Who Pays?

On February 10, 2011, in Reviews, by John Sumser

theladders commercial

Desperate to please. Isn’t that who gets the job most of the time? Are the critics really mad because theLadders out-cynicals the most cynical?

Who Pays?

Have you noticed the noise about whether or not job hunters should pay for help? The controversy swirls around theLadders (the $100K plus jobsite). Various pundits, most of whom seem to be recruiters, are unsettled (sometimes vehemently unsettled) by the idea that a job hunter could or should spend money in pursuit of the next job. There’s even an international component.

While there is an occasional voice of reason, the piling on continues.

I wonder whether the HR and Recruiting professionals who are a part of the mob calling BS on The Ladders understand the implicit conflict of interest in their stance.

It’s odd, don’t you think, that the people who benefit most from job hunter ignorance are the most vocal in their criticism. After all, if prospective employees can easily find their way through the huge volumes of data, would they really need so much career advice and support? Hands down the loudest critics are those who benefit most from job search ignorance.

It would be something different if this was a chorus of hiring managers decrying the idea that sifting through job data is a value added service.

Let’s take a closer look at the question of who pays for job hunt assistance. Isn’t it really the case that the candidate always pays?

  • Lets start with badly designed employment websites. They are the vast majority. The extra time that a candidate takes to search through a badly executed site is precisely a cost to the job seeker. Candidate pays.
  • Who ultimately pays for executive recruiting fees? There are only two possible answers: stockholders or employees. Doesn’t it seem likely that a candidate’s salary would be higher if there were no headhunting fees? That the compensation budget for a given position is part salary, part recruiting fee? Candidate pays.
  • If you make the short list and are interviewed for the job, who pays for your time and effort? Candidate pays.
  • If you apply for a job by sifting through a kajillion jobs from Monster, SimplyHired, Indeed or some other source. Candidate pays in time and effort.
  • In the days of the newspaper, you had to have a subscription to see the jobs. Candidate paid.

Simply, the candidate always pays. The critics are making a distinction between cash out of pocket and the cost of waiting, inconvenience, lost opportunity and unnecessary effort. Seems like a distinction without much merit. Candidates can and do pay for all sorts of services.

There’s a double irony in this kerfuffle.

The history of Monster.com is instructive. During the time of their hyperbolic growth, the web was full of dark criticism of the Monster culture, pricing and sales approach. While the folks at Monster central put in some effort to change the company’s reputation, the hard reality was that strong criticism is a symptom (and maybe even a cause) of strong growth.

In a high growth phase, any publicity is good publicity. The critics may be a part of theLadders growth engine.The louder the noise, the faster the growth.

I was a part of the group invited to New York to get to know the Ladders. With the wind at their back and taller mountains to climb, the company is investing in a variety of ways to get their story out. The junket to the tony Standard Hotel is just a tiny part of theLadders charm offensive. The Ladders is trying to buy attention and credibility as it moves in the general direction of an IPO (my interpretation).

The folks at the top of the now 400 person organization are real veterans (and winners at that) of the dot com era. The two cofounders got to know each other as central figures at HotJobs, the company that introduced super bowl advertising into our industry. Back then, HotJobs invested the equivalent of a quarter’s worth of revenue in the super bowl ad. The IPO and ultimate sale to Yahoo are a part of the DNA at theLadders.

What I saw during the time I spent with theLeaders at theLadders was pretty instructive. The company is growing. Their ambitions are big. They know what they’re doing.

Like Monster before them, the company is full of machismo, arrogance and certainty. These are essential elements for a team headed towards the public markets. An IPO is a window through which you pass, not a destination in and of itself. The get together seemed to be an attempt to reach out and understand the limits of the market.

But, they weren’t really looking for answers.

As the bunch of us wandered through the corporate offices, it was hard to ignore the effect of having their current commercial running on endless loops on huge monitors all over the place. The 400 twenty-somethings working in the din of a bullpen with no offices seemed immune to the writhing bodies trying to desperately please the boss (that’s the commercial). If the job hunter pays business model starts the controversy, the latest ad campaign throws gasoline on the fire.

Desperate to please. Isn’t that who gets the job most of the time? Are the critics really mad because theLadders out-cynicals the most cynical?

