A tale of two job board companies

It was the best of times, it was the worst of times for job board companies. Sorry, just had to use that! But indeed, for some job boards, right now is pretty darn good. And for other job boards, it’s not so great.

Take, for instance, two job board companies: DHI (Dice, Clearance Jobs, and eFinancialCareers) and Upwork. Both have been around a long time – DHI first started as Dice back in 1990, and Upwork is the union of oDesk (2003) and eLance (1999). You could call them survivors, in fact. Both rely heavily on the health of the tech sector. Both have had their ups and downs over the years – and now both are exhibiting clear trend lines: DHI is trending down, and Upwork is trending up. For comparison’s sake, let’s take a look at each company’s Q3 reports.

For DHI, Q3 continues a string of flat to falling financial reports. Of its three job boards, only ClearanceJobs showed an increase in revenue – up almost 16%. Dice fell by 13.5%, and eFinancialCareers fell by  23.2%. In the earnings call, Art Zeile, CEO, mentioned the roll out of new products, and the ongoing goal to make all three sites ‘marketplaces’ for matching tech talent to employers. For subscription customers, the renewal rate is 63% – down from previous reports.  Of those subscription customers, 13% count for 50% of the revenue. Management blamed much of the drop on the pandemic, riots in Hong Kong, eFinancialCareers underperformance, and variability in demand from staffing firms. In other words, they had a lot of excuses.

But it seems odd that a company so focused on the tech sector did not see stronger performance during a period in which demand for remote tech work soared. It seems odd that a company that was willing to ditch other underperforming job boards continued to hang on to eFinancialCareers. I felt in reading through the earnings call transcript that a lot of fingers are crossed at DHI. Has the company reached bottom yet, or is there still further to fall?

Upwork’s Q3 had a different flavor: revenue was up 24%, to almost $97 million, and marketplace revenue was up almost 26% from the preceding year. The pandemic appears to be accelerating at least a portion of  employers’ willingness to use freelancers instead of permanent employees – and Upwork is growing as a result. The platform continues to encourage employers to reuse freelancers, and is rolling out what they call a ‘Project Catalog’ – essentially a prepackaged set of common freelancer projects (such as website creation) that employers can browse. The earnings call indicated (as always) an increased focus on enterprise customers, and the eternal ‘refocusing’ of the sales team. Some things never change.

So there you have it – a tale of two job board companies, each with their own business model and long history, each publicly traded, and each responding differently to a challenging year. I don’t expect either to disappear in the coming months – but I don’t think that the trends lines for each will change, either.

NOTE: Full disclosure – I worked for Dice from 1997 to 2000. An old-timer!

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