A matchmaker for the job market

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Headline: A matchmaker for the job marketByline: NICKY BLACKBURNEdition; DailySection: EconomicsPage: 12

Thursday, July 17, 2003 -- When Gal Almog's wife, a human resources manager, came home complaining that she spent a good 80 percent of her time reading resumes, most of which turned out to be irrelevant, Almog decided to try to find a hi-tech alternative. After examining the market, he discovered that the Internet made it possible to develop an exciting solution that he thought might just revolutionize the human resources sector.

Three years later, Almog has turned his idea into a new on-line job-match recruitment service. His company, a small but promising start-up called Redmatch, has already managed to amass a number of prominent customers around the world, and looks set to become profitable by as early as next January.

Human resources is one of the biggest markets in the world. In the US alone, some $300 billion is spent on the sector annually. Despite this, the problem of finding the right job, or the right employee for a job, is becoming increasingly problematic.

In the past, it was done through advertisements, primarily in newspapers. In recent years, however, the Internet has become an increasingly popular tool to advertise and find a job. Huge recruitment Web sites have been set up, including Hotjobs.com, Career Builder, and Monster.com, the largest on-line recruitment site.

These Web sites offer candidates a much larger choice of jobs than traditional newspapers, and offer employers a larger range of potential applicants. However, while they have many benefits, they also have drawbacks. Candidates must wade through hundreds or even thousands of jobs looking for the right one, while employers are often swamped with so many resumes that it takes them days to get through the pile. Many of the applicants are often not even qualified for the job.

"Instead of adding value, the Internet has created more mess than there was before," according to Almog, CEO of Rosh Ha'ayin-based Redmatch. "The Internet has made information so widely accessible that hundreds of people reply to advertisements for jobs. Monster.com receives 50 CVs an hour for every job advertised.

"By the time your resume lands on the desk of the recruitment officer it's probably too late. As an applicant you don't know if you are applying in the first hour, the second, or the tenth. Often the right resume will be lying there unnoticed beneath a pile of unqualified applicants. The whole process is completely inefficient."

Rather than target these "monster sites," Almog, the founder of the California-based network storage company StoreLogic, decided to target the newspaper industry, which is losing in the battle for job advertisements.

"Newspapers have lost 50% of their advertising business in the last three years," Almog says. "The trend is towards on-line advertising, which is cheaper and provides more resumes. Today newspapers are left with advertisements for high-level jobs - people who don't use the Internet to look for work, and for low-level jobs - people who don't use the Net at all."

The figures are certainly not good. The job advertising market is estimated at about $18 million annually. At present, $14m. is spent on newspaper advertising, and the rest on-line. By 2007, however, experts estimate that 50% of all employment advertising will be on-line.

As an example, Almog calls up Monster.com and types in that he is looking for a sales position in New York City. The site returns with 2,596 sales jobs. Almog then turns to The New York Times and inputs the same information. The newspaper, one of the world's most prominent, returns with just 238 job advertisements.

"That's just 10% of what Monster.com offered, and it's right in the newspaper's backyard," says Almog.

Almog believes Redmatch will help rectify these problems. He jokingly calls the product a job-dating service, similar in concept to a traditional dating service.

In fact, he has a point. The Redmatch service is not a search engine, it's a matchmaker. The system selects and matches a candidate with a job. It has to be a reciprocal match for the information to be sent on.

When a job-seeker enters the Redmatch site, he fills in all the details of his education, employment history, and skills. He also adds details of what kind of job he is looking for, the number of hours, desired salary, and the location.

These details are only required on the first visit and can be adapted whenever necessary. They are also anonymous, and just to make sure, users can block certain companies, ensuring that current employers don't discover that they are hunting for a new job.

Once the details are completed you click continue and "boom," says Almog, "You get all your job matches." The jobs are listed in order of matching potential, and users can send resumes with one click. If the employer is interested in the candidate, he marks their details in red - a "redmatch" - and contacts them directly through a messaging system built into the program.

"This is a candidate-centric solution," says Almog. "It allows people to manage their careers through the newspaper. People won't go to The New York Times for a job when they can find more on Monster.com. They will, however, go there if they know they can find more qualified jobs and go through an easier process to get them."

