Job Board Client Retention and Candidate Acquisition Optimization. Modeling Qualified Applicant Acquisition

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1 Job Board Client Retention and Candidate Acquisition Optimization Modeling Qualified Applicant Acquisition October 2010

2 Background In the mid s job boards began a swift assent to become the preferred medium for recruitment advertising. Contributing to their success was the cost, speed and functionality of the platform vs. the newspaper. Throughout the last decade, the popularity of job boards has continued. Yet with a relatively low barrier to entry, the number of boards has increased geometrically to over 40,000 in the US alone. The fragmentation of the job board industry creates challenges for job boards to generate enough traffic for their site and it creates confusion for the advertising client to choose an effective board for their postings. A lack of traffic yields lower job impressions and consequently fewer applicants for each position. Although periods of high unemployment can cause traffic gains, it can still be a challenge to generate enough qualified applicants to satisfy a client who has paid in advance to post on a site. Most boards in the US, Canada and Europe have a pricing model that mirrors that of the newspapers they ve replaced charging the client company for the right to post the position. This can be a per post fee, a subscription fee, a slotting fee or some combination. This pricing model was relevant when response levels were difficult to track, however, with the metrics now available through a sophisticated site, a more responsive pricing model is needed. Job boards will spend varying amounts of their resources on account acquisition campaigns and most use some combination of marketing and SEO/SEM along with inside sales/service professionals. When put together, the cost to acquire a new client for a job board can easily exceed the revenue earned from the first postingespecially if the job board offers free trials or significant discounts for the first posting. Long term, the profitability of a viable job board is dependent upon the ability to retain the client for some period of time and get the client to advertise multiple postings during that period. A Better Metric A 2008 survey by Weddle s 1 indicates that on average, a company with either a posting or one performing a resume search will l use six (median response) job boards as part of their recruiting campaign. This indicates that no one board seems to be able to satisfy a client. Job boards jockey for a position as one of those boards with promises of performance or lower costs. Ultimately though, most hiring managers base their decision on the quality and the quantity of applications received from a site and the cost of those qualified applicants. Consequently, boards looking to increase the retention rate of their client base need to focus on the performance of their site and offer two new valuable metrics to clients: 1) The number of qualified applicants generated for a given posting 2) The cost per qualified applicant 1 Weddle s Annual Source of Employment Survey 2008->39k responses

3 The cost to acquire a qualified applicant should be the common basis to compare all the diverse channels a client now has available. Economic Recovery and Job Creation Although the National Bureau of Economic Research declared last month that the U.S. recession ended in June of , the reality is the tepid recovery over the last year has not yet created a hiring rebound in the U.S. market. The Conference Board Employment Trend Index for August of 2010 showed a 9.4% improvement since August of last year, but a decrease from a month earlier. 3 The report does indicate that they forecast modest employment growth this fall. The good news comes with a familiar challenge: many employment experts expect that that this pick up in hiring will again result in various skilled positions becoming difficult to fill. New Competitors Longer term, the retirement of the Baby Boomers will generate additional skill shortages and consequently, job boards will need to look at other ways to ensure client satisfaction and higher fulfillment rates. Over the last few years, job boards have found the competitive landscape changing. Not only is the competition from other job boards more intense 4, but aggregators, social network sites, professional network sites and other pay per click advertisers have all entered the employment advertising market as viable alternative for client companies. Up until now, most job boards have benefited from being able to deliver large quantities of targeted job seekers to a posting purchased by a client. For those smart clients that measured performance, the cost per applicant or 2 Christian Science Monitor September 20, Great Recession Over 3 Conference Board Employment Index August IAEWS reports 50,000 job boards now available in the US market and up to 100,000 worldwide

4 the cost per qualified applicant usually favored the job board over other channels- hence the large gain in market share for job boards over other media. However, with the fragmentation within the industry, job boards today need to find low cost alternatives to continue to drive traffic to their postings. The failure of the job boards to meet this need will cause a higher rate of client attrition and dissatisfaction. Sophisticated boards are using a variety of SEO strategies to ensure higher ranks within the search engines. However, if that does not generate enough visitors > job views > applicants > qualified applicants, then a board will need to consider other alternatives to satisfy the client. Today, boards have four options in order generate additional qualified applicants. 1) They can send their positions to an aggregator (10-15 available in the US) and have their posting listed either organically or as part of a pay per click (PPC) campaign. The PPC campaign is the only viable method to ensure visibility and added traffic - which will hopefully generate additional job views and candidates. The aggregator model is changing with some now taking adverts from job boards ONLY as part of a PPC campaign; while others have started accepting jobs directly from the employer, competing directly with job boards. 2) A job board can purchase a Google AdWord campaign for certain keywords and drive traffic back to their listing on their site. 3) A job board can move certain positions onto the social network platforms to drive traffic back to their posting. 4) And finally, the fourth option is to join the Jobg8 network and purchase qualified applicants from other member boards. The following table is based on actual data from Jobg8 and client companies. It compares the cost of acquiring qualified applicants for a client s position.

5 Job board cost to acquire qualified applicants using various channels US National Aggregator Google Adwords Jobg8 Min. Cost per Click $ $ NA Impressions per click NA Clicks Req. per NA Applicant Cost per applicant $11.16 $18.41 NA Qualification rate 78.9% % 10 NA Cost per qualified Applicant $14.14 $23.33 $1.50 Not included in the above table is the cost to drive additional traffic to a posting via a social networking site. Two examples are Twitter and LinkedIn. Twitter offers a business an opportunity to post tweets for free, however, there is a cost associated with posting and managing the tweet. Recent data from industry blogs 10 correctly state that recruiting through the social networks is anything but free and recommend strongly the need to measure the total cost (time and tracking) and effectiveness of this channel. The LinkedIn network now offers job postings as a slotting price model for a minimum of ~$1200 per year. Depending on the size of the company and the number of annual postings, this could be a relatively high cost per qualified applicant. Conclusion Job boards are moving into a period where non-job boards represent some of the more acute competition. Job boards need to understand that the base pricing offered by most boards still represents real value in terms of the cost of a qualified applicant. Helping client companies focus on this basic effectiveness measure will help to promote the continued value of job boards. In addition, a job board interested in improving their qualified applicant per posting performance will utilize a number of marketing and strategic partnership programs and channels to drive success. Understanding the cost of those channels and the effectiveness for the client is what will distinguish successful boards in the future. 5 Depending on Aggregator- price can vary from $0.10 to $0.25 per click depending on keyword and demand- In our campaign, the Aggregator had a min posted price of $0.25, but accepted a min price of $0.20 per key word phrase 6 Google AdWord Auto Bid Program - local campaign- 4 keyword strings purchased for local priority 7 Google AdWord campaign purchased for open Jobg8 positions advertised- AdWord hyperlink pointing back to posting on job site- responses tracked using Google Analytics 8 Actual data from Jobg8 campaigns- Avg Clicks/application attempt- Avg Jan through July Actual Avg- Jobg8 US network - % of apps that met basic qualification questions July Top 5 Reasons Why I love Recruiting Metrics - Chris Brablc reasons-why-i-love-recruiting-metrics-reason-2-apples-to-apples-comparisons/

6 Although Jobg8 has no direct control of the pricing within their network, current pricing between job boards would indicate that the Jobg8 marketplace offers real value to the job board industry. In addition, the Jobg8 model is based on a pay per application model, eliminating the risk to a job board trying to increase performance for their client. US Office: 75 West Commercial St. Suite 204 Portland, ME European Office Tower Business Park Kelvedon Road Tiptree Colchester Essex CO5 0LX Pacific Office PO Box 631 QVB NSW Australia

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