Whatjobsite Job Board Survey Spring 2010

In March 2010 whatjobsite conducted a survey of the UK’s leading job boards in order to get a picture of the current state of the market and the outlook for the year ahead.

 

The Headline Figures

• 92% say job board traffic is up.
• 76% say application rates are up.
• 69% say the volume of business is up.
• 53% see increases in the volume of direct advertiser business.
• 38% see increases in the volume of recruitment consultancy business.
• 75% say turnover is up.
• 53% have seen increases in marketing spend.
• 38% saw staff numbers decrease.
• 84% expect turnover to increase in the year ahead.
• 53% will hire more staff in the year ahead.
• 76% positive about the SME and corporate recruiter in the year ahead.

 

About the survey

In all whatjobsite surveyed 30 job boards in the UK. This group consisted primarily of whatjobsite job board partners (advertisers on our site) as well as whatjobsite approved websites. In addition, we invited other job boards that are not advertisers on whatjobsite but are widely considered to be top tier sites in their area. Respondents consisted of Managing Directors, Sales Directors and Marketing Directors and Managers of such job boards. The survey was carried out online with further research conducted directly with job boards themselves.

 

 

Background: other views of the online recruitment market

 

Perhaps the best way to see exactly how traumatic the last number of years have been for the job board sector is to view the long term trends. The Born Job Advertising Index is a statistical index of the total number of jobs advertised across a wide range of job boards in the UK. The Born Index was begun in June 2007 (with the index set at 100). In the graphic above we can see the monthly job advertising trends since June 2007.

As will be immediately apparent, the Born Index reached its highest level of 116 in August 2007. Since that time the trend has been generally downward. A year later in August 2008, for example, the Born Index was at 88, giving us a 24.1% reduction in job advertising. If we then look at the Born Index figure of 46 for August 2009, we can see that this marked a 47% reduction on August 2008 (88) and a 60% reduction on the high of August 2007 (116).

But August 2009 marked the low point in job posting volumes with a slow recovery starting in September 2009. By February 2010, the index was up 41% on the August 2009 trough; and was up 12% compared to February 2009. While the trend was healthy and upward, the index of job posting volumes in February 2010 was still some 43% below the August 2007 highpoint. Clearly the sector still has a long way to recover.

 

The state of the market

What has happened to the job board sector over the last couple of years has been challenging and while the recovery may be gathering pace, there will continue to be fallout in the market. This can be seen in the number of job boards being offered for sale as well as the increasing number of Zombie job boards (Zombie job boards are job boards which are effectively out of business but maintain the appearance of being in operation by carrying jobs for free from selected recruitment consultants). Even well-known and well-established job boards have parked brands and sites in their networks and are instead focussing on their core offerings.

What’s more, the industry is constantly abuzz with rumours of job board insolvencies. Like other sectors, concerns centre on job boards seen as being highly-leveraged and over-extended. Whether there is any truth to these rumours is uncertain, but the fact that such rumours are circulating is indicative of a febrile industry.

The rate of launch of new job boards has fallen too. There have been some successful launches over the last number of years but, in general, few job boards have had real and tangible success. These failures will be due to the wider economic conditions and a frighteningly competitive market, but may also be due to specific structural changes in the sector.

Specifically, there has been a subtle change in the job posting and distribution market. Job posting services distribute jobs from recruiters to job boards. Being plugged into a job posting service is essential for new job boards as few job board clients are willing to go through the effort of posting jobs themselves on a trial site. In the past, new job boards could establish relationships with job posting services and plug into their distribution channels. This allowed new job boards to pull job inventory onto their sites. While this inventory was largely carried for free (job board didn’t charge clients to advertise for very long trial periods), it did give the new boards the chance to build candidate numbers.

But some of the main job posting providers are now charging considerable sums to integrate new job boards and many start-up job boards simply can’t afford it. Effectively, therefore, these new entrants are starved of both job inventory and clients which has resulted in still-born job boards. In many ways, job posting services are now the gatekeepers of the job board market — and many in the sector have expressed concerns over their potential role in curtailing free competition.

Another change in the last year has been the increasing use of social media as a recruitment tool. Again, many see this as a threat to the job board but while social media recruitment has and will become an increasingly important part of recruitment strategy, it is very unlikely that it will presage the end of job boards for the foreseeable future. What is more, leading job boards have responded to the challenge of social media recruitment by adopting social media strategies of their own. Most quality sites are now creating job communities on LinkedIn, Facebook and Twitter.

Finally, the Flat Fee Online Recruiter product continues to grow. From just a couple of operators a number of years ago, this sector has now grown to over fifty players. Indeed, the biggest growth in this sector seems to be coming from the recruitment agencies themselves offering flat fee online recruitment as a parallel product to their traditional placement service.

