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How much is the market worth? - 04/2001

Online recruitment industry estimate

We asked several online recruitment companies how much they estimated the UK online recruitment market to be worth. These are the results:

Currently, based mainly on the job advert model, we believe that the market in the UK is worth 1 billion. However, a competitive climate has meant that the industry has begun to fragment and find alternative revenue streams, before the existing business model is anything like saturated. Given that the market is shifting from pure recruitment advertising to CV exchange, and more significantly ASP/workflow solutions, we predict that the Forrester estimation of a market worth 4-5 billion by 2005 will be exceeded. Pat Elliot, MD, jobpilot UK.

We estimate that the UK market for services offered by job boards was between 50 and 60 million in 2000. This is predominantly made up of job postings and revenues from the use of job board CV databases. To put this into perspective, the 'offline' UK recruitment advertising market (national newspapers, local papers and trade press) was worth around 1.4 billion in 2000.
We expect the value of the market to approximately double in 2001 to around 120 million. The bulk of these revenues will still be made up of job postings but with an increasing share being taken by CV database revenues as well as online screening and candidate management tools offered by job boards.

Job board revenues are only one aspect of the total online recruitment market size. The other elements to take into account include:

Design and build of corporate recruitment pages
Online media planning provided by advertising agencies
Online recruitment tools such as web-based referral programmes, virtual recruitment events, 'push' marketing using email
Internet 'headhunting' fees
Candidate management systems offered by software suppliers

These services are offered by a variety of suppliers at the moment and this year will see job boards also including these tools as part of their services to clients. Andrew Findlater, Business Analyst, totaljobs.com

We are seeing continued growth in our marketplace, setting new records this quarter in terms of both visits to our topjobs.co.uk website and revenue. The value of recruitment advertising in the quality national press is c400m, and c20% of these vacancies are now online - with this figure expected to increase by 50% over the next 12 months. Don McIntosh, general manager, Top Jobs on the Net.

Its currently very difficult to gauge the value of the UK online recruitment market. Its definitely an issue that we need to address. The Media Monitoring Service (MMS) provides the offline market wi the industry standard data and we're working with the AOLR in order to try to develop a similar system for online recruitment which should help answer this crucial question Tim Elkington, head of reseach at workthing.com.

We estimate that the industry is worth 25M. Total advertising spend on the Internet is rising at an average of 107% per year, and total Internet spend in 2003 is estimated to be 105m. Alex Schlich COO, Gradunet.

And finally, David Head, publisher of Recruitment International is an oracle of information on this matter:

The greatest conundrum for any onlooker trying to fathom out the complex world of the online career sites is just how big is the market? And further how do you arrive at such a figure?

Being a traditionalist, as Publisher of Recruitment International magazine we cover the established bricks section of the staffing industry. From Adecco to Michael Page, Korn/Ferry to Big Jobs Ltd. Therefore it is far easier for me to put a figure on the value of this sector simply because history and to some degree trends are on my side. For the year ending May 2001 I have a figure of 23.5 billion. This is turnover derived in the UK only from any staffing company as detailed above. The REC quotes 18 billion for 2000.

When you look at online recruitment how do you select the criteria that will form the basis of your market size. Turnover from jobboards/career sites would seem the most appropriate. How many of them are there in the UK? Hundreds? Thousands? Do you only consider recognised sites such as Monster, GoJobsite, and Stepstones? What about publishing led sites such as workthing and totaljobs. What about traditional recruitment company owned sites such as myoyster and Firstpersonglobal? Then there are recognised sites with part ownership by traditional recruitment firms, GoJobsite & Manpower. And lest we forget recruitment firms and publishers, newmonday a VNU/Randstad business.

I believe that the only way to get an accurate figure for online activity would be to discover the actual sales turnover of all of the online recruitment sites live on the WWW. Easy. Hold on. How much does CISCO or Intel spend on its own recruitment website? Face it - it's not going to happen. No one is going to find out the size of the market because no one knows how many companies and therefore how many websites with recruitment on them there are in the world.

Don't despair, its not all doom and gloom. There is some very positive stuff here. What I can tell you is that despite having no accurate figures the online market is growing exponentially. Our friends at Forrester say that online recruiting is growing at a CAGR (Compound Annual Growth Rate) of 51%. See Figure One.

They predict that with a CAGR of 51% turnover for the market in 2000 is $1.15 billion. This figure will grow to $7.0 billion by 2005.

A word of caution. Online may have the CAGR of 51%, however, it is the traditional recruitment companies that have the profits. And in my opinion it will be a case that the real winners in the online battle will be those who combine bricks AND clicks.

Oh and if push comes to shove my valuation of the online market for 2000 would be 1 billion, around 5% of the traditional sector.