Why are recruiters abandoning the pay-to-post model?
Many thanks to Jennifer LeClaire for allowing me to post this article. Enjoy!
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Why are recruiters abandoning the pay-to-post model?
By Jennifer LeClaire
Monster.com and its pay-to-post pricing model once took the recruiting world by storm. Now, the storm may be calming as employers begin to second guess the pay-to-post model.
According to Deutsche Bank analyst Jeetil Patel, the number of job listings on employment Monster Worldwide fell dramatically in May compared with a year earlier. U.S. job postings were down 18 percent on a year-over-year basis for the second quarter, with a 21 percent drop in May. That’s worse than the 8 percent slide in April.
So the question becomes, why are more recruiters abandoning the pay-to-post model? Is it sheer economic conditions, or are recruiters merely looking for a new model? Hiring managers and recruiters are sounding off.
The Survey Says…
In a recent survey promoted to recruitment and Human Resource executives, some answers to the pay-to-post question begin to emerge. For example, nearly 69 percent of respondents said job board pricing models no longer satisfy their online recruiting needs.
Drilling down a little deeper, only about 20 percent of respondents agreed the pay-to-post model yields good results with consistent value. More than 65 percent took the opposite view, reporting dissatisfaction in the overall value of pay-to-post.
A whopping 75 percent of respondents disagreed with the premise that searching resume databases often uncovers quality candidates. More than 64 percent said most job boards don’t provide useful tools that allow them to manage and make hiring efficient, and only about 16 percent agreed that online job boards provide a quality service to job seekers and employers.
The overarching takeaway: More than 60 percent said they would prefer a less risky performance pricing model where they only pay if they find a suitable candidate for the job.
“The pay-to-post pricing model places all the risk squarely on employers and provides no guarantees of finding a qualified candidate,” says Rafael Cosentino, vice president of business development for RealMatch. “Risky up front pricing and poor performing keyword based job boards are just two of the reasons why employers are beginning to abandon the pay-to-post pricing model in favor of pay for performance and free employment sites.”
The New World of Recruiting
Recruiting is much more complex than it used to be, says Vani Colombo, vice president of programs with the Northern Virginia Chapter of the Society for Human Resource Management.
“You can’t just post an ad on a site like Monster and wait for candidates to come,” says Colombo, also the director of Human Resources at VIPdesk, an Alexandria, Va.-based outsourced customer care provider. “You really need to do your homework and think of recruiting as a marketing campaign–who is my target market, and how can I reach them?”
The bottom line is this: With a wave of retiring Baby Boomers, a wave of less experienced Generation Y workers coming into the market, and the changing economic landscape, finding the right people for the right jobs at the right time is more critical than ever.
Michael Buckner, global director of Talent & Acquisition at Waggener Edstrom, a multiservice global public relations agency headquartered in Boston, cites several reasons for the decline in pay-to-post, including the languishing economy, the trend toward targeting passive candidates and the rise of Googlers who just use search engines to look for “PR Jobs in Boston.”
However, Bucker’s fourth reason may well expose the root.
“It’s hard to see the ROI for job boards,” he says. “The ‘tagging’ of candidates to determine from whence they came to you originally is not an exact science and the ’self-declaration’ of a candidate regarding how he was sourced is probably even less accurate. Hence, it is difficult to say X percent of your hires came from Monster or HotJobs or CareerBuilder.”
Throw it Against the Wall
Kiersten Kaye, director of Human Resources for Boston-based CSN Stores, an e-commerce company that operates more than 200 stores, has watched what she calls a growing trend over the past decade.
“Job seekers are using the throw-it-against-the-wall-and-see-what-sticks approach to their job search,” she says. “For every one qualified applicant we’re getting resumes from 10 to 20 unqualified applicants for the open roles we post on job boards and our Web sites.”
This “wall sticking” approach led to companies adopting Applicant Tracking Systems that allow recruiters to do keyword searches to cull through a bank of resumes and extract only the few that meet the criteria for the role. But that, too, causes problems: a backlash of disgruntled applicants who complain they are sending their resume into a black hole, never to be seen again.