 
  • Anonymous

    Love your take on it John. In the end – the consumer always pays – whether through fees like the Ladders, time and inconvenience or through higher prices in the grocery aisle. The consumer always pays.

    What I find interesting (and I don’t think I’ve seen anyone address it) – is the Ladders isn’t targeting lathe operators or janitors or hamburger flippers. They are targeting folks who either aspire to or have held $100K jobs. If a $100K a year person can’t swing $500 to find a job – then there’s something wrong with the applicant not the service. I could see a bit of blowback if they were targeting college grads or folks laid off from the Chrysler assembly line. But they aren’t.

    Now – if the real issue is the promise the Ladders make not being fulfilled – that’s an issue of fraud – and the market will vote on that.

    But to take the stand that people who are either qualified for or have been pushed out of a $100k job don’t have the scratch to pony up for a new job is ridiculous.

    The RIAA had an issue when the market took a turn and changed the status quo – I’m not seeing anything different here.

    Arthur C. Clarke said:

    New ideas pass through three periods:
    • It can’t be done.
    • It probably can be done, but it’s not worth doing.
    • I knew it was a good idea all along.

    It think I would add one more after the first – “It shouldn’t be done.” That’s where we are with the Ladders me thinks.

  • http://www.staffingtalk.com greggdourgarian

    So that’s what those writhing bodies were doing…pleasing the boss?

    Anyway i agree the never-charge-the-candidate zeitgeist ignores supply/demand reality and ultimately hurts the candidate.

  • MaureenSharib

    What’s a kerfuffle?
    Love the word.

    I made a prediction the other day over on LinkedIn a few days ago that’s generating some unexpected answers that support your theory:
    Prediction: One Day Employees Will Buy Jobs http://tinyurl.com/4zw2nl4

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  • Rayanne

    Double dipping isn’t a good idea at any party.

  • http://rehaul.com Lance Haun

    With apologies to all who posted about the issue, I don’t find the argument about paying versus not paying terribly fascinating. Empirical evidence shows there is a market need and willingness among consumers, especially on the high end.

    What I find extremely interesting is that there is so little analysis done on the effectiveness of TheLadders as a product. Is it worth the money? Does it get the results promised? How many recruiters build a long-term relationship with the company? How well are people placed using their product?

    I’ve heard anecdotal analysis but that’s problematic. The question of paying versus not paying for TheLadders wouldn’t be much of a topic of a discussion if it were, say, 30% more likely to land you a job.

    I think we all know that the concept is disruptive and the marketing is provocative. I want somebody to show me the beef on them though.

  • http://www.hrexaminer.com John Sumser

    Respectfully, Lance, there are no methods for job hunting that have that
    sort of analysis. It’s a red herring to suggest that it’s possible or would
    make a diference. Do you know of any other recruiting services that track
    effectiveness well?

    Job Board technology is over 20 years old. In all that time, no one has been
    able to accuratel measure both sides of the equation. In fact, there’s good
    reason to believe that a generic analysis (across all recruiters and job
    hunters who use a particular service) would generate meaningless average
    values.

    It’s unlikely that a recruiting service would equally serve coal miners and
    software engineers. It’s probably the case that you can’t really generalize
    about recruiting tool effectiveness within a job function (like software
    engineering) because regional distinctions make such an important difference
    in recruiting.

  • http://twitter.com/jletourneau jletourneau

    John, superb article and analysis. I observed a high-energy workplace, however I was at a loss to say if it was “dedication to the cause” or just a trading-floor culture.

    I have to commend you on your comment, “It’s odd, don’t you think, that the people who benefit most from job hunter ignorance are the most vocal in their criticism.” I have been at a loss in understanding why some Headhunters literally hate TheLadders and everything they stand for. Do they really threaten our profession that much? I mean, really?

    The aggressively defensive posture toward TheLadders among many within the HR community can only come from a place of defending “turf”. Of course, this manifests itself in tangential arguments that suggest that the concern isn’t truly requiring the job seeker to pay, rather it’s the “unethical business practices.” Behind closed doors, we all know better.

