Flat Fee recruitment – a direct question to main player job boards

I’m intrigued about something (as first posted about on this blog: "Are job boards ruining what could have been a beautiful thing")–  so  want to ask a direct and genuine question to any senior job board types out there on twitter or stumbling across this 'ere blog.

 

Flat fee recruitment agencies are undercutting your business model by selling space on your site to direct clients at less than 10% of what you would charge if they came to you directly – therefore losing you revenue hand over fist on a daily basis. With new proponents of this model jumping into the mix on a weekly basis have you perhaps created a monster or is there a particular reason (that I can’t fathom) that you are willing to see your brand being lined up alongside (and therefore valued comparably to), let’s be honest, non-entity job boards?

 

I am genuinely intrigued and whilst I understand my posting of this may not show me in best light (whether that be naivety in understanding the commercial working of a major name job board or naivety in thinking anyone may be willing to get involved in a public debate on it) I’m hoping someone can help me understand how this is viable for you long term?

thanks

Comments

[stuart mockford]

Nothing new here, recruitment agencies have been doing exactly this for years, ie. posting jobs to job boards at a fraction of the cost, had the company posted directly.

What we are seeing is a new type of recruitment business with no branch network, highly technology aware and an extremely low cost base; it is a natural evolution (a hy-brid if you like) of both the recruitment and recruitment advertising industries and I would expect the recruitment brands that see the future to follow suit.

[Alcartwright]

I remember (back in the day) when trade magazines took ads from job boards and no one (except the publishers) could understand why.

It basically boiled down to money /revenues. The magazines were desperate for money, they'd take it from anyone, even their competitors.

I imagine the job boards are the same now. They don't regard flat-fee companies as threats or competitors; they are driven purely by money and targets.

[Alex Hens]

well that's not exactly true is it Stuart? The differentiation was that (in most instances) the ads were unbranded / blind (whether as a term of the contract or because that's how Rec Cons preferred to work) - and also with the Rec Con charging a significant %age of starting salary, the actual cost for a direct recruiter to use them gave a balance between the price of direct recruitment (for which you could expect to pay several hundred £s and do it yourself) and the cost of the alternative - as far as the job board was concerned.

When the first of these came along then sure it was a natural progression for sales and figure hungry job board. "You wanna buy 10,000 slots up front? yeh - surer, slip on a logo for the same price. Sign here!"

But now the proverbial worm is indeed truly turning to bite the Job Boards on the ass (I love to mix my metaphors :). With the price differential between direct posting and using a Rec Con actually reversed and many people seeing "more coverage is better than less" as a no brainer then revenue has to be dropping through the floor and therefore be unsustainable?

I mean sure - if you're a niche or random long-tail job board then getting a volume of £5 postings is like manna from heaven - but if you're an established brand with a marketing team, decent sales force and very expensive Sales Director and board member salaries to meet then it's surely not viable.

Just kinda reminds me of when Reed.co.uk suddenly stopped offering free advertising and quite a number of Rec Cons were up in arms about how dare a company mess with their business model - which is of course farcical. So I'm wondering out loud - would you be so willing to spend £500 on Webrecruit or whomever if it didn't have JobBoard or TotalJobs or the Ladders or whoever else on there?

Let's face it - we all know (and you better than most) that 80% of responses come from 20% of job boards, and I'm sure the quality %age is even more skewed.

So yes - it is a natural evolution with the conditions as they are - but can the main players in the job board market afford to allow those conditions to remain?

[Stephenodonn]

I'll need to think more about this, to have a firm opinion.
However it does remind me of the multipacks of sweets, crisps or Coke that are sold in supermarkets. Each individual pack is labelled "Not to be sold separately". My point is that the manufacturers are dictating the terms on which their product can be resold (or not).
Whilst it would be difficult to police, I could see job boards exercising the same control of their own product. Unless of course, they're happy to receive the revenue as a trade-off to the appropriation of their brand.
I should point out that several fixed-fee recruiters advertise through www.1Job.co.uk, and we are very grateful for their business.

[Jamie Leonard]

I completely disagree with you Stuart. These companies are not the natural evolution of recruitment. In fact, half the job boards that sell to these companies have no idea who their selling to and how the jobs are being used. But hey, that’s not their fault and fair play to them. If they can take advantage of some telesales rep £3k short of their target on the last day of the month, who’s to blame? It’s the job boards fault!

I don’t think we should stop selling to these companies, I just believe we should increase the rate to a level that they can’t undercut the people that sold to them.

