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Betting on the Boards

In the online recruiting game, many believe niche boards, job aggregators and social networking will soon reign supreme. Others, however, aren't so sure, contending that the big job sites are taking the necessary steps to prevail.

Tuesday, December 1, 2009
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What a difference four years can make. Back in 2005, Intel Corp. posted the vast majority of its job openings on large online job boards and then waited for responses from potential candidates.

The costs were high. Intel spent $1.2 million that year on job boards in the United States, says Allen Stephens, recruitment marketing manager for Intel's global staffing group. But despite that expenditure, recruiters were getting bombarded with resumes from unqualified candidates, the company was having trouble attracting passive candidates and independent data told them the market share of large job boards was declining, suggesting that they would be less effective and not host as much traffic.

"It turned out we were spending millions on these postings on job boards and ... we weren't really getting the ROI that we wanted," says Stephens. "It's just not efficient."

Since then, Intel -- which hired 7,700 people in 2008 to fortify a global workforce of 80,000 -- has been steadily tapering what it spends on large job boards. The amount dropped to $721,000 in 2008 and is expected to be in the neighborhood of $284,000 in 2009. (The economy also played a role in the limited spending in 2009.)

Now, the Santa Clara, Calif.-headquartered company puts its recruiting emphasis in a number of different places -- such as social networking, niche job boards and job aggregators, which scroll through job boards and company Web sites to display those openings in one spot -- much like Expedia, Priceline and Orbitz do for airline tickets by searching through airline sites for the lowest fares. (For more on aggregators, see sidebar.)

Apparently, Intel isn't alone in its search for alternatives to large job boards -- market share for CareerBuilder decreased from 14.9 percent in 2006 to 8.4 percent in 2009, while market share for Monster declined from 11.4 percent to 2.5 percent during that period, according to Experian Hitwise, a New York-based information-services company.

HotJobs was the exception over that three-year span, increasing its market share from 4.7 percent to 6.2 percent. That said, however, HotJobs' share of the market declined by 2.8 percent since 2007, when it was at 9 percent. (Experian Hitwise measures market share based on the number of visits to employment Web sites during October of each year.)

Meanwhile, job aggregators, social networks and niche boards are hot on their tails. Indeed (job aggregator) and SnagAJob (niche board) each claim roughly four times the market they did in 2006, while LinkedIn garners 13 times as much, according to Experian.

Nevertheless, the "Big Three" still have, by far, the most unique visitors of any job sites -- more than 21 million for CareerBuilder; nearly 18 million for HotJobs and about 14.5 million for Monster, according to comScore, a Reston, Va.-based company that monitors online traffic. The next closest is Indeed, with 8 million.

So what does this predict for the future of large job boards? Can they stay atop the employment market or will they eventually fall behind their fast-rising competitors?

Depends on who you ask.

Some Big Three critics are quick to say large job boards are doomed because the business model of providing a place for companies to list jobs and await responses is outdated; they believe other online recruiting companies will soon emerge as leaders. Others, however, say the large job boards are already adapting to the new market and with their extensive databases of job-seekers and companies, they are well equipped for the new recruiting world. Still others see merit in using both.

Going Social

Intel is one of a growing number of companies that's utilizing newer online recruiting methods, such as LinkedIn, to mine resumes to search for passive candidates -- always among the most coveted by recruiters. It also uses other social-networking sites, such as Facebook and Twitter. Social networking gives the company a way to "break down the walls" of communication and enable potential applicants to talk with Intel recruiters at any time during the application process, says Stephens.

In addition, it has increased its use of job aggregators and found that the pay-per-click model costs less than large job boards, he says, and leads to less bombardment of resumes from unqualified applicants.

Niche job boards have also been added to Intel's recruiting arsenal. With technical positions such as hardware engineers and software architects, the company now posts to boards catering to those specialized candidates. Not only is it cheaper than posting on a large job board, says Stephens, the candidates have specialized experience and skill sets, leading to better-fitting applicants and less resume bombardment.

Yet, Intel still maintains a presence on two of the Big Three job boards (Stephens declined to specify which two). For the most part, he says, the company mines their vast databases of resumes. It also uses the big boards for profile hiring -- for instance, when hiring, say, 25 manufacturing technicians, it will create one generic posting to make 25 different hires, thereby saving money. It doesn't do the same on niche sites because it's more effective to use them to hire for one specific skill set.

