This profile looks at internet jobsearch sites and the online recruitment industry.

It covers -

• introduction
• evolution
• who is searching and advertising?
• the industry
• issues
• studies

     introduction

Use of the internet to connect job seekers and employers attracted attention from the mid-1990s, with "recruitment by clicking" being hailed as revolutionary, an unprecedented business model and a laudable assault on 'big media'.

As with online match-making, 'equaintance' and other social software services much media coverage has been based on industry boosterism, with claims that

• "nearly half of all Internet users have looked for a job online" as they heed the call to "pound your computer keyboard, not the pavement"
• "by 2005 around 96% of all companies will use the Internet for their recruitment needs"
• 45% of UK job seekers use the net as "their preferred method of looking for a job, 75% have applied for a job online, 59% have obtained an interview as a result and 19% have obtained a job"
• "internet recruitment is quicker, cheaper and more effective", with "better matching of jobs and job seekers"
• "the web means better flow through for placement agencies"
• "as everyone finds jobs online, job searching will morph from want ads to rich career networks"
• cost-per-hire of online recruitment is around 10% of offline recruitment
• "over fifty million CVs are floating on the net".

We can differentiate three aspects of online recruitment.

The first - and arguably most significant - involves electronic mail, with acquaintances alerting each other to needs/opportunities, employers providing descriptions and using electronic correspondence at all stages of the recruitment chain, applicants providing bids and vitae, and third parties such as identity verification services responding to queries over the net rather than by the postbox. The impact of electronic mail rather than hard copy relates to ease of use and timeliness.

A second aspect involves use of the web for electronic publishing, with employers (or agents) posting their needs on corporate sites and recruitment sites of varying sophistication and job seekers responding to those needs or merely posting profiles that feature their aspirations and vitae.

At its simplest that publishing is an online form of traditional print classified advertising and offline job boards. More sophisticated variants encompass public search facilities, automated data matching, intranet access to specialist databases (eg maintained by a recruitment agency) and features such as the inclusion of video (useful for determining whether the owner of a CV does indeed have two heads).

A third aspect involves enhancing that publishing - and facilitating better recruitment and staff retention - through interactive testing (including intelligence, skills and psychological tests) and automated verification of credentials.

Enthusiasts have also seen scope for integration with education services and for the provision of life-long career management to members of the binary proletariat.

We have for example encountered predictions that sites operated by commercial recruitment agencies or professional associations and educational institutions will

• house personal portfolios that demonstrate an applicant's proficiency
• leverage aggregated date to forecast job shortages several years hence and determine appropriate remuneration now
• use artificial intelligence for better analysis of vitae and matching of job seekers to job openings
• enable recruiters to offer a person to an employer before a position is advertised

In practice many claims about online recruitment are problematical.

It is clear that many jobs in some industries are not being advertised or filled online. Others, particularly elite professional and executive positions, use email but rarely appear on job boards. Personal connections - aka soft networks - have not been vanquished by the web. Much 'online' activity relates to positions advertised on corporate intranets and internet sites rather than sectoral or multisectoral job boards. Claimed efficiencies for employers and employees may not be realised, with for example suggestions that

online mainly equals more noise ... it's too easy for job seekers to 'spam' employers or do a dump a CV onto a board. Much of our time is spent filtering junk applications from overseas wannabes

As we have noted below, the profitability and effectiveness of many services are uncertain, with few benchmarks and little public disclosure. Major operators appear to be garnering most traffic (at the expense of smaller non-specialist competitors) but some niche operators arguably deliver better results for job seekers and employers.

     evolution

Precursors of current internet recruitment sites/services took three forms: private databases maintained by recruitment agencies, bulletin boards developed by enthusiasts prior to the web and 'wanted' advertisements in print formats (in particular the classified ads that provide the "rivers of gold" for major newspaper groups).

Monster.com – the Amazon of the industry – was launched in 1994 as The Monster Board by Jeff Taylor, founder of specialist recruiter Adion. It was acquired by yellow pages publisher TMP Worldwide in 1995, expanding in competition with independents such as Hotjobs and the online arms of advertising and recruitment groups.