If half the job boards upped their rates to a place that stopped them butchering what we offer, they’d soon disappear. And yes, I get that the same could be said for the staffing market, but those rates are historically low, when job boards were in a lot different place than they are today, and the offering is completely different.

As it stands today, TheLadders have some existing contracts in place with these companies, for pretty much the reasons above. Moving forward these deals will be put under the microscope and if I am anything to do with them, they wont happen.

These are very much my views and not the views of TheLadders.

[Alex Hens]

As I say Stephen - with all due respect I'd class 1job.co.uk as exactly the long-tail job board where Flat Fee-ers are manna from heaven, but I don't see how the big name job board brands benefit from being bundled alongside you and therefore perceived at a value of 1/10th of a £600 flat fee or such like.

As always be interested in your further thoughts though :)

[Stephenodonn]

Good point Alex. However, 1Job doesn't have different classes of clients and charge rates (employers and recruitment agencies). We charge per click-through, at a fixed rate, with no bidding.

[dom sumners]

this is a simple one -
1. crap job boards should take this advertising as they should take money from wherever it comes.

2. good job boards should not take this business at these rates in a million years - its not like a rec agency at all - its allowing your product to be resold at about £10 a job to an advertiser who would have paid £300.

Sadly most sales management are either too dumb or much more likely are pressured to hit targets by any short sighted means (in online recruitment - the long term is not a factor).

The good job boards that do take it - treat the fact like a dirty secret that they don't like talking about.

[Keith Robinson]

Had to think a little while about this one and it wasn’t an age thing.

So as an industry "whore" who has taken $$ from all sides my take.

- First we have to be precise in what we call flat fee recruitment. Their are some companies who are not flat fee recruiters BUT space brokers - they offer no screening or short listing services BUT package together packages of job boards and sell at a mark up. They buddle some good boards (who agree are and will take money from anyone plus some aggregators plus some free to use sites. THIS is NOT flat fee recruitment.

- UK media has for 20 years had different ratecards - when I ran Computer Weekly the cost of a Full Page for a corporate was double or triple the cost of a large recon - why volume. In 85 we moved from No of ad i.e. frequency discounts to volume and the "cat was out of the bag".

- Both fixed fee and space brokers buy in volume and sell on either with the edition of other services e.g. screening or just with a media mark up.

- Is fixed fee an evolution - well it might not be the "evolution" but it is the exploitation of all the techniques available to recruiters to reduce cost - The effective use of multi posting, using screening and sourcing techniques efficiently, using low cost screening "factories in India or Eastern Europe and finally the communisation of a process.

- They also run very lean and mean operations and are the RyanAir of the recruitment industry -but customer like the price and like Ryan Air we I suspect will forgive a lower service level. So to that degree they are a form of evolution.

BUT should big successful job boards sell advertising at such discounts - well last week a friend I know was concerned that his $8 a post for a not big volume might not be as good as his competitors are paying. A top 4 board by the way.

We reap what we sow - I encouraged volume at Totaljobs - why? because to me job boards were about volume and all research showed that more postings = more traffic so we entered a volume war. Trouble is it is true - Indeed the US aggregator has proved "volume of jobs wins traffic" the cat well and truly is out of the page.

Another issue for job boards is that the only content they have is/are jobs - no jobs = no traffic or $$.

So to answer the $64k question - why do the big boards engage - answer are all above;

- Greed
- Fear
- Targets
- Volume
- Management
- Lack of confidence.

And social media will only make the issue worse!!

- The flat fee guys will use to find candidates cheaper

- Social will take vol and revenue

- To fight back we will see a volume and rate war.

The deepest pocket syndrome.

Bit of a rant and sure I'm wrong or simplifying it all.

Robbo

RESPONSE FROM Alex Hens :

Thanks for your input Keith. Absolutely invaluable as a man who's been there and can indeed tell it how it is.

I guess the point is that the sales teams at the major job boards were constructed with one focus - Land Grab in an emerging market (I've always said the first 10years of the Market was like the Clondike). And they've done a good job in establishing the business that has established the brands. The thing is that in a market that has evolved so quickly are those people still the right ones? Or indeed, do the senior management realise that if they don't change the goal posts (in terms of what their Sales Directors are bonused against) to match the fact that the game has changed then they're potentially doing themselves out of work? Because if this model perpetuates (and whilst the quality argument is very valid - a price different of several 100% is to much to ignore by most clients) then there's no way they can afford the big teams to manage or big marketing budgets.

