IAEWS Member Congress 11-04-09

If you follow the ups and downs of the Job Board Business you know all about the International Association of Employment Websites. The group founded by Peter Weddle just 4 years ago has steadily grown through boom and bust to become a significant factor in elevating the conversation about this corner of our industry.

Things have been dark enough over the last year or so that a group of us have been thinking about the future of the industry in some fairly structured ways. In fact, Peter has even taken to calling us "The Future of the Industry Committee."

The group includes some remarkable people, Carol Barber from Bernard Hodes Advertising, John Bell from Boxwood Technology, and Ted Daywalt from VetJobs with occasional (but very meaningful and constructive) contributions from Gautam Godhwani of Simply Hired. Though it is just my opinion, I think that Gautam may very well be the all-around smartest CEO in our industry at the moment.  My involvement in the conversation has really been enriching and edifying for me and I am grateful to Peter for the opportunity to serve our community.

Part of Peter Weddle's extraordinary skill-set includes the ability to attract the right people and empower them to speak freely with him and with one another. The dialogue this group has been having for the last nine months or more has been challenging. We moved from articulation of our own individual perspectives to development of consensus based on the influence we have had on one another and some fairly wide-ranging primary and secondary research.

One of the neatest things about working on this project for me has been the opportunity to get to know and work with Carol Barber.  She was once just another faceless competitor to me but is now someone I regard as a friend and colleague. It has been truly enriching to work on concerns and issues that transcend the parts of our work that occasionally bring our companies into competition. She is charming, sophisticated and disarming. Knowledgeable, professional and street-smart; she is a very dangerous woman and it has been lots of fun to work with her. The association is better for her guidance as a member of the Board of Governors and she deserves both honor and gratitude for her service.

Ted Daywalt’s service to the industry in helping us come to terms with the tyranny of OFCCP Compliance while being a staunch advocate for veterans and their families is both tireless and legendary. IAEWS and the job board industry as a whole just wouldn’t be themselves without Ted. Much of Ted’s work on the committee is taking us down from 10,000 feet by reminding us not to over generalize and to remember that the niche job board world has unique features and challenges. He routinely injects a healthy dose of skepticism concerning quick-fix compliance solutions. Rigorous research coupled with very hard work will better serve corporate customers than the snake-oil and “no worse than anybody else” off-the-shelf answers proudly touted by vendors with dubious designs on their client’s budgets. Ted never lets us forget this.

In the course of the committee's work to date, we have exchanged hundreds of emails and participated in dozens of conference calls. We have also conducted three waves of surveys and used validated proprietary market research. The data-stream includes numerous articles that suggest that job boards have some serious catching up to do if they are to keep pace with the evolution of social media and its transformative impact on recruiting and how people see themselves in the world we share.  

One of the hallmarks of the work the team does is perseverating focus on the industry as a whole. We have been and remain concerned about the growing gap between utility for corporate employers who want to find people quickly and at relatively low cost and the need to deliver real value to job seekers.

At Arbita, we observe that even as the aggregate number of job postings grows through customer acquisition (perhaps because the recession is bottoming out?) the average number of responses per posting is declining. What we are noticing is that candidate behavior appears to be changing.

Social Networking IS displacing the more "traditional" job board model. The working theory that is gaining traction within the committee and the industry at large is that candidates are using job boards as research vehicles. 

Savvy seekers find opportunities at job boards and then use the information they gather about where the jobs are by reaching out to their networks to connect with relevant contacts within the targeted employers. Think of this development as "What Color is Your Parachute" meets LinkedIn.

This shift in candidate behavior is fueled in part by a seemingly endless barrage of broadcast and print media coverage on the frustrations of job seekers who have attempted to find work through job boards without success. Couple this difficult environment with the atmosphere fostered by the "hunker down and wait out the storm" mentality that prevails inside the recruiting teams of many large corporations during this irksome economic cycle and you have an emotional climate of escalating frustration with the status quo among displaced and transitioning workers.

Combine the dual concerns of screening too many "unqualified responses" with the need to stay "below the radar" in companies that have lowered costs and driven increased productivity through lay-offs and the result is that the perceived value of job boards and their products has eroded. Social Recruiting by contrast, enables hiring managers and their staffing teams to do one-to-one recruiting. It also empowers them to meet their real headcount requirements even while they outwardly appear to have "gone quiet." Carol often refers to this in our calls as “quiet recruiting.”

