It’s no secret that Indeed has been ripping up the rule book recently and so this month we’re investigating what their changes mean for the recruitment industry.
We look at Indeed’s history and its rise to success, the huge changes it’s been making over the past few months, the impact this will have now and for the future of recruitment, how your strategies should shift, and the legacy of this for the recruitment industry.
A potted history of Indeed
When Indeed was launched in 2004, the job board space was very different. Monster.com had been around for 10 years and dominated the market. LinkedIn was launched in 2003 but was predominantly a networking site and Stepstone was just finding its feet in Europe. Indeed’s job search engine approach set it apart from the job boards and it quickly acquired a surge of users.
Since its inception, Indeed has expanded to over 60 countries across the globe and is available in 28 languages. Over the past year, the job search and hiring platform has made some announcements and pivots that have sparked a great deal of debate within the recruitment industry.
- 2004: Cofounded in Austin, Texas and Stamford, Connecticut, it is among the first job board aggregators in existence.
- 2005: Indeed officially goes live with the beta version of its pay-per-click (CPC) job advertising platform. It’s not the first to adopt a CPC model but it undoubtedly popularises it. As well as its job posting and searching functionality, Indeed can track the frequency of keywords within postings, serving as an indicator of job market trends.
- 2008: A global recession means a tide of unemployment and job seekers turn to Indeed in their droves.
- 2010: Indeed surpasses Monster.com to become the job search engine with the highest traffic in the United States.
- 2011: Indeed allows job seekers to apply directly to job postings on its website and offers a CV search function for recruitment agencies and employers.
- 2012: Indeed becomes an independent operating unit of Recruit Holdings Co., Ltd.
- 2016-2019: Recruit Holdings Co., Ltd. makes several acquisitions, including the assets of Indeed competitor Simply Hired and Glassdoor. Indeed makes further acquisitions, including Syft and ClickIQ.
- 2023: Wanting to find a more cost-effective way to advertise jobs, Indeed rolls out a cost-per-application (CPA) model. All clients are switched from CPC to CPA, only for the platform to perform a U-turn and switch back to CPC in December of the same year.
- 2024: At their March investor update, Indeed announces a plan to pivot from job board to “full-service recruiting agency.” In May, Indeed ceases to allow organic postings, switching to a model whereby all traffic is chargeable. Around the same time, the platform makes circa 1,000 employees redundant (around 8% of the company), blaming both “a global slow-down in hiring” and the fact that the “organisation is still too complex.”
Indeed’s 2024 proposals
From our potted history, you can see that Indeed’s early success and smart acquisitions allowed it to grow hugely over the course of just under two decades. Then the pandemic hit and the global job market was hugely affected. Recruitment-related business the world over were forced to adapt and make changes and Indeed was no exception. From years of growth and scant changes to its models, Indeed has made a number of unexpected announcements over the past year, each of which has been met with much discussion, debate and more than a whiff of controversy.
The one that U-turned
Early in 2023 Indeed switched from cost-per-click (CPC) to a cost-per-application (CPA) pricing model. With the previous CPC model, you were charged whenever a candidate clicked on a sponsored job posting, whether they went on to apply or not. To combat wasted clicks, the CPA model only charged when a candidate filled out and submitted an application form through Indeed. The aim was that you would only be charged for interactions with more intent, from more engaged candidates.
However, there was enough of a negative response from advertisers that by the end of the same year, Indeed axed its CPA model and reverted to CPC. Why? On paper, CPA makes sense. But there’s a psychological element at play here. You may not be charged for each click but, as applications are charged at a substantially higher rate than clicks, it felt to many like they were paying more – even though in the long run it would even out.
On a recently released Talent Matters episode, Steven Rothberg describes CPC as “death by a thousand paper cuts. You still die at the end of the day but each one isn’t that painful.” The issue with both CPC and CPA is quality. Not all applications are created equal and a bad quality application is a bigger loss in one go than a click. And here is where it failed. Ultimately, CPA doesn’t create the holy grail for recruiters – payment only for a quality application from a candidate they can take forwards in the process.
The one that axed free postings
If its pricing model U-turn was divisive, Indeed’s announcement that it was discontinuing free job scraping (and therefore free traffic) blew up the recruitment industry. For a while, it was all anyone was talking about. Agencies of all sizes went into panic mode at the thought that a substantial amount of their traffic would now only be available for a price at a time when many recruitment businesses were still struggling. Recruitment agencies that had been relying on that traffic saw a sharp decrease in applications.
Indeed’s standpoint was that the decision was driven by mass-posted roles, often of a lower quality, that diluted the impact higher quality job adverts could have. The more jobs on the board, the harder it is for candidates to find the genuine, well composed job adverts. Not only does that potentially place fewer eyes on your ads, it could mean fewer job seekers searching Indeed in the first place as they turn to less chaotic generalist job boards or niche boards. Take away free posting and you immediately remove a high percentage of scam and low quality adverts.
