I remain puzzled by Monster’s decision last week to buy HotJobs from Yahoo for $225 million. I should say at the outset that I’m hardly a disinterested observer; my own employer makes a good chunk of its revenue from a niche job board that competes with both companies. But it is precisely that perspective as a competitor — as well as that of a hiring manager and job seeker — that leaves me scratching my head. Monster’s official explanation for the purchase offered the type of blather you’d expect about the benefits of size and “efficiencies”. But while scale obviously has some importance for job boards — if no one’s coming to your job board, then no one else will either — the medium also experiences rapidly diminishing returns. In other words, there’s a huge risk of being huge, specifically, that it will make it harder for job boards to achieve their core purpose of matching employers and job seekers.
In one sense, job boards are similar to other types of advertising markets, but while a typical advertiser is looking to sell as much product as the audience is willing to buy, an employer advertising a job has a very limited inventory; namely, a single open position. And it’s not like they can just give that position away on a first-come, first-serve basis, or sell it to the highest bidder. So as the scale of responses increases, so does the work the employer has to do to process them and pull out the top candidates.
What does that mean in practical terms? As a hiring manager, I’m reluctant to post a listing on a mass job board, since I know I’ll get inundated with responses, many of which will be a poor match. As a job seeker, I’m reluctant to apply for those jobs, since the odds are very good my resume will get stuck at the bottom of a large pile. That disconnect has allowed niche job boards like ours to cut into the business of the market leaders by promising employers an applicant pool that is more relevant but also more manageable.
So does that mean the Monsters of the world should be acquiring niche sites? Well, that might be a better use of their money than buying HotJobs, but if niche sites are successful, they ultimately bump up against the same scale constraints as the big boys. A better strategy is to move beyond the “classified ad” approach and try to figure out a better way to match up employer and applicant. For example, in this video, eHire CEO Ben Sabrin explains how his company is looking to move from “searching” to “matching”: Read the rest of this entry »