Almog believes the system saves employers 60% of the time they currently spend on recruitment. Details of candidates are sent to the human resources officer via e- mail. He says the system is easy to use, and employers can even see what candidates are already available before they advertise, allowing them to evaluate the value of the system before they spend a cent.

The program also allows the company to design and manage its own recruiting process on-line.

"It's a cradle-to-grave system, offering the company the chance to find candidates, process them, and manage the interviewing process," says Almog. "People become loyal to this type of service, and it allows a newspaper to leverage its strength and offer a better solution than other on-line recruiters."

Redmatch sells the system to newspapers as a service. It powers the site and gives the newspaper the tools to manage and run it. New features and enhancements are updated automatically. Each deal is usually worth hundreds of thousands of dollars, depending on the size of the newspaper and the number of advertisements.

Redmatch has also included an attractive feature called the Salary Survey, that lets employees find out how much they are worth on the market, and how much more they could expect to receive if they added additional skills or qualifications. "This has proved to be a powerful way to get users into the system," Almog says.

The algorithm behind the salary survey was developed by Tel Aviv University's Prof. Camil Fuchs, the former head of the Israel Statistics Society.

Two weeks ago, the company launched a new Web site in Sweden. In just 10 days, 10,000 people registered for the salary survey. Even in Israel, which has a population of just over 6 million, 3,000 people register for the salary survey every day. The survey is also available in Spain, the US, and the UK.

Almog founded Redmatch in 2000 with Alan Schonberg, founder and former chairman of Management Recruiters, an $800m. business and one of the world's largest recruitment companies with 1,200 branches, and Daniel Avidor, whose family owns Aurora, a Spanish-language publishing house in Israel.

Initial funding of an undisclosed sum came from private investors. Last year, the company raised a further sum from DZ Israel Associates, an Israeli venture capital firm. The company is now in the middle of another round of fund-raising worth an estimated $3m.-$5m. Part of this money - approximately $1m. - will come from private investors, the rest from international venture capital funds, Almog says, adding that he expects the round to close in about four months.

Redmatch plans to use the money to double its staff from 20 to 40 by the end of 2004. It also plans to enlarge its US office in Cleveland, Ohio, and turn it into company headquarters, and to open a European office.

Redmatch won its first deal with Yediot Aharonot in January 2002, soon after it completed development of the system. Yediot controls some 70% of the classified advertising business in Israel. A year later, Anuntis, the largest publisher in Spain, also purchased the service. In June, Redmatch signed an agreement with Swedish company, Metro Newspaper Group, one of the largest newspaper chains in the world, with 30 newspapers in 14 countries.

Redmatch is also set to launch a site for a newspaper group in Wisconsin in the US. The chain, which is Redmatch's first US customer, has 27 newspapers. Other deals are also on the horizon, says Avidor, the company's president and CFO.

"We are working with a fairly defined market," says Almog. "Newspapers and job sites are well-known." At present the company is focusing mostly on medium-sized newspapers.

The concept of job matching, while new, is rapidly becoming mainstream. As a result, Redmatch is aware that it must work fast if it is to stay ahead. Almog says the company is one or two years ahead of the market, but other companies - including Monster.com - are moving into this sector and looking for new matching solutions.

Almog says the company has two main competitors, one in Europe that has a matching solution, and one in the US that has simple job search functionality.

"Our competitors don't really provide anything different from conventional search and apply," Almog says. "It took us millions of dollars and many years of experience in a real-life market situation to perfect our solution. We are ahead of the market and our value proposition is strong.

"We are offering technology that can make newspapers more money, and since they are not in a very good economic position right now they are open to adopting our technology."

"We are the first company to target newspapers," adds Avidor. "We came to the newspapers with an understanding of their problems."

It is mostly in an attempt to stay ahead of the crowd that the company decided to raise more money, even though profitability is around the corner.

"We have a window of opportunity," says Avidor. "We need to grow quickly, otherwise we might lose opportunities that exist today. We want to see our solution as the desk top solution for employer and candidate. If we don't run fast enough we will be No. 2, and it's very difficult in this business to come in second. We need to be the first and the best."

If Redmatch does manage to achieve the No. 1 position, it will do so in a large market. Almog estimates the value of the market to be worth some $800m., and hopes that Redmatch will capture between 10%-50% of it.

It's an ambitious aim, but according to Avidor, interest in the company is high. "Hundreds of thousands of users are already using our system," he says.

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