With New Competition from Google Jobs, Indeed Adopts LinkedIn’s InMail Model to Tap New Profits

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Dec 15, 2017
This article is part of a series called Editor's Pick.

Life is pretty good at Indeed right now.

Case in point, its parent company recently announced that segment’s EBITDA for the company, in the last six-month period, enjoyed an increase of 96.6 percent, year-on-yearUnfortunately for it, however, past is not always prologued, and the presence of Google for Jobs is making things a bit uncomfortable.

As a result of the added competition, it’s fair to expect pricing pressure will soon be a reality if it’s not already. Facing a future of commoditized job postings, I was surprised to hear rumors last week the company would actually be upping prices as much as 35 percent heading into 2018. Huh?

Sure enough, many customers will see an increase in the check they write to Indeed each year. “Yes, prices have increased,” said a recruiter who preferred to remain anonymous. “My best estimate is I’ll be spending 20-30 percent more next year.”

The increases, however, aren’t in the job-posting solution. “Posting jobs on Indeed will remain free-of-charge,” said Paul D’Arcy, SVP of marketing at Indeed.”Promoting jobs is market driven. We don’t charge for hires with our primary product, and most people won’t notice a difference in pricing.”

The increase in price, it turns out, is in how Indeed charges employers to contact users in its resume database, which now numbers 100 million. In comparison, LinkedIn touts a user base of around 550 million. Here’s the message Indeed sent out to customers recently:

Here at Indeed we care deeply about our customers. We strive to put customers at the center of every decision we make to ensure that Indeed remains the best place for employers and job seekers to engage with one another. To that end, we’re announcing some changes coming to Indeed Resume for employers.

In early January 2018, we will be changing our pricing model to encourage employers and recruiters to more effectively find and engage job seekers. Employers will now need a Resume Subscription in order to contact candidates. Each Resume Subscription grants you up to 30 or 100 new contacts each month (depending on which subscription plan you select) with any unused contacts rolling over for up to six months.

In addition, we will have a new contact credit system to reward high-quality contacts: every contact you make that receives a job seeker response will be credited back for you to use*. With over 100 million resumes and an average total response rate of 44 percent on Indeed Resume, we expect to be rewarding lots of contact credits to employers. Account administrators will have the ability to purchase subscriptions in January.

If you are not an account administrator and have a linked account, please reach out to your account administrator to get a subscription for you in January. Employers will be able to choose from two subscription options below: Note: save 20 percent when you make an annual purchase Featured Employers will continue to enjoy unlimited contacts through the first quarter of 2018, after which point they will need a subscription to contact candidates. This is just the start of many improvements we are building to make Indeed Resume the best place to find and engage with talent. For more information about these changes please review our FAQs or reach out to your Indeed Account Executive.

Thank you,

The Indeed Team

* Contact credits will be awarded solely at Indeed’s discretion and Indeed reserves the right to change the contact credits system at any time

** Pricing and our offering are subject to change

Basically, Indeed is looking to monetize its resume database more so than it has in the past. In fact, D’Arcy said Featured Employers used to enjoy unlimited messages to resumes in Indeed’s database. This was probably a good idea in theory, but abuse resulted. As one contact confidentially shared with me, “The strategy here is to prevent recruiters or agencies from blasting out to a wide number of candidates about their roles, which may not be a fit. Aim of course would be to prioritize their own customer experience to encourage more visitors/users and keep the cycle going.”

Fighting spam is never a bad thing, but there’s another factor I suspect. Job posting and promotion revenue is at risk of going down, compliments of Google and Facebook getting into the space this year, so Indeed is looking to an asset in its 100 million resumes, that neither can compete with at the moment, to drive revenue. The model works great for LinkedIn’s InMail product, so why not Indeed?

“They still have the best resume database to mine,” one of my contacts told me, which makes it something people will pay for, particularly the ones who have been using it essentially for free till now, even if the price point hurts a bit. “A recruiter license will now give users 100 contacts/mo. for $2,400 year. So, if you typically contact 300 people/month as a recruiter, you’ll need three licenses. This will likely hit staffing and large enterprise very hard.”

The strategy is sound, especially if Indeed is attracting candidates who aren’t going to LinkedIn and can’t be surfaced on solutions like Entelo, HiringSolved, and others. The job-posting product won’t die tomorrow, and Indeed is smart in its attempt to be a one-stop-shopfor all employers, but growth will be challenging if they don’t diversify.

According to one of my sources, Indeed hopes to grow 40 percent via inside sales in the U.S. next year, and focusing on the resume database is the best way to accomplish this goal. Job postings isn’t going to get it done, and one of my sources shares numbers as to why.

“I placed a posting on Indeed and ZipRecruiter at the same time for an admin assistant yesterday,” my source said. “In about 20 hours I received 49 resumes from ZipRecruiter at a cost of $.027 per resume. I received 10 resumes at a cost of $.658 per resume on Indeed. A year ago, or even six months ago, the response rate would have been reversed.”

Click here for Indeed’s blog post on pricing changes.

This article is part of a series called Editor's Pick.
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