Online Job Search: Leveraging the Subscription Model to Create a Better User Experience
TheLadders.com, the online source for job seekers targeting positions paying $100k and above. What a great company and what a great product. I am proud and privileged to be one of the original angel investors in the Company back in early 2004, placing my belief in founder Marc Cenedella and his vision of turning the online job market on its head. How? By creating a natural self-selection mechanism on the part of job seekers, requiring them to pay to access the full slate of $100k+ jobs in its database. Job posters, i.e., corporations, financial institutions, etc., conversely, pay nothing. In essence, TheLadders.com created a subscription model geared around the job poster user experience, where the goal isn’t to collect the greatest number of resumes, but the right resumes to fill a position. This stood in marked contrast to the way Monster and HotJobs were (and still are) running their models, ones in which the job posters, i.e., corporations, government agencies, etc., pay to have their job specifications posted on the site, while job seekers view them for free.
The problem: under the conventional model, job posters are bombarded by both qualified and unqualified seekers alike, as there is no barrier to responding to any job posting, regardless of how unqualified a candidate might be. However, with TheLadders.com, why would an individual who is more likely qualified for a $50k job pay for the privilege of responding to a posting for a $100k job when they are invariably going to get shot down? Answer: they wouldn’t because it costs something. Just like health care deductibles. Paying makes the individual think about resource allocation and probabilities. It forces the consumer of resources to become economically rational and to allocate scarce resources accordingly. This, in turn, creates a much better user experience for the job poster, as they don’t have to spend enormous amounts of time culling through 10,000 resumes of which maybe 100 are pretty good, where TheLadders.com might generate, say, 200 resumes of which 80 are really good. I am pulling these numbers out of the air but you get the picture.
Bottom line: Marc and his team have done an amazing job changing the face of both job posting and job seeking at the high-end of the market. And this success was recognized in a terrific article in today’s New York Times:
RECRUITERS with six-figure jobs to fill know better than to post
them online and start a stampede of marginally qualified job seekers.
But they also know that the Web is the easiest way to find applicants.The Web’s surprising answer to the problem? Charge them to look.
A
growing number of niche sites devoted to high-end jobs are finding that
applicants are willing to shell out a few dollars — or a few hundred,
in some cases — for the chance to get access to job ads. The strategy
will not help the big online job boards find more applicants for
entry-level positions, but analysts say it is ideal for sites like TheLadders.com, ExecuNet and others seeking the senior executive crowd.“It
turns out that having the job candidates pay is a great screener, and
employers love it,” said Charlene Li, an Internet analyst with Forrester Research.********************
The upper-level jobs niche has been slower to develop, though,
because companies typically hand off such jobs to corporate recruiting
firms. Those firms, like DHR International and Korn/Ferry
International, set up their own Web sites, but those sites are used
mainly to market the firms’ offline services instead of connecting
applicants with companies online.To fill that void, several
former HotJobs executives introduced TheLadders.com in 2003, with the
mission of posting only those jobs with annual salaries of $100,000 or
more. At the time, the company made an odd bet — that it could attract
more applicants if it charged them a monthly entry fee of $30.That
is precisely the opposite of the approach used by mass-market
employment sites, which charge applicants nothing but charge companies
varying fees to post job openings.In its early years,
TheLadders.com was slow to grow, partly because it did not attract
enough job postings to justify the site’s cost. But as employers and
corporate recruiters learned that they could find qualified applicants
for nothing, the number of job postings jumped.Now, according to
Marc Cenedella, the chief executive of TheLadders.com, the site listed
70,000 jobs last week and is on pace to exceed $30 million in sales
this year from about 1.4 million subscribers. And the site now counts Microsoft and the EMC Corporation as clients.
Rock on, Marc. Your idea made sense in 2004 and it makes sense today. Congratulations on your Company’s meteoric growth and its bright prospects for the future. You see, it’s easy: just come up with a great idea that is totally different than what the market leaders are doing, build it deliberately and smartly over a three year period and begin raking in the cash. Easy, right? Not.