Otherwise it's time to downsize and get your costs to be like that of a niche / longtail job board player as quickly as you can.

[Keith Potts]

Firstly I'd like to say that I am not prepared to comment on what should or should not be charged  (direct reference to fees or multiples of) on a public domain due to the fact that I would be breaking competition law and would be liable to a fine which extends to my entire group (The fine is 10% of total group revenue).

What I can talk about is our three customer types 1) Recruitment agencies (RA), 2)  Advertising agencies (AA) and 3) Direct employers (DE). For each category of customer we have different products available as the customer types are quite unique and require different levels of service (branding, volume deals, access to CV DB etc).

We do not currently offer a reseller package apart from the types of relationship  we have with Advertising agencies. The type of customer defined in Alex's blog would be what we define as a reseller which we don't support. If we do find a situation where a reseller has persuaded our sales team that they are an RA but behaving as an AA, we politely provide them with the packages and pricing on offer to the AA clients.

Jobsite has always had this policy and from time to time we have discovered unscrupulous companies violating this policy. The resellers are normally small RA's with a hybrid model, technology companies with a posting model or minor Job boards trying to attract more candidates to their board. These "resellers" add little or no value to the client or the job board and became prevalent around 2003.

What is important to us is to provide our candidates the very highest quality vacancies, with speed and relevancy. We do this by working very closely with RA, AA and DE clients to offer the best and most suitable package for their recruitment needs. What we are NOT interested in is a reseller model where ouselves, our clients and our candidates are being deceived and undermined. We just won't have it here at Jobsite and if you know of any such company breaking this policy, please kindly inform us so that we can deal with the situation accordingly.

Keith Potts
CEO
Jobsite

RESPONSE FROM Alex Hens:

Thanks for taking the time to input on this Keith.

Back in the days when I was booking media I was always a massive fan of Jobsite for exactly that transparency - which I always felt gave the candidate a far better experience too, which had to be better for the client. But from my personal experience and those of people I've spoken with I'm afraid that Flat Fee is ultimately Reseller by a different name.

I know that recently I was approached (as a provider of recruitment technology solutions) to quote against a requirement to build a technology that was spec'd to simply automate the posting facility across multiple boards using massively discounted rates (I'm under NDA so no names). Whether it's going ahead or not I don't know - we're not building it I know that - but like it or not there's a particular arm of the industry is full steam ahead down that path.

I also have a very good friend who recently used the highest profile of Flat Fee providers, WebRecruit, and received zero additional service - if the applications didn't come through to her directly then they were certainly simply bounced to her with no screening or input. But for £495 why wouldn't she use that facility. And I don't know which sites the role was carried on - but I do know that Webrecruit post to your site.

I also recently spoke to someone in sales at a different job board to yours recently and they've seen first hand jobs that they quote against appearing a week later through a flat fee recruiter account.

So the trouble is - how exactly do you distinguish? I'm thinking that maybe (certainly in other job boards if not your own) a blind eye has been turned for quite some time, or indeed there's been a massive degree of naivety shown - and with Keith Robinson rightly pointing out the SEO benefits of volume ad publishing, I'm wondering whether this is something you have to revise your business model to live with because maybe this horse has well and truly bolted?

[Gareth Lloyd]

Alex – thanks for the invitation to comment - and apologies for the long post.

I hate to state the obvious but will do anyway – of course job-boards are commercial enterprises and of course we focus on P&Ls. Whilst it would be nice to say that every action is taken with long-term strategic impact in mind, of course short-term tactical decisions come into play. E.g. some top tier boards offer free trials from time to time, and others make good money from targeted emails from advertisers that we won’t accept at Trinity Mirror Digital Recruitment (e.g. see my tweet of 11 Feb). Both are just examples of short-term tactical decisions that those businesses have decided are right for them at that time.

We have the same policy as Jobsite on resellers – our Ts & Cs prohibit reselling of ad space. We do enforce the ban on space-farming, though there is no doubt that from time to time, some advertisers do manage to slip through the net.

We sell different products at different rates to different client types, because their needs are different. However, the lines can be increasingly blurred, as client types can now often be hybrid (as Stuart says) – are they direct, or a recruitment consultancy, or an ad agency? We have ad agencies (including my old employer in Australia) performing recruitment consultancy-like services; and recruitment consultants here who perform ad agency services; RPOs who are both the client and the recruitment consultant; and then smaller new operators trying all combinations of service offering. There is a definite line (between ratecards) when it moves from being “recruitment with an advertising bundle” (which is well-established) to “substantively, just an advertising bundle”. If the latter, then it’s really just an arbitrage play, and it is up to us to get them on to the appropriate ratecard.

