What’s turning heads, however, isn’t so much the platform’s functionality, but the price tag. Subscription fees range from $5,000 to $10,000—a bargain, considering employers generally spend $100,000 to $200,000 to get this type of sophisticated system from an assortment of vendors, says Mike Madden, senior vice president of product at Monster.
The affordability of Monster’s Talent Management Suite is no discount-bin special or a gaffe by the billing department. It’s part of a broader, calculated strategy to go after smaller employers. The so-called Big Three job boards—Monster Worldwide, CareerBuilder and Yahoo HotJobs—are rolling out lucrative products at affordable prices for companies with workforces of 1,000 to 5,000 people.
The shift is a drastic departure from the time when big, high-profile clients got the VIP treatment and smaller employers were largely ignored, no matter what the corporate rhetoric.
Pursuing small and medium-size companies makes sense, since many employers in the limited pool of Fortune 1,000 companies are already locked into deals with job boards. The largely untapped small and medium-size markets could provide billions of dollars in new revenue, job board executives say.
With stakes so high, job boards are aggressively developing targeted products and pricing structures that cater to the needs of smaller clients. The industry is also encouraged with this strategy as it has proved to be highly successful for other HR technology vendors, such as applicant tracking system companies.
Industry experts say this strategy brings together the best of both worlds, generating economic growth for job boards while putting cutting-edge technology and recruiting tactics into the hands of smaller employers.
Establishing a foundation
Strategic workforce management practices, such as employment branding and marketing, are often foreign concepts to small and medium-size employers, which is why job boards are going to great lengths to educate this segment of the market.
"Our sales process is practically a consultancy service," says Dave Dalton, director of business-to-business marketing at HotJobs. "We often have to explain basic recruitment methods that are second nature for big corporations but uncharted waters for small employers."
The success of Yahoo Media, one of HotJobs’ most recent launches, hinges largely on the job board’s ability to educate its clients. Not only must HotJobs describe the product’s capabilities, it also must provide a framework explaining the product’s usefulness. Yahoo Media enables clients to post branded banner advertisements on various Yahoo Web sites, which attract niche audiences through interest-specific online content.
In the case of large companies with savvy HR executives, little hand-holding would be required because they recognize the inherent value of targeted recruiting. The opposite, however, holds true for smaller employers that generally aren’t familiar with sophisticated recruiting practices and don’t realize that reaching niche audiences can yield successful results. Consequently, HotJobs has to go the extra mile in explaining the product, Dalton notes.
"Small and medium-size employers in the trucking industry are not only made aware that they can post ads onto Yahoo’s NASCAR site," he says. "We arm them with additional knowledge by emphasizing that some 80 percent of truckers are fans of NASCAR and could potentially be drawn to this type of Web site content, which can then enable companies to target qualified talent more effectively."
CareerBuilder also is chasing smaller clients, betting heavily on the largely untapped market and using training and development as a strategic cornerstone. The underlying philosophy is to expose potential clients to sophisticated talent management approaches in hopes of brokering new deals, says Jason Ferrara, director of corporate marketing for the Chicago-based job board.
Two years ago, CareerBuilder created a specific marketing group—dubbed the Small Business Unit—to offer clients guidance on what it considers to be best practices in recruiting tactics. Employers are coached on everything from developing a corporate brand to writing job postings that are clear and enticing.
They are taught to emphasize key attributes about their unique environment—a move intended to make them as appealing as large employers with recognizable brands.
"Small businesses have a lot to offer employees," Ferrara says. "Our job is to help them highlight these characteristics so they can have a shot at competing with big-name corporations."
Some of the attributes mentioned in the descriptions could include a small company’s ability to offer more hands-on responsibilities to employees, deeper participation in the community and a more flexible work-life balance.
Education is just one of the many tactics job boards are using to attract smaller clients. There’s also a trend toward generating products and services that are priced more affordably and sold in smaller bundles that are easier to deploy.
It came as little surprise when Monster announced last year that it would eliminate the traditional per-application pricing structure on its Monster Performance Assessment tool and offer one with a more affordable pricing model. The applicant screening program, which once cost thousands of dollars, can be bundled in smaller service packages that start around $100.
"Small companies can now get their hands on sophisticated automated tools that make their life easier," Madden says. Monster believes the performance assessment tool will be particularly useful for smaller clients, which are generally short-staffed and don’t have the resources to sift through heaps of résumés in search of suitable candidates. The software picks the candidates that best match the requirements for the position.
"The assessment tool does the prioritizing for the companies," Madden says. "All they have to do is select their favorites from the narrowed list."
Monster has stiff competition when it comes to courting small clients. This segment of the market has become so strategic for HotJobs that the company takes their needs into consideration once the new products and services are conceptualized.
"They are not afterthoughts," Dalton says. "Our goal is not to create a product and then trickle it downstream, but to develop something that from its inception serves all of our clients."
With this line of thinking in mind, HotJobs decided to make the Yahoo Media products scalable. Customers can negotiate a predefined price for subscribing to the service, virtually eliminating the risk of overspending. In addition, the media products are offered on a pay-per-click basis, which can be cost-effective for employers on tight budgets.
CareerBuilder also is taking significant steps to meet the needs of smaller clients. Whenever possible, job openings for its Small Business Unit are filled with individuals who have experience in selling products and providing services to small-business clients. Their market knowledge is used to effectively sell as well as proactively develop offerings that are suitable for this segment.
"We recognize that the needs of small clients are very specific," Ferrara says. "Our goal is to have representatives who understand how these businesses function and offer them tools to make life easier."
A trend that’s here to stay
Small and midsize employers are in luck because, for the foreseeable future, all signs indicate that job boards will continue to cater to their needs. It is a trend that extends well beyond the industry. Many providers of applicant tracking systems, such as Taleo, have made significant inroads in the small and medium-size markets.
The company launched Taleo Business Edition, which was specifically tailored for this segment, two years ago. The offering is affordable, costing about $1,000 annually for basic users, says Jason Blessing, general manager of Business Edition. The company is able to bring in some 150 small and midsize customers each quarter.
"It has become a very important part of our strategic pillar," Blessing notes.
Besides deploying significant resources to introduce targeted products and services, job boards have launched other efforts that extend the trend, industry experts say. One of the catalysts for partnering with newspapers and other media outlets is so that job boards could expand their reach.
"Forging alliances with newspapers gets more feet on the ground and increases the job board’s ability to get in touch with smaller employers," says Jim Townsend of Classified Intelligence.
As appealing as this segment may be for job boards, they should establish certain boundaries, Townsend explains. Given the high degree of education and hand-holding these clients require, job boards should have certain established limits.
"Bringing up to speed an employer that only recruits using ‘for hire’ signs is not going to be cost-effective," Townsend says. "Converting them into clients wouldn’t be the best approach."