Richard Collins: The recruitment advertising industry needs to shift to quality based models.

GUEST POST: Here at the Job Board Doctor, we always want to push our thinking and our readers’ thinking so from time to time we will invite leaders in our industry to share their thoughts. Enjoy. 

Richard Collins, CEO & Co-Founder C Squared Technology

In the last few years the recruitment advertising market has fundamentally shifted. When we sold ClickIQ to Indeed in 2019 the demand was for tech that could help optimise ad spend. Make it more efficient. (You might recall there was those crazy few months, where we saw 3 programmatic exits back to back). At that time we lived in a world where there was nearly always a shortage of candidates.

Then Covid hit, and the normalisation of remote working, followed a few years later by the explosive adoption of generative AI. The result is that the hiring world of today looks very different, as are the needs of recruitment advertising clients.

Changing needs – bridging the gap

Employers live in a world where they have both a massive oversupply of applications, and yet still have skill shortages across the board.

The problem for our industry, as seen through the financial results of the major players, is that the models we are selling are no longer aligned with our clients needs, and they are voting with their budgets.

Unless we can bridge this gap between what advertisers want (more qualified applicants) and what the advertising industry is paid to supply (more clicks and applies, regardless of quality), then life will only continue to get more difficult.

The 3rd major evolution of recruitment advertising

It is this disconnect that I think will drive a major evolution of our industry. The 3rd we have seen over the last 50 years.

• 1st was at the start of my career in the mid to late 1990s, as classified advertising was digitised and shifted from paper to the internet.
• 2nd was the move from paying for advertising based on duration to paying for performance, driven by Indeed from 2008. (Programmatics were a natural extension of the need to then manage this, but were not an evolution in themselves.)
• The 3rd and current evolution is the shift from paying for quantity to quality.

Shifting from paying for quantity to quality i.e. for qualified candidates.

Paying based on quantity, i.e. for qualified candidates, is the logical way in which the industry will bridge this disconnect, and I think is also a reflection on the maturity of our industry. Just like as you get older, you come to appreciate quality over quantity more.

And whilst as an industry we have always strived to deliver high quality, better qualified applicants, we have not generally been paid for it.

We are publishers, not recruiters after all. The fact that we don’t want to compete with our clients has been a long held and sensible view.

But the market has changed, as has technology, and a middle ground is emerging which will allow us to shift how we sell and that will have a profound effect across the whole of recruitment.

So is this shift a good or bad thing for job boards?

Short answer is, it’s a good thing, but only for high quality job boards, less so for those who are just shoveling low quality clicks. As the former you will make more money and have happier clients by moving to being paid for qualified applicants.

An end to selling failure

If you think about it, recruitment advertising is largely selling failure. Which isn’t great from a customer experience. We sell a product where 95%+ is rejected, yet still paid for. We generate lots of clicks and applies. But only a very small percentage result in a positive action like an interview. The rest are discarded. By switching to a quality model, clients pay more per applicant but only when there is a positive outcome.

Getting close to the hire to make more money

By shifting to qualified applicants, we are getting closer to the hire (as Indeed like to say). By doing so you move up the value chain to a more valuable, higher margin product, as demonstrated by the fact that Recruitment Advertising is worth $35 billion a year, yet recruitment as a whole is $350 billion.

However, we have to remember we are still publishers and not recruiters after all, so it’s knowing where to finish.

Personally, I think if we can deliver qualified applicants, as defined by the advertiser, that they would consider interviewing, that would be the logical place where we should stop, leaving it to employers to decide on the final hire based on decision making that is largely out of our control.

How will this shift to paying for quality manifest itself?

I see 3 immediately obvious ways.

1. The rise of AI sourcing bots who automatically find only qualified applicants for jobs, they will be seen as competitors to job boards, but in reality it will be job boards that will deliver the candidates that this technology will work on.
2. Media networks that automatically optimise based on quality
3. Click Per Qualified Applicant (CPQA), the buying and selling of “qualified” applicants.

The problem with CPQA….its really hard

If a Cost per Qualified applicant model was easy to deliver, then we would already be surely doing it.

The problem you see is every job is different and every recruiter has a different view on what makes a candidate qualified. There are near infinite possibilities, so how do you price and manage that?

The key we believe is to embed screening and verification into the top of the funnel at the advertising level. One that is entirely flexible based on the needs of the recruiter. It needs to be able to deal with all possible eventualities, from ID checks, Right to work, Skills assessments, experience, etc. It needs to be forward and backward compatible. It needs to avoid the use of AI in any hiring decisions whilst providing a positive experience for the job seekers themselves.

You also need to be an independent arbiter of truth and be trusted by buyers and sellers alike. You need a clear, advertiser owned, method of deciding.

Finally you need an algorithm that prices all the above. That works for all parties.

Hence why it has required a fundamental shift in the recruitment market to make the effort of building such technology worthwhile and creating enough motivation to adopt the changes across the industry.

Do or die.

Moving from a quantity to quality of applicants model, will quickly shift from a nice to have to essential way of working to ensure long term survival.

Don’t believe me?….

Speak to any head of TA and they will tell you they are overwhelmed with applicants. The vast majority of whom are not suitable. Wrong country, lacking key skills and qualifications.

The causes can be debated endlessly, AI, easy apply, poor matching. Etc. Probably all them, but in reality, no one cares. The point is Quantity is not something they want more of right now, so as an industry we have to shift to a quality model. If we don’t, then they will do it for us, by voting with their budgets.

We have already seen the 2 largest players in the market trying to adopt this approach, but when you have a billion dollar legacy business and demanding shareholders, the technology is the easy part.

But the question is how to achieve that and how close to the hire we want to get. What’s right for Indeed, may not be right for the rest of the industry.

We are publishers not recruiters after all. Why should we risk being paid on something we can’t control – ie the hiring process.

But, we can control the quality of the applicants. And unless we shift from a quantity mentality we are doomed.

Sure we can wait until employers solve the problem themselves by developing screening and verification into their tech stack, but can we survive that long, and are we sure we will get the outcome that we desire at the end of it.

But if we grasp this change and start delivering what our clients want, more qualified applicants, then as an industry we will be revitalised, with a rosy future ahead of us.

Food for thought.

About C Squared Technology – If you’d like to find out more, our website is www.CSquaredTechnology.com and to participate in our partner program, just fill in the form.

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