SM: How has the online industry impacted the traditional executive search firms? Do you work with recruiters, or do you replace them?
MC: Once a company has decided to hire $100,000 talent, they have made a decision that they need a professional to handle it. There are certain things your in-house HR staff is equipped to do, and there are things your HR staff is not equipped to do. I would say that 50% of the time companies turn to a recruiter and the other 50% of the time they handle the search in-house.
We don’t particularly care how companies structure the recruiting function because we can handle it either way. I have never been under pressure from recruiters who thought we were going to put them out of business. We make recruiters more effective, and they see us as a tool. Recruiters have a limited marketing budget; they use it only where they know it will work. We have delivered for them many times over.
SM: During the 2009 recession, how did your business fare? What trends did you see in the $100,000 jobs, and were recruiters still relying on you?
MC: Recruiters definitely rely on us. The recession was interesting. While reports showed unemployment at 10.2% across the country as a whole, the unemployment level for professional and managerial types ranged from 4.7% to 5.2%. We saw occupations that required advanced degrees fared better, which is reflected in the fact that over 42% of the people on TheLadders have advanced degrees.
We are at a point now where companies have lost as much as they can. They cut a lot of jobs in 2008 and 2009. These same companies are now more focused on targeted growth. Rather than spreading their hiring across all areas of the company, they are hiring in targeted areas. This is where recruiters help companies significantly.
SM: What is your strategy to continue to leverage your base while continuing to grow? It would seem as though companies are going to need an increasing number qualified workers and that the demand for $100,000-plus jobs will continue.
MC: First, we are expanding offerings to job seekers. One new feature is called “follow a recruiter.” If someone finds a job listing that was posted by a recruiter, chances are that the recruiter will have similar types of positions in the future. We enable the job seeker to follow that recruiter and see all the jobs he or she posts.
Second, we are expanding offerings to corporations. We have increasingly been getting requests from recruiters and hiring managers to help screen resumes for them because these people are not great at Boolean querying of Internet databases.
SM: Executive recruiters use sourcers to do this job, so the budget exists for the function. If you provide this additional level of service, you should charge for it. Are you charging for it now?
MC: That is an area we have been working on. We are conducting tests on it right now. I think it is going to depend on the behavior we are able to observe. We need to understand if we are charging for an extra hour a month of high-touch service or ten hours a month. If it is just one hour, then I can offer it as a service to our customers, but if it is going to require 10 hours then we have to charge.
SM: You should be charging for that service.
MC: Probably. We have also contemplated dropping membership fees to $10 a month to get more users. What are your thoughts about that?
SM: How many resumes does a particular posting get today?
MC: On average each posting brings in 21 resumes. At the height of the recession, that number jumped to 26.
SM: Then if your price point drops to $10, you are right back at the concern your recruiters and hiring managers had, which is too many resumes. If you do drop that cost, then you definitely need to provide an addition paid service to screen those resumes. I believe that recruiters have a budget for sourcers and you are positioned get access to that budget.
MC: That is definitely something to consider.