    In terms of HR needing some “data” to say whether TheLadders “works” or not, I don’t agree. Losing a job is an incredibly emotional event, as is trying to land one. It strikes our sense of security at its very core. The Execs at TheLadders know this, so their site-specific marketing is FB-style status updates showing people that look like us, with families like us, etc. ‘If they can persevere, so can we . . . ‘ That’s not a lottery strategy, it’s having faith, the one thing you MUST have to fight on in your search for a new opportunity.

    It would be great to see other HR Peeps buy into the basic marketing premise that people buy emotionally and then try to justify with logic. A Job Seeker doesn’t need more data, they need belief. If TheLadders, Jesus, Buddha, or a Bald Eagle help you achieve that end, there is no level of price-sensitivity that exists.

  • Nick Corcodilos

    Lance,

    We can trace a single cell as it makes its way through our ailimentary canals and out our butts, but job boards can’t track their users through the very process they claim to be experts in. Gimme a break.

    The only stats I know of about TheLadders are here, from a webinar I presented to 600 MBAs for Harvard Business School. Read ‘em and weep: http://corcodilos.com/blog/2378/theladders-a-long-shot-powerball-lottery-tucked-inside-a-well-oiled-pr-machine

    (I don’t take credit for the analysis — one of my exec-level readers provided it.)

  • http://rehaul.com Lance Haun

    I suppose you’re right (though I would debate the “isn’t possible” characterization). I just think the only thing that might interest me about the “should/will candidates pay?” question is that some attempt to analyze TheLadder’s product on its merits might make its way forward. That might lead to more end user analysis of job boards (as opposed to simply evaluating based on employer effectiveness).

  • http://rehaul.com Lance Haun

    I don’t think they need data, Josh. On the contrary, plenty of recruiters make decisions without supporting data all of the time.

    I guess the interesting part of TheLadders disruption for me would be creating a market for paid or exclusive access job boards. If that were to happen, more thought would go into job board effectiveness as a candidate product and it could be a disruption that actually impacts the greater market.

    I don’t disagree with your buying on faith argument but pure marketers also overlook the importance of product. If you look at the way Apple has captivated the consumer electronics market, you see both brilliant marketing (the buying on belief) and then brilliant product execution. Those two pieces working together create a juggernaut.

  • http://twitter.com/lruettimann Laurie Ruettimann

    I was all proud of myself for starting a trend until I realized that Nick @ Ask The Headhunter has been very thoughtfully writing about this for ages. I don’t give a shit about the commercials (gasp) but I care about truth in advertising and legal commerce.

    Paying for access is illegal in America. Jack Abramoff (in a very simplified summary of the case) was sent away for charging people for access AND lying to his Native American clients about the access they would receive.

    http://en.wikipedia.org/wiki/Jack_Abramoff

    Jack Abramoff. The Ladders. Am I the only one who sees parallels between the shady and fraudulent practices? Dunno. Maybe I’m wrong.

  • Nick Corcodilos

    It’s an old management adage that explains the failure of the job boards to deliver what they promise: “You can’t manage what you don’t measure.” Trouble is, an entire industry has now grown around a service that doesn’t work, and it goes out of its way to protect what can’t be measured or managed. Shields up! We don’t need no stinkin’ facts, because facts would put us out of business. For shame.

  • http://www.hrexaminer.com John Sumser

    Nick raises some interesting points about the industry. I wonder where he
    publishes the metrics that show job hunters the likelihood that they will
    get a job if they send him a resume. If he doesn’t publish those
    effectiveness stats, I wonder why not.

  • Ella

    I think The Ladders is a great idea – for companies and job seekers. I think the commercials are awful, but I’m not offended. I don’t care about charging job seekers (lots of job boards find various ways to do so).

    I tried them – as a job seeker, as part of outplacement package for employees, as an employer with 100K+ jobs, and with my parents. In none of those roles did the Ladders come close to delivering anything promised.

    If The Ladders wants to recover it’s reputation, it needs to acknowledge some things. Say something like – “We’ve had issues, and we’re working on them. Here’s what we’re committing to delivering from this point forward.”

    And – this is the key – they need to deliver on their commitments. For their job seeker candidates, no marble-mouth we can’t *really* guarantee the jobs are 100K. Either guarantee them or don’t.

