Pay per posting vs. pay per response
For the past 15 years, the job board industry has been dominated by the ‘pay per posting‘ revenue model: an employer purchases a job posting (and sometimes resume access or other add ons).
Yet there’s another model that has been around a while: ‘pay per response‘. In other words, you post your job, and when job seekers apply to your job, you pay for each application.
On the surface, it seems that pay per response would be more attractive to most employers – after all, if your ad tanks, then you’re not out any expense, right? But…what if you have a strong response? You could actually end up paying more than the cost of a traditional job posting. This concern, plus the dominance of the traditional pay per posting model and technical issues, has held back adoption of a pay per response option on most boards.
As a job board operator, you may want to consider pay per response as an alternative revenue model. Why?
- it has the potential to drive up your job postings, as more employer may be willing to put their positions on your site if the up-front cost is $0.
- it has the potential to generate higher revenue per posting if your site can deliver the seekers
However, you should be ready to handle an employer’s concerns over bogus or unqualified applications, and excessive numbers of application. A possible solution: allow the employer to ‘cap’ the number of applications for each job (thus limiting their financial exposure), and including 1-3 screening questions for each job.
Employers that utilize ATS are probably poor prospects for pay per response, however – in my experience, they are ‘feeding’ their internal prospect system and thus want as many applicants as possible. So they will prefer a fixed cost per posting, rather than variable.
Your thoughts? If you’ve utilized a pay per response model, please share your experiences!
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Jeff, you raise good questions and concerns here. As someone who has worked with leading job boards in our markets for 6 years, I believe strongly that the subscription based model is the best compromise. This model allows employers to pay a set fee and post as often as they want/need.
Having spoken with literally tens of thousands of job seekers over the years at events, I am fearful of the effect of pay per applicant on the applicants. If you cap the response number, you’ll likely turn away qualified candidates with no justification as to why. This is a negative experience for the seeker, and based on the law of 7, he or she will tell 7 people about how unresponsive your company is.
Another concern from the job seeker side is that it’s proven to be nearly impossible to predict future employee performance based on a set of strict hard skills. That being the acknowledged, the idea that a system can somehow screen out unqualified candidates will surely also screen out qualified ones.
HR Professionals and Recruiters, I apologize in advance for what I’m about to say. There is simply no substitute for looking through resumes and performing phone interviews to find the right person for the job. It’s absolutely critical in today’s economy that a business is hiring the right FIT for their company, rather than just the right set of skills for their job openings.
Determining fit, engagement, drive, and motivation can only be done through human interaction and attention. As a hiring manager, I almost always come across resumes for job openings that don’t fit into the criteria that I set forth, but offer enough tangential skills, experiences, values, goals to be great candidates.
Job boards will continue to give job seekers a place to find job openings, and will continue to drive INTERESTED seekers to advertisers/employers. That model is simple, efficient, and effective, and just like the bicycle, it may evolve over time, but at it’s core, it will always be a viable and valuable mode of recruiting.
Jeff,
This is a really great question and one that was addressed by the recently launched job site Zoomph.com (http://www.zoomph.com). Zoomph does not charge the employer to post jobs. Others who use the site have the ability to refer a friend for positions in which they see a match. The site encourages employers to post an incentive, which will only be rewarded to the person who refers the successful candidate (key word is “successful”).
The employer will pay the referee once the candidate is hired, but if and only if, that is how the lead was generated. When employers use Zoomph.com, they have nothing to lose and there is no cost to post or for referrals. There is no retainer fee and job posts only expire once the job is filled!
Check it out. I’d love to know your thoughts!
Thanks for this post and your great insight.
I think it’s better to cap number of pay-per-click application per day.
That way recruiter may run the ad as long as necessary and keep the cost under control.
That’s what AdWords does.
After 10 years in product development and management of the most successful job board in our region – I concur with what Jason said.
We have also toyed with the idea of pay-per-response but haven’t done it based on the reasons Jason mentioned. However I think there is a chance of making it work if we get our target market and pricing right. Think about it – it’s no different from Google Adsense. This will not appeal to big corporates who have big budget and bargaining power, but it might be an attractive idea for smaller companies tight on spending.
Jason you hit the nail on the head. In a perfect world would be a viable idea however with so many unemployed and people just applying for any job that they think they can do Employers capping the amount of applications they would receive would only most likely lock out many qualified candidates.
I think Jason is definitely correct about the subscription model. However, if the goal is simple to increase revenue I definitely think there is room for a hybrid model based around pay per post.
Employers would pay to post a job and applicants can apply for free but pay a buck or two in include extra documents, a portfolio, video, etc. This gives more quality content for employers – so they can focus in on people that are ready to put something forward to get the job, but doesn’t punish applicants without cash.
We are starting to test the P4P model on our boards after many complaints about unqualified applicants. The P4P model is certainly not a do-all solution to job posting, but having it as an option allows job owners to be fairly selective about the applications they receive. Most use only the option to exclude those unable to work in the US, but others get much more picky about their requirements having to do with certifications and experience. These jobs are often looking for a very specific candidate. Traditional posting (pay per ad, unlimited responses) work better when the candidate could potentially be anyone. Subscription based posting (given number of jobs, unlimited responses) have proven to have had a negative impact on the effectiveness of job boards after being abused by candidate harvesters. There have been recruiters over the years posting job ads with the intention to build their own resume databases. It is great for them, but candidates often get no feedback on their application and wind up being one out of thousands in a database.
The comments from Jason et al are valid, and addressing them becomes part of the product itself. We have recently released our Pay For Performance posting model, which is available to recruiters alongside our traditional Pay 2 Post products.
When posting a job, the recruiter is able to specify filtering (qualifying) questions, as well as place a cap on the number of qualified applications they wish to receive (therefore controlling their costs).
As soon as the requested number of qualified applications has been received, the job is removed from the job site – so candidates are not applying into a “black hole”. In addition, the ineligible candidates who have not passed the filters receive a response advising they have been unsuccessful.
In the past 2 months we have had phenomenal feedback from advertisers trying the model – specifically pleased with getting online exposure at $0 upfront cost, and less admin time spent on replying to blatently ineligible applicants.
We at VTIQS.com have a slightly different slant on the application filtering model.
Firstly our system supports all job boards. (so far anyway)
Applications from the job boards are sent to our servers and immediately forwarded on to the agency. (The agency uses our special email address instead of their own)
We then send the candidate an email asking them to qualify their CV via online questions we prepare in advance with the agency.
Should the candidate answer the questions as required, an email is sent to the agency informing them of a possible match for their vacancy.
The agent finds the appropriate candidate in their inbox and they carry out due diligence in the normal manner.
We are finding our clients more often than not end up placing a candidate introduced via the VTIQS alert.
Some clients have used the “Are you eligible to work in the US?” alone but this doesn’t do our service justice.
3 or 4 well crafted questions usually give the best results.
We then charge a small fee per alert. No alerts, no fees.
The two questions below are included free of charge accepting that they are essential components when filtering CV’s.
“Are you eligible to work in the US?”
“Are the answers you have given above reflected in your CV?”
In a nutshell its similar to P4P but you still get all the CV’s.