About a year and a half ago, I wrote about the pay for performance model (PFP) – where employers pay for specific candidate actions (usually clicks), rather than for a job posting. The idea has an intrinsic appeal – after all, who wouldn’t want to pay for just what they want, rather than a bunch of stuff they don’t need?
Well, many months later, the discussion over PFP continues. At the most recent IAEWS conference, some recruiters said it was just what they wanted – while others seemed satisfied with job postings and other traditional job board products. We’ve also seen products such as Appcast.io come to market focused exclusively on PFP – and of course Indeed, SimplyHired, and other aggregators continue to push their PPC offerings.
So this got me to thinking. Is PFP a fad – like .jobs – that creates a big whirlwind of publicity in the recruiting press, then fades away? Or is PFP the future, destined to eliminate the paid job posting and related products where the employer pays for access to candidates, rather than actual candidate activity? Or is PFP something in between – a new tool that is added to the recruiter tool box alongside existing options (like job postings)?
If you’ve been reading this blog for any length of time, you can probably guess where I will come down. There’s nothing like being in the industry for almost twenty years to make you a bit skeptical of new models that promise to ‘revolutionize’ the industry. Such things do happen – but much less often than people think.
My take: PFP can offer true value to certain types of employers hiring for certain types of positions. Are you advertising for a highly skilled position in a constricted market? Then paying for clicks or applications will probably cost you less than paying for a job posting. Your job – by its nature – is going to attract less traffic and interest than a lower level, less skilled position. So you’ll save some money. Plus if you don’t like the clicks/applications you’re getting, you can cut off the ad.
However, if you’re advertising for less skilled jobs in less constricted markets, job postings will probably treat you better. You’ll get tons of clicks/applications, and after a certain point, your cost per click/application will drop substantially.
My other take: if I was an employer, I’d be a lot more interested in paying for applications than I would paying for clicks. Applications are much closer to what I really want – hires. Some companies already offer this. The challenge – on the job board side – is figuring out how to make it economically viable. Some sites – like Hired and Angelist – are simply using a variant on the contingency recruiting model: make a hire, pay us a percentage of the 1st year’s salary. Interesting idea, but sounds tough to scale.
So, is PFP going away? No. Is it going to grow? Yes. Is it going to replace every other recruiting option out there? No.
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