Stephens says Intel plans to re-evaluate its recruiting efforts in 2010, but anticipates shifting even more of its resources away from large job boards.

Many companies will likely be following Intel's lead, experts say, since large job boards can't continue to primarily function as places for companies to post simple listings, then wait for applicants. Such a system makes it "pure random luck" that the right candidate will apply, says Lou Adler, CEO and founder of the Irvine, Calif.-based training and consulting firm Adler Group.

A February 2009 report by CareerXroads, a Kendall Park, N.J.-based staffing-strategy consulting firm, says job boards as a "source of hire has indeed peaked" and predicts such use "will diminish in the future."

"The market share of hires attributed to job boards, and especially the larger boards, is flat and poised to lose ground when considering the economy, the increasing penetration of search-engine marketing, social networks and other Web 2.0 apps that firms are exploring," the report states.

Indeed, recruiters and job-seekers are increasingly seeing job boards as a middle man, since more and more people are using Google or job aggregators to find job listings directly on a company's Web site.

Katherine Hansen, associate publisher and creative director of DeLand, Fla.-based career-advice site QuintessentialCareers.com, goes even further to predict job boards will be extinct within 10 years.

"Job-seekers lament the lack of relevant jobs that turn up in searches, vague job descriptions that don't identify the employer, a user-unfriendly process and the black-hole experience of posting a resume or applying to a job board's job posting ... ," she says.

"One of the job-board features that initially made them so attractive -- ease of applying for jobs -- has made them a significant nightmare for employers."

Big Boards' Sustainability

In contrast, representatives from large job boards insist they're still industry leaders and will stay that way into the future.

Ted Gilvar, executive vice president and global marketing officer at Monster, acknowledges that revenues dropped this year, but attributed that to the recession -- not to the company's business model.

"The jobs business, in a world with record-high unemployment, is down and I don't think we're really being hurt more than anyone else," he says.

Gilvar does acknowledge that "the landscape has changed," since job-seekers today have more ways to search for jobs online; however, he still predicts a "bullish" future for New York-headquartered Monster.

That's because the company made significant changes recently. For example, Monster acquired semantic-search technology firm Trovix to make Monster's resume searching more efficient for recruiters. Under the old model, a hiring manager searching for people with experience as an "assistant to the CEO" would get search results featuring people who have been "assistants" as well as "CEOs."

"I think one of the biggest frustrations of job boards, historically, has been that the ability, through keyword search, to match the right candidate to the right jobs has been spotty," says Gilvar.

Monster also upgraded its search feature by developing Power Resume Search, which utilizes semantic searching, a technology that makes associations between words to deliver more relevant results. Recruiters no longer have to become "Boolean black belts," where they must figure out which complex set of keywords to put in the search box, says Gilvar.

If they were searching for a "Director of Finance" under the old model, they would be best served to also type in: "Director of Corporate Finance" or "Dir. of Finance" or "Director, Finance." Now, a Monster search for "Director of Finance" will automatically scan for abbreviations and synonyms, as well as correct misspellings, according to the company. (Monster also plans to implement the new searching algorithm on the job-seeker side.)

Sue Feldman, an analyst at Interactive Data Corp., based in Bedford, Mass., says Monster's new search function is something that "plain old Web-search tools cannot provide."

"What I saw was impressive," she says.

Such a simplified job search can't be replicated by using Google or another search engine, she says.

"It's much harder if you're trying to search everything in the world," says Feldman. "No doubt about it."

Monster is also getting into the social-networking game, creating "communities" for different professions.

LedgerLink, for example, caters to accountants, providing news on the profession, as well as a Facebook-style interface through which users can "friend" each other and exchange messages. Of course, it also includes accounting-job listings. (There is even a community called HR Guru.)

"If you look at vertical communities -- Dice, for example -- we have more engineering and technical people than Dice does, just due to our sheer scale, but people don't think of us that way," Gilvar says. "By creating these vertical communities that are relevant to a specific audience, they'll begin to rethink the value proposition that lives on Monster."

Resume bombardment still remains an issue, but Gilvar contends it's not really a Monster problem, but is a product of the significant number of people hunting for jobs during the recession. He also says that, although posting on a niche board will typically yield fewer responses, "fewer doesn't necessarily mean better."

