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RECRUITING ON THE WEB

In a highly competitive labour market, employers are turning to the Net to find new people

Ross Laver May 29 2000
Cover

RECRUITING ON THE WEB

In a highly competitive labour market, employers are turning to the Net to find new people

Ross Laver May 29 2000

RECRUITING ON THE WEB

Cover

In a highly competitive labour market, employers are turning to the Net to find new people

Ross Laver

Two decades ago

far back in the mists of

time in high-tech terms—Gerry Stanton was vice-president for human resources at Mitel Corp., a telecommunications equipment maker. Those were heady days at the Ottawa company: revenues were soaring and the firm had a reputation as a technology superstar, so there was no shortage of people clamouring to work for it. “On an average day,” Stanton recalls, “wed get 150 résumés.” The problem, of course, was that no one had time to read them all, let alone examine them carefully to identify promising applicants. Says Stanton: “I used to joke that I was VP in charge of buying filing cabinets. Every time we placed career ads in the newspaper, we knew that 70 per cent of our needs were already sitting there in those cabinets—yet there was no efficient way to screen them.”

Thanks to the Internet, that has changed. As has Stanton: after a stint as an independent corporate headhunter, he now runs an Ottawa-based firm called E-Cruiter.com Inc., which develops software for companies in Canada and elsewhere that want to use the Internet to recruit new employees. It’s a fiercely competitive field, but the market is growing so rapidly that, for now at least, Stanton probably needn’t worry about his own career prospects. “The forecasts for this industry differ,” he says, “but one thing everyone agrees on is that online recruiting is destined to become a multibillion-dollar business.”

And like everything else on the Internet, the trend is unfolding at breakneck speed. Two years ago, the concept of online recruiting was still a novelty. A number of small Web sites acted as job boards for high-tech employers, but none was big enough to attract national attention. Today, however, there are two widely advertised Canadian Web sites for corporate recruiters and job seekers— Workopolis.com and Monster.ca. There is also a growing demand for software that allows individual companies to manage their own Web-based recruiting systems.

No longer is the practice of online recruiting confined largely to the high-tech industry. At the beginning of 1998, according to Forrester Research Inc., a Cambridge, Mass.based market research firm, only 17 per cent of the world’s 500 largest companies were actively recruiting on the Internet. A year later, the figure had jumped to 45 per cent. By 2003, Forrester predicts, all large companies will use the

Internet as a recruiting tool, as will 60 per cent of mediumsized companies and 20 per cent of small ones.

There’s a simple reason for this development, and it’s one that corporate bean counters readily understand: done properly, online recruiting is far less expensive than the traditional method of finding new employees. The savings start with the cost of advertising. A typical career ad in a daily newspaper can cost thousands of dollars a day, while an online posting generally costs a few hundred dollars at most and runs for several weeks. To drive down the bill even further, many large companies opt to become sponsors or partners of job boards, which gives them the right to post an unlimited number of online career ads for a fixed yearly or quarterly fee. Workopolis.com charges its 200 partners as little as $15,000 a year for unlimited postings. That’s roughly the charge for a single quarterpage career ad in The Globe and Mail, the site’s majority owner.

The savings are even greater for companies that choose to automate part of the hiring process by eliminating or reducing their use of printed résumés. Increasingly, job applicants are being encouraged to fill out “electronic” résumés that are collected in online databases, either on an employer’s own Web site or on a site operated by one of the big job boards. Using customized search terms and sophisticated filtering software, employers can then screen tens of thousands of applications in a single go, instantly narrowing the field to a shortlist of potential candidates. One U.S. market research firm, Creative Good Inc., estimates that a policy of online recruitment can save a company as much as $12,000 per new employee— $3,000 in advertising costs and $9,000 in time spent opening envelopes, manually sorting and filing résumés, reviewing applications and replying to candidates. “With the right technology, recruiters can devote more of their time to the valueadded steps of the hiring process,” says Louis Tetu, the Canadian CEO of San Francisco-based Recruitsoft.com, a leading rival of E-Cruiter.com.

