Insider View of Online Recruiting
Why do you get in your inbox marketing jobs when you are interested in senior engineering positions? How do recruiters contact you for positions more junior and totally unrelated to what you do? When you apply for a job online, why do you have to enter every detail which is already on your resume? The online recruiting industry can be frustrating and hard to understand.
Having worked at Indeed and Glassdoor, and done consulting engagements afterwards, let me try to explain the lay of the land in online recruiting. This post is focused on the US. Much of it is applicable to other English-speaking markets and the EU as well.
Old School Industry Meets Google
In the olden days, job ads were in the newspaper. Candidates had resumes or CVs on paper. (Hmm, they still do…) It took quite an effort for the two sides to find each other.
Nowadays, job descriptions and personal resumes are still a few paragraphs of text — it’s just in digital form and online. The biggest change is that search technology allows us to search among millions of jobs or people based on keywords. And see similar jobs or people based on how they describe themselves or whether they attract the same people.
People searching for jobs have come to be called active candidates. When recruiters search for candidates, the activity is named “sourcing” and the candidates are considered passive.
Active Job Seekers
If you are looking for a job, one site stands out: Indeed.com. Indeed is the world’s biggest job search engine. In most countries where it operates, it has more visitors and job listings than its competitors. It is an aggregator, which means that it collects jobs from a variety of sources. Some are posted on Indeed directly, others are crawled from the web, and partner job sites provide the rest. Being an aggregator, Indeed boasts a wider selection of jobs than a site like Monster.com, for example. This is similar to how you can find more news articles on Google News than you can on New York Times or CNN.
Indeed has modeled itself after Google in providing a simple interface for fast and comprehensive search. It uses rigorous A/B testing to discover what new features work best, and focuses on the needs of the job seeker. Employers don’t have to pay for displaying most of the jobs you see on Indeed. Most jobs are shown based on their relevance to the job seeker. There are a minority of paid listings shown, similar to what Google search does.
Job boards are other industry players that cater to active job seekers. Job boards are sites like Monster and Dice where employers pay to have their jobs listed. Job boards, relatively speaking, have been in decline compared to the rise of aggregators. A major reason is the smaller variety of jobs on the boards compared to aggregators.
Among job aggregators, SimplyHired and Glassdoor were the main competitors to Indeed.
SimplyHired ceased operations in 2016 and its web assets were acquired by Recruit, the corporate parent of Indeed. The SimplyHired site is now powered by Indeed. SimplyHired failed in large part because it didn’t focus its product on what’s best for the job seeker. They ran way too many ads and sponsored listings.
Glassdoor is still in this fight. Unfortunately, most consumers know Glassdoor for its company reviews and salary information rather than job search. Indeed offers free job postings worldwide to employers, which gives it an egde in offering unique jobs compared to Glassdoor. Also, Indeed has been profitable for years and can afford to focus on user experience, while Glassdoor needs to focus on growing revenue to justify its large venture funding. So it has been an uphill battle for Glassdoor against the market leader.
Passive Candidate Recruiting
Passive candidates are those who are already employed and not actively looking for new jobs. They are “sourced” by recruiters. The clear leader in this space is LinkedIn, which was acquired by Microsoft in 2016. Most professionals in the US and many other countries have profiles on LinkedIn, and the company sells access to recruiters to search the profiles and contact people about job openings. Recruiters can reach out to a whole list of people at once with a canned template, which can lead to irrelevant messages.
Recruiters value passive candidates higher than active. Part of the reason is that recruiters actually have to work to get the passive candidates while actives are inbound on their own. Another reason is that it is relatively easy to apply to jobs online and so a lot of unqualified active candidates overwhelm a minority of good active candidates. Lastly, active candidates can sometimes be viewed with suspicion, as in “what’s wrong — why do you need to apply for a job?”
Another interesting player in this space is a startup called Entelo. They aggregate profiles from a variety of sites where professionals like software engineers, designers, etc congregate. Recruiters pay to access this database of prospective job candidates.
Semi Active / Passive Candidates
In reality, there are a lot of professionals who would be open to switching jobs if given criteria were met. This is usually some type of upgrade, like bigger title, higher salary, more freedom to work remotely, etc. However, it is too time consuming for them to be looking for jobs actively. When they get contacted by corporate recruiters, it is often mass email for irrelevant openings or lateral offers of “more of the same,” neither of which are very attractive.
There are ongoing attempts by startups to find solutions for these semi-active candidates. The proposed solutions usually involve getting the candidate to declare what they are looking for in their next opportunity, and then some form of semi-automated “matching” happens. The most successful company in this space appears to be Hired. They specialize mostly in individual contributor jobs in the software industry: engineers, designers, and data scientists. They work well for relatively junior IT talent. It is not clear if they can scale to other professions or more senior talent and leadership roles. An interesting runner up in this space is Indeed with their Indeed Prime.
Processing Job Applications
When applicants are getting considered for a position, that usually happens within a piece of software called an Applicant Tracking System (ATS). If you have applied to jobs online, you are probably familiar with Jobvite, a popular ATS. An ATS powers the careers portion of an employer’s website, for example Microsoft Careers, etc. The ATS accepts the candidate’s resume and contact information, and on the other side the recruiter and hiring manager review the resumes, add notes, schedule interviews, and input feedback from the screenings.
The ATS which has the largest share of job openings is Taleo, a subsidiary of Oracle. It also exemplifies the problems with most ATS, which started as enterprise software and therefore do not optimize for good user experience. For example, they require job applicants to create usernames and passwords to apply to a job, even if job seekers are unlikely to ever come back to log into this employer’s ATS. Also, it is common to pepper the user with dozens of questions during the application, including repeatedly asking for basic information which is already on the resume. This is why it is hard or sometimes impossible in this day and age to apply to a job on a mobile phone. Things aren’t much better for hiring managers — most ATS do not allow you to compare two candidates side by side or rate them; they force you to either reject the candidate or move forward in the process.
If you need an ATS, the best choices are Greenhouse or Lever, two modern ones which avoid some of the frustrations of the older systems. Oddly, there is no ATS I know of that offers self-serve sign up for small businesses. This looks like a missed opportunity. Someone ought to create a free modern ATS.
In Closing
The online recruiting industry is complex and there are many players in it. We haven’t discussed part-time gigs, recruiting agencies, analytics providers, alternative recruiting outlets like The Muse, etc. I am happy to help with more advice about the industry and to consult about product development ideas. Feel free to reach out to me on LinkedIn.