Another way of assessing the merits, for me, is – is this bona fide purchasing on behalf of a specific client, or space-farming (block-booking to get a volume/rate discount and then selling on to all-comers)? The latter is contrary to our Ts & Cs, so we’ll work with the client to determine how to move forward in a way that complies with our ratecard and terms.

We’re acting as a jobs marketplace, and transparency and honesty are important for a marketplace to work effectively. So, as Keith P says, we want candidates to get the right vacancies at the right time, and clients to have a level playing field (in terms of product and price) in reaching those candidates. Space-farming isn’t in anyone’s interests: clients, candidates or job-boards.

With the volume of advertisers that TMDR deals with, there’s no way we get this right 100% of the time; and there are conversations on a regular basis about specific deals and which side of the line they fall on. So, like Keith P, I’d very much welcome anyone letting me know if you notice any advertisers on any of our portfolio sites breaking our Ts & Cs in relation to this.

Change does not equal doom for job-boards/online recruitment advertising. As we all know, change is the only constant.

Gareth Lloyd

[Comments here are purely my own and don’t represent the views of Trinity Mirror plc]

RESPONSE FROM Alex Hens:

Let's be honest Gareth - if there's one person you don't have to appolgise to for a long reply to a post then it's me ;)

Thanks for taking the time to add your two peneth - but my feeling is that by allowing Rec Cons to evolve their offering purely off the back of massively discounted ratecards many of the established job boards may have blindly started a chain reaction they/you can't stop. A forced move to a revenue model that can't support established running costs. Because direct clients that would have spent with you in the past will increasingly turn to wherever to get the best deals. That's human nature.

So whilst change is constant, this is something that collectively the job boards are (or at least were) arguably in a position to foresee and manage - I question whether a culture of shorttermistic target chasing has blinded the big players, which in the long run will reduce the investment Job Board owners have made to very very little. Unless of course £10 a job posting is good enough to sustain your business - in which case there really is nothing to worry about :-]

[Rpennie]

Hi All and sorry to interrupt your "old boys network" talking "the old days" discussion but I think the initial question IMHO should be looked at in a different way which offers everyone a chance to change for the future and make more money!

The Flat fee recruiters are playing in a space where everyone has made too much profit/margin for years now as every job is treated equally.

In reality not all jobs are equal, not all candidates are equal and not all job adverts can generate the same end value. So rather than offer fixed cost adverts for any old job (or search job board databases for skills but that is a different story) at a fixed fee we should start to look at different adverts costing different amounts. So an advert slot for a qualified accountant should cost more than that for a credit controller or a high salary job posting should cost more than a low level salary job.

And could you start to look at Google Ads and start to serve job postings in bid value? [I assume the boards are looking at all revenue models]

Therefore fixed fee recruiters couldn't do it and it all becomes higher value SEO consultancy and plays into 1Jobs hands?

If I have gone off topic I apologise or if this is a private party I will stay watching only!

RESPONSE FROM Alex Hens:

You've got some interesting thoughts and observations there - so thanks for your comments. It's unfortunate that you've cheapened them with a purile and unfounded jibe at this being some sort of club (certainly not this debate anyway) and then further by choosing to remain anonymous - but open public debate is not for everyone (particularly when they favour cheap shots).

But to go back to the valued part of your contribution - the idea is interesting but I'd imagine not particularly workable in terms of a clear and transparent rate card, the thing that most people actually want to see. If you're buying space on behalf of a client they don't want to know it might be between £x and £y - and they also wouldn't accept that role x = £a whilst role y = £b+50%.

So personally I think you're approach would be a little like throwing the baby out with the bath water - or even using a sledgehammer to crack a nut (metaphor-pick-&-mix).

But it's an interesting proposition and hope you don't stay watching in the future - just next time try to leave your shoulder chips at the door and come as you :)

[steve evans]

Interesting thread, let me add my thoughts from the point of view of a recruitment owner.

Why does this model exist? Because the recruitment landscape has changed. Far be it from me to be seen to educate this respectable group, but let me point out why recruitment is where it is today.