    For employers, screen the candidates The Ladders certifies as being a $100K candidate. Here’s another way to monetize the experience, as demonstrated by online dating sites. You ask the candidate to pay to join, and to pay a slightly higher price to be a verified candidate.

    What I do care about is my personal experiences with The Ladders – they didn’t deliver and they’ve never addressed why they couldn’t. I would love to be able to use The Ladders as part of outplacement packages (if they could deliver on what they promise to my highly comp’d and executive groups – just imagine).

    The Ladders needs to deliver on it’s commitments. If those commitments are too difficult to meet (making sure a job is a $100K job), then that’s a fundamental business problem.

  • http://www.fasttrackrecruitment.com Mitch

    LOL

    I especially liked the rationale that candidates pay through maybe sometime having to click on one or two extra links on job boards. That’s some real creative thinking right there.

    The best one though was that candidates would get higher salaries if there were no recruiter fees. That is just sheer brilliance.

    But seriously, I think all this article is going to achieve is to make everyone who reads it a tiny bit dumber.

  • http://www.asktheheadhunter.com Nick Corcodilos

    John, I think you need to get a better definition of “headhunter.” Try this: http://www.asktheheadhunter.com/crocs51notheadhunters.htm

    Headhunters don’t charge job hunters a dime, the best don’t accept unsolicited resumes, and they don’t find jobs for people. I think you’re confusing us with “employment agencies.”

    By the way, do you intend to “approve for publication” the first comment I submitted to your blog this morning?

  • http://www.hrexaminer.com John Sumser

    Hi Nick,

    I’ve approved everything that’s come across the desk.

    Of course using a headhunter costs the candidate. It is a very expensive
    process in terms of risk, expectation, time, energy and effort. You take the
    candidate’s resources every time you involve them in a search.

    Headhunters take money out of the transaction and use candidates as their
    inventory. I don’t understand why you’d resist making the effectiveness of
    your process transparent.

    I don’t understand the distinction you make between job boards and
    headhunters. Being used by a headhunter is by far the more expensive
    endeavor for a candidate. Perhaps you mean that you don’t extract cash from
    the job hunter for your services. That doesn’t change the fact that you take
    precisous resources without offering the kind of transparency you demand
    from job boards.

    As I said in the article, I am surprised by the fact that the people who
    benefit most from candidate ignorance are the most outspoken on this issue.

    I’m not misunderstanding anything, Nick.

  • http://www.corcodilos.com/blog Nick Corcodilos

    So let’s get this straight, John. You’re comparing a service (TheLadders) that charges an employer for access to candidates, whether the employer hires a Ladders candidate or not; to another service (headhunters) who get paid only if the employer hires their candidate, and that guarantees the placement or provides a refund. Is that the comparison?

    You’re comparing a service (TheLadders) that delivers millions of resumes to HR departments that HR has to then sort through; to another service (headhunters) that delivers about half a dozen checked-and-qualified finalist candidates to the hiring manager for interviews. Is that the comparison?

    And you get paid fees to advise employers and others in the career industry, but you don’t actually fill any positions before you get paid?

    (I submitted a comment to your blog this morning and has not appeared. But not to worry: I re-posted it on my own blog.)

  • http://www.hrexaminer.com John Sumser

    Nice try, Nick but you are just dodging my question.

    If you want the job boards to be transparent, why are you unwilling to be
    transparent yourself. Do you disagree that the candidates you put forward
    make an investment in your services? Don’t they deserve some clarity about
    the odds that they will find a job when they work with you?

    I am indeed comparing the services. It seems to me that you think that since
    your service is more exclusive, you don’t have a responsibility to be
    transparent and accountable to job hunters. I find it quite odd that you
    want your low priced competitors to deliver something that you are unwilling
    to.

    So, Nick. What percentage of the people you present as candidates get the
    job? What percent of the people who you consider as candidates get the job.
    Surely you track these statistics and have them at your fingertips.

    John

  • Alison Green / Ask a Manager

    Hi John. I’m someone who’s been a fairly vocal critic of The Ladders, at least in the comments on one of the posts you linked to, and I’m not a recruiter. I’m a hiring manager who also runs a blog trying to help job-seekers (among others) on the side. So please mark me down as a hiring manager who has a real problem with The Ladders’ treatment of their customers.

