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Recruiting is a company's marketing and sales relationship with its future and current employees. It is (and always has been) inseparable from advertising. The most sophisticated executive search firms practice an art form that combines network and direct marketing with subtle sales closing techniques.

The web allows more rapid access to prospects. It also fosters the development of more intimate relationships with prospects in advance of the sales process. It creates the possibility of improving the quality of the credentials of a group of prospects. Free training, in advance of a placement, is becoming a standard component of the Recruiter's toolkit.

Understood correctly, the move to include training in Recruiting is just like any other pre-relationship incentive. Like coupons or trial issues of a magazine, outreach programs can be orchestrated to give a potential recruit real benefit and a taste of company culture. As labor shortages expand and we learn how to dig deeper into the candidate pool, providing incentives prior to the employment contract is a natural consequence.

- John Sumser, © TwoColorHat. All Rights Reserved.

Networks

From ComputerJobs and Techies.com with their city by city distribution schemes to the CareerBuilderNetwork and CareerSite's recent alliance with Advent communications to CareerPath, the mother of all distribution efforts, each firm offers a variety of options. Unfortunately, no one seems able to explain whether or not these tools work. Does it matter that your job is posted on the Fortune Magazine job board? Who knows. All the service providers seem able to tell you is what's possible. Results, and the planning and budgeting required to achieve them, are a distant second.

As we look around, one of the interesting bright spots is a small, underpublicized service at CareerSite. Like Restrac, Resumix and IIRC, CareerSite offers a "one stop" cross-site posting service. Combined with their emphasis on "do nothing" Recruiting, the service offers the potential for media planning and analysis that allows a Recruiter to make decisions based on results. It's worth a look and a call.

- John Sumser, © TwoColorHat. All Rights Reserved.

Performance Pricing

Unfortunately, jobs and the people who fill them don't come with identical qualities. There's no standard part number for a DBA or a marketing manager. No two companies offer the same jobs. Unlike stocks, books, CDs, furniture, liquor, flowers, cars, beanie babies, groceries or appliances, prices are not fixed and "fit" varies widely in our industry. While it would be nice to imagine a simple online recruiting system, it's hard to imagine how it would evolve.

Don't be fooled. Recruiting on the net is neither cheap nor easy. It will never become a job or resume vending machine. The very nature of Recruiting suggests that the Internet version will remain every bit as complex as the non-Internet version, perhaps more so. There are no dynamics, historical or economic, that suggest that the Electronic Recruiting Industry is headed towards a consolidation. Rather, since the Recruiting transaction is most likely to happen at the intersection of region and profession, the broad proliferation of Recruiting web sites seems to be in an early phase.

If this assessment is correct, online recruiting will get increasingly complex. The skill and understanding required to execute an online Recruiting campaign is going to continue to increase. The internal costs associated with delivering results from a web recruiting endeavor will continue to rise for the foreseeable future.

"But", you say, "job postings are cheap and getting cheaper by the moment."

With 30,000,000 observable online job postings, its obvious that the value of a single job posting is in decline. The unasked question is "are these postings producing the required results?" Given the difficulty of evaluating all of the possibilities and choosing the best ones, we think it's unlikely that these postings are being effectively executed. It creates a situation that is rapidly changing the rest of the advertising world. Sadly, the Recruitment arena is often the last place that change comes home.

The price of a posting is so low that it is impossible for an ad agency (or anyone else, for that matter) to deliver intelligent customer service at a percentage of the deal. The idea that "media placement" is worth, say, 15% of the transaction is borrowed from a time when advertising was expensive. In today's market, when advertising is cheap, sound guidance costs a lot more than 15%. It's easy to imagine a service that provides strategic guidance for 5 times the cost of the ad. After all, buying the ad is easy. Knowing which ad to buy is the hard part.

The rest of Madison Avenue is moving towards performance based pricing, and quickly. While the labor shortage makes the prospect a little harder to swallow in our universe, performance pricing is coming. At the point that an ad agency (or job board) starts to be compensated on the basis of results, how will we tell the difference between them and third party Recruiters? That's one of the questions TMP is answering with its acquisition of Executive Search Firms.

