Pay-to-post verses Pay-for-performance
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The “Why are recruiters abandoning the pay-to-post model?” post generated a lot of comments and attention. (Wow!) In this post, Rafael Cosentino of RealMatch follows up with a post of his own. Feel free to chime in on this as well. (Thanks Rafael for your support.)
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Pay-to-post verses Pay-for-performance
By Rafael Cosentino of Realmatch
Over the last few days I have received a lot of fantastic feedback on the subject of pay-for-performance pricing verses pay-to-post pricing models based on several articles posted across the Web. There are a few misconceptions which I would like to address. I think everyone agrees that employers and recruiters basically post jobs to achieve 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 using pay-to-post pricing, they only get one guarantee. The guarantee is that the text within the job listing will be entered into a website’s database and will be displayed on that website somewhere for xx number of days. I want to keep this balanced here but really, If I just want to see the words I type appear on a webpage somewhere, 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 then 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 many other assumptions too; like the site I am posting on actually has traffic. With 50,000 job boards up and running, how many do you think are worth paying-to-post? How many have more then a few hundred or dozen users? I’ve seen many Pay-to-post pricing providers sell “So’s”. “So” is a bridge which leads to a hypothetical outcome but which provides no guarantee. Here are two common examples of “SO’s” which boards sell and employers buy-
1. Our site has a lot of traffic SO your job will be seen a lot – There may be a billion people on a website but there is still no guarantee that a lot of people or any people will see/click or apply for my job. If there is a guarantee of users that will see/click/apply to my job, 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 wish 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 see/click/apply to my 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 above. 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.
When your wife sends you to the store to buy avocados, do you pay before you walk into the store? The store maybe the biggest store around with tons of different products but I’m sure we can all agree that they just might not have the fresh avocados you’re looking for, especially if it’s Cinco de Mayo or other high demand times. If I pay upfront just to get in the store and find that there are no avocadoes then I have paid for nothing and now my wife is going to kill me. Stores that sell specific products wouldn’t stay in business if they couldn’t stock or supply what their customers demanded but for some reason employers and recruiters have been conditioned to accept less when hiring candidates online. This is why the pay-to-post pricing model is being abandoned by some employers and recruiters; there is no guarantee that the store has what I want and you’re asking me to pay before I know.
A look at the pay-for-performance pricing model
Pay-for-performance may sound familiar because it is the basis for which the contingency recruiting industry was built. Contingency recruiting happens 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.
To my knowledge Realmatch is the only platform that combines online job posting, matching technology and an applicant tracking system with a pay-for-performance pricing model which eliminates the risk for employers and recruiters. If Realmatch doesn’t deliver a worthy person, as defined by the job poster, then the job poster pays nothing. This is the difference in Pay-to-post verses Pay-for-performance pricing models. Happy shopping!
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Comments
Honestly, Rafael, I have rarely read an article that is so NOT thought through properly. First of all, do you not pay your ticket before you go to the cinema? What happens if the movie is bad? Will you ask them to pay your money back? Is your wife likely to kill you then as well?
Concerning a comment that is to be left on a blog in order to attract potential candidates: if somebody leaves a clearly commercial (and in this case I consider job advertisements as some kind of publicity as well) comment on my blog, I will delete it. I’m planning to answer it later.
Anyway, leaving a comment on a blog to promote your company does not make you look serious as a recruiter. As a candidate I would have the impression that the company is so much looking for a cheap way to attract applicants. What would my salary look like in that case? It would probably be cheap as well. No thank you.
There is one side of things that is completely missing in this discussion (I have mentioned it on my blog and in a comment I left on Jim’s blog http://www.therecruiterslounge.com/2008/07/15/why-are-recruiters-abandoning-the-pay-to-post-model/):
this is the print side of the recruitment ad business. There, recruiters have to calculate with much bigger budgets AND they do not have any guarantee either.
Job sites that are not serious usually perish quickly. That’s simple: recruiters post there once, they realise that there is no result at all and they will never try it again. That’s a natural business cycle.
If recruiters are not sure whether to post on a specific job board or not, they should contact agencies that are specialised in job site consulting. We know (thanks to statistical measurements made in-house) which sites to recommend and which ones to avoid. The clients are very satisfied with this.
Apart from that job boards also have a function further to the simple “we post there to find the perfect (or real) match”. Job Boards provide companies with the possibility to display themselves as attractive employers. Being seen in the talent market is one part of an online recruiting strategy as well.
I wonder how the business model of Realmatch is going to pay off. It sounds like a lot of work to me and not much revenue. How does it go?
Have a nice weekend,
Eva
Excellent article that articulates exactly where the industry is headed and why. The real question is how fast online recruitment advertising morphs from version 1.0 to version 2.0. JobDig has improved the model from 1.0 to, I’d guess, 1.7 or so by seamlessly integrating print, web, radio, and TV and helping employers become far more proactive and targeted in their advertising without spending an additional dollars.
With LinkUp.com, we have also placed a foot squarely in the version 2.0 world by aggregating jobs straight from company web sites themselves (no job boards, not 3rd-party sites, but only company web sites). This free service helps employers better leverage their corporate career sites. If employers want to promote a portion of their jobs or all of their jobs, they can create a LinkUp account and initiate a paid-search/pay-per-click/pay-for-performance campaign. As the article points out, this LinkUp model entails far less risk, is far more efficient, and helps companies better leverage the investments they have already made in the ATS system and their corporate career site.
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Interesting model…terrible video:
http://www.realmatch.com/EMIntroVideo.aspx