Congestion on the boards

Fri, 15 May 2009

With so many job boards on offer, and so many continuing to enter the market, choosing which one to use can be a bit like deciding at which restaurant to eat. There are the household brands like Monster and Reed.co.uk — equivalent to McDonalds and Pizza Express. Or there are more exotic specialists — wotservicejob.com or justengineers.net, for instance, comparable to your local Thai or Indian eateries.

And the pricing plans on offer are just as varied as those offered by restaurants. Do you go for a set menu or a multiple advertisement bundle, or individual courses or single job adverts?

As the job board industry matures, talk in the sector is that prices are on the increase. In the UK the issue provoked flurries of web postings and counter-postings last year when Reed.co.uk introduced charges for high-volume users.

Reed.co.uk’s head of operations, Martin Warnes, says that those companies that are being charged are happy to make a financial contribution to the ongoing improvement of the site and increased attraction of candidates.

And some participants in the marketplace agree that the services and products being offered are the most important factor in the setting of advertising rates.

Mark Hepworth, (left) managing director of JobsGroup.net, says: “We actually set the prices so they realistically reflect the value of the service we offer. We operate 10 niche online recruitment sites and price each one according to key variables, including the number of unique visitors, the level of applications, the number of jobs-by-email recipients and the amount of registered jobseeker CVs per site.”

Hepworth says the company has developed packages to meet the varying requirements of different recruiters, from a premium Gold Package, which includes unlimited CV database access and job posting, to a jobs-by-credit-card product for occasional vacancies.

“The key is to listen and respond to our clients’ requirements — recruiters aren’t shy about saying what they want, and after seven years in the business we have an excellent understanding of how to satisfy the vast majority of their needs,” adds Hepworth.

Alan Townsend, (right) chief operating officer of Monster UK, agrees that rates reflect the services on offer. Townsend believes that the job products offered by the sector haven’t moved on much and therefore pricing has remained steady. Monster’s rates have not changed this year, he says. “Last year there was a small increase but that was because we improved our CV product by acquiring 1.3m CVs. The product is worth more now as a result.”

Rosalyn Rahme, (left) director at Goldjobs.com and Silverjobs.com, says that rates have had to increase to cover the cost of increasingly sophisticated software and technology. She adds that rates could have increased further but salaries within the sector have been static. “As the number of jobs in the sector increased, there has been increased competition for talent, but salaries have not risen. However, there has been more automation.”

Goldjobs.com rates are reviewed annually, but had been stable for around five years. T

“he way advertising packages are bundled up means that it is still very cheap,” she says.

Volume is key
For some operating in the job boards arena, the volume of jobs on offer and the volume of job seekers visiting the site are key in the setting of rates. “Job volume became a core KPI [key performance indicator] for any board along with customer acquisition. Once you deliver response you can begin to increase your prices and the more you control the market the higher the price you can charge,” says Keith Robinson, founder of Kangarooster.com. “Supply and demand — so increased control over the candidate flow plus a tightening labour market and a shortage of talent — equals rate increases.”

Trinity Mirror’s hotonline, recently launched 20 niche jobs boards. Its managing director, Andy Baker, says: “We will see where we are doing well and getting candidate growth, then ask our customers for more money.”

However, he says the group hasn’t followed the job board norm of introducing price increases on 1 January. “We most recently increased our prices when we have improved our product — in July we improved our CV database, so we increased our rate.”

It’s about the competition
Then there are those job board operators who base their rates completely on what others are doing, and others who blame the increased competition in the sector for rate changes.

Jim Ryan, managing director of OfficeRecruit.com, says: “Rates are going up across the board mainly because of increased competition. Also we need to charge more to maintain site development, support and infrastructure. We need to recoup these costs.”

James Brotherhood, new media manager at leisurejobs.com, believes the influx of large publishers entering the market is pushing up prices. “They are throwing their weight behind marketing and their sites have pushed up the cost of advertising online.”

Justin Hodnett, managing director of Justfindajob.com, also blames increased competition for rate changes — but in the opposite direction. Hodnett says when he launched his site 18 months ago he charged advertisers £7 per vacancy, per month. At one point, he raised the monthly per vacancy fee to £200, and then because of competition reduced it to £50. Most recently he has re-launched the site as a free site. “The competition is so intense. It’s stupid. Eventually rates will have to fall because recruiters are beginning to learn they can play the job boards off against each other to get the best rate,” says Hodnett.

Localjobsearch.co.uk currently offers recruiters a single posting rate of £20 and a corporate account of £500 per month for unlimited job postings. Channel manager Abi Mellor says: “In the year we have been operating, our rates haven’t really changed. People seem to think we offer a fair price. Looking to the future, customer feedback and what everyone else does will affect what we do with rates.”

Promotions
Fierce competition in the sector has prompted job boards to offer promotions to attract advertisers, although some believe this devalues the services on offer. Example of such promotions include:

• Localjobsearch.co.uk has been offering job postings for £1 to celebrate its first anniversary. Mellor says it has proved extremely successful, increasing the number of jobs posted by 500% in January.
• JobsGroup.net offers a number of promotions throughout the year. In 2006 these included the ‘Bonfire Bonanza’, ‘May Madness’ and ‘World Cup Price Match’. “These promotions help to get people talking about our offering, and offer a good way to invite new clients to try our services. Experience shows they usually stay with us,” says Hepworth.
• In December, hotonline offered its clients a ‘four months for the price of three’ promotion. However, MD Baker says promotions have to be used judicially: “I’m not a fan of ongoing promotions because they undermine the rate card.”
• And OfficeRecruit, which was bought by the Daily Mail Group last year, only offers promotions to attract new clients. In January, it offered a 40% discount for customers who took both its CV search and job postings products, and a 30% discount if they took either service separately. MD Ryan says: “We need to have something to drum up new business, but we don’t offer free trials anymore because we’re a mature site. We don’t need to show what we can do.”

Free offers
The topic of free offers is a bone of contention among the job boards; some believe it’s a good way to entice new customers, others believe it devalues the sector.

“Being free does not stack up: how are you going to attract job seekers, “says Monster’s COO Townsend. “We spent $20m on advertising — paid for by the revenue from job postings.” He contends that job sites which offer free trials are not putting any value on their product, so eventually the people who pay to use it start to question its value.

Goldjobs.com director Rahme says a trend at the moment finds recruiters moving from job board to job board taking advantage of free trials to advertise their vacancies — and taking their business away once the trial has ended. “We lose a lot of business because we won’t offer free trials, but it’s like walking into Marks & Spencer’s and asking to try out the food before you buy it. It’s sad there are job boards out there still doing it. I guess there are still sales people who believe the recruiters will be loyal — but they aren’t.”

Rahme says her company used to do lots of promotions, especially in December, but they weren’t particularly successful. “It didn’t matter, because if people don’t want to advertise they won’t,” she says.

Danny Cannon, executive director at advertising agency MKH Advertising, summarises the situation this way: what’s happening to rates depends on who you talk to. “There are some sites who have invested significant sums of money on making sure they produce results and are targeting the right audience, so are more confident in what they are charging,” he says.

However, there are a lot of good deals to be done, he adds. “It’ll be a long time before people stick to their rate cards.”