- John Sumser, © TwoColorHat. All Rights Reserved.

Buying Resumes

Although we remain uncertain about CareerCentral's price point (we think it's too low), the model that Jeff Hyman has established is well worth considering. CareerCentral has fired the first shot in the web-wide purchase of resumes. With search pricing at about $4,000, there's plenty of room (in theory) to increase the flow of resumes and pay finders' fees. Other services are experiencing a drying up of resume submissions. Unfortunately, an ad priced at $150 gives the provider little room to increase the flow of resumes.

This is just the beginning.

It's really quite surprising that the Electronic Recruiting Industry has taken so long to catch the web's fundamental pricing trend. For years, the AmericaOnline business model has included the willingness to pay up to $500 for a new customer. Customer acquisition costs are regularly calculated as a part of the sale of online ventures. Many of the portals develop their marketing budgets around the concept.

What's a Resume worth? Obviously, there's some sort of sliding scale involved. Contact information about a $100K/yr. Systems Analyst is worth more than a $20K landscaper. The fact that the question can be posed indicates a change of major proportion. We're tempted to say that the $100KK Resume is worth $750 as a starting point.

Here's how we get there.

Given a typical 30% placement fee, about half of the effort (half of 30% is 15%) is expended identifying an acceptable pool of candidates. If it takes 20 qualified Resumes to place a single candidate, then the value of a single resume in a $100K placement is $750.

And the value is rising.

Although we can't, for editorial reasons, participate in the CareerCentral program, we have no doubt that lots of people will. The returns are too tempting. Given the choice between promoting a service that never says thank-you and one that pays real money for visitors, most services that fit the profile will be sorely tempted to take CareerCentral's offering. As the program spreads, we'll see competing programs and price escalations. CareerCentral is well positioned to ride out the escalations.

We've been talking about witnessing a change in the business models in Electronic Recruiting. This is a very interesting start.

- John Sumser, © TwoColorHat. All Rights Reserved.

What's Up?

Along the road to publishing this edition of the print newsletter, we've undergone some changes here at IBN.

After two solid years of bouncing around the North American continent delivering classroom seminars, a couple of simple things dawned on us. First of all, it became increasingly clear that many job boards were going to be delivering free seminars as a part of their marketing strategy. It's a natural and important evolution. Internet Recruiting tools currently require a heavy dose of education before customers can effectively use them. Secondly, it became clear to us that classrooms are not effective in delivering the sorts of advanced techniques that we've pioneered.

As a result, we've split our training product line into two separate components. For the past couple of months, you've probably noticed the piece at the bottom of this page offering our onsite individualized training. By focusing on the specific needs of a specific company, we've been able to leave our customers glowing, effective and ready to move full tilt into the online recruiting game. We're convinced that this customized approach is a necessary part of building a solid online recruiting team. With a dozen, of these engagements under our belts, we can assure you that our customers end up extremely satisfied.

In the print newsletter, we're announcing the second part of our training initiative. Seminar In A Box, our CD based training program, will begin shipping on June 1, 1999. The idea is simple. Rather than taking a full day out of the workplace to digest relatively foreign ideas, we're building a day long training program that can be constantly reviewed by all of the people in an office. The courseware is built around our day long Advanced Searching and Sourcing Techniques seminar and includes video, text, testing and a completion certificate.

We are convinced that solid Electronic Recruiting can only happen in a work environment that shares a base level of competence. With a CD based training program, the workforce can be trained during slack hours. Because the material is reusable and repeatable, it's now possible to create a solid foundation of expertise within a company. We're proud of the fact that we're the first (as usual) to use the technology to reduce costs, increase benefits and further expand the capabilities of our customers.

We're offering the course at $295 for prepublication orders (through June 1, 1999). After that point, the package will sell for $395. Given the fact that similar seminars, held in hotel classrooms away from the workplace, retail for $995 per person (and more), we're sure that you'll agree that the offering is a bargain.

You can learn more about Seminar in a Box and get a copy of the order form by downloading the print newsletter. It's a great way to bring your entire office up the learning curve.

- 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.