From Hired to Wired

As the old saying goes, people pretend to work, when employers pretend to pay them. The good news is that structural changes in the recruitment industry are making it easier for candidates to find themselves a better job. But with the space becoming increasingly crowded with managed service providers, online job boards, social networking sites as well as the traditional band of recruitment industry suspects – the real question may be who really gets to make the money, and who has to just act like they do.

Here is the way it used to work. Hiring managers farmed out role descriptions to HR managers, who after considering their internal pool, would place an employment ad in a newspaper. In some countries, especially in Europe and Australia, most of this sourcing function was handled by large recruitment agencies who made hefty margins on retainers, success commissions and even media placement mark-ups. Newspaper advertising was expensive, but at the time was the most efficient way of reaching an audience of both active and passive job seekers.

The emergence of online job boards in the late nineties redefined the model, delivering high volumes of applications to posted jobs for low cost. The result was a cannibalisation of print ad volumes in the transactional employment category. However, despite the fact that online recruitment has been with us for nearly a decade now, in the main job boards remain print style ads placed online. Worse still, the evidence points increasing volumes of irrelevant and low quality applications coming via the web channel.

If you think about it, in most of the key traditional newspaper categories which have migrated online, the most successful companies have not merely translated existing models but re-invented them based on available technology. Dating sites like Match.com are certainly a replacement of print personals, but with their advanced set of profiling, matching and interaction tools are about as similar as Ferrari might be to a go-kart. Similarly, while there were originally online versions of ‘general for sale’ classifieds in the early days, there is no disputing that the eBay auction model has proved a far more effective market mechanism for matching buyers and sellers. Strange then, that in employment - one of the largest advertising revenue segments – that most of the major players are still very much characterised by the Web 1.0 model of letting candidates search through ads as though they were reading a virtual classifieds section.

Change is afoot. The two most interesting developments in the space are smarter technology at the recruiter backend, and emerging tools for candidates to manage their professional networks. On the corporate side, recruiters are now investing in applicant tracking systems to manage the large volume of online applications, as well as integrating a diverse range of profiling tools such as ePredix which benchmarks candidates based on weighted success archetypes. The logical end point to all this is that companies start tracking candidates rather than applications, and use their tools to actively target and monitor progress on closing top talent as if they were a sales lead.

At the candidate level, social networking services such as Linkedin and Ryze are becoming de rigueur in the business development and headhunting process. In one sense, they are an online version of referral networks, which have long been the highest quality source of corporate hires. However, by making personal networks transparent and third party introductions to easy, social networks have the potential to become vast pools of qualified talent that may prove far more efficient at candidate sourcing than existing models. No wonder then that Linkedin have recently inked a deal with Taleo, a candidate tracking system provider, which will now allow them to delve deeper into corporate HR systems.

Newspaper groups have not been complacent in addressing the risks to their core employment classified revenues. Print advertising, especially for specialist and executive roles, continues to be a critical part of the passive sourcing equation for targeting candidates not actively looking for work. Further, companies concerned about aligning their employer and consumer brand propositions are also utilising mass mediums such as newspapers and television to reinforce their ‘employer of choice’ messaging. This however will not be enough to reverse what will be a candidate driven revolution in job searching. 

In the end, candidates actively looking for employment will always flock to the largest and most efficient market mechanism. No surprise then that one of the most disruptive entrants to this game will be the meta classified engines such as Simply Hired which aggregate listings from multiple providers into a Google style interface, combining locality search as well as useful prompts from Linkedin in case there are people at the hiring company who you already know through your network. It is not hard to see how these emerging meta classifieds sites will cut the job boards’ lunch unless they start being more creative about the service they provide the recruitment sector.

Longer term, it all comes down to search. And when you talk search, sooner or later, you have to deal with Google. There are already niche players opening business to help employers use Google to drive candidate traffic to their openings using search engine optimisation techniques. Recently, Google have also launched their Sitemaps service, which allows site owners to upload new content or pages via XML. In the past dynamically generated pages, which might include new listings on a corporate job portal, were invisible to search engines. Google’s initiative will now allow applicant tracking providers to directly integrate with search engines, to get all corporate jobs listed seamlessly in search results. You don’t have to be genius to see what happens next - a Google branded vertical search engine for employment which will bypass online classified players and all other intermediaries.      

Sexy technology? Without doubt. And a hell of a long way from ‘postions vacant’.

Comments

[Greg Tingle]

Nice piece Mike. Anyone want to hire a top pr gun? Google me! Rgds Greg Tingle Hello: Packer, Murdoch...

[Ben Barren]

Great piece. Linkedin has reached a critical mass now and its global deal with simplyhired points to the future of Web Services open API integration between previously disparate services eg look at the growth in hybridised services built from the google maps api.

Job boards in Australia havent progressed heavily since 1997 and Web 2.0 will definitely drive positive change.

[Malcolm Duncan]

Very accurate commentary Mike;would be interested in your views regarding recruiters now using blogging-style sites to aggregate interest.Also agree that recruitment is stating to look more like talent management.

[Jim Fish]

Have any of you seen this site http://www.jobrepublic.com.au. It seems to be a different recruitemnt model. For one thing they are charging Jobseekers also. Not sure who is behind it but they seem to have a pretty low ad budget. Good example of technology defining straegy maybe?

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