Over the last couple of months I have had many interesting conversations with several job board owners and recruitment agency bosses. Both their business models are in flux. Job boards are moving to such an extent into recruitment agency territory that they are not job boards anymore. This is partly driven by Indeed & co putting pressure on advertising revenues, and partly driven by the belief that stronger revenues can be had further down the recruitment value chain.
These job boards offer a vast array of different services:
- Job advertising
- CV database subscription
- Media buying service
- Social media campaigns
- Flat fee recruiter service
- Interim and permanent recruiting
- Recruitment Process Outsourcing (RPO)
- Executive Search
These services are often supported by home-grown, light applicant tracking services. The revenue model depends on the suite of services the clients choose. In some, job advertising is free, because additional higher value services are being purchased.
This shift becomes dangerous for traditional recruitment agencies, as the job boards have ready-made talent pools, built through their core business over several years previously. They are known brands in their sector or location through their on-going candidate interactions. They have digital marketing knowledge of finding candidates outside of aggregators and are therefore adept at running specific recruitment campaigns. They are comfortable with technology and have a culture of optimizing their website and digital marketing capabilities. In comparison to recruitment agencies they often have a lower cost base because they use their job boards to recruit and their technology to do a lot of the leg work currently done by consultants.
This shift also requires a move from a predominantly candidate-centric approach to an in-house recruiter bias. These job boards are not the new hybrid breed of Hired.com and Staffinder.com, they are not the generalists like Indeed.com or technologically enhanced like JobandTalent, but traditional job boards. With tools like RolePoint Connect available, job boards can now easily integrate into ATS, therefore having visibility and influence over the entire recruitment funnel and easily moving towards a cost per application, even a cost per hire model.
Often these job boards are still in an identity crisis and don’t yet have the talent and culture that is needed to transfer into a proper recruitment solution business. Changing this can be hard, especially when job board traditionalists clash with the progressive recruiter wing when debating and deciding the focus of the job board going forwards or when existing revenues might need to be sacrificed to make room for the new. A single-minded approach and an appreciation of their new direction is paramount.
Recruitment agencies are still successful businesses and have capabilities that those job boards still lack, but they have to change. They have to import talent attraction and marketing capabilities that they abandoned when job boards (and to a certain extent aggregators) were their friends. They have to take the best of job boards and implement it. For example, viewing their website as a job board and growing it into a significant candidate source. They have to move faster in implementing technologies to increase productivity and integrate with other recruitment marketing channels beyond job boards and LinkedIn.
They have to move data-driven decision-making up the agenda and most importantly, they need to take the threat that job boards pose seriously. Especially, as job boards are already adding further candidate engagement services that they sell to clients or use to their own advantage, such as deep sourcing, programmatic advertising and, if they are owned by publishers, increasingly meaningful integration into their parent companies’ news sites. Not to mention renewed focus on cultural matching through ElevatedCareers and others.
I expect recruitment agencies to add further capabilities, either through acquisition (maybe the Adecco purchase of 33 was driven by this), investment vehicles such as Randstad’s fund or normal upgrades and integration. Whatever happens it will be interesting…