Applicants feel disconnected with the recruiting process and consequently hate recruiters because most recruiters are only contacting and following up with the truly qualified applicants, Kaye says. So what do the applicants do? Throw more up against the wall.
“Applicants feel like they need to send 100 resumes to get one bite,” she says.
“Smart recruiters gave up posting for roles, because it’s like culling for a pearl in a oyster farm.”
Wading Through Irrelevant Listings
Jonathan Davis, founder and executive vice president at Austin-based recruitment process outsourcing provider American Workforce Companies, handles active searchers for more than 100 companies a year. From where he sits, Monster’s advantage is it drives more traffic than other boards but the number of irrelevant listings is hard to digest.
“Not only have we been using niche job boards a lot more often,” Davis says, “when we just came up for renewal with Monster.com they practically gave away job postings just so that we would renew because they are well aware of the decrease in the value of their posts.”
Another possible cause of the pay-to-post model’s decline is the proliferation of pay-to-post job boards. Dan Singer, co-owner of Civil Search International, a Tempe, Ariz.-based engineering staffing firm, is certain the hundreds of new boards are splitting the attention of hiring managers and job seekers.
“Monster used to be an effective recruiting tool to find the passive job seeker, but most of our clients are no longer willing to pay the big bucks to find average talent,” Sager says. “Monster no longer gives us an adequate return on investment.”
Many recruiters are paying big dollars for long-term pay-to-post contracts and are extremely hesitant to renew, according to Sager. In the meantime, he says, Monster is being very stubborn about cutting prices.
Suggesting a Paradigm Shift
Dora Vell, principal of Vell & Associates, an executive search firm in Waltham, Mass., has some suggestions about how the pay-to-post model needs to change. More targeted responses, she says, is a good place to start.
“Right now, we get too many responses that are irrelevant,” Vell complains. She’d like to see anonymous posts that don’t demand a response from her firm. If there is only one qualified candidate out of 100 resumes, she says, her team doesn’t want to be obligated with the financial and time burdens of responding to the other 99 so they are not left wondering about the position.
“We’d like to see some way for the posting site to allow us to post the acid test, and for the site to analyze candidates – like a Business Intelligence system – and proactively provide alerts,” Vell concludes. “We want the site to screen irrelevant candidates out automatically.”
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Comments
Great post!!
This is exactly what is going on right now at my employer. Rumors that all job board contracts will not be renewed. The realization that the job boards have extracted the monies without the ROI and held us hostage. I am wondering why we as corporate recruiters, can not demand more services for the hefty price we pay to post and see the same candidates that our competitors and third party agencies pluck from. My best hires are still employee referrals and they cost alot less. Just my penny for thought-
You wont see too many publications writing about this…why you ask? Because Monster/Careerbuilder/hotjobs and the other incumbants get all their revenue from the pay/post pricing model and they dont want their customers thinking about this or knowing about alternatives. Nice one Recruiters Lounge!
Great article Jennifer! First I can’t believe ONLY 60 percent said they would prefer a less risky performance pricing model. The hiring process is all about ROI, so what’s wrong with guarantee on your investment? Higher salary requirements should not equate to higher recruiting fees. There are recruiting marketplaces that allow you to set your own recruiting fees now, like Dayak and you are not billed until your new FTE has secured the position after a probation period.
My Monster agent was /dare I say it/ frantically and frequently calling me to sell me more listings and or trips through his watered down database. I finally had to be abrupt and tell him I was not interested with an inefficient method of hiring-practice. Like the want-ads and newspapers it just doesn’t make sense.
Jim – That’s my Q to step in and say try RealMatch, Realmatch uses a pay for performance pricing model…not pay to post. You can post your job for free and immediately view the profiles of matching candidates from the database. Over the next 48 hours you’ll also receive applicants and you can view their profiles for free. Realmatch only makes money if you decide to open the resume of a matching and interested candidate/applicant. Resume opening packages start at $25 for 4 opens. If you register as an employer, send me the email you already registered with and I will credit your account with a free resume opening.