  • http://www.corcodilos.com/blog Nick Corcodilos

    John, when I start charging someone for my services, I’ll gladly provide them with whatever metrics they’d like.

  • John Sumser

    You gotta love Nock ‘ask the headhunter’ Corcodilos. He claimed to have posted something on the HRExaminer site. I told him I hadn’t seen it and could he send me a copy so that I got it into the conversation. Twice. Politely. Really

    Ultimately, I had to go to his website and get it. Here you go:

    “John,

    You don’t offer any new spin on the apologists’ defense of the Ladders, but you base your entire post on the same fallacy. Paying for career help or for job listings isn’t the criticism. If someone can make a buck helping people get jobs, that’s good. And if those people actually land jobs by paying for help, that’s good, too.

    The criticism against TheLadders is that the company’s practices are fraudulent. TheLadders doesn’t deliver what it charges for.

    And, like the other Ladders’ apologists, you don’t address that anywhere in your post. You ignore it. You ignore the substance of all the critiques — “the noise” — that you disparage.

    The rest of your post is fluff — a 3-Card Monte game that’s clearly designed to distract folks from the facts and information that many Ladders critics (myself included) have presented to demonstrate the fraud.

    Your real agenda is revealed in this statement: “any publicity is good publicity. The critics may be a part of theLadders growth engine. The louder the noise, the faster the growth.”

    Pure public relations flak. Because, John, not all publicity is good publicity. “Loud noise” might contribute to faster growth, but growth doesn’t prove the integrity or value of a service or of the company behind it. All it means is that more suckers are paying up. And if that’s your criterion for backing, defending and endorsing a business, well, go for it, Man.

    You have not addressed any of the detailed, credible criticisms directed at TheLadders. Instead, like others who’ve been wined and dined by TheLadders, you just wrote a public relations release for Marc Cenedella.

    I called out Josh Letourneau, and I call you out, too. Address the specific complaints of Ladders customers, and of employers who have been abused by TheLadders.”

  • GerryGerrcrispin, sphr

    One of the better threads. I’ve enjoyed reading it immensely. Thanks for sharing the angst and patronizing the population.

    It occurred to me that no where does anyone mention the money that actually changes hands. (Apparently details get in the way of philosophical points)

    I could (and have) gotten twisted up about Haldane charging desperate low level, out-of-work professionals $5000 for (at the time) a personal meeting or two, some direct mailing and implied promises that were tacitly supported when the WSJ accepted their ads.

    I’ve real trouble getting past “caveat emptor’ when folks who nominally make 100k fork over $35 for a month. Think they could make their own determination of ‘value’ w/o all the paternal help?

    Yes, double dipping is a problem for me (Rayanne) but I’ve learned that the US culture is much more concerned about these issues than elsewhere. I’ll have more to say after some international research on job-seeker pay models elsewhere. For now this is all entertainment.

  • http://www.inflexionadvisors.com/blog Mark Stelzner

    I’m beginning to regret having attended this event at all. As a community we’ve shown a complete inability to have an open discussion on what many perceive to be important issues without the “us” versus “them” mentality taking hold. Accusations are thrown about, name calling is rampant and we tend to lose sight of what’s important. If anything, we’ve shown that we’re stubborn and opinionated contributors who perhaps wear our bias and preconceived notions a little too heavily on our sleeves. As a result, no one “wins” and we certainly haven’t helped job seekers or recruiters along the way. Two cents is all I can afford to spend on this topic anymore…

  • http://www.corcodilos.com/blog Nick Corcodilos

    No need for data in HR, Josh? Your position here contradicts your position on ERE:

    “What we all need to keep in mind that is while there is science (not just “art”) that great Recruiters use in their recruiting efforts (such as NLP), your discussion here is one of back-casting from market performance to “quantitative HR”… While I’m not suggesting over-analyzing, I do believe that key performance indicators and forward-looking metrics have their rightful place in the discussion.”

    What forward-looking metrics and performance indicators does Ladders offer to HR?