The major change is that (on the whole) clients do not hire against potential, they hire against budget. It is no longer the case that a good CV will get an interview on spec. Clients recruit when they have budget sign off. This means that the recruitment process has gone from being predominantly proactive to largely reactive. Recruiters are not able to groom and nurture quality candidates and then “sell” them to their network, they have to wait to be assigned a role to work on. Candidates have understood this and now do more work themselves to get themselves a job. This levels the playing field and takes the onus away from proprietary databases and towards online tools. Which leads me onto…

The advances in job board technology, with effective email alerts and intuitive artificial intelligence, serving recommended jobs has dramatically increased application rates through the boards.

The relationship between the client paid advert and the non branded ad has changed, as the ideal adverts are recommended by the job board regardless as to how that candidate is initially attracted with the initial branding.

The initial introduction into the job search has changed as more and more job seekers turn to Google rather than their recruiters, 101 million searches for jobs last month on Google, this changes the initial engagement behaviour of the candidate. However…

There is no loyalty to job board brands. No job board can claim 100% exclusivity to their candidate database. Clients know that to make sure their role is seen, they need to get the greatest coverage.

Clients also know that advances in technology has drastically reduced the cost of recruitment. At the click of a button we can post a job advert to 750 job boards and then the job specification is “parsed” across the databases, automatically returning best results based on semantic searches (and with another click they can review all relevant biogs on LinkedIn). Client know this simple process isn't really worth 20% of the annual salary?

One final note. I have never thought much of the contingent recruitment model. Why should I work hard to find the best candidate only for the client to turn out not to have budget or the role changes (or not be a good employer).

My company (www.NetNatives.co.uk) does everything a recruiter NOW does; we create the campaigns, post, search, filter, screen, shortlist organise interviews and reject/confirm but our model is paid our ability to do this, not our client’s ability to hire. We are not job board resellers.

And on a final FINAL note. I have been exposed to some pretty horrific recruitment practices in my 15 years all because the consultants wanted to close the deal. Not for the benefit of the candidate, nor the client but for their pocket. This does not happen when the client makes the objective choice to recruit without undue and irrelevant influence.

Hope this adds to the debate and if there are any questions please come back to me [email protected]

RESPONSE FROM Alex Hens:

Great input Steve - thanks very much.

Most of your points and observations on the evolving face of recruitment are IMHO right on the money, and it sounds like you approach your activity with diligence and integrity - which is great to hear. But I fear you may be one of the (few) exceptions to this.

The Recruitment Consultancy industry has over the years, let's be honest, not really been known for it's high business ethics. I'd argue that it's impossible for a job board to actually keep tabs on what the heck is happening with any volume based account & whether the practice is akin to reselling or not. Certainly the cost of doing so would be disproportionate when you consider the time, effort and potentially legal ramifications of then stopping a suspected account anyway.

But with the manner this has run away from the job boards (and anyone who thinks it hasn't is I'm afraid simply wrong) the question is whether their revenue model can actually survive a such a massive change, because even though direct bookings may only have made up a lesser %age of postings, with a revenue value so disproportionately large it was still always (I'd imagine) massively important for the Monster, Jobsite, Totaljobs etc of this world. Hell - if it wasn't they certainly wouldn't have such a big (relatively) direct sales force & marketing activity.

And clients are shifting. Shifting at pace. Because they're being pitched too from every angle by this low cost solution and that - and many a recruiting client doesn't give a damn if it's breaking some job boards T&Cs or not. Especially at a price where it's a no brainer to give it a go and see what drops in. The market is so confused anyway then why spend time & a couple of grand trying a couple of job boards when this company or that reckons I can try all of them for sub £500.

And if I were still in an Ad Agency booking media for clients I'm pretty damned sure they'd be asking me why they should pay £500 a job posting on a single site when they can get 5-10-15 other job boards for the same price with Flat Fee business.

So things have changed - yes. Technology has evolved - yes. But can big boy job boards afford to allow this model to prosper - I'm not so sure they can. But then maybe it's too late already.

[stuart mockford]

Gents very interesting debate, well done to Alex. I have been around for almost as long as the two Keith's and do not profess to have all the answers but one thing is for certain, the market will decide!

[Stephenodonn]

I agree that the typical differential in the "per advert price" between volume-booking recruitment agencies and single-ad-booking direct employers is so great that this sector was bound to appear. People will always look to exploit loopholes, and in this instance the job boards need to decide on what terms they will play the game, if at all.
For as long as there is a £10 to £300 spread in the cost of posting a job advert, there will be those who can find a profit margin in that space.

[stuart mockford]

perhaps we should take a look at the South African model, employers and recruitment agencies pay the same to advertise jobs.