Sectoral, multisectoral and geographical sites proliferated during the dot-com boom, as start-ups emulated the emerging majors, recruitment agencies tested the water (or sought to boost their market value by expanding online) and developers migrated from bulletin boards to the web. Growth of the industry reflected consolidation within the global advertising and human resources industries, with conglomerates such as Saatchi and WPP assembling (but rarely integrating) service providers that encompassed media buying, web design, executive headhunting, clerical staff placementand psychological testing.

Forecasts that the web meant imminent demise of newspapers as such – or merely their economic basis as readers relied on banner ads, search engines, portals and other mechanisms – saw major media groups launch generic and local job sites. The success of that expansion varied, with Australia's dominant commercial media groups fending off local and overseas web-only recruitment sites. In Europe the success or otherwise of major groups such as Bonnier, Trinity and DMGT reflected factors such as local expectations, development strategies, cross-marketing and preparedness to invest.

Caution about cannibalisation of print revenue was reflected in the US, where there were disagreements about national/regional job sites and about relations within publisher consortia, evident in dissolution of some partnerhips (or competition from local sites under the auspices of individual newspapers) and laments that revenue and profitability was not commensurate with investment.

By 1999 Monster was reportedly attracting over 2.5 million visits per month, with over 50,000 job postings from 40,000 companies and around 500,000 resumes. It followed others in the dot-com trajectory, with parent TMP initially being rebadged as Monster.com, then dropping the 'com' to become Monster Worldwide. Accelerated consolidation following the 2000 dot-com crash saw Yahoo! acquire the HotJobs job board for US$436 million in 2002, the demise or restructuring of some competitors (typically towards a sectoral/local focus), winding back of services launched by some professional organizations and increased marketing or commercialisation of 'free' services such as San Francisco-based Craigslist. The latter – with more traffic than Monster according to some metrics providers (although lower revenue) - came into the eBay orbit in August 2004 when the auction group paid US$1.4 billion for a 25% stake.

2003 and 2004 also saw the emergence of independent academic and government studies – including some empirical research - highlighting issues such as the absence of benchmarks and public information about success rates. One observer accordingly commented that some major services appear to be useful opportunities for the newly unemployed to fill in time (particularly if participation evokes large-scale unsolicited approaches from service providers rather than employers) but - given success rates in the US of around 0.8% to 0.2% - are less effective than using personal soft networks.

The future of the industry is unclear.

Some pundits, particularly those closely aligned with the industry, forsee significant growth in revenue and greater profitability. One observer notes that aggregate online online job advertising revenue in the US is around 15% of spending on print ads for recruitment but is growing at a greater rate (claimed as 25% to print's 4% growth) and will overtake traditional classified ad spending. Investors in 'old media' need not despair, as much of the growth is taking place in regional sites owned by newspaper groups.

Forrester – unabashed by indifferent results from its past consultations with the crystal ball (or was it eye of newt and toe of gnat?) - estimates that by 2005, job boards will have "evolved into career networks that will capture 55 per cent of an online recruitment market worth $7.1bn". Competitors and some industry figures offer less expansive forecasts, envisaging competition among the majors , the erosion of margins as job seekers and employers migrate to local sites and sectoral sites, and increased costs for marketing and provision of features that would provide the ‘career networks’ mooted by Forrester and its peers.

The attractiveness of those features for end users – and the ability of major site operators to provide quality at an acceptable cost – is unknown. Experience offline suggests that individuals and employers are wary about capture by 'body shops', particularly on a long term basis and without the human element. It is likely that most candidates – particularly those whose placement is most lucrative – will continue to emphasise personal referrals ahead of corporate sites, broader jobsearch sites and print media.

     who is searching, advertising and deciding?

There is considerable uncertainty about use of online job search (and its effectiveness) in Australia, the US and other locations.

That uncertainty is exacerbated by confusion over terms such as "internet recruitment". It is reflected in uncritical acceptance of assertions such as "employers and recruiters use the Internet to make 48% of all their hires" - we suspect that a somewhat greater percentage also use telephone and paper in hiring.

