By: ProcurementIQ Analyst, Syed Ali Khan
With graduates on the hunt for their first jobs, students looking for summer work and experienced workers seeking to improve their career prospects, the summer months present a unique opportunity for businesses searching for new talent. Nevertheless, the hiring process comes at a cost, and it is important that companies carefully consider how they plan to attract talent. While there are many ways to find new employees, including staffing agencies, executive search services and, to a lesser degree, newspaper advertising, online job posting services have become an increasingly attractive means of soliciting applications. There are thousands of online job posting boards where buyers can list their job openings, and applicants can access posting boards from any internet-capable device, making the service a convenient and effective method of reaching potential hires. ProcurementIQ has identified the three most used job posting service pricing models and the benefits and disadvantages of each in order to help buyers better review their talent acquisition spend.
The Job Posting Service Market Today
Buyers can select from a variety of general and niche vendors. The largest players in the market, CareerBuilder, Monster Worldwide, LinkedIn and Indeed, curate general job boards. Businesses that use general job boards are able to cast a wide net for applicants because job seekers with diverse qualifications and experiences frequent these sites. Niche job boards provide businesses with more targeted platforms to place their job postings. These vendors build a community around a specific industry, profession or employment type. For example, niche provider Health eCareers (DHI Group) focuses solely on careers in healthcare, while Snagajob focuses solely on hourly work, like retail and food service positions. While businesses have a wide selection of job posting service providers to choose from, they must also be cognizant of adverse market conditions when purchasing job postings.
Prices for job posting services have been increasing in the past three years, and ProcurementIQ forecasts them to continue growing in the three years to 2019. Prices have grown as businesses have expanded their ranks and made better use of online resources to find talent, prompting a rise in market demand. Moreover, job seekers have increasingly been using personal computers and, now, smartphones to find employment opportunities online. The greater practicality of job posting services in comparison to other hiring alternatives has also contributed to demand and price growth. Substitutes like staffing agencies and executive search services can be costly for many businesses, and print classifieds have become a significantly less attractive option as newspaper circulation has plummeted. High market share concentration and consolidation efforts by the largest players in the job posting market also hinder competitive pressure that would otherwise help keep prices low. These unfavorable market characteristics make it vital for buyers to ensure they are gaining the best value from their job posting service providers.
Picking The Right Pricing Model
The three most common pricing models in this market are fixed pricing, subscription pricing and pay-per-click pricing. It is important to note many of the largest job boards provide a combination of these pricing methods, allowing buyers to pick the one that works best for them. Fixed pricing is most prevalent in this market. Under fixed pricing, buyers purchase a job posting for a set amount of time, normally 30 or 60 days. The benefit of fixed pricing is that buyers know exactly what their expenditure is going to be upfront. Furthermore, buyers who prefer this pricing model have a larger selection of job boards from which to choose because it is the most used pricing model.
Many job boards use subscription-based pricing to target companies with reoccurring job advertisement needs. Under this model, buyers subscribe to a predetermined number of job postings and can alter them as they see fit over the subscription period, swapping job advertisements as necessary. This model provides buyers with flexibility in regards to what they want advertised and allows them to better forecast monthly spend on this category, but it may be inefficient if the number of job advertisements a buyer needs fluctuates substantially from month to month.
Lastly, some vendors use pay-per-click pricing. Many of these vendors are aggregators that crawl websites and post businesses’ job postings on their site for free. Buyers can also proactively post their job opening free of charge on many of these sites. While this is a sure-fire way to save on job posting spend, free postings on job aggregators can quickly move lower on search results as new listings are added. Buyers can increase the chances of their posting being viewed by paying for optimization services on these websites, which often use a pay-per-click pricing model. When using this pricing model, buyers can set the amount they are willing to spend. For example, if a buyer budgets $200 for a posting and a supplier charges the buyer 50 cents each time a potential applicant views the job posting, up to 400 people can view it. Buyers benefit from this pricing model because it incentivizes suppliers to promote buyers’ job postings. By maximizing views, suppliers earn the full extent of a buyer’s investment in the advertisement. However, buyers will have to experiment to see what budget leads to their desired number of applicants, which takes time and money.
All job boards are not created alike, and where a business solicits applications can have a profound impact on the cost of recruiting new talent. With prices increasing and a plethora of job boards and pricing models to choose from, buyers should regularly reevaluate their talent acquisition spend to make sure they are getting the best exposure for their buck.