121-A Fast-Growing Market Under Attack from Below
There are a hundred thousand job sites in the U.S. and abroad. These sites charge employers to post jobs on their web sites in order to attract qualified employees. The big three in the market include Monster, CareerBuilder and Yahoo!HotJobs. With unemployment rising world-wide, these job sites are still growing. However, they are losing market share to emerging alternatives.
These alternatives are considerably less expensive than the big three. One of these alternatives, LinkedIn, has a professional orientation. This site offers a suite of services, called Talent Advantage, that has gained more than a thousand customers, double the number it had in 2008. This company is particularly good at finding, and offering up, what’s known as “passive” candidates. These are potential hires who are currently employed and not looking for a new job. The LinkedIn network has the capability of “pushing” candidates to employers who meet preset criteria. And LinkedIn is cheap in comparison with the big three.
Another inexpensive alternative is Twitter. Recruiters using Twitter can send messages to their followers who, in turn, copy the messages to blogs covering professional areas where potential candidates might be reading.
Monster, the largest and best known of the job sites, is responding by improving its services:
- It moved its call center from India to South Carolina
- It developed “contextual search” technology that improves the quality of the candidates developed on a search
- It reduced the number of steps required to upload a resume
- It created a feature that shows job-hunters how they can move from one field to another
We have studied several hundred low-end competitors (see Audio Tip #87: Potential Low-end Competitors in a Marketplace on StrategyStreet.com). There are four distinct types of low-end competitor. Most industries see at least one of these four types. To respond to them, an industry Standard Leader (see Audio Tip #81: Standard Leader Products and Companies) has the following choices:
- Ignore the low-end competitor, if it is unlikely to expand
- Block the competitor using one of the Standard Leader’s exploitable advantages
- Acquire the competitor, if it is available for a reasonable price
- Add a new price point to flank the low-end competitor
- Increase the company’s level of benefits at the Standard Leader price point
- Drop prices, where all else fails
In many cases, a good Standard Leader can respond to a low-end competitor in ways that maintain its growth and protect most, if not all, of its margins (see Audio Tip #142: Defensive Pricing Guidelines).
The last 12 years have seen major changes in job board recruiting due in part to consolidation among major players. Monster worldwide acquired Yahoo Hot Jobs in 2010 and eventually closed the site. In turn, Randstadt Holdings, an Amsterdam-based human resources and recruitment specialist, acquired Monster in 2016. CareerBuilder was acquired by a private equity firm and a pension fund in 2017. The Japanese powerhouse market leader, Recruit Holdings, acquired Indeed in 2012 and Glassdoor in 2018.
The industry remains highly fragmented with more than 50,000 total job boards worldwide. The reason there are so many is that profits are high in the industry. The leaders in the market have shifted with the growth of new entrants with new technologies. An analytical firm, which ranks job boards by their attractiveness to company recruiters in 2022, found LinkedIn most attractive in the US with an 11.5% market share. Indeed followed with a 9.3% market share. CareerBuilder and Monster were out of the top five. Social media sites, especially LinkedIn, have become important listing sources for new jobs. Other new entrants include Facebook and Instagram, who are gaining popularity in recruitment. Some market share services show CareerBuilder, Monster and ZipRecruiter with more significant market positions. However, none of the top three competitors in 2009 are nearly as important as they were back then.
This industry is evolving. There are now only half as many recruiting sites as there were in 2009. As industries become more mature, and possibly hostile, they evolve in predictable ways. See HERE for a description of this evolution.
THE SOURCES FOR STRATEGYSTREET.COM: For over 30 years we observed the evolution of more than 100 industries, many hostile. We put their facts into frameworks applicable to all industries and found patterns. Strategystreet.com describes the inductive results of these thousands of observations and their patterns.