A small-scale Pew Internet & American Life Project study in the US claimed that 61% of internet users in the 18 and 29 age cohort have looked for jobs online, compared to 42% of those in the 30-49 and 27% of those in the 50-64 age cohort, with 50% of online US men having sought job information compared to 44% of online women. Supposedly 10% of online unemployed conduct an online job search on a typical day. 44% of whites have sought jobs online versus 60% of online African-Americans and online Hispanics. On a typical day online the most active job searchers were online office workers (consistent with other research suggesting that 50% of clerical staff spend between one and five hours per week surfing on company time); Pew unsurprisingly found few skilled laborers and service workers hunting online. It did not provide detailed figures for satisfaction rates.

A 2004 US commercial study suggested that 60% of candidates preferred securing a new job through personal referrals; with 50% using recruitment agencies and 55% through online job boards.

A 1998 US survey of businesses had earlier found that about 37% of participants use online recruiting of employees, including 71% of selected US technology companies, 42% of those in the financial services industry, 39% in healthcare, 45% in insurance and 59% in telecommunications.

Nielsen//NetRatings reported in 2004 that

the overall unique audience for career development increased 30% from last year to reach 27.2 million. Monster remains the leading career development Web site in terms of unique audience, with about 9.6 million visitors, followed by CareerBuilder at 9.3 million and Yahoo! HotJobs at 7.1 million.

Monster boasted of over 50 million job seeker members worldwide, a database with 41 million resumes and over 150,000 member companies.

     the industry

Figures for the size of the online recruitment industry, its profitability and its effectiveness are contentious.

IDC forecasts the world market will be worth US$13 billion by 2005; Forrester's prediction in 2000 was a more modest US$7.1 billion for "online recruitment networks", with a forecast in 2004 that the US job-search market would double to US$1.9 billion by 2008.

As noted above, revenue and expenditure is attributable to subscription and success fees paid by applicants, position advertising and success fees paid by employeers, advertising paid by other entities, web design and hosting charges, psychological evaluation service fees, credit reference service and credential verification fees, work by resume-writing and resume-posting services and costs associated with marketing job search services in online/offline venues. Much of that marketing takes place in print publications, with online marketing expenditure supposedly concentrated in a narrow range of locations (in particular paid placement on search engines and in news sites).

As of late 2004 online recruitment services at the global and national levels essentially have the following characteristics -

• a handful of major sites that attract the most traffic (and most CVs), have a multi-sector coverage and operate on thin margins
• a large number of small multi-sector sites facing difficulty competing with the industry majors
• a smaller number of specialists that cover a specific region, industry or area of expertise, generally with higher margins

That landscape is similar to the online matchmaking industry profiled elsewhere on this site.

We have identified several thousand sites in what was not a comprehensive trawl of the web. Commercial metrics studies suggest that the industry majors are typically in the top ten or top twenty destinations of surfers measured by those companies. Success rates appear to vary considerably, with 'niche' operators (some of which are owned by the multi-sector majors) probably having higher success rates and profitability on a smaller population.

Ownership varies, with key players being

• offline recruitment specialists that have expanded online through acquisition or development of an independent online presence
• major newspapers, with example several multi-publisher consortia in the US and EU (eg Tribune and Knight-Ridder's Careerbuilder, which acquired Careerpath.com established by the New York Times, Washington Post, Hearst and Gannett)
• some industry/professional organisations, that are balancing revenue generation with a service to their members
• portal operators such as Yahoo!
• 'born online' internet recruitment specialists

The web has not meant the death of print, with for example reports from the UK that in 2003 the "recruitment industry" spent around 95% of its £1.5 billion advertising budget on traditional print and broadcast media.

     issues

Online recruitment poses several issues -

• efficiency
• privacy, spam and identity theft
• other aspects of performance
• corporate sites as a public face of an organisation

For job seekers and potential employers a salient concern is the efficiency of the online recruitment process. Most independent studies suggest that most recruitment is still done through personal networks and with some personal contact. Going line to post a CV or view 'want' advertisements does not eliminate the need for 'face time'.

Arguably the greatest impact of job search sites has been the ability to scan a large number of ads without getting ink on your fingers, although one observer comments that the switch from newsprint to bytes means that employees can surreptitiously job hunt at their desks.

The absence of benchmarking - and the paucity of information about how employers are using job boards and services - means that it is difficult for job seekers to determine which site/service offers greatest value for money. Surveys that we have undertaken about applicant and employer perceptions and experience in high technology and legal recruitment suggest that some organisations have successfully eschewed online services, instead relying on personal soft networks.

