To charge or not to charge the candidate a “security deposit” for hiring and recruitment services?
When I left a fairly established and growing career in development finance, to found my own company — Magic Billion–I knew we had a strong product and a large market (both B2B and B2C).But the reality of the business only hit me when I got into the day to day. I am starting a short series where I will address a few issues over the course of the next few weeks — this I hope will be relevant for entrepreneurs (industry agnostic) and those in the hiring and recruitment services (including in manufacturing recruitment, IT, hospitality etc.).
This week the issue I wanted to talk about is charging a minimal security deposit to the candidate when they evince interestin our overseas job postings. Now, given the rampant scams in this sector (of hiring and recruitment services) in India (and perhaps in other countries) — one thing was clear for us starting out. We wanted to get all our revenues from our B2B clients, i.e. the employers. The rationale is obvious. If the employer benefits economically from having the candidate of their choice adding to their company’s top line, they should pay for that service. Accordingly, for the first cohort we sent abroad we didn’t charge anything to the candidates. Sadly, we landed in thick soup.
Without any “skin in the game” for the candidate, when interviews got scheduled with the employer (and mind you, this was our first client, so there was a lot riding on this relationship), 50% of the candidates didn’t show up. This was a HUGE credibility loss for us as an organisation but more importantly for Indian talent as a group. Because of this callous attitude shown by some candidates towards the process, multiple stakeholders suffer: us as the provider of the talent, other candidates and the B2B client i.e. the business looking to hire.
The impact of this highly unprofessional attitude of some Indian candidates, towards sought-after world-class jobs, has also resulted in hiring and recruitment services moving from talent surplus countries like India to the Philippines, Thailand and other East Asian countries. A tenth of the population of Philippines works in overseas jobs today. As compared to this, India has only about 20 million people abroad, which is 0.15% of our total population.
We tried this approach (of not taking any security deposits) a couple of more times to see if the pattern repeated itself, and unfortunately it did. No amount of undertakings, assurances or tele-confirmations help. To save our company from further embarrassment, and to save the credibility of Indian talent in global markets, we now charge a minimal INR 10–50,000 (depending on the job role) to ensure that not only serious candidates apply for jobs but they actually show up for interviews! Also, we realised that serious candidates have no issue with paying the deposit (they are convinced we are genuine because of our credentials, which are out in public domain). Of course, if a candidate does not clear an interview (despite showing up), this money is returned in full to the candidates — as we did for our J1 candidates this summer — and will continue to do so for all our programs. Ethics and values are at the centre of what we do at Magic Billion.
Magic Billion Founder Series by Aditi Banerjee