RESPONSE FROM Alex Hens:

I think that would be a good solution - but I'm not sure that the job boards could afford to (as I've prattled on in my responses above ;)

[Nick Gallimore]

I manage a Recruitment Agency (in the tech space, predominantly perm, and operating a model where the focus is - unlike the Flat Fee'ers - focussed much more on selection).

Despite a per-head (Consultant "head", that is) increase in the amount we've spent on on-line advertising, we've seen a massive drop in the amount of vacancies filled via the advertising medium (it's now at c10%, down from about 25% in the preceding 12 months).

This is a continuation of a trend that has been visible since the peak of the on-line advertising model in about 2004.

I don't understand why a client would use a Flat Fee company with no guarantee of job-filling (we advertise for our clients working on a contingency basis and they pay NOTHING unless they take a candidate through us), but I do wonder what the effect of the Flat Fee'ers is on the job-board model as a whole - because I see job postings going up, but efficiency and delivery going down.

We're probably 12 months away from moving away from on-line advertising (at least in it's traditional, job-board-led form), and I know we're not the only ones.

RESPONSE FROM Alex Hens:

Great to hear yet another perspective Nick - thanks for getting involved.

Interesting indeed - & I think you're right, there's still a massive gap between where volume Flat Fee'ers can deliver and more specialist requirements that requires engagement, established networks and industry knowledge. Maybe this is what separates the added value quality recruitment consultants from the (cow)boys.

Or maybe this is where print comes back into the mix. Print is dead - long live print :)

[Jay Cholewinski]

An interesting debate. webrecruit was set up to offer clients an alternative to traditional recruitment agencies and newspaper advertising.

webrecruit started off this alternative recruitment model back in 2001 when we took the bold move to be transparent with the client on how we find candidates using online methods, and to strip out some elements which are the domain of the traditional agency, such as interviewing candidates. This puts some parts of the recruitment process back onto the client but we reflected this in our lower fees.

Over the years an increasingly growing number of companies have been formed which have taken our lead but who we feel do not follow the ethos of this online recruitment agency model, and instead do indeed act as more of a reseller. By definition, certification and the regulations set out in the Employment Agencies Act we are a recruitment agency, albeit a new breed of online recruitment agency.

I certainly empathise with several of your views regarding this sector, but we started webrecruit and position ourselves in the market space as an alternative to a traditional recruitment agency, not as an online recruitment advertiser. Our clients pay us to fill a vacancy, not to advertise it. If we are not successful in finding them a suitable candidate then we do not earn our fee. Our fee structure is geared around salary level and is relative to the amount work required at our end. We utilise several online methods to help us fill our vacancies: actual job board posting, whilst very important, is just one element, and we also see success from searching and sourcing candidates directly using sites such as LinkedIn and online databases.

I frequently recommend job boards to clients who fall outside of our model and who are interested in reducing their cost per hire through direct means. The online recruitment industry is going from strength to strength and will continue to evolve, enabled by new technology. All those involved have to adapt to the new recruitment landscape and I am confident that webrecruit will continue to add value.

Jay Cholewinski
Director / co-founder
webrecruit

RESPONSE FROM Alex Hens:

Thanks so much for stopping by Jay. Great to get your side of it too.

Unfortunately, however, I am going to have to come back at you in regards to your comment: "we started webrecruit ... as an alternative to a traditional recruitment agency, not as an online recruitment advertiser". Now I have never experienced your services first hand, but other than the fact "...if we are not successful in finding them a suitable candidate then we do not earn our fee" I don't see from the experience I've had reported to me that you differ in any way at all.

Webrecruit advertised the job you'd been sent, applicants were sent back to the person who'd engaged your company and that was that. Done. Where's the Recruitment Agency in that activity?

And if this is how WebRecruit, the highest profile of Flat Fee'ers / Online Recruitment Agencies are working (even on occasions), in a manner which would appear to be in direct contravention of many of the job boards T&Cs you advertise with (although of course - maybe in the instance that was reported to me you didn't use any of those particular job boards) then it doesn't take a great leap of imagination to appreciate that this is indeed common practice throughout the industry. Don't you think?

[Keith Potts]

Alex, thanks for responding to my post. I'm not sure this is a new issue for us here where the "horse has bolted". It is simply an issue of companies breaking our T's and C's. This has been going on for many years now and I agree that it is very difficult to police.

