Seven years ago I hired a technical growth marketer in San Francisco. It was 2014, tech was hotter than heat, and Talent was expensive. The salary was $140,000/year, the marketer was 24 years old, and the headhunter took a massive $50,000 bounty, refundable if the hire lasted less than four months.
Seven months later he left to start his own company.
$50,000 down the drain, a key employee gone, and a new hiring process to be kicked off. That was the moment I realized that existing staffing models were broken.
But I didn’t know what I didn’t know.
Or, what would work better.
Christopher Stanton is a Marvin Bower Associate Professor at Harvard Business School. He’s been studying labor, staffing, entrepreneurship, and the future of work for a decade. With a number of colleagues, Stanton recently studied the Braintrust model, compared it to existing short and long-term recruiting and staffing solutions, and wrote a paper about what he learned. I recently had the opportunity to interview Stanton about his findings.
Apparently he likes what he sees:
“My view is that Braintrust is really a player that is going to be a more efficient staffing solution that provides transparency to both sides of the market.”
Stanton originally started thinking about staffing, recruiting, and alternate modes of work over a decade ago. A classmate in graduate school planned to hire developers from oDesk (now Upwork) to get a staffless startup off the ground.
oDesk was revolutionary in its day, but Stanton argues that this model for gig intellectual labor hasn’t really moved the needle. Neither have the major players in the longer-term bigger contract space: massive staffing companies like ManpowerGroup or Adecco which employ thousands, deploy hundreds of thousands, and make billions.
While the gig economy has exploded in some transportation or delivery verticals over the past ten years, marketplaces for smart, educated, enterprise-level Talent have largely remained static or even atrophied.
“That's been a puzzle to me and I've spent a lot of time trying to figure out why we haven't seen more of the ... gig or contract or alternative work types of models in enterprise settings,” Stanton says. “We've really seen this model take off and completely disrupt incumbents in the taxi and delivery space through the Ubers and Lyfts and Grabs of the world.”
That stagnation has an impact. Nestle, now a Braintrust client, needed to hire six technical workers for an innovation project. The cost via traditional hiring processes? $310,000 on agency fees, or a staggering $52k per hire. For key positions, it can be even higher. Plus, the business-as-usual hiring process would have taken them 4 months, Stanton says.
The even bigger problem?
Time is money, and more importantly, time is competitive advantage. Waiting four months to kick off a mission-critical project that you lack the internal capacity or expertise for is extremely expensive in terms of market positioning beating competitors to launch.
One set of reasons why new models haven’t really emerged, Stanton says, is a jumble of compliance and HR challenges: building a system that fits how enterprise thinks and works. Simply put, it’s not easy. The other set of reasons is core to the process of Talent selection: most existing platforms inundate hiring managers with hundreds of applications of varying quality and dubious relevance to the open position.
Essentially, they’re offloading the process of matching need-to-solution to the very people who are paying for exactly that service. Buried in that mountain of hundreds of resumes might be the gold nuggets that hiring managers seek … but finding them is challenging at best and impossible at worst.
And that’s led to below-par experiences with staffing platforms.
“The seamless type of transaction that you expect when you summon an Uber or ... DoorDash is not exactly something that we've seen in the higher-skilled, more differentiated contractor gig space to this point,” Stanton says.
But there’s been massive change in 2020 and 2021.
Part of it has been enabled by the emergence of Braintrust, which is a decentralized community where Talent meets opportunity. Just one example Stanton cites is an enterprise that needed help with a project. In one day, Braintrust matched them with five capable people.
12 hours later, two of them were hired.
“I think there are two core pieces with the Braintrust model that look different,” Stanton says.
“The first is that everyone who is a party to the transaction understands what they're getting and what the other party is getting. The other piece of this is I think the incentive system ultimately will allow better matches.”
100 resumes down to five, in other words.
Aligning incentives helps too.
Crucially, the Braintrust system doesn’t take a cut of freelancer pay. The major contracting agencies? They typically take 30-40% of a freelancer’s pay, and that’s a smaller fraction than the big consulting houses, which often charge their clients multiples of consultants’ actual salaries. Neither of those models is engineered to make top Talent feel good about what they’re doing, and the result is that employers and clients don’t get the best results either.
The other driver of massive change in 2020 and 2021?
The ongoing pandemic.
COVID-19 made remote work acceptable. And remote work puts contractors and employees on a much more level playing field. That massively accelerated Braintrust adoption. Most of the labor market statistics suggest that the pandemic drove at least a tripling or quadrupling of the rates of remote work relative, Stanton says, and Braintrust started growing at 60% month over month.
Add it all up, and it’s clear that something big is happening here.
“Time to hire has just fallen dramatically,” Stanton says, referring to the Braintrust model.
“The second theme is that the number of people that they're having to evaluate before pulling the trigger to bring someone in has fallen dramatically.”
But it’s not just about cheaper.
And it’s not just about faster.
Primarily, it’s about better.
“The other aspect that we've uncovered from interviews is that both time to hire and the ability to find people has improved,” Stanton told me. “But it also seems like on-the-job processes and collaboration have improved, and the folks that we interviewed tended to attribute that to the fact that they have more insight into what people are doing and they're getting better matches. And this is despite the fact that all of this is happening remotely, and many of these clients were not remote first prior to the pandemic.”
Evidence so far indicates that while the pandemic may pass, the changes it brought to work will permanently impact how we bring Talent to bear on projects.
And that, Stanton says, might ultimately impact how we construct companies themselves. Which, if true, means the decentralization Braintrust brings to Talent marketplaces might even come, to some degree, to the American corporation.