Workhunters find internet is just the job

Editorial by Maija Pesola, article sourced from FT.com (link at footer)

Online recruitment appears to have come into its own in 2004. According to a recent survey by polling company YouGov, the internet has now become the most popular for UK jobseekers to look for jobs, surpassing traditional avenues such as newspaper advertisements and recruitment agencies.

People are attracted to the ease of searching for jobs online. Recruiters, meanwhile, like the targeted nature of advertising through online sites.

But the annual advertising spending on online jobs is still much smaller than the amounts spent on job ads in newspapers. According to NTC research, the national press is estimated to account for some 200m of annual spending, while online spending is closer to 100m.

This is partly because of the fact that newspaper adverts still command a substantial premium to online job ads. Jobsites such as Monster.co.uk tend to charge a flat 250 fee for a job ad, compared with about 3,500 for a quarter page advert in the Guardian job section.

However, online recruitment is growing rapidly - in the first quarter of the year, spending on this sector was up nearly 55 per cent from the previous year.

Newspaper recruitment ad revenues - which are at about half the level they were in 1999 and 2000 - have started to show some growth this year after three years of decline. However, this is on a much more muted scale - about 5.6 per cent quarter-on-quarter.

Some newspaper groups are hedging their bets and investing in online recruiters to help offset their own falling sales. The Daily Mail and General Trust, for example, bought Jobsite.com in March.

Four newspaper groups - Newsquest Media Group, Northcliffe Newspapers Group, Trinity Mirror, Guardian Media Group Regional Newspapers - also own jointly Fish4, the online homes, auto and