Privacy is emerging as another concern, with recognition that some sites have inadequate or misleading data protection policies, some sites do not adhere to those privacy policies and some users have a poor understanding of how personal data will be handled in the immediate and long term. Poor practice in handling of recruitment data is not restricted to the online environment, with privacy advocates for example having long-standing concerns regarding offline treatment of applications by employees and recruitment services and regarding the weakness of privacy legislation for the protection of that information. Critics also note misuse of posted vitae for spamming and identity theft, discussed elsewhere on this site.

Dot-com euphoria about 'job finding by mouse' has increasingly been displaced by lower expectations, characterise by one observer as "pay and pray".

A realistic approach has been encouraged by criticisms from within the industry, with a UK recruitment specialist for example claiming that "online recruitment is riddled with inefficiency, misleading information and outright fraud". Others have compared recruitment services - online and offline - to used car retailing or personal matchmaking, with claims that recruitment sites

• quote inflated salaries or incorrect job descriptions to make positions more attractive
• do not live up to claims about careful matching, instead emailing job seekers with ads that do not relate to information supplied during an exhaustive registration process
• repeatedly advertise the same jobs or positions that have already been filled
• make unsubstantiated claims about the security of personal data
• improperly sell personal data to retailers and other entities
• do not provide trained staff or other support for job seekers
• fail to expunge outdated information, whether on a systematic basis or in response to specific requests

Questions about public disclosure (particularly in relation to success rates) and benchmarks are common. Inaction by consumer protection watchdogs has reflected greater emphasis on identifying and prosecuting online financial and retail scams and - as with matchmaking - the difficulty of grappling with poor performance in an industry where there is room for subjectivity.

A final issue relates to use of corporate sites, a public face of an organisation. A particular concern is lack of integration between advertising on a corporate site and follow-through by operational staff or recruitment specialists, with criticisms for example that applicants do not receive timely replies (or indeed any acknowledgement) and that personal information is not appropriately handled.

     studies

There has been surprisingly little rigorous academic or government publication regarding the online recruitment industry, with media coverage accordingly offering an uncritical view and frequently parrotting figures of uncertain validity from major commercial research houses or particular recruitment site services.

For an upbeat but superficial view of adoption by particular US demographics see the Pew Internet and American Life Project Online Job Hunting report (PDF). There is a more nuanced treatment in Ben Anderson's 2004 Everyday research in the knowledge society: who uses ICTs to find job and health information (PDF) and Jan Schapper & Susan Mayson's 'The rhetoric and reality of e-cruitment: Has the Internet really revolutionized the recruitment process?' in Human Resource Management: Challenges and Future Directions (Brisbane: Wiley 2003) edited by Ruth Wiesner & BruceMillett.

Peter Kuhn & Mikal Skuterud coauthored several cogent studies on the efficacy of online job search in the US, including 'Job search methods: Internet versus traditional' in 2000 Monthly Labor Review and 'Internet Job Search and Unemployment Duration' in 2004 American Economic Review (here), with the latter concluding that "either Internet job search is ineffective in reducing unemployment durations, or Internet job searchers are negatively selected on unobservables". The 2003 paper In With the New, Out With the Old: Has the Technological Revolution Eliminated the Traditional Job Search Process? by David Van Rooy, Alexander Alonso & Zachary Fairchild has a more positive view.

We have pointed to other works such as Mark Granovetter's landmark Getting a job: a study of contacts and careers (Cambridge: Harvard Uni Press 1974) and The Strength of Weak Ties: A Network Theory Revisited (PDF) in discussing social software and 'equaintance' networks.

Print and online guides for job seekers, employers and intermediaries abound. Many are of indifferent value and for example repackage received wisdom about "how to write a CV" or - in in an echo of early dot-com primers - feature hyperbole about "winning a job with your keyboard".

Two of the more prominent US works are Pam Dixon's Job searching online for dummies (Foster City: IDG Books 1998) and Guide to Internet Job Searching, 2002-2003 by Margaret Dikel & Frances Roehm (New York: McGraw-Hill 2002).

::