The product we have for Direct Employers is the Display advert and the Semi-Display advert. These products have been designed specifically for the Direct Employer and focus heavily on branding, time on-site and multiple email notifications. These are very different from Lineage adverts which are short, sharp, non-branded messages designed specifically for Recruitment Agencies. What we are seeing is an influx of companies buying a package of Lineage adverts and selling them on to Direct Employers without even adding any value. We view this as a violation of our T's and C's and to us, this is the same as buying a bulk lot of tickets for a concert and selling them on at a profit. How the ticket agencies handle this problem is to limit the number of tickets they sell to an individual but it is more complex for us, hence why some get through the net.

What is happening here is that Direct Employers are being resold adverts which have not been tailored to their specific needs. I have not met any corporate clients who would knowingly opt for a non branded, one week, one email notification advert and I'm not expecting to in the near future. If this becomes something that the Market desires then we will put together low volume discounts and packages accordingly. At present, as with ticket touts, these unauthorised resellers are bending the rules to their advantage.

Keith Potts
Managing Director
Jobsite

RESPONSE FROM Alex Hens:

Sorry Keith - it's happening. I (currently ;) have a very small window onto the media buying world, but even in my limited exposure I know a major FMCG who is going down that route within the next couple of days - I'll let you know how that works out if you like.

I've also spoken to a sales rep from a different job board who says they see this happening on a weekly basis - quoting clients on a requirement and then seeing the same thing posted a week later through a Flat Fee'er (although seemingly the client often comes back direct after that experience for a number of reasons).

And whilst I'm sure you won't see any movement from those direct clients who you have an established contract and presence with you - they'll have no doubt about the value of a quality presence with a quality job board - but I'd be very surprised if, especially in these particularly budget focused times, your sales teams aren't finding themselves increasingly losing out to Flat Fee'ers for SME or even larger businesses who still aren't particularly online recruitment savvy. It goes back to my original point (a long long way back up the page ;) - whilst you and I both appreciate the benefit of a semi or display advert, paying 2% (or less - perceived or otherwise) of that cost and still getting at least some presence on your site is pretty compelling to many - no?

But maybe you do indeed have the answer - let's face it, the volume deals will pretty much come whatever (because you've built, and are still building, a strong brand on a very good platform with great candidate traffic). Offer direct clients the opportunity to buy at a rate of £10-£15 for an unbranded week through a credit card portal and let's maybe level this playing field again.

:)

[steve evans]

This thread has been really interesting for me, reminds me of conversations we recruiters had in the late '90s. There was an air of protectionism in the air then. At that time it was aimed at the job boards, so there is a certain irony in the tone of this thread (although it seems that this thread is more aimed at protecting advertising agencies).

When I set out my business plan in April 2008 for my online recruitment business, it was based building a business would benefit employers and candidates based on the changes in recruitment I documented earlier in this thread. I ended up branding it flat fee as this was my perceived view of how I should be best represented in the market.

This thread has been interesting for me as it appears that we are in the minority with what we offer and how we work.

When asked what I do, I always answer that I run a recruitment company. If I am willing to run the gauntlet of being associated with estate agents and financial advisers but not be considered a recruitment company by my peers, I think it is time to re-brand my business!

I have not come into this market as an opportunist (even though opportunism isn't necessarily a bad thing, eh, Alex!), but as an ethical, commercially minded recruiter, who has run job boards, an ATS business and a £12 million turn 60 strong recruitment company.

Thanks for allowing me to contribute to these posts, it has opened my eyes to where we are in the market and how we should be perceived.

RESPONSE FROM Alex Hens:

I see what you're saying Steve - but if you're reading into this that it's about protecting advertising agencies then that's not coming from me. My background gives me a certain affinity for and empathy with that side of the industry for sure, but my thinking behind shaking this particular tree was wondering about things from a job board perspective - pure & simple.

It sounds as if you are indeed one of the exceptions that would prove the rule amongst your peers - because from my perspective it's a field that is awash with blatant resellers and resellers in kind. And I don't see how any job board can police it any more (or indeed if they needed to or wanted to). For me the cat is very much out of the bag. The horse has bolted. So let's talk about this friggin elephant in our room etc etc etc ;)

Now of course, you building your business properly won't be affected by any of this. You'll have delighted clients who will come back time and time again and even if direct clients can buy slots for £10-15 a pop then that won't matter as the value that you add far exceeds that - but yet still for a very modest £575. Hell I'll give you a go next time :)

Whilst you may not have felt you entered the market as an opportunist I can assure you I meant no insult by that because IMHO any business needs a good dollop of favourable opportunity for it to succeed, particularly when first establishing itself (I know I'm holding onto to every drip of it that comes our way as best we can). And I'd argue that the massive disparity between cost of direct and consultancy bought job slots, together with all the things you have listed in regards to technological and candidate evolution, have married nicely with your ability to see this and tie these things together to make this a great time for you to start your successful business. A time of opportunity.