But, just as with the CPC/CPA debate, there’s also a psychological angle. The human condition leads us to value things more when we’ve paid for them. We put a value on those items that we don’t always when we’ve received them for free. Now agencies are having to pay for traffic, the quality candidates that are coming to them are perhaps valued in a way that those that came via free traffic weren’t necessarily. Did Indeed anticipate that? It’s a canny move if they did.
The one that could end recruitment as you know it
A tad dramatic? Well, when a job board announces that it’s not just switching lanes but changing pools entirely, it’s enough to make you sit up and listen. Indeed announced their long-term strategy and future vision at their March investor update and used the term “full-service recruiting agency” to describe where Indeed Hire was going to take them.
What does this mean? Keen to find out, I listened to Indeed CEO Chris Hyams talking about Indeed’s strategy and vision at the aforementioned update. He declared Indeed the “leading global two-sided talent marketplace,” and explained Indeed’s full-circle offering. This already encompasses ‘Attract’ (search and click by interested candidates) and ‘Connect’ (applications from quality and engaged candidates leading to interview). ‘Hire’ is the next stage and is what Hyams refers to as a ‘full-service recruiting agency built on Indeed’s data and AI matching technology,” calling it “a massive future opportunity.”
This move is intrinsically linked to Indeed’s cessation of free job postings and their assurance that this will lead to a greater percentage of hires. This is a bold move by Indeed as it risks alienating a huge part of its customer base – recruitment agencies – by pitting itself against them. It’s still early days and whether they will achieve their aim is up for debate but it’s got many recruitment agencies feeling nervous for the future.
What this means for recruitment agencies
The impact of these changes are twofold but neither spell the end of the recruitment agency. What it does mean is that recruitment marketing strategies may have to change.
Rethink advertising budgets to focus on quality traffic
Firstly, let’s look at what the cutting of free job postings means. Yes, you now have to pay for all job postings which will require an adaptation to your job advertising budget if you’ve been used to getting free traffic through Indeed. However, whilst this has come as a shock to some, this might not necessarily be such a bad thing.
On a recently released Talent Matters episode, Steven Rothberg (Founder and Chief Visionary Officer of College Recruiter) describes that a gut reaction to leave Indeed entirely could be “more of an emotional than a rational decision.” He goes on to explain that, “if the Indeed traffic is of good quality and you are placing enough of those people, then buy the traffic. Some of your competitors won’t so it could give you a competitive advantage.”
Rather than making a knee-jerk reaction to cease all advertising through Indeed, take time to look at how valuable the traffic you’ve been getting from Indeed is. You may decide that it’s not worth it but if you regularly receive quality applications via Indeed, it could be that it’s worth investing in.
Diverse candidate attraction strategies are key
Both announcements highlight a need for recruitment agencies to avoid relying too heavily on job boards and to diversify their candidate attraction strategies. What else should you be doing to attract and engage quality candidates? We recommend the following:
- Spend time focusing on your recruitment website, ensuring you have a job page optimised for Google for Jobs, fresh, engaging and search engine optimised content, and a great UX with a clear and straightforward candidate journey. Bringing candidates into your own ecosystem is not only ultimately more cost effective, it means you have complete control.
- Invest in your own data-powered tech. Data is knowledge and knowledge is power. To compete with the job boards, you need to know where to find candidates, when to advertise your jobs and what to include in your job ads. There’s recruitment tech that can help you do all of that and more.
- Fully utilise your CRM and build a talent pool so that you’re not reliant on externally advertising your jobs. CRMs are often woefully underused but code your candidates properly and check your database before using job board credits to advertise and you could save both time and money – it’s a win-win. What you don’t want is to be paying to advertise on job boards only to receive applications from candidates already on your system. Just remember that a database only becomes a talent pool when you spend time nurturing those relationships. Check in on candidates, offer guidance, tell them about current jobs that could be a fit, forge those all-important relationships.
- Put your people front and centre as they are the one thing job boards can never compete with. As job boards and job search engines such as Indeed evolve and diversify their offering, recruitment agencies need to double down on what sets them apart – their people. Relationship nurturers and builders, hand holders, cheerleaders, networkers, expert consultants, industry insiders – your recruiters are what differentiates your recruitment agency from tech-powered job boards, no matter how advanced the tech.
Will Indeed succeed in becoming a “full-service recruiting agency”? Possibly. Will that mean the death of the traditional recruitment agency? Yes and no. Recruitment agencies that fail to make changes to their marketing strategies, that operate in the same way they always have, will struggle to compete.
However, those that take this opportunity to diversify their candidate attraction strategies, that invest in and promote their consultants as industry experts and relationship builders, that ensure their adverts are optimised and engaging, and that really look at where their most valuable traffic comes from – they will be the ones to not only survive but dominate the market.