Point is, within 48 hours of posting on Realmatch, you will know how many matches and applicants you have and if for some reason we cannot fill that position…you haven’t paid anything.
In the interest of fair balance, abandoning the pay-to-post model also means employers/recruiters are using completely free sites like Craigslist too…
Rafael – could you credit my account with a resume opening please: trothman (at) lucasgroup.com
I have already registered on realmatch and posted a job and would like to view some of the matched resumes. Thank you.
My experience has been quite different. I’ve found hires by fishing in the Monster pond. I’ve found candidates who regularly keep their resumes out there, “just in case”. And if they’re not looking, they are great sources for me to network with. Sometimes I wonder if we’re afraid to query the job board database and make a cold call. A friend made a placement with a Monster candidate he found. His client complimented him & said they had no success with Monster and had to rely on a 3rd party recruiter. Ironic that the workman blamed the tool, isn’t it?
I do not agree with some of the ideas mentioned in the article. I’m aware that the Internet gives recruiters, agencies and companies better possibilities and tools to track candidate behaviour than offline media (assuming that recruiters advertise in several print titles at once). And I’m aware that the Internet is mainly based on the number of visits per site, visibility in general and clicks on links.
But I have never seen recruiters asking for a “success-based” pricing model for press recruitment advertising, and I’m sure that newspapers would never accept that. So why should online job boards do this? Compared to offline media, pay-to-post models are a lot cheaper and offer higher visibility among the target group. Of course, this can also mean that a number of unqualified applicants reply to a job role.
To be honest, as I’m working for an HR communication agency that is online-oriented exclusively, I see many job ads that are rather badly written (by the way, most of the time the texts and layouts are taken from the press adverts, but this does not work the same way on the net) and I’m not surprised that they attract unsuitable candidates.
As an agency consultant, I do not only recommend better targeted job titles, vacancy texts, etc but also the job sites that are best suited per position and per country. I know that the markets are very complex and that recruiters have lots of other things to do than research the best sites for their hiring needs. Be certain, there are suppliers who take care of that. And it is for that reason that I will stick to the pay-to-post model. This is also something I have been writing about recently: http://en.online-recruiting.net/?p=28
I’m looking forward to reading your comments on this.
Affinity Circles offers access to over 15 million verified college alumni through exclusive partnerships with top universities and professional trade associations. Check it out at http://www.affinitycircles.com/recruitingwebinar.html
There is no traffic on that affinity circles site according to quantcast:
http://www.quantcast.com/affinitycircles.com
10,500 people per month. Its difficult to beleive a site can provide access to users when no one visits the site.
Hmmm… Are you familiar with Compete? Check out this link:
http://siteanalytics.compete.com/affinitycircles.com/?metric=uv
@ Toby,
Affinity Circles hosts the official networks for over 150 alumni and professional assocations on the domains of those associations. ie. Stanford.edu, Dartmouth.edu, etc. You will not be able to see total traffic looking at Quantcast. That only measures traffic to our corporate site, which is comprisied of enterprise customers, investors, and media.
Pay-to-post verses Pay-for-performance
I received a lot of fantastic feedback about pay-for-performance pricing verses pay-to-post pricing models. There are a few misconceptions which need addressing. First off, can we can all agree that employers and recruiters post jobs for basically one ultimate goal:
Job posting’s ultimate goal: To identify and hire a qualified and interested person for my job.