But it's because of that same £ disparity that there's a tsunami of businesses following behind you - and I'd argue they're fixated in particular on "buy a load of slots - flog em on for £500 - bish bosh bang job copy posted - ££DOSH££".

But I could of course be wrong about that :)

[Al Cartwright]

Have to agree with you there Steve.

Most employers still find the job board market very confusing. They haven't mastered choosing choosing the best site or writing decent copy, or indeed dealing with the response.

It's easy to see why the recruitment ad agencies would feel threatened by companies operating similar models to yours. You basically do everything an ad agency offers (except print), and yet provide an simple, results based fee structure.

I've often wondered why an employer wouldn't use a flat fee recruitment company? For certain positions (£15k - £40K), it seems a no-brainer.

[Jay Cholewinski]

Many thanks for your feedback Alex. The fundamental difference between us and a traditional recruitment agency is the fact that we do not interview the candidates at any stage. Also, we decided to be very transparent with the client on how we go about filling their vacancy, with one of these methods being sourcing candidates through job board exposure.

I understand there is a lot of confusion as to what companies such as ours offer, but Webrecruit is an employment agency. This has been confirmed by REC and BERR.

We are simply offering clients an alternative to using a traditional recruitment agency. I respect the industry as a whole; we just identified a different level of service at a different cost that clients seemed to welcome.

An ad agency does not need to comply with the Employment Agencies Act – we do. I cannot speak for the other companies offering similar services, but Webrecruit is an employment agency. Without going into the full details of our offering, you seem to be just addressing one element of our service – posting vacancies online to source candidates to fill our roles. Isn’t this also an element of a traditional agency’s activity? I agree they have an additional layer of service (interviewing for example) and charge the client accordingly.

We live in a world of choice and we are just offering clients an alternative that still fits within the remit of an employment agency.

I think this is a great discussion and I appreciate the opportunity to speak up on behalf of online recruitment agencies.

RESPONSE FROM Alex Hens:

Thank you for stopping by and contributing :)

[Peter Gold]

Alex

You have clearly touched a nerve with this post and good to see some people talk the same old bollocks as they always have done! That aside let's go back to you original question.

1. Job boards can and should take the money while they can from any source as their lives are going to get ever more difficult.

2. The buyer (HR) does still not get it in the majority of cases. They think by advertising direct AND using a flat fee agency (instead of a "normal" fee agency) they are saving money (go figure).

3. Flat fee agencies do less so charge less - basic really. Ryanair has been mentioned and I'd agree that BA versus Ryanair is a good comparison - and somehow BA just keep on going!

But here's the real issue IMHO. Some of the big brands will start looking at direct attraction activities in earnest as most of the job boards deliver bugger all (and I do know as I have tracked them)which is easily proven at a basic level by simple traffic stats alone. The likes of Jobserve/Jobsite continue to perform in certain markets as do certain niche sites but it is the 80/20 rule all over and any half brained recruiter can look at their traffic stats and figure out what is working and what is not.

The other contender is the job aggregator. The job boards feed them for now (why!) but I have direct clients who feed jobs direct (thereby blocking the job boards) and get good volumes of traffic for nothing so why stick with job boards.

Google are doing a lot to help websites master their traffic and if you have access to the full webmaster toolset there is stacks of info that will help you optimise your site. I would estimate that any business should be able to halve their job board spend without losing out and in fact, being better off in many cases.

So for now, jb's are taking the money while they figure out a way to survive - which of course many will. Life will continue as it always does and debates like this will never go away!

A simple question like this causes such a debate - well done matey now get on with flogging your ATS - you don't have time for this social media thang!

Peter

RESPONSE FROM Alex hens:

A hot recruitment blog debate isn't worth it's bandwidth unless you've turned up and been all prickly and sweary ;-)

But you're right (probably), but not least in pointing out that I don't have time for this Social Media engagement and debate - all very distracting :)

[stuart mockford]

and in a further twist, broadbean has just appointed mark southgate (ex Barkers) as media buyer. What is he selling (is it just DMTG) at what rate and to whom?