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Explore SolutionsIn the latest financial quarter, Recruit Holdings Co. Ltd., the parent company of Indeed and Glassdoor, faced a stark reality: a significant decline in revenues within its HR Technology segment. The dual impact of changing economic conditions and a bold shift in pricing strategy have led to a downturn in the performance of these leading job platforms.
The labor market has experienced a rollercoaster of demand fluctuations and talent shortages, exacerbated by uncertain economic conditions. Companies have become more conservative with their hiring plans, leading to a decrease in job postings.
Recruit Holdings, a dominant player in the HR technology space, owns both Indeed and Glassdoor. These platforms are integral components of its expansive portfolio. However, despite a global labor market that remains tight with job openings above pre-pandemic levels, Recruit has reported a decrease in total job postings and a significant drop in paid job ads, suggesting a recalibration of the job-seeking and hiring dynamics on these platforms.
Junichi Arai, the Senior VP of Corporate Strategy and Investor Relations at Recruit Holdings, noted in a conference call that although job openings have not dwindled to pre-pandemic numbers, the mismatch between job seekers and employers is finding equilibrium.
“This was also reflected on Indeed and Glassdoor,” Arai stated. “While total job postings, which include both free and sponsored listings, continued to decrease, job seeker activity as measured by traffic and applies on our hiring platforms continued to increase.”
Indeed’s Pricing Model Changes
Last year, Indeed implemented a significant change in its pricing structure, opting for a “pay per started application” model. This shift was intended to better align Indeed’s services with employer demands for qualified applicants. However, this move coincided with a stark reduction in paid job advertisements, suggesting that the new model may have deterred some employers due to cost concerns or a perceived lack of value, further aggravating the revenue situation.
Will CareerBuilder Suffer a Similar Decline?
CareerBuilder recently announced its transition to a ‘Pay Per Resume’ model in August of this year. While this move seems to follow the industry’s shift towards performance-based pricing models, it raises questions about whether CareerBuilder might witness the same decline in revenues as its peers. The speculative nature of this pricing change in a volatile market makes CareerBuilder’s future uncertain.
The Impact on the Recruitment Industry
The recruitment industry is at a turning point. These shifts in pricing models signal a deeper change in how recruitment services are valued and consumed. The transition to performance-based pricing suggests an industry-wide attempt to provide more tangible ROI for employers. However, the current economic backdrop might force recruitment platforms to reassess their strategies to maintain profitability while offering competitive pricing.
Indeed and Glassdoor’s revenue declines amidst these challenging economic and labor conditions serve as a stark reminder of the recruitment industry’s vulnerability to broader market forces. For recruitment marketers, it’s a period of recalibration and innovation as they navigate these changes.
