Here’s what 2009 has in store for job boards - vast change.
• Employers are scaling back their use of job boards. They aren’t hiring.
• Lots of HR managers will lose their jobs. But, sometimes that helps down the road when they are rehired in new companies, we gain a new customer.
• Many executive recruiters will throw in the towel and take jobs in less lucrative and less cyclical industries.
• Many job boards will shut down or sell for pocket change. Others will survive but only exist because it doesn’t cost anything to keep the website up. These will land customers every once in a while when a new sucker comes along but will never again compete in their niches. They will mostly act as affiliate sites for the major boards and land mines for employers.
But there’s nothing new here -- it’s just the same thing that happened in the last recession we weathered. So, what’s different this time?
• Competition is fierce this time. It comes from clutter and from craigslist, vertical job search engines, social networks and the seemingly never ending flow of venture capital.
• The newspapers are finally failing.
• The success of social networks is crowding out other forms of internet usage.
• The success of blogging and twitter is building trust in individuals over brands. Think Seth Godin.
• Even immigrants whose English is barely functional are using craigslist.
• Trust in brands has never been lower - think Lehman, Bear Stearns, Merrill Lynch, AIG, SEC, Republican party, etc.
• Integrity has never been scarcer – think Eliot Spitzer, President Bush, Senator Ted Stevens, Gov. Blagojevich, etc.
• We’re all jaded by the failures of loud obnoxious VC backed job boards.
And that’s why this recession is going to provoke vast change in the job board landscape. Here’s what’s going to happen:
• Employers will take fewer chances than ever. The few that didn’t demand free trials in the past, will start. The ones that demanded free trials before will be more open than ever to zero-risk pay-for-performance or CPC models.
• Small-time entrepreneurs no longer have a good shot at creating a successful job board. The window was open in the late ‘90s through the early 2000s. It’s now closed.
• Trust will be established by authenticity, transparency and results.
• Audiences will begin to see traditional branding as a red flag.
• Website visitors have high expectations of finding immediate value. They will disappear faster if they have to hunt for it.
• Established job boards will diversify into new niches at a faster pace.
• Established job boards that can survive 2009 will benefit during a period of relative quiet as the market turns and increase their dominance substantially.
• Finally, there will be waves of acquisitions in the next boom as consolidation picks up and the job board industry truly becomes a corporate world.
What do you think 2009 will bring?
Well for purely selfish reasons - I sincerely hope that this prediction is wrong: "Small-time entrepreneurs no longer have a shot at creating a successful job board. The window was open in the late ‘90s through the early 2000s. It’s now closed."
That said I think you're right in at least one aspect and that is that if someone is planning on entering the market with the same business model used in th late 90's, early 2k then they are going to have a hard time.
But I also think it goes back to one of your prior posts about starting up a new board. Find a niche that is not well served. Once that is done, make sure that you're business model is relevant to the times. I don't think the industry is dieing I think it is in the midst of a redefining itself, a rebirth.
Those that survive will have adapted, those who are successful in coming to market will bring more to the table than a bulletin board with ad space. At least that is my hope and fwiw, my prediction. Happy New Year!
**es** I hope you're right too Jeff! Certainly think you have a point about bringing more to the table than ads for an underserved niche - that's the only way to go. If you also run another business that can feed the venture over a year or two of losses, you would be two steps ahead. But then you'd be on verge of being more than small-time, lol. I started with a few thousand dollars, no business experience and no connections... those days are gone.
Eric, why do you say that 'traditional branding' will be seen as a red flag?
**es** Jeff, I think people's BS detectors are going to become a little more effective. All the hype that came out of Jobster, Itzbig, etc and that still comes out of Monster and CareerBuilder comes with a lot of polish. And yet the guy that started Craigslist who delivers more traffic and results for everyone without fail every year at a price of near zero does it without any branding whatsoever. Check out his twitter feed... he's talking about his birdfeeder most of the time, lol! -eric
I think a lot of what you say makes sense Eric. We saw a lot of cleaning up in the last recession. I think there are a few of rays of light for optimism however. I beleive offering great service and having valuable content results in a steady stream of new job seeking and employer clients.
I'm not sure what you mean "traditional branding as a red flag". Are you saying name brand sites in our field are doomed because they have a recognizable name? I think branding in general is a good thing and can't be dismissed because of a few bad apples. Many brands have remained respectable as other brands self destruct.
Do you remember Techies.com? They were headquartered in our state - Minnesota - so I watched them closely. They grew like gangbusters. But, they had a crappy product and when the VC money ended, they crashed really fast. Hype will get you only so far. It’s always been that way. Unless you are clearly in touch with your client base, you will die quickly if you don’t have a good product.
I think you are right that entrepreneurs will have a hard time breaking into the very crowded market. However, I've seen a lot of cases of creative people entering a saturated market and doing very well. Wal*mart comes to mind. Indeed seems to be another example. We take all new competitors in our space seriously.
On occasion, they manage to grab a functional market share. We compete head to head with Craig's list since we are a regional career Web site. Although Craig’s list is a great site (we use it), Craig's list is not meeting the needs for most of our employer clients. There are a lot of job seekers that do not or seldom use it and there are a lot of employers that will not use it for a variety of reasons.
In our market it's still free. I think when they start charging their nominal fee in this market, we'll see a big drop-off in employer participation. The $ step, however small, is a big one as I’m sure you know.
CPC is an interesting model. I think it meets the needs of many companies. We use it and like it. However, it requires more management time and can get out of hand if you are not careful. Also, branding opportunities are very limited or very costly. Don’t underestimate the advantage of employer branding. There are 4 or 5 recruitment advertising agencies in our region that make a living (although they are struggling now) on the value of employer branding.