Setting up a job-search Web-site board is relatively easy from

a technical standpoint and there are hundreds of them scattered across North America. The key to success, however, is scale: job hunters naturally tend to congregate at the sites with the largest number of postings, which in turn draw more advertising from corporate recruiters. Worldwide, the most popular recruitment site is Maynard, Mass.-based Monster.com, which evolved out of an online job board founded in 1994. With branches in Canada and eight other countries in Europe and the AsiaPacific region, the Monster network now boasts roughly 420,000 job postings. In Canada, though, Monster’s site runs a distant second behind Workopolis.com in the competition for job postings—illustrating the off-stated principle that on the Internet, being first is, if not everything, pretty close to it. It was not until February, 1999, that Monster.ca had its official launch, but by then a homegrown site, GLOBEcareers.com, was firmly established with a five-month head start. As its name suggested, GLOBEcareers.com was an offshoot of The Globe and Mail, the most popular advertising vehicle in Canada for corporate headhunters. Also last year, The Toronto Star briefly considered launching its own job-search site but decided instead to climb into bed with the Globe —the first-ever corporate alliance in the history of the two archrival dailies.

The deal they negotiated gave the Star 40 per cent of the business in return for a cash payment of $7 million and a guarantee of $ 12 million in advertising over three years. “We could have built our own site, but it would have taken several million dollars and anywhere from six months to a year to replicate what the Globe already had,” explains Bruce Annan, the Stars president of electronic media. “And frankly, I’d rather own 40 per cent of a successful site than 100 per cent of a failure.” One thing the Star did insist on was a change in the operation’s name, which is why, in January, Globecareers.com (de-capitalized a few months earlier) morphed into Workopolis.com. The site now has more than 30,000 job postings and more than 200,000 posted résumés, says Kim Peters, its president. It also has alliances with several of Canada’s busiest Web search sites, including Sympatico.ca, the online flagship of Montreal-based BCE Corp., and Excite.ca, backed by cable giants Rogers Communications Inc. of Toronto (which owns Macleans) and Shaw Communications Inc. of Calgary.

Given those advantages, it’s hard to see how Monster.ca, with about 6,000 job postings, can ever catch up. In fact, the biggest challenge to sites such as Workopolis.com is

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not competition from other job boards but the perpetual need to stay abreast of advances in technology and changes in corporate hiring practices. Recruitsoft.com’s Tetu argues that job boards are destined to decline in popularity as companies increasingly acquire the tools to operate their own online recruiting networks, thereby reducing the role of the middleman. Companies such as Bombardier Inc. and the National Bank have retained Recruitsoft.com to manage the career pages of their Web sites, which include application forms for job seekers and so-called passive job seekers who are currendy employed but whose skills and experience make them attractive candidates for potential future openings. E-Cruiter.com provides a similar service for Bell Canada, CIBC and Clearnet Communications, among others, but it also has a partnership with Workopolis.com, which ensures that job postings on each of those corporate sites are automatically displayed on the larger site.

Naturally, people with a stake in the job-board business vehemendy disagree with Tern that their services will soon be considered passé. “He’s quite right that communicating with prospective employees is going to require some sophisticated tools,” says Annan. “But these are early days, and we won’t stand still. You’re going to see us adding a lot more fuctionality to our site so that ultimately employers and recruiters can hire better people.”

And what about those career ads in the newspapers? The consensus seems to be that they will continue to be a fat source of profits for dailies such as the Globe, but that increasingly they will be used not to publicize specific openings but to promote the company as a place to work—a necessary function in an era of low unemployment and growing competition for talent. Thanks to the buoyant economy, Stanton says, “for the first time in history, individuals have acquired more control over the hiring process than companies. It’s almost as though skilled people are in a position to hire the companies, and not the reverse.” Nice work if you can get it. G3