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Startup uses artificial intelligence to connect job hunters, recruiters
By Andy Rosen
Globe Staff

If you’ve ever recommended a successful candidate for a job, you might have gotten a sense for how your good word saved time and money for the company that made the hire.

Now, a Boston startup is building a system that it hopes will help both professional recruiters and people looking to cash in on their professional networks by matching employers with prospective workers.

The company, Scout Exchange, believes the idea is big enough to revolutionize a global recruiting market it pegs at $500 billion. And to show how serious he is about it, local entrepreneur John Chuang is putting a big chunk of his personal fortune behind the endeavor.

Chuang, who conceived the idea for Scout Exchange in 2012, is the longtime chief executive of the marketing talent agency Aquent. Together with his Aquent cofounders, ­Chuang is putting $100 million into Scout Exchange through their investment firm TRI Ventures.

Scout Exchange says it uses artificial intelligence software to connect employers to recruiters who have expertise in hiring people in a particular field. For instance, if a client needs to hire a machinist in Iowa, the system can call up a recruiter with a network in that geographic and professional area.

“We have tons and tons of companies with employment hiring needs, and we have tons and tons of recruiters with the ability to solve that problem,’’ Chuang said. “The vision here is to build a platform between.’’

The venture firm was also an early investor in Angie’s List, the services review site of which Chuang was formerly chairman.

For now, Scout Exchange is focusing on working with professional recruiters, and the company believes it has hit the sweet spot in the talent search business.

Scout Exchange, unlike some of its competitors, believes the process is not ready for automation. That’s because resumes — already becoming less common in the age of LinkedIn —are not standardized, and they are mostly self-serving, said Ken Lazarus, whom Chuang hired as Scout Exchange’s chief executive.

On top of that, job descriptions often are poorly written. He said the data available through these tools are so bad that the company’s computers can’t reliably connect workers to jobs they would actually be good at.

That’s why Scout Exchange wants to keep the recruiter at the center of the process, instead of trying to connect hiring managers directly with candidates.

Scout Exchange launched its product three years ago and is doing work for big companies, including ExxonMobil, Bank of America, and Kaiser Permanente.

The company said employers have used the platform to offer $300 million in placement fees, the money that clients are willing to pay recruiters for successful hires. The company takes a cut of the fees paid out on its platform.

The company has about 100 employees and plans to use the investment from TRI Ventures to continue developing its software and for international expansion.

Chuang, who stepped down as Aquent’s chief executive last year but remains chairman, said Scout Exchange’s platform will make referrals so easy that anyone with a good feel for making business connections will be able to do it.

“There’s going to be dramatic changes in how matching takes place, and we’re pretty determined to be at the forefront of that,’’ he said.

Andy Rosen can be reached at andrew.rosen@globe.com.