 

The Survey

What follows is a sample of the questions asked in the survey, an outline of our conversations with job boards about these questions and our own analysis.

 

In general, how has user traffic and job performance changed on your site compared to the same time in 2009?

It will come as no surprise that, with the employment market as it is, most job boards have seen significant increases in key candidate statistics. Unique user and Visits, long the most popular statistic for evaluating job boards, have increased for virtually all sites. Most have also seen increases in job application statistics, candidate registrations, CV-loads and email sign-ups. But while it is always positive to see website traffic increase, many job boards have admitted that the quality of candidates may have decreased while recruiters are reporting significant issues with candidate spam.

 

In terms of your different clients/advertisers, how has the volume of recruitment advertising business changed for each compared to the same time in 2009?

As will be clear from the graphic above, most job boards (69%) are seeing an increase in the overall volume of advertising. Interestingly, however, most were excited about the rebound in the direct advertiser market. 53% saw increases in this business in the last year.

In talking to job boards we found that most had seen between a 30% and 60% drop in revenues last year and put most of this loss down to the almost total collapse of the direct client segment. This is a high-margin segment for most job boards so any recovery in this sector has real bottom line impact on profitability. This excitement also applies to the recruitment advertising agency business too —though all the job boards we spoke to admitted to a degree of discomfort in dealing with (and the terms offered by) the remaining recruitment advertising agencies.

 

How have your published recruitment advertising rate card prices changed since this time last year?

See below.

 

How have your real and actual rates and prices changed since this time last year? For example, have you been able to effectively increase prices by removing complimentary products or have you had to decrease prices by adding more complimentary products.

As will be seen from the results of the two previous questions, some job boards have managed to increase their rates but for the majority rates have stayed the same. This will come as no surprise. The market is increasingly competitive with some of the leading job boards cutting their prices —especially for the self-service e-channel job advertising product. What’s more, the increasing number of Zombie job boards continues to put deflationary pressure on all rates. It does seem, anecdotally at least, that niche sites may have held their prices better.

 

With regard specifically to your Recruitment Consultant business, how has the use of the following products changed compared to the same time in 2009?

Again, we can see the trends in the use of products by the recruitment agency clients of job boards. Again all are up, signifying an increase in general employment advertising activity. What’s more, the CV database product continues to see growth ahead of job posting or any other product.

 

With regard to Direct Advertisers only (Companies, organizations, public sector but not including Advertising Agencies or Recruitment Agencies), how has the use of the following products changed compared to the same time in 2009?

Much like the recruitment agency sector, the overall volume of business is up in the direct advertiser segment too. However, while all products were up, featured jobs (enhanced job posting products) were reported to be ahead of standard products.

From talking to job boards, however, this turned out to be less a reflection of increased spending by direct recruiters than the discount necessities in a more competitive market. While rates have stayed the same, most job boards are now offering upgrades or enhancements on their standard products in order to close deals. This is especially the case for the direct client —at least the direct client requesting the account managed service.

Not also the increase in the the use of CV databases by direct recruiters. A couple of year ago it was unusual for job boards even to offer this service to direct advertisers. Now, however, it is an increasingly common part of the standard recruitment advertising package. It also marks a subtle change in direct recruiters from passive advertising to active candidate sourcing and may indicate a generally more active role by direct recruiters in the years ahead.

The general consensus is that while the market is stronger than last year, the direct market still has a long way to go before it reaches the heady levels of a couple of years ago.

 

With regard to Recruitment Advertising Agency business only, how has the use of the following products changed compared to the same time in 2009?

The Recruitment Advertising Business remains an important part of the revenue mix for job boards. Again, this is welcome business as, traditionally, the recruitment agency business is less sensitive to price and deals tend to be larger due to the commission-based structure of this market segment. All sites are seeing increases in the purchase of core products by recruitment advertising agencies.

A lot of recruitment advertising agency business is, however, dependent on a price-indifferent public sector. There is little doubt that employment in this sector will decrease after the election. In addition, with the collapse of Barkers, a leading Recruitment Advertising Agency last year, many job boards express both caution and frustration when dealing with this sector.

What’s more, the advent of social media recruitment has given recruitment advertising agencies a much-needed value-added product to offer to clients. Recruitment advertising agencies continue to use job boards as core recruitment advertising tools, but are increasingly touting social media strategies as recruitment advertising and sourcing tools. This change may result in advertising spend drifting from job boards to social media activity and may help recruitment advertising agencies recover some of the revenue that they lost with the flight from print.

 

In terms of your own company, how have the following elements of your business changed since this time last year?

