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« You are who you hire | Main | Announcing Jobster Sourcing Tools, Summer 2007 Edition »
As noted on TechCrunch today, Jobster has taken the 2nd step in our ongoing push towards performance based job advertising. Today we launched our new cost per applicant or CPA job postings. This has been in the works since fall of 2006.
I have been talking about pay for performance job advertising for years. When we started Jobster in 2004, we noted that job advertising was one of the last forms of advertising to shift towards an online pay for performance model. By now, we're all familiar with how pay for performance via adwords has altered the broader advertising landscape. And, we're all familiar with how new models are popping up in industry after industry to get closer and closer to the actual value realized by the transaction. So, we said, why not job advertising?
In thinking through this problem, we looked at where the market was and where it might go to become more efficient over time.
From: Pay per post. Flat rate job postings are largely non-targeted, non performance based advertising. You pay your $400 to post on monster and you get charged regardless of whether you find the right candidate or not.
To: Pay per good applicant. A more efficient model would only charge you a market rate for reaching good candidates.
[Note: in concept, this is actually quite similar to the offline headhunter model. Retained headhunters charge a premium for delivering only qualified candidates. Contingent headhunters charge the ultimate premium by only charging you when you make a hire. The price differentials are quite startling to think about and reflect the value the market already places on performance based models. A job posting might cost you $400. A retained search might cost you $5000 for a bunch of qualified applicants. A contingent hire will typically cost 30% of first year compensation, or $30k+.
The problem with bringing cost per hire online though is that hiring is not a transaction that will be actually closed online. It's not like buying a product where you pay at point of sale and then get your goods shipped. With hiring, you might find a product you like online (e.g. a good candidate) but then it might be several months before the person is or is not hired, depending on interviews, other externalities, etc. So, instead, we've been looking towards what we believe to currently be the next best thing -- what if you could only pay for good applicants?]
What we've put out there today is just the first step towards what we believe to be the right direction.
Employers can go on Jobster today, post their jobs, and pay $5 every time they get an applicant. In exchange for this, we feature and target their jobs. There is no flat posting fee, just an agreement to pay $5 per applicant. They can set their budget such that if they only want to pay $50 or $100 or $150 at most, they will only pay per applicant up to their budget limit. Behind the scenes, we are targeting their jobs in a number of ways to drive good candidates.
In the future, this will become more sophisticated. The market will set the price for certain types of positions. We will target potential candidates in many, many ways. And, employers will only pay when they get good applicants, not just any applicant.
Our hope is to make very fast progress on this. It is an iterative process. Every week we are shipping new code, watching and testing, and learning as we go. We are already gathering some incredible data from users on this.
Later today, we will also be releasing a major update to our Sourcing Tools for finding passive candidates. This new release, Jobster Sourcing Tools, Summer 2007 edition provides recruiting organizations with enhanced ways to search and message 35 million passive candidates. I'll be blogging about that more on Monday.
Taken together, Jobster continues to move the recruiting industry forward towards more efficient models for targeting and engaging the right candidates in a more efficient customer model.
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Great to see that Jobster is joining the small but growing number of job boards who are making pay-for-performance advertising an option for our clients. It better aligns our interests with theirs as we continue to provide value to employers that old media simply cannot.
Steven Rothberg, CollegeRecruiter.com, Jun 7, 2007 3:10:30 PM
So this means NO more FREE POSTING. Correct? The model is now pay per candidate that responds and you can not set the budget lower than $5.
For high end positions this is an ok model. I assume the thinking is that $5 for every "candidate" that inquires is a fair price considering that one in ten candidates is a good candidate if you are lucky. You then actually pay $50 per good candidate...if you are lucky.
For low end positions - clerical, light industrial, etc. you would not use it but then again, that demographic tends not to use the internet to find jobs.
Karl, Jun 13, 2007 1:17:10 PM
Jason,
You mention you are moving toward a mdel where " employers will only pay when they get good applicants, not just any applicant." as quoted from above.
Are you going to let technology decide what is a good applicant or something else?
Rob, Aug 15, 2007 11:19:49 AM
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