Swanson: Value of Big Boards Waning

From a report today by Nate Swanson, who analyzes HR/recruiting stocks for ThinkPanmure:

“We believe that companies are beginning to realize that the value proposition of the large, generic job boards (Monster/CareerBuilder/HotJobs) is waning, at best, as they increasingly provide a large volume of low-quality candidates. With recruiter in-boxes being filled with the equivalent of “resume-spam,” these large job boards are becoming less effective and eliminate many of the efficiencies of the online model. We believe that growth in these generic job boards is slowing, with online postings moving to niche job boards that are geographically or vertically focused (StepStone and Dice), or to sites that offer a pay-for-performance or “all-you-can-eat” pricing model (SnagAJob).

Second, we see the recruiting process becoming more complex and believe that recruiters will be spending an increasing amount of time on “employer-branding” initiatives, which target passive candidates and employee referrals. Here, companies will look to leverage their existing employees or alumni groups as a valuable source of new candidates. In fact, studies show employee referrals to be one of the largest and most cost-effective sources of new hires. Popular social networking sites such as LinkedIn and Facebook bring the power of an extended network to the recruiting process, although it’s still very early and a highly manual process. We think that social networking sites are becoming more and more like job boards. In fact, one HR manager to whom we recently spoke views the content on these sites as more valuable than those in a resume, as the content is public and therefore verifiable, and more current than the profiles listed on a job board, which could be more than a year old.”

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5 Comments on “Swanson: Value of Big Boards Waning

  1. six months ago I thought that social networking was a bubble about to pop but starting to think it is more like an earthquake for the recruiting world, though it will still take years for a lot of really viable niche sites to emerge.

  2. While I will not refute the author’s claims that some large boards are struggling, it should be pointed out that this is not the case across the industry. Companies who rely almost exclusively on their own traffic to yield EOI are dying (Monster), while companies who have partnered with the niche boards (CareerBuilder powers/partners with 1600 sites) and social networking sites (exclusive Facebook partner) that you mention are not only increasing their EOI numbers but are also bringing in the diverse and quality candidates that companies are looking for. As is true in almost any case, one should avoid sweeping generalizations, especially conclusions based on incomplete research.

  3. Todd,
    You have hit the nail on the head with desciption of Job Boards as a major source of resume spam. We have tracked the job board response/placement ratio of a number of our recruitment company clients over the past 12 quarters and it is a downward slope which has acclerated in recent quarters. It is clear that is being driven by many more reponses to job postings as more applicants scramble for less work by posting more responses. As a result our clients’ recruiters are wasting even more time trawling through job board responses – and it is like dealing with spam.
    This coupled with Job Boards trying to push through increased rates (to protect their revenues) is pushing recruitment companies to carve back job board advertising and go to their their candidate database first.
    And with due regard to John’s comments – this IS a general phenomenon and until Job Boards find a way of delivering relevant candidates with up-to-date resumes to the industry they are going to become progressively less important as a candidate source. Job Boards would love to give recruitemnt companies the placement metrics that justify the advertising spend. They can’t and the recruitment industry is rapidly waking up to the weakness of those metrics – whether it’s a generic or specialist Job Board

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