This is just the kind of problem that I particularly enjoy working through. The challenge is like The Gordian Knot with lots of complexity and ambiguity to sort through and many “right answers” that just don’t seem to fit or work when applied to the case at hand. With this kind of problem it is far better to look for the right questions than it is to relax vigilance and proclaim solution out of fatigue or complacency.

Some of the key questions that the committee has been considering include:

How are job boards currently perceived by the candidate community?

What can be done to improve media treatment of job boards?

How can the industry compete with the momentum of social media in the recruiting process?

How can the committee constructively alert media owners to the growing threats their industry is facing?

How much time does the “traditional job board” really have for course correction?

How much room for maneuvering does a job board gain or lose based on the scale of their operation or their depth of market penetration?

How can job boards improve their relevancy for both candidates and employers?

Can job boards co-opt the competitive challenge from social media through mimicry?

How do the much maligned job boards join the social networking party without completely retooling their technical platforms and business models?

How do you get a group of fiercely competitive empire builders to act and think as if they have shared concerns and interests (even when they do?)

The underlying challenge in all of the committee’s work has been coming to grips with changes in user behavior on BOTH sides of the job board business model. The recession is driving employers to be quiet and cost-constrained. Job seekers are disappointed with the results they get through job boards and turn to social networking environments where they feel they may get better outcomes and often do.

Spending precious resources wading through torrents of resumes from unqualified “applicants” is difficult to do when you are tasked to do more with less. Job board owners who were planning to raise their prices are finding it difficult to justify in a “no-hire, no buyer” environment. The vast numbers of active AND qualified people make it fairly easy to attract the people you need without much reliance on job boards for the time being.

Job seekers are driven to social networks by media and affinity and encounter a rich world of interconnectedness and support. By contrast the unresponsive behavior of some employers who use job boards creates anger and frustration among seekers who begin to wonder if the jobs they are applying for even exist. The smart ones get proactive and find that research-driven networking that employs job boards as a database of target opportunities rather a connection vehicle is their best antidote to not working. In the process of getting wiser they blame the distributor (the job board) and the manufacturer (the corporate employer) alike for the bad experiences they endure.

John Bell deftly delivered the most recent report from the Future of the Industry Committee’s research efforts to the IAEWS Member Congress that met in Chicago last week. The group is fortunate to have him.

By any measure, John’s influence in the job board universe is astounding.  He controls a media “float” that would be the envy of Croesus let alone the CFO of any recruitment advertising agency. His firm operates the job board component of more than 700 professional association websites.

Despite this super-abundance of power and influence John is courtly and modest. One of John’s most endearing qualities is his constant search for ways of telling the disagreeable truth without being disagreeable. John makes a real effort to be a gentleman and he always succeeds.

When we met in Las Vegas in the spring of this year the media owners in attendance were mostly in denial about the seriousness of the issues facing their businesses and seemed to be of the mind that their position was unassailable. After hundreds of hours of individual thought and group work and three rounds of surveying and polling, the committee has finally gotten the attention of the constituents we mean to serve.

The key take away from John’s delivery of the summary of our findings is that the association wants the committee to continue its work. This is a marked improvement from our early efforts to raise awareness of these concerns with the community.

The highlight of the meeting was a presentation by Aaron Matos, CEO of Jobbing (and a member of the IAEWS Board of Governors.) With humor, grace and fierce reasoning, Aaron demonstrated that there is a great deal of elasticity in the job board business model and that media companies that are willing be adaptive will have a significant revenue opportunity in the post recession scramble to replace the many people who were fired or the 50% of employees who say they will leave their current employers as soon things get better.

The pivot point of Aaron's presentation is the fact that job boards are actually gaining in market-share during the recession, even as revenues across all recruitment media declines. This is cold comfort for some, to be sure, but a hopeful (though perhaps optimistic) perspective nonetheless. Aaron focused on customer retention as the key to sustaining competitive position and the core driver for growth in any business.

Aaron became really passionate early in his presentation when he asked, “How many of you think job boards are dead?” He went on to explain that hearing this drumbeat through the media and the blogosphere (to say nothing of the numerous presentations that echoed these sentiments at the combined Kennedy – OnRec Conference last week) makes him feel like his head is going to explode. So the temptation to take the title for this article from Aaron’s presentation was simply irresistible.