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Analysts at Zurich, Switzerland-based financial-services firm UBS apparently think Monster is poised for future success. In late September, the company's analysts upgraded Monster's stock from "neutral" to "buy" and moved its target price from $17 to $27. (The stock was around $15 at press time.) UBS hailed the company's acquisition of Trovix and expressed its belief that the new technology could set them apart in the online recruiting field and increase market share.

CareerBuilder, meanwhile, has also expanded its focus beyond job boards, offering employers a variety of consulting services. In January 2008, for instance, the Chicago-based company launched Personified, a fully functioning consulting firm that offers a wide variety of services -- from targeted acquisition to process optimization to social-media-brand management. It also launched CB Media, an advertising agency, and CB Transitions, a unit that offers outplacement services.

"CareerBuilder has always had a consultative approach," says Brent Rasmussen, president of CareerBuilder North America. "The new services we're providing enable us to engage in deeper relationships with our clients that go beyond what the competition can offer."

Rasmussen admits that revenues are down this year, but contends that CareerBuilder's range of products and services are still cutting-edge.

"Niche boards have always been around ... and we partner with many niche sites to be part of our distribution network," he says. "In addition, we've launched our own niche sites such as WorkinRetail.com, Sologig.com, CareerRookie.com, etc. Niche sites have value, but they cannot offer the same depth and level of customer service that our organization offers."

Rasmussen also criticizes social networking, saying it can't provide the "constant flow of candidates" that large companies need in a healthy economy.

"If you need to hire five IT professionals, LinkedIn could be a good fit for your recruitment efforts. If you need to hire 150 IT professionals, it won't work," he says. "There are companies that have thousands of job openings at any given time. Social networking wouldn't be able to provide the level of support needed."

(Yahoo! HotJobs did not respond to requests for comment.)

Feldman concurs that the sizes of their databases give the Big Three serious advantages. With more people to choose from, she says, there's a better chance of hiring the right ones and the bigger boards should be advertising their size and reach to employers and job-seekers.

The challenge for the large job sites -- and something that, if solved, could bring them into the future -- is to find a way to "take Monster or CareerBuilder and make them behave like one of these smaller, vertical [sites], essentially giving you the same precision," says Feldman.

Gerry Crispin, co-founder of CareerXroads, says the big boards are capable of adapting to the new job market -- though whether they do or not is still open to question. The real test will be to see if the new tools and offerings help them attract top candidates.

"Obviously if they don't gain the attention of the top-notch job-seekers, then why would employers post jobs through them anymore?" says Crispin.

Tony Petrucci, former vice president of HR at Aramark and an adjunct professor of HR at Temple University in Philadelphia, also believes the quality of candidate will separate prosperous job boards from the rest.

Businesses "are not searching for near as many positions and when you have [a large] number of job-seekers in the marketplace, it's harder to sort through," he says.

"I think that has forced [employers] to make sure they are using the tools that will drive them to the high-quality passive candidates than the other candidates."

"An Era of Change"

In this changing world of online recruiting, say experts, HR executives need to stay ahead of new technologies -- namely aggregators, social-networking tools and niche sites -- and leverage them in their recruiting strategies. If they don't, they may have trouble finding the right people.

According to Petrucci, HR executives should consider teaming up with consultants who monitor these new tools and can train recruiters.

"If you're teaching [new recruiting tools] to hiring managers, it's going to become part of an overall talent-acquisition strategy where, by being more networked, they're going to have more candidates in their pipeline," he says. Hiring managers who are trained to harness these tools are going to be more effective at acquiring top talent and owning the recruitment process than those who rely on an external recruitment company, he says.

Crispin believes HR leaders need to start this process by making sure they understand the full range of services that each recruiting tool offers.

When recruiters pitch HR executives on the best ways to spend hiring funds, "they need to be smart enough, sharp enough, bright enough and interested enough to understand fundamentally all the different sources," says Crispin.

He says utilizing niche job boards with connections to professional associations -- such as the IEEE site for engineering and technology professionals -- gives recruiters a leg up on finding the best and brightest.

It's also important that HR executives and recruiters stay abreast of changes, since today's online recruiting market is ever-evolving.

"It constantly changes. We're not in an era of stability; we are in an era of change," says Crispin. "So the measurement of our success is a continuous process. And as it changes, we change our approach. Some job boards may be successful today, others may be successful tomorrow."

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