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It is better
to not be on
the web than
to be on and
not know why

John Sumser

is more
it seems.
John Gall

It's better to
do a few things
really well than
than to do
a lot of things
If you can't
make the necessary
commitments of
time and energy
to your
scale back
your plan.
John Sumser

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Materials written
by John Sumser
© TwoColorHat.
All Rights Reserved.

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Pricing and Cost
(October 16, 1998) Getting your arms around the actual costs and benefits of online Recruiting is no small challenge. First of all, there's the learning curve and the persistent nagging notion that you are missing something. Then there's the problem of figuring out how to compare the costs to your existing processes. Then there's the question of how and when to integrate web results into your existing data streams.

One thing is very sure. The real costs of using online Recruiting tools are internal. The fees for posting a job or running some other form of advertisement are just the tip of the iceberg. We'd go so far as to say that Internet Recruiting is not only not cheaper than other methods, it is significantly more expensive. While the price is low, the costs are high.

Don't misunderstand. We are definitely not saying to stop using the net as a Recruiting tool. We're just pointing out its relative cost. If you are going to spend the money, we think you should understand why and how to maximize your return. We are asking that you drop the assumption that "cheap" is a useful rationale. We are suggesting that you give your attention to what you are buying rather than to what you are being sold.

The strengths of the net are speed, endurance and intimacy. Ultimately, what you buy online is higher quality. You pay accordingly. Using the net to recruit, you obtain the opportunity to form long term relationships with candidates who are available nearly instantly for relationships.

The medium itself is "hotter" than the alternatives. This is a way of describing the opportunity that the web offers to form intimate bonds initiated by the candidate. Maintaining those relationships, through the constant delivery of candidate-centric value, is possible through effective database manipulation. Personalization allows you to turn the "slush pile" into a labor pool.

If you don't take advantage of these opportunities, you are basically overpaying for your tools.


(October 15, 1998) We often run into entrepreneurs who are sure that they can revolutionize the marketplace by introducing standards. Imagine how easy things would be if all Resumes were standardized and all job descriptions fit into nice neat categories. With standardization would come the ability to make the employment marketplace infinitely more "efficient".

Imagine how wonderful life would be if money grew on trees, automobiles were all free and everyone lived in a mansion.

Most efforts to develop standards have the objectives of the entrepreneur at their core. They tend to be flawed because their underlying goals promote a single perspective. It is critical that electricity behave in predictable ways. We all want our VCRs to play the movies we rent. The values of a standardized set of employment tools are less obvious.

In economic terms, the employment arena is one of the cleanest examples of a pure, unregulated market. With no competitor holding more than 3 or 4 percent of the game and lots of individual players, the market works more efficiently than most others because it is unregulated and has no monopolistic player. Standards usher in the possibility of market dominance and regulation. Standards would introduce a higher level of predictability and a higher set of underlying costs.

We understand the frustrations behind the various pushes for standardization. Automation is much more difficult to implement in a pure unregulated market. Time seems to be wasted on the reconciliation of differing formats. A pure market is a chaotic environment and amplifies the human need for order.

But, is it really smart to introduce processes that favor larger players? Will placements be better across the board or will they be better in only some organizations? Without a broad acceptance of a new standard, the benefits would accrue in an uneven manner. The only way to avoid this risk is to regulate or organize the existing players. The push towards standardization ends up facing a chicken and egg problem.

Direct Marketing

(October 14, 1998) Many recruiters wince at the notion. Direct marketers use repetition, blunt suggestion, timing and technology to create responses from target audiences. How could web recruiting possibly be like these techniques.

In today's world, Online Recruiting is limited to a lottery ticket gambit. Put your jobs in a fee based database or two and post them on your website; maybe someone will send you a resume. The whole house of cards depends on the right person being available at the right time. Or, search the web for passive candidates hoping that they will be available.

Persistence and repetition, the hallmarks of direct marketing (DM), rarely enter the equation.

Seen correctly, intimate one to one marketing is precisely a subset of DM. The current approach, with its reliance on procedures that work in newspaper classified ads, misses the value of being in the candidates mind again and again. Typical direct response profiles assume as many as 12 exposures before prompting a decision. (An exposure is each time that a prospect is made aware of a possibility.)

It is possible to use the web more effectively by using job ads exclusively to drive traffic to a web recruiting campaign. In this approach, the typical "home page" plays a secondary role. More important is a tailored pitch delivered to the exact type of person who would respond to a specific "ad".

For thinking purposes, imagine that a job posting on a fee based board has two parts. The first part, the actual posting, is a short pitch designed to cause the right candidate to click a link that points to the second part. Part two is on the recruiting company's website. It "sells" the candidate on the opportunity and exposes the parts of the company's website that are interesting to that particular candidate.


(October 13, 1998) No, we haven't gone "weekly". With a couple of interesting surges in our consulting business and two different seminars running this week, logistics got the better of us. We've shipped the 5th volume of our free paper newsletter. About 100 customers have ordered and received their 1999 Electronic Recruiting Index. It's been a very busy time. We're rearranging the team to ensure that the newsletter continues to arrive daily.

Keep your eye on a little company called Datamain. Staffed by a brain trust from a number of recent Electronic Recruiting players, the company has the talent to deliver real web solutions in a sophisticated way. We are particularly excited about their work on an emerging standard called HRML.

Have you noticed that this fall's standard magazine cover story seems to be "Recruiting and Internet Job Hunting"? Reader's Digest, Inc Magazine and Fast Company have all added their weight to the question.

You might mark this time in the development of the industry as "The Alliance Cyclone". Alliances seem to range from simple link exchanges to complex content and cash trades. For the most part, the current crop resembles first love. The relationships are temporary learning experiences that pave the way for more powerful and enduring things down the road.

What comes after the "portal" craze? It is clear that by focusing on retaining visitors, the "portals" lose their initial attractiveness. People visit portals to find out about other things on the internet. When the portal ceases to provide that core service, it stops being a viable destination. We think that portal fever looks like a broad attempt to reinvent AOL. It's kind of silly and bound to be a short lived thing.


(October 6, 1998) As the industrial revolution changed from an era of gigantic projects (railroads and early skyscrapers) to factory automation, no job was more secure than the village blacksmith. As late as 1925, every town on America had a "smithy". Since the put the shoes on every horse, fixed the wheels on every wagon and even fixed the customized parts of early automobiles, the smithy was quite often the center of town life.

Imagine trying to explain to a smithy in 1925, that by 1928 only 50% of the shops would exist and by 1935, the survivors would be running gasoline stations (at best).

It happened that quickly. The new technology (assembly lines) performed the smithy's function in an entirely different way. Smithies, who were responsible for the whole job, could only gain employment if they specialized in a very narrow piece of their old trade. Not only did the profession die, the role these practitioners played shifted. No longer were smithies the gatekeepers, mayors and councilmen. Their families suffered deeply from the loss of status and income.

For the most part, no one noticed. They were too busy enjoying the thrill of their new automobiles.

We are reminded of smithies every time we talk to a successful recruiter who works a solid local niche. We think about it every time we survey the dismal offerings from third party firms. The answer is obvious but the credit lines are weak.

It's a tough time to gather verifiable statistics. What we know for sure is that the flood of venture capital is artificially lowering the cost per hire. Key new entrants are buying market share at the direct expense of the traditional industry.

The third party industry segregates just as you'd imagine. 20% of the offices and small companies generate most of the revenue and profitability. The remainder struggle to stay afloat. The large franchise firms operate on the same principle. Unfortunately, the weak offices can not survive the intense financial pressure. The top 20% will survive a while if they invest wisely in candidate acquisition.

The answer lies only partly in web technology. A new model that favors the role of the candidate is emerging. It takes a deep recognition of the realities of the labor shortage to make the shift. Enough money to survive a "rainy day" doesn't hurt.

- John Sumser, © TwoColorHat. All Rights Reserved.

Industry Outbriefings

(October 1, 1998) Our standing prediction is that the stock market downturn will be followed by several months of continued decreases in the unemployment figures. This morning's release of the numbers showed another decrease in new claims for unemployment benefits. At 295,000, the number is at a 29 year low, tied with April 1998. Planners who assume that declining unemployment figures will continue to serve as indicators of economic growth are in for serious shocks.

The recruiting marketplace has changed permanently. For nearly a decade, the number of new entrants into the workforce has been in a decline driven by birth rates. The competition for candidates is intensifying and the tactics that work in recruiting are the opposite of the ones that have worked historically.

Nowhere is the tactical change more obvious than in online recruiting. While the early hype focused on the "cheapness" of the new medium, its real long term benefit is speed and access. Filling the staffing requirements of growing companies demands long term relationships with a candidate pool. It requires a rolodex/database that is five years longer and ten times deeper than your current approach.

We've been crowing about our recent Industry Analysis for a while now. The 1999 Electronic Recruiting Index covers the industry in comprehensive detail. From a 400 question survey of 2,620 paying customers to a detailed analysis of emerging strategy, the report covers everything you need to know to function effectively during this time of rapid change.

In the middle of this month, we will be conducting a series of "industry outbriefings" that cover the results of our surveys and analysis in the 1999 Electronic Recruiting Index. We'll take a look behind the numbers and expose

  • Recruiter's Needs and Who Meets Them
  • The Real Costs of An Integrated Online Recruiting Program
  • Customer Satisfaction Ratings and How They Are Liable To Change
  • Market Opportunities
  • Changes You Can Plan On
  • Job Posting / Website Integration
  • Factors Driving Market Growth
  • Survival Tactics For Recruiters
The one day intensive seminars will be held in
  • San Francisco on October 12
  • Chicago on October 14
  • New York City on October 16
Seats are still available. To reserve yours, call our offices at 800.358.2278. We're offering a package price that includes a copy of the 1999ERI.

- John Sumser, © TwoColorHat. All Rights Reserved.

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