A look at the pay-to-post pricing model
As a general rule when an employer posts a job via pay-to-post pricing, they only get one guarantee. The guarantee is that the text within their job listing will be entered into a site’s database and will be displayed on that website somewhere. I want to keep this balanced here but really, If I just want to see the words I type appear on a webpage, I can comment on any Blog for free. Why would I pay $50 or $400 to see my words appear on a webpage? If there is no guarantee as to traffic, quality of user, clicks, number of applications or any other defining metric, what is the difference between posting a job on XXX job board and leaving a comment on a Blog? By definition, the pay-to-post pricing model places all the risk on the employer because there is no guarantee that the posted job will find and engage a qualified candidate. Employers pay to post under the hopeful assumption that someone will see, click and apply for their job. But there are other assumptions too; like that the site I am posting on actually has traffic. With 50,000 job boards, how many do you think are worth paying-to-post on? I’ve seen many Pay-to-post pricing providers sell “So’s”. A “So” is a bridge which leads to a hypothetical or potential outcome but which provides no guarantee. Here are two common examples-
1. Our site has a lot of traffic SO your job will be seen a lot – There may be a gillion people on a website but there is still no guarantee that a lot of people or any people will see/click or apply for your job. If there is a guarantee then what is the number?
2. Our site’s audience caters to your target audience SO your ad will be seen by the types of people that you want to recruit – The site may have a lock on the market you which to reach but there is still no guarantee that qualified people or any people will see/click or apply for your job. If there is a guarantee then what is the definition of your target audience and how many of them will apply to your job?
The side effects of posting a classified job listing can include receiving dozens or hundreds of resumes to your inbox. This again has no value for employers and is just a means to achieving the ultimate goal which we have already defined. Scarier still is that posting on some job boards results in receiving no resumes. But whether you receive 1000 resumes or none, the ultimate goal has not yet been attained but you have already paid for a service. This is why paying-to-post is being abandoned as a pricing model.
A look at the pay-for-performance pricing model
Pay-for-performance may sound familiar because it is the entire basis for which the contingency recruiting industry was built. Contingency recruiting is when a recruiter sides with the employer’s situation by agreeing, “You will pay me nothing until you decide that a candidate I bring you is of the type and quality you’re looking for and until I find, and you agree that the candidate looks good then you will pay me nothing.” Contingency based recruiting is the heart of pay-for-performance pricing because the employer only pays when they like what they see.
Realmatch is the only platform to my knowledge that combines online job posting, matching technology and an applicant tracking system with a Pay-for-performance pricing model that removes the risk from employers/recruiters. If Realmatch doesn’t deliver a worthy person, as defined by the job poster, then the poster pays nothing. This is the difference in Pay-to-post verses Pay-for-performance pricing models.
[...] “Why are recruiters abandoning the pay-to-post model?” post generated a lot of comments and attention. (Wow!) In this post, Rafael Cosentino of [...]
At LatPro, we don’t offer pay-for-performance pricing models, however, we have always allowed recruiters to search our database without paying. We simply **** out contact information for nonpaying users.
Sometimes our * system doesn’t work and recruiters contact candidates for free. But on the whole, it’s still a good relatively fair system.
This topic fascinates me and I have written much about free classifieds for this reason: http://www.internetinc.com/free-classifieds
I have also written extensively about the number and quality of job boards here: http://www.internetinc.com/job-board-niches-analysis-2008
Personally, I suspect monster.com numbers are down mostly due to the recession. While the article by Jennifer is thought-provoking, I have a feeling she works for realmatch which makes this more of a press release, albeit a good one…
The major job boards are dead yes, and moreover those who are buying up niche sites and then just converting them over to their core technologies will soon found they bought junk.
The simple way for all to get low volume, highly relevant application traffic is to optimise your own careers pages using web 2.0 long tail SEO optimisation techniques.
I can show you all results that we have for how this works to gain you
2-5 relevant job seekers per job and how the nature of the long tail
linguistics is its own self administered filtering system.
Really the results are amazing.
It appears from her Linked In profile that Jennifer may be a ringer for RealMatch given that she’s in the PR business. Just goes to show the power of planting articles in strategic places. They got a lot of play from this judging by Google search.
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That makes sense to me. Yes the internet has made recruiting easier in one sense but more complicated in another. There is a lot of noise and its tough for recruiters and job seekers to know where to spend their efforts.