**es** By traditional branding I mean what you see on the homepage of Monster.com - beatiful models, eloquent text ("Your Calling IS Calling"), good positioning, etc. If you don't have a director of marketing on staff who earns around $100k or more writing stuff like that, you're not doing 'traditional', lol.
Techies.com visited us in our office to pitch their $7,000 min price service way back when!
I don't think I'm pessimistic really... just see a lot of dramatic change coming and miss the days when I could afford a 3rd place ranking in every singly job board niche, lol. The changes coming bring big opportunity as well. It's mostly good news for guys like us.
Thanks for your comments Sam!
-eric
Some interesting thoughts here and broadly speaking I think you are right in your prediction of considerable change in the industry. However, I think it's too easy to get caught up in the pessimism that is sweeping the World.
Clearly we're in a downturn, but the reality is that life goes on - people will continue to want to move jobs, many companies will continue to recruit and there is still plenty of scope for turning a profit in the job board industry. Recessions make all companies leaner and more efficient, part of which involves employing high quality staff.
The effect this downturn will have though will be most hard-felt by the medium size job boards. The small niche players don't have massive overheads (although probably won't make a hell of a lot of money either, but they should survive), the large players will probably make cut backs but will have the brand presence and reach to be viewed as the safe bet for companies still recruiting.
Medium size boards though will find it harder to scale back overheads without undermining important parts of their business (like sales teams) and may well not be the first point of call for recruiters. They'll have to fight even harder for their business.
On the upside, this downturn will force out the hundreds of non-entity job boards who entered the fray thinking they could make a quick buck. Boards left will be those who offer value, haven't relied on absurdly massive VC funds, or aren't servicing other debt, and those with good client relationships.
One other thing I would add - Asia has innevitably been hit by the downturn as much of their exports come to the the US and Europe. But they are still economies seeing fantastic growth. For the non location based niche board, Asia presents plenty of opportunity still, in spite of other obstacles that might exist.
**es** those are good insights Will! I wonder where you would draw the lines between small medium and large job boards? It's true that there is a lot of pessimism to go around, but the source of mine is not the talk - rather, it comes from the growing difficulty of providing value. I see the bar continually raised while obstacles mount at the same pace...
Eric,
This is a very thought provoking post. The recession is certainly a negative when it comes to any business that serves the hiring needs of employers. In my opinion, 2009 will be the most productive for many companies. It is time for companies to put their head downs and work. However, there are several bright spots for niche job boards.
1. Cost/hire - In the long run, niche job boards are the low cost/hire solution. Placement firms are having trouble creating enough additional value to warrant 30% of an annual salary. The downturn is forcing HR managers to look more closely at their cost/hire and no doubt they will find niche boards cost reductive in the downturn and in the long run. The good thing for placement professionals is that their knowledge and skills are needed within the job board business. Creative destruction.
2. Craigslist - I am not a Craigslist junky but it appears to me that Craigslist tries to be all things to all people. Trying to be all things to all people may work for eBay but I don't see it working in the job board business. Monster and CareerBuilder fall into this caregory as well. They simply don't have the expertise and focus to serve a given niche as well as their more focused, smaller competitors. I am speaking from the prospective of serving employers that are looking for skilled professionals.
3. Competition and Expansion - Now that job boards are a proven business model the waters will get more bloodied with competition. This will make it more difficult for upstarts. However, if someone has the talent, ambition, and work ethic then they can be successful. My advice to those folks would be to look for areas that are underserved. Find niches within niches. Head for open waters if you will. Established boards will be looking for these niches as well but don't let the competition scare you. Competition is part of the fun.
Eric, I like your sites focus and really liked the niche board list. Keep up the good work.
**es** thank you David! You make some excellent points - our very talented sales director comes from a recruiting firm. Also, I recently placed a classified advertisement in the newspaper and was really astonished at the poor cost/value.
There certainly is still a lot of potential in the niche job board market for talented entrepreneurs. It may be a less forgiving marketplace now, but the opportunity is still there for anyone who can solve a few difficult puzzles.
-eric
As a principal in, and operator of, a niche job board that has been in business since 1998, I think your insight and overall future outlook is right on...some may see it as pessimistic - I see it as realistic.
In the last few months, we've spent much of our time developing new ideas, new innovations -- attempting to streamline jobseeker/employer connectivity and find new ways to earn revenue. These tough times have forced us to invent new revenue streams that we didn't know existed before (or were hesitant to try in the past) – these ideas hold much promise. We are now approaching our business very differently...it is the only way to survive.
**es** thanks Joe, glad to hear from you! I would love to hear about your new stuff. -eric
Hi Eric, Your topic about the Top 100 job board niches garnered alot of attention here at www.job.travel. While we are new job search website, we would love to get listed onto your website. We are FREE service to job seekers and are very cost efficient tool for employers! Thank you, Joe
**es** very interesting Joe, you have one of the most unusual domain extensions of any job board I've come across. That should help you get a top ranking sooner - I see you are on page 3 now. Stay in touch.
Good post Eric. You covered a lot of ground in a fairly short post and IMO you're spot on with some of your thoughts. 2009 is going to be about survival for many, including job board operators. -Rick
**es** thanks Rick! And a great time to be going green with a bicycle in place of a BMW. Wish I could manage that, lol. -e
thanks!
William AustraliaWorks.com.au - Australian Job Discussions, Career Advice and more!
**es** thanks - this story is on CNN today:
Newspapers fold as readers defect and economy sours
The Rocky Mountain News, gone. The Seattle Post-Intelligencer, gone. The Seattle PI.com website will be run out of the same iconic headquarters in downtown Seattle. The chain that owns the Los Angeles Times and the Chicago Tribune is in bankruptcy. Other papers, large and small, are teetering on the brink.
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