t perform as well as others did. Ultimately, we were able to recommend a number of candidates who were hired — but on the basis of how they performed on our suite of assessments that measure demonstrated skill, not just where they went to school or worked.

The opportunity: Lazlo Bock, former Head of People Operation at Google, uses research to show that the single biggest predictor of an employee’s performance in the workplace is the “work sample.” This is to say — the best way to see if someone will be good at the job, is to see them actually do the job!

Sounds obvious, but it’s surprising how often an unstructured 30 minute “chat” with a candidate substitutes for a rigorous technical and capability assessment. Don’t you want your PR Manager to be able to write a good press release? Shouldn’t your Category Manager know how to create a demand forecast? Should you be waiting until the interview to find out?

Competency assessments including case studies or work simulations will increase the likelihood of hiring talent who will be high performers on the job. At my previous role as an Investment Officer at a financial technology venture fund of Accion International, we gave every single applicant a case study before the interview. If they couldn’t write an intelligent analysis comparing a handful of investment opportunities, there was no point in an interview. Today, companies like Mettl and Jombay are helping companies add more objective assessments to the hiring process to increase their hiring efficiency and success rate.

Challenge #4: Willingness to invest in talent and finding the right recruitment partners

This last challenge will be the hardest to tackle, but I think will result in the greatest change for Indian companies in the long run. Across the board, there is a mindset that talent is an afterthought, that hiring is a mere necessity of running a business, not the core of what makes its successful.

One way this manifests itself in outsourcing to any external recruiter who can fill an empty seat as quickly as possible. There are over 20,000 “mom and pop” recruitment agencies in Mumbai alone. The cut-throat commission-based model these agencies work on — one months’ salary if you successfully place someone — creates terrible incentives. Recruiters tend to send their clients the highest priced candidates for a role, not necessarily the ones who are the best fit for a role.

The opportunity: As with any fragmented market, technology and business model innovation will play a big role in consolidating the long-tail of sub-scale recruiters.

In the meantime, we hope that all companies will take a thoughtful approach to their hiring. Carefully consider the mix of processes you build in-house, the human resources you deploy, and the technology and trusted recruiters you bring on. Your in-house team shouldn’t be manually reviewing thousands of resumes — it’s 2017! Plan your hiring in advance — don’t start searching today for someone you needed yesterday. Think about how to incorporate assessments, work samples, and on-site interviews into your process.

And always remember — the lowest cost solution is often not the best choice. Shortlist estimates that closing a mid-level hire can take as many as 70 hours and cost as much as 2.5 lakhs (USD 3,700) in time and fees — and if you make a rushed or sub-optimal choice — you might find yourself having to start over.

We’ve had the privilege of working with dozens of clients who truly value talent. And you can see how it pays off — not just in their awesome team culture and employee retention rates, but also for their bottom line. I hope that more companies in India will turn these hiring challenges into opportunities and enjoy the same benefits for their growing businesses.

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The Full Stack Business Model for Talent?
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I am very excited about the current popularity of the term “full stack,” the zeitgeist of which was captured by John Herrman’s recent New York Times’s article on “the stack” as the flavor-of-the-moment tech metaphor for understanding everything. The author noted that the term refers to a set of software that works together to accomplish something, but has expanded to comfortably roll off the tongues of a diverse range of non-techies in such contexts as diet (a “supplement stack”), leadership (a “talent stack”), and public policy (the “India stack” — though I suppose that’s still kind of techie). I will admit, I’m a gleeful offender, though I mostly still use the term in boring, as-intended phrases like “full stack engineer” and in sentences like, “Gosh, we’re having a hard time finding awesome full stack engineers, do you know any in Hyderabad?” (Seriously; do you know any?)

All this full stack talk has made me think about the full stack business model — distinct from a full stack tech solution or full stack platform — which happens to be what we’re building at Shortlist. In this context, full stack connotes something akin to “vertically integrated,” owning the full (in this case) recruiting value chain from job description to source to shortlist. But it also means that we act as a company’s outsourced full tech stack, bringing the “best of” a robust talent tech stack to companies so that they don’t have to go figure it all out on their own.

How does this concept play out at Shortlist?

We work with companies to deeply understand the role (and which competencies will drive success), build a candidate pool through a diverse range of channels, and most importantly, narrow down large candidate pools from many to few using a mix of sophisticated software and thoughtful human touch.

This is a bit unusual for a tech company, and earns us the occasional accusation of being a “service company,” an insult in VC/tech parlance on par with egg-throwing in a French election (Marine Le Pen, you deserved it!). It’s true that most companies in the talent tech world are obsessed with being a purely tech solution that picks one thing (video interviews, gamified assessments, social media search) and slots neatly into a company’s HR tech stack, playing nicely with the jumble of HRIS, CRM, ATS, social search, and other stuff revving the engine of sophisticated Fortune 500 HR teams around the world. If you’re a startup selling to a big company with a sophisticated talent value chain, there’s a darn good case to be made to specialize and focus, optimize the heck out of your corner of heaven, integrate promiscuously, and wait for someone to buy you.

Unfortunately, I think this is a challenging strategy for a company building a tech solution for talent issues in emerging markets, because it’s not what the market wants or is ready for.

Across industries, I’ve seen many companies fail trying to tackle just one part of a value chain, and I’ve seen how the success stories realized they needed to figure out the entire thing to succeed. We saw this in microfinance, as the success stories in India of the early/mid 2000s grew by owning the entire product and distribution value chain for financial services. We saw this in household solar products, as the success stories in East Africa of the late 2000s/early 2010s grew by owning the complete manufacturing to packaging to sales/distribution value chain, many times extending into after-sales service as well. And we’re seeing it even today as e-commerce businesses figure out new ways of solving last mile delivery and payments in order to grow their businesses.

We think it’s a similar case when it comes to talent and recruiting, albeit with less distribution and more of a tech dimension. SMEs with 1,000 or fewer employees will rarely have “talent tech stacks,” and frankly will rarely have any HR-focused software capable of integrating with cutting edge tech tools.

And when it comes time for SMEs to hire and grow, they don’t want to go out hunting for software, doing demos, comparing features and prices, negotiating contracts, waiting out tech integrations, training employees on how to use it, weathering complaints about how “the old way was better,” and praying the new tech actually works and generates ROI to write home about. No way!

When SMEs need to hire and grow, they want people, not software: they want to talk to people who understand their needs and they want to be given candidates who are great, ready to be interviewed, and ready to get to work. It’s not that these companies are opposed to software and tech — not at all! — they’d just rather someone else figure that out, so they can get back to their core business.

At Shortlist, we figure that out. We build technology that makes the human touch more efficient and effective, while not expecting it to replace humans altogether (yet). And we build for the full value chain, knowing most SMEs in particular want partners to solve their whole problem, not just part of it.

At least that’s what we always wished existed as we’ve built companies as founders, managers and investors in India and Kenya over the years.

So here’s to the full stack business model! (And here’s to full stack engineers, too, who should come talk to us if they’re in Hyderabad and ready to build something awesome.)

 

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