One wise man I know thinks that job boards will see a post-recession resurgence in revenues followed by a rapid die-off because jobseekers will continue to stay away in droves now that they have learned to circumvent the boards through Google searches and social networking. Aaron’s presentation made the first half of this argument and left the second half up to the individual business acumen of his audience.

Although visible in the slides, absent from Aaron’s argument was the fact that social media is gaining recruitment advertising market-share at a much faster rate than job boards. Implicit in the whole recruitment advertising market-share gain-loss analysis is the fact that the newspaper classifieds sector of the market is where the gain in share  for job boards is coming from and that social media is gaining share from both the newspapers AND the job boards. Aaron’s engaging and well thought out presentation has me wondering if he might be the CEO most likely to build the first new job-board company with a billion dollar public market capitalization in the post-recession rebound.

The way forward for the industry was subtly and oh so gently suggested by the agenda that Peter Weddle set for the meeting. Jobstreet’s CEO, Mark Chang was the Congress Chair and he opened the meeting by pointing out that there is no recession in the growth oriented economies of the Pacific-Rim and India. Mark flew all the way from Singapore for the event and his kick-off showed thoughtful observers that however difficult the current environment maybe in the Americas there is ample room for growth for those with a truly global vision.

Representing the only corporate customer in the room, Sharon McCone of Wal-Mart (with audience support from two of her co-workers) pointed out that listening to buyers and understanding that your enterprise exists primarily for their benefit is not just “The Wal-Mart Way” it is the timeless key to growing and sustaining a business. She cited several sources of disappointment with the deaf ear that job boards turn towards their corporate user’s suggestions and guidance.

More chilling was Sharon’s presentation of Wal-Mart’s internal portal for employees and stakeholders. The mywalmart site employs many features of social media including profiles, and recommendations from users.

The site is an example of what the job boards could do if they were inclined to keep pace with the changing technical environment and social forces driving the transformation of our online lives. There are notable examples of efforts in this direction but they remain outliers.

Even more chilling for the media owners in the room were the comments that she and her two colleagues made about the ease of use and laser targeting delivered by solutions like LinkedIn. Sharon highlighted recent searches that were completed quickly, efficiently and with next to no expense by proactive Wal-Mart recruiters who used research and sourcing after the job boards failed to produce the results her company needed.

While Sharon’s presentation was civil and generally upbeat it was clear that she had a message to deliver to the group. The message reads something like this: “We will take the future into our own hands if you don’t adapt to our needs and the realities of the environment that is shaping the way we all do business in the 21^st century.” Her highlighting of ComScore’s recently published finding that 75% of all internet traffic flows from the consumption or production of social media was a sobering moment for attentive attendees.

On a brighter note, Natasha Zurnamer, CEO of SMS ME JOBS based in Australia, delivered a presentation on an important audience development and revenue generation opportunity for job boards in the Americas. Her talk on “The Emerging Role of Mobile in Online Employment Services” shed light on the need to extend the marketing and service-delivery platform BEFORE changes in the Telco’s pricing model lead to a flurry of new entrants who push their way into the market using text-messaging as “the nose of the camel under the job board’s tent flaps.” If you are looking to get smart about mobile marketing you want to be on Natasha’s dance card.

Mark Chang closed the meeting by encouraging the group to take the challenges and competitive threats the industry is facing seriously and learn from the emerging media rather than dismiss them. He cogently suggested that the risks we don’t take seriously are the ones most likely to cause our failure. Paying attention early and often while remaining students of our own businesses and the environment we operate in are the surest path to sustainable competitive advantage.

What happens next depends on how intensely media owners are prepared to focus on the brutal facts at hand. A great road map for the path through the recession and to a brighter future for the job boards can be found in Jim Collins’ recently released book, How the Mighty Fall: And Why Some Companies Never Give In.

A copy of the report the committee made to the IAEWS membership is available to association members by visiting http://www.iaews.org.  If you are interested in joining the association or want more information on the benefits of membership please visit: http://www.employmentwebsites.org/membership-information

A copy of 6 Must Fund Recruiting Initiatives from Arbita’s Recruitment Genome Report is available for download at: http://www.arbita.net/Offer/2010-6-Must-Fund-Initiatives-Download.html.

You can download a copy of the original Arbita Recruitment Genome Report by visiting: http://www.arbita.net/Offer/Recruitment-Genome-Report-Download.html.