Founder and CEO of Joveo, the global leader in programmatic job advertising. On a mission to deliver the right job to everyone!
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It’s been more than 10 years since the concept of disruption rocked the tech industry. Companies as diverse as Uber, Airbnb, Netflix and Warby Parker capitalized on two phenomena—lack of transparency and inefficiency—to fundamentally transform what it means to take a taxi ride, travel, watch a movie or buy eyeglasses.
I believe the lack of transparency in job advertising tech, an important segment of the $218.8 billion staffing and recruiting industry in the United States, is indicating a need for similar disruption. Changes happening today will soon transform the way people find jobs and the way employers pay to find people.
A Case Study On Price Transparency
Prescription eyeglasses provide an excellent example of a notoriously opaque industry. The concept of having optical lenses precisely ground and inserted into mass-manufactured frames has been the same for decades. I was always mystified by the fact that a pair of glasses with plastic frames and lenses that could be made in an hour cost hundreds or even thousands of dollars! As it turns out, eyeglasses traditionally enjoyed a stratospheric markup of up to 1,000%. This was in part because of the near-monopoly on the eyewear industry held by EssilorLuxottica.
In 2010, Warby Parker disrupted this opaque industry by setting up its own manufacturing and production facilities, allowing for more affordable pricing. While first sold only online, the company now has more than 200 stores that generated $598.1 million in revenues in 2022.
The company kicked off some level of fundamental change in the eyewear industry, spawning a plethora of alternatives from vintage-inspired eyewear to re-lensing your old frames to fancy readers. But the reality is that EssilorLuxottica continues to see outsized profits, and I believe that's fueled by opaque pricing. This lack of transparency ultimately hurts consumers in the cruelest way: by capitalizing on their most basic need to see clearly.
Where Job Advertising Tech Lacks Transparency
As it turns out, the job advertising tech ecosystem suffers from a similar lack of transparency as well as systemic inefficiencies. Here are just a few illustrative examples.
Opaque Pricing
Many programmatic job advertising platform providers tell employers and HR recruitment professionals that there’s no charge to use their platforms, but nowhere in business is there a free lunch. These providers make money from the job sites that supply candidate traffic and applications in the form of commissions.
While this might seem reasonable because the platform itself is technically free, programmatic job ad providers inflate the prices that job sites charge for employers' access to their boards. These come in the form of hidden markups on ad media bought at the back end in a “blind exchange.”
Employers have every right to demand transparency behind the exchange so they can know exactly where their dollars are being spent. It’s also more equitable for job advertisers to pay a percentage of media spend as a fixed fee, rather than an opaque variable markup.
Unethical Time Windows
After job seekers click on an ad to apply for a job, there can be a time lag between that click and actually completing the application. If the time difference between the first click and submission is more than 24 hours, the conversion won't be attributed to the job site. But some programmatic job ad platform providers will still charge their clients for having that post on the site.
Worse still, the platform provider can arbitrarily change the duration of that conversion window to extract more revenue from the advertiser. This practice hurts talent seekers beyond their pocketbooks because not all candidates complete an application in one sitting. Charging the same amount of money for reaching low-intent and high-intent candidates exacerbates an already troubled system.
To create a fair market environment, if traffic is highly unlikely to result in conversions, the company that made the job posting shouldn't be charged.
Double Dealing
When job seekers click on an ad to apply to a job, they're often greeted by an interstitial pop-up that collects their email, name and phone number. This information is frequently aggregated and sold, with or without the job seeker’s consent or the knowledge of the company that's looking for workers.
Additionally, job seekers may be directed to other jobs after applying to the one they first clicked on, so job sites gain more clicks. Multiplied across several customers who are posting jobs, these sites can extract significant secondary revenue from the “exhaust” of the original click.
The Revolution Is Underway
Having spent more than two decades of my career in recruitment tech, I’m well aware of the data manipulation and unethical accounting that goes on behind the scenes. I’m also aware that employers are fed up with the lack of transparency and the inefficiency within the entire talent acquisition ecosystem.
And they should be.
Companies are now paying close attention to the value they get for their enormous spend on talent acquisition. Opaque pricing, price gouging and systemic inefficiencies are the concerns being murmured across the job advertising tech industry. In the next couple of years, I predict those murmurs will turn into a roar.
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