In the 2019 Global HR Tech Lookback we noted emerging global trends in the job board marketplace category. Driven by the global skills shortages/gaps, one of the models that we expect to see more of is the blending of education and job/skills match. To simplify, it works as follows: Marketplaces provide the jobseeker, in this case students, some ability to demonstrate their skills via tests, assessments, code challenges, or even coursework. This data then drives a match with employers offering internships, project work, or sometimes full employment. We’ve seen a variety of financial models supporting these marketplaces. Normally, it’s one of either the employers paying to sponsor the content and then select the talent, or the candidate/employee paying for the service via subsciption, flat fee, or a percentage of salary for anywhere from one to three years.
The latest marketplace to align with this trend is India-based InterviewBit, raising USD $20 Million. However, they break with the norm of charging employers OR consumers/candidates and have built their model around charging both. Placed candidates have their pick of three payment schedules: “prepaid without guarantee earnings,” “prepaid with guaranteed earnings,” or “postpaid with guaranteed earnings.” Postpaid is a payment of 15% of the placed employees salary for two years – basically the candidate paying a full 30% of annual salary staffing agency fee. Here’s the catch, the employers are also paying. Employers have a variety of options to have their jobs stand out and then get access to talent – pricing models include one time fees for campus season recruiting, subscription fees, and “custom fee plans.”
When it comes to charging candidates, in the U.S. we’ve all seen this model before. Companies that want to charge a percentage of your income for some period of time as their fee for finding you a position. We’ve seen it online with other job board marketplaces that ultimately all pivot back to employer-paid fees for ads or higher touch services. We also saw it back in the 1970s and 1980s when staffing firms would charge candidates in a similar fashion. It was a bad idea then. It’s a bad idea now. However, I can’t remember a model that charged both sides of the market for essentially the same transaction.
Candidates, or let’s call them consumers, will pay for value-add services to improve their ability to find or secure a new position. I’m a big fan of companies that provide a valuable service that helps people gain a better understanding of how to navigate a job search or reach their career goals. Candidates have myriad free options to find open positions. They do need help in better understanding those options and how to navigate a hiring process. However, that’s what staffing firms do for free for candidates, and 15% of income for two years is the equivalent of a 30% fee to the candidate. It’s just flipping the payment for a staffing model onto the candidate, but then in this case still charging the employer.
Help candidates. Don’t charge them.