  • http://www.hirecentrix.com HireCentrix

    Nick, I am in agreeance, will my comments be posted? So far Sumser has done a GREAT job at censoring me.. but here is my try
    The wrong questions are being asked here — the Main Questions that should be asked is WHY.. and there are a few WHYS

    Why were the majority of individuals who were chosen, were individuals who had and have Limited or No experience with the product; as Recruiters and or headhunters; who have no or limited industry and especially recruiting experience?

    Why were the majority of these “experts” pretty much the same individuals who tend to appear at the same or similar conferences; and are considered as influential (as per sumser) not based upon WHAT they know, but because of the popularity of their blog –(who they know)

    Why did ladders crate this think tank on such short notice? What is Really going on there, that they needed this immediate reactive attempt to a positive punch in the arm?

    Why do we see the same faces respond in defense of the “pundits”

    Lastly, I do think that there are some people being hung out to dry on this one more so than others, and the “others” deserve it more.. a lot more…

    I think that the ladders took a Wonderful Class in Maslows Heirachy – cause they really understood that to woo individuals, to fatter them, and make them feel appreciated, would allow them to be more subjective than objective…

    I can understand why some of the Junior Members did manage to slurp down the koolaid Shot.. but the more senior members???? WHY?? What do they get from all of this???

    KM

  • Sandra McCartt

    My response was to Josh’s original post that he has completely changed (after several people responded to it,) in which he wondered why headhunters were so threatened, felt that HR didn’t like the ladders because HR was protecting their turf. He further opined that “job seekers didn’t need data only needed something to believe in be it The Ladders, Jesus, Budda or the Golden Eagle”.

    Not sure why Josh felt he needed to completely change his post after there were responses to statements and questions he raised. I suppose it’s better than responding to the replys that were specific to his comments.

  • http://www.corcodilos.com/blog Nick Corcodilos

    You know what, Josh? You have zero integrity. You are a disgrace. (Ditto to you, John, for cleaning up after your boy.) You post a lengthy note about TheLadders, including about how HR doesn’t need data. Your comment is criticized (see below). Then you go back and engage in some serious revisionist posting, turning your blubbering defense and praise of TheLadders into a ludicrous revision of your position. And John Sumser lets you do it. You boys belong together — anything for good publicity, and no brass or balls to stick with your position. I’ve never wandered into this den of pay-to-play HR “dialogue” before, and I won’t be back. Look at yourselves in the mirror in the morning — and live with the fact that you’re still the same bunch. “That’s just me shooting straight with all of you.” You’re as crooked as they come, Josh. Edit that one, if Sumser lets you.

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  • Anonymous

    There’s probably silence from the job boards, Susan, because the employers who usually ask these questions are actually in a better position to know this than the job boards. I’m not saying this is the case with your organization as I don’t know, but I do know that the vast majority of the hundreds of employers who use our job board simply have no clue where their applications are coming from and rely upon metrics from their job board and other media partners to even know how many clicks they’re receiving.

    We have and should have no access to the applicant tracking systems of the employers but if those systems were properly installed and used then every job you posted would have a unique URL (web page address) for every media partner so you’d know exactly how many clicks we’re sending to you, how many and which of those turned into applications, and how many and which of those turned into hires.

    Of all of our clients, only one comes even close to being able to accomplish this and even they are only able to track applications and not hires. So if they were to ask me about “yield and performance” and I were to be silent, what else could I be? The ROI of using a job board or any other media should be cost per hire, but if they don’t even know where their applications are coming from then how could they know their ROI and if they don’t know it, how could we?

  • http://twitter.com/garelaos Gareth Jones

    Job boards, as you mention, have no ability to track their performance (Appart from views and applications) so they rely totally on the client (recruiter or inhouse) to measure but as you say, very few, if any, do.

    I did and i can tell you the results are shocking. It took me three months to track the data but once we had it we were able to halve our spending on job boards overnight. It is important to note also that these boards were niche boards, not generalist, all industry or functions sites. Im talking specialist functional sites.

    Relevancy and placement rates were so low we ran and re ran the numbers to make sure we were correct. The other issue is the cost of handling all these non relevant applications. The volumes are now immense.

    Job boards, as i said in a recent post, are in the unusual position of being a business who’s customers dont actually measure their performance and value. Long term, this is not a good place to be and if the general apathy and complacency of the industry doesnt change, job boards could suffer pretty rapidly.

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