The percentage of job boards seeing increases in turnover is striking. 75% reported a bounce back. But the survey only captures general trends. In our conversations with job boards, most job boards quoted increases in turnover in the region of 15% to 30%. Job boards with exposure to the public sector saw the strongest growth.

It must be remembered, however, that even at the higher end of 30%, job boards are still considerably down on levels a number of years ago. This will explain the decrease in staff numbers. Significant job losses occurred in the sector in the last eighteen months. Worst of all, many job boards lost quality and experienced staff and replacing these will be difficult. The tendency amongst the larger players to hire cheaper classified sales staff from print and online directories has resulted in a decline in the quality of service being offered.

The smaller independent sites have, it seems, held on to their more experienced staff and the level of expertise is apparent. This may well offer them a real competitive advantage in the years ahead. However, with the generalists often being the first experience of online recruitment for direct recruiters, the decline in staff knowledge, expertise and experience may have longer term consequences for the wider job board sector.

 

Over the next year, how do you predict the following elements of your business to change?

It is clear that most job boards surveyed are positive about the year to come. 84% anticipate increased turnover. Indeed, in talking to job boards, the budgeted range of growth is between 25% and 35%. This brings growth rates to the levels enjoyed during the hay days of the early noughties.

However, all admit that these projections are tentative and somewhat “finger in the air.” There is still considerable fear that there will be a double dip recession. In addition, the forthcoming election will see cuts in the public sector and, as a consequence, a decrease in hiring in this sector. How this impacts on the wider economy is uncertain.

Website development also seems to be back on the agenda too. Very little significant development occurred in the sector of the last couple of years —with the exception of iPhone applications. Always an innovative industry, it’ll be interesting to see what the sector brings us in the year ahead.

One additional note of optimism is that many job boards anticipate hiring more staff this year. As we said above, the biggest challenge in hiring is likely to be hiring quality staff.

 

How positively or negatively do you view the year to come as far as potential growth is concerned for each of your particular clients lines?

The key to recovery for most job boards lies in the direct market with 76% anticipating an increase in business in this area. Few job boards were able to quantify the potential growth in this sector but all see the direct advertiser as essential to returning job boards to levels of profitability seen in the past. Indeed, for most job boards the levels of interest from the direct advertiser market is the single largest driver of optimism.

What’s more, it is the view of most job boards we spoke to that the direct market still has a considerable amount of structural growth ahead. This is both because of the better economic conditions, but also because the continued drift of recruitment activity from the recruitment agency and print advertisers to the job boards.

The Recruitment Consultant business looks positive too. However, because of the low margins on this business for the majority of job boards, the share that this business will contribute to revenue growth is seen as relatively modest. Indeed, with so many job boards offering unlimited deals and/or memberships, many confess that they will see little or no increase in revenue from growth in this sector in the year ahead. Not until the general employment market returns to a candidate-tight status, do job boards expect to see significant revenue growth in this sector.

The Recruitment Advertising Agency business is also viewed positively. Again, like the direct advertiser market, this is a high-margin element of the revenue mix so any growth here will have significant impact on profitability. However, as we outlined above, many job board are aware that Recruitment Advertising Agencies, while offering job boards as part of the recruitment advertising mix, are beginning to focus their attention on the high-touch and high-value social media recruitment space.

 

Conclusions

In general, the job boards we surveyed and spoke to were positive about the year ahead. Less scientific but perhaps more illustrative was that in talking to job boards we got the distinct impression that things were beginning to feel like they were getting “back to normal” after a traumatic couple of years.

As we also said above, the majority held most hope for the direct advertiser market. Job boards can have little impact on the overall levels of employment activity but advertising strategy seems to have shifted markedly from candidate attraction to advertiser attraction. Prices are coming down and exclusive offers and package deals are now part of the job board offering for employers.

The Recruitment Advertising Agency business has returned and is also most welcome. However, following the collapse of Barkers in which many job boards lost money, many smaller independent job boards are wary of investing too much in or exposing themselves too much to these clients.

Recruitment Consultancies are still the core of the job board business. Their job inventory and regular invoices is fuel on which job boards operate. However, most of the job boards we spoke to seem to think there is little likelihood of significant revenue growth in this sector. Of course, our survey group is of leading job boards so these sites will, in general, have held their recruitment consultancy clients. It was the second and third tier sites that have suffered most and these might see growth here.

Finally, we would like to thank the BORN team for the permission to use their statistics. We’d also like to thank the participants in our survey for the time, their input and their generosity in sharing their thoughts, insights and opinions with us.

If you have any further questions about this survey, don’t hesitate to get in contact via out contact page.