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It is better
to not be on
the web than
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not know why
John Sumser

Reality
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John Gall

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scale back
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Hidden Costs

(October 18, 2000) Why are the "job board in a box" companies (Hire.com, Joboo, Boxwood and so on) having such trouble with market traction? The core idea is right: the best recruiting website is your own home page. What's going on, then?

It turns out that most companies (except the top 200 brands) don't have large enough web audiences to make the leasing of a home page function useful. What most purchasers discover is that a really solid employment offering points out the weaknesses in overall traffic development. When you begin using one of them, you are immediately confronted with the weaknesses in your web traffic.

As we saw in yesterday's note, traffic, in a permanent labor shortage, requires constant investment in value for the job hunting and career minded traffic. For the most part, the aforementioned services don't offer a meaningful solution to the traffic problem. In effect, they become the measurement of the problem.

Part of the problem is that really meaningful traffic development is really expensive and requires very careful planning. Given that a candidate is really worth 30% of the first year's salary and given that you need at least a hundred resumes that are close, a very high traffic development budget might be in the neighborhood of .3% of a year's salary ($100/visitor on a $30K job). At the other extreme, some points based programs get the costs down to around a dollar (though they aren't very targeted).

It's beginning to look like web traffic development costs spread on a "bathtub curve" with both low and high quality traffic being the most expensive. For instance, a loyalty program like Cybergold, while useful for developing visitors for a huge candidate pool like Headhunter, is, in the end, very expensive for a single company. Although eyeballs can be purchased for $1 a set (over time), the recruiting website is forced to discern professions from groups who are targeted along leisure interest lines. The traffic fit just isn't always there. Loyalty programs can produce high volumes of low quality traffic.

At the other extreme, visitor acquisition priced at search firm levels begs the "why bother" question.

The market's silly emphasis on Internet Recruiting as a cheap alternative to newspaper advertising makes the real traffic development numbers hard to stomach. Those numbers look like the cost of running a search firm (20% of the first year's salary). We've said many harsh things about the search industry over the years. Never once have we said anything other than "there is a direct correlation between the prices they charge and the value they deliver". Unfortunately, the cost of acquiring candidates is rapidly exceeding their reach.

In summary, the job board in a box offerings are slow to take off because they confront customers with a harsh reality and no solution. In a permanent labor shortage, anyone who promises cheaper is smoking pot. The solution involves owning up to the harsh new reality and delivering the right product.

- John Sumser

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