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Craigslist to Add Cost for Job Postings in Four New Regions

October 17, 2007
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The free ride is coming to an end for some HR executives who rely on the online marketplace Craigslist to hire talent. Starting November 1, the popular Web site will charge $25 for each help-wanted ad posted in the markets of Chicago; Sacramento; Portland, Oregon; and Orange County, California.

Craigslist normally doesn’t charge recruiters to post help-wanted ads, but the company adopted the fee at the urging of Web site users who wanted to enrich the quality of the online job board.

“The $25 sum is intended to be high enough to keep out irresponsible posting activity but low enough to be affordable for legitimate recruiters to do their job,” Craigslist CEO Jim Buckmaster says.

The majority of Craigslist’s revenue is derived from job posting activity, since most of its services are free. Yet the company currently charges fees in seven of the 450 regions where it operates, including New York, New Jersey, San Francisco and Washington, D.C.

The company has no plans to charge in more markets. It doesn’t intend to increase the cost either, Buckmaster says.

“We did not get into this business with the objective of making money,” Buckmaster says. “We are offering a community service.”

Nevertheless, the new price point could take a toll on small employers with scarce resources but is unlikely to affect large corporate employers with generous recruiting budgets, says Peter Weddle, CEO of Weddle’s, a recruiting consultancy in Stamford, Connecticut.

“As long as it’s within certain boundaries, recruiters are willing pay for quality talent,” Weddle says.

Craigslist is still considered an inexpensive form of online recruiting, considering it is not uncommon for large job boards to charge $75 to $100 per posting.

Once the Craigslist fees are instituted in those markets, however, activity probably will drop somewhat, says Mark Mehler, principal at CareerXroads, a recruiting consultancy in Kendall Park, New Jersey. He predicts a rebound soon thereafter.

“People trust Craigslist,” Mehler says. “Once you gain that trust, people will come back to you over and over.”

Each month, the company receives 1.5 million new job postings.

Buckmaster says the Web site enjoys a good reputation among recruiters because it is inexpensive and effective. He says Craigslist’s tight geographic focus enables employers to attract job applicants that can come on board quickly, since they don’t have to relocate. What’s more, candidates tend to be familiar with the employer, he explains.

“Some people swear by Craigslist,” Weddle notes. The site draws a young, urban demographic, which is highly desirable for certain employers. Yet Weddle stressed the importance of having a diverse online recruiting strategy.

“Recruiters need to understand that one source cannot possibly help them meet their talent needs,” Weddle says.“They need to probe deep and wide.”

Craigslist competes with major players such as Monster and CareerBuilder despite minimal advertising costs and no sales force. Craigslist hosts 30 million unique visitors and 8 billion page views each month, Buckmaster says. Some 25 percent of the page viewing activity is related to job searches.

Gina Ruiz

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