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E-Recruitment - Market Assessment 2005
Key Note Publications Ltd, June 2005
Online is Niche but Moving into the Mainstream
Online recruitment is a candidate-driven market and there are now 16.8 million jobsite users in Great Britain out of approximately 30.6 million adults accessing the Internet.
However, it would be wrong to think of e-recruitment as a central focus of recruitment activity in the UK, although it is true to say that online recruitment has become a strategically important media to fulfil vacancies by both recruitment agencies and, more recently, employers. While online recruitment spending pales into significance against the revenue generated annually by recruitment agencies, the use of e-recruitment is rapidly expanding.
It is Both Online and Offline
Comparing expenditure on online recruitment with recruitment spending generally misses the point that online recruitment is not, in essence, in competition with offline recruitment methods. Today, online and offline are increasingly being merged into an integrated recruitment process. Publishers and recruitment agencies offer employers and job advertisers the options to `sell' their jobs both online and offline simultaneously or at different times. Moreover, traditionally strong in finding jobs for affluent, white males from London and the south east of England, the Web is now better able to meet the recruitment needs of employers seeking candidates of all sexes, income grades, races and geographic areas, making it better suited for a wider role in recruitment.
The online recruitment industry today is essentially a `clicks and mortar' world, dominated by major offline publishing groups such as Reed Elsevier, Associated Newspapers and the Guardian Media Group, and recruitment businesses with major offline operations, such as hotgroup and Reed Executive. Pure-play jobsites are the minority.
From Quantity to Quality
As online and offline merge, so the focus of online jobsites is changing: originally sold on their ability to cut the cost of advertising jobs, online jobsites are now seeking to meet the needs of recruiters who are using e-recruitment as part of wider electronic human-resource (e-HR) operations. A growing proportion of recruiters are seeking to develop e-HR and e-recruitment strategies.
While the online jobsite continues to offer cost savings over offline media, increasingly, the focus is shifting towards improving both the quality of candidates that apply for jobs and candidate management. As e-recruitment becomes part of e-HR, so the focus of recruiters is shifting towards accurately evaluating and comparing the relevant skills of candidates, i.e. screening, filtering, sorting and ranking candidates and managing candidates for jobs. This in turn is reshaping the services and functionality offered to recruiters by jobsites.
Jobsites must increasingly develop services and solutions to help recruiters throughout the recruitment value chain and across the broad areas of human capital retention and development, such as training and career development. Furthermore, in response to recruiter pressure, jobsites are becoming more sophisticated in the types of jobs they offer and their geographic targeting.
At the same time, recruiters have realised that candidate services are vital if they are to be attractive to job seekers, a vital factor in a labour market facing skills shortages. Among job seekers, job finding remains the key motivation for using jobsites, including the availability of job-related information (e.g. on recruiters or on an industry). However, a range of other factors also drive site traffic, especially career-associated information such as training information, careers advice and finding employment news.
Under these pressures, jobsites are developing in the following areas:
They provide value-added services to job seekers, such as services and information to aid the job seeker in his or her career management and development. Jobsites are expanding the range of career-related information and services on offer to the job seeker. Such services help build and maintain site loyalty and help ensure repeat visits by job seekers as they change their jobs/careers throughout their working lives. This is especially important to the multi-sector generalist sites, which lack the site loyalty and low cost base of the specialist, niche sites, many of which grew out of specialist trade magazines and enjoy strong brand loyalty with job seekers.
They are diversifying overseas to attract job seekers in other countries, reflecting the global operations of major employers and the overseas search for in-demand skills.
They provide value-added services to recruiters, especially services along the recruitment value chain. This is leading sites to vertically integrate, often by buying in solutions or partnering with companies with the relevant software expertise or intellectual capital. Today, candidate filtering, screening and selection is a main focus and, in the future, candidate management will become a core focus of jobsites. They are investing in new site functionality and services.
Strong Future Growth but a New Business Model
This report forecasts that by 2009/2010, the vast majority of adults in Great Britain will have Internet access, with the proportion of adults using the Internet to find jobs or access careers information at 74.5%. Between 2005 and 2009, the amount spent on job advertisements on the Internet will grow significantly. Annual growth will slow during this period, as the market enters a more mature phase of development.
There will be a continued integration of offline and online recruitment, both within recruitment companies and between online jobsites and offline recruitment companies, meaning the traditional boundaries that existed between print media owners, job boards, recruitment advertising agencies, recruitment consultancies and technology companies will be eroded. A new breed of `super suppliers' will develop, capable of offering employers a range of online and offline resourcing.
Jobsites will have to grow in sophistication in terms of both the range and quality of services they offer. Return on investment will become a main factor influencing where recruiters spend their money, which will result in the current `paid for advertising' model replaced by a more `placements orientated' model, where recruiters only pay for results (i.e. placements).
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