Find out more
About IBN

Our Rate Card

Articles

Presentations

Trends Reports

Archives

Resume
Databases
(Over 60)

Company Job Listings
(Over 4000)

OUR HOME

Every one of these users will change jobs an average of once every six years (unless they are in Silicon Valley where things move at a faster pace).Discounting high turnover regions, that's 12.5 Million job changes this year. With something like 3 Million discrete job postings, nearly a quarter of Recruiting has some sort of online component.

What's the transaction value?

We have long held the notion that third party fees are pegged at market rates. While we get some disagreement from HR players, we think that internal costs (not all of which are measured well) generally equal the low end of third party rates (20%). The median national salary is about $35K/year. From that angle, the cost of recruiting a single employee looks like $7,000. It is very conservative to describe the Recruiting expense associated with 12.5 Million job changes as $8,750,00,000 (Eight and three quarters Billion Dollars).

In fact, the number is much higher. Labor shortages, which run from Information technology through retail, are driving the cost per recruit closer to 50% of the first year's salary. As cost accelerate rapidly, little is done to track actual expense.

The next doubling of the Internet user population, likely to happen before the end of 2000, will make Internet access nearly universal in America. With a market potential extremely conservatively described as nearly $18 Billion, the sheer volume of potential transactions will have interesting consequences in our industry.

The six year job change cycle makes investments in long term relationships a situation requiring very patient investment.

- John Sumser, © TwoColorHat. All Rights Reserved.

Freebies

The essence of these kinds of relationships is the delivery of relevant value, on a continuing basis, to the members of a candidate pool. We think that it is unlikely that most members of the pool will want information about jobs and career management. Rather, the development and maintenance of a candidate pool depends on the actual relevance of the service to the day to day existence of each individual in the pool.

So, as we often mention, free training and skills development services have a real edge. In addition to identifying people who are self-starters willing to take charge of their own personal development, the delivery of training content enables a Recruiting operation to be abreast of the changes in a potential employees credentials while the change is happening.

Recently, there has been a spate of attention given to a company with a plan to give away 10,000 desktop computers. The company, Free-PC.com, is financed by USA Networks, a Barry Diller company with deep pockets. Although their ambitions are commercial (think Home Shopping Network), the economics are particularly attractive to recruiters.

At, say, $500 per machine (purchased in units of 10,000...shipping included), a modest sized Recruiting operation could establish strong, long term bonds with a pool large enough to support 500 annual hires. At $550 per machine, onboard video-conferencing would bring an end to first interview expenses. The experiment is smaller in scope than most current job board investments and offers extremely explicit targeting possibilities.

At extreme scale (say 100,000 or 1,000,000) the numbers fall yet again. Hardware ceases to be a critical variable and the support and communications embedded in the system become the discriminators. Clearly, the economics would be persuasive for high end placements (executives, SAP, ERP). Viewed as a component of a lifecycle investment in inventory, with an eye on placing everyone in the pool at least once a decade, the numbers get downright interesting.

The typical Recruiting mindset avoids obvious parallels with typical consumer advertising economics. But, as database generated, one to one marketing becomes the norm in the consumer market, the techniques are increasingly applicable in the Recruiting marketplace.

- John Sumser, © TwoColorHat. All Rights Reserved.

Where to Look

At about 8:30 last night, we strolled in to our favorite local consumer electronics store. It's one of those chains with lots of cameras, computers, stereos, cell phones and so on. We've been learning the ins and outs of web video from one of the salesmen.

The store has a very high speed Internet connection (several cable modems) that is used to demo WebTV and various net capabilities. Almost everyone we've talked to on the staff has a solid set of web skills. After all, selling in today's consumer electronics environment demands it. The entire sales staff seemed to be clustered in the computer section watching several monitors.

It turns out that they were swapping Job Board bookmarks and tips.

The company, under pressure from web sales operations, is suffering twinges of financial performance problems. The initial reaction of the upper management team has been to restructure the bonus arrangements with the sales force. As we talked with the staff, they grumbled "20% of our income was bonus-dependent. Now that that's changing, we're looking."

Imagine the sight. 14 seasoned consumer electronics salespeople with web skills clustered around three terminals figuring out that evening's job hunt strategy, giving each other resume tips and pointers to job advice Websites. We can imagine that the scenario is plying out in all of the chain's stores. As the door locked behind us and the store closed, we sat in the parking lot with a cup of coffee. The session continued on till after we drove away.

Driving down the interstate, it was easy to imagine those salespeople working in e-commerce as customer service reps or marketing professionals. The combination of technical understanding, experience in consumer hand-holding and performance based sales compensation makes them ideal for a number of hot openings. But, a typical job board's search engine is unlikely to help them find their next gig. As of yet, no one has the demonstrated capacity to translate experience and skills across industries in any sort of automated way. Unless the salespeople are motivated to think creatively, the job boards won't help.

- John Sumser, © TwoColorHat. All Rights Reserved.

Lower Common Denominator

Recently, we watched a focus group of new Recruiters tackle a series of online job boards. (Focus groups are all the rage in front end design these days even though they don't seem to add all that much to the process.) There were about a dozen Recruiters who had been brought together to test various aspects of a new Recruiting interface. The company tried to balance the group by providing 6 Recruiters of varying ages who had no web experience with another 6 who had varying degrees of web experience. The results were comical.

One of the options in the new interface asked Recruiters to hold down the "CTRL" key while clicking a mouse. Two of the dozen (one in the "experienced" group) held down the C, T, R, and L keys (instead of the "control" key). Besides the silly hand contortions (try to hold all 4 and click your mouse), a more serious point emerged.

As we get more sophisticated in our web usage, we tend to take a lot of the little things for granted. Many new users have not climbed the learning curve along with us. The other side of Sumser's law is "As the median experience of a new user declines, your relative level of experience grows exponentially." It is critical that you learn to account for the fact that each day you gain additional experience that increasingly distances you from the average user.

- John Sumser, © TwoColorHat. All Rights Reserved.

Customized Onsite Consulting

We've recently added Nicky Gordon to our staff. Nicki is a seasoned recruiting research professional and an acclaimed trainer with extensive hands-on experience solving sourcing problems with the Internet. She will be delivering these customized training programs in which:

• We will explain how to make a clean move to web recruiting as the principal source of prospective candidates
• You will receive the tools needed to search the Internet effectively including A CD with over 30 Software Tools to get you started.
• You get the full benefit of our "Advanced Searching And Sourcing Seminar" without having to leave the office.
• You gain the knowledge needed to use Spiders and Robots, advanced Search Engine Techniques, Candidate Pool Access and the development of Just-In-Time Sourcing techniques. We'll teach you the skills and tools used by visionary recruiters.
• You will get a detailed course of action; we will walk you through the steps involved in going from Job Order to Placement.
• All Examples are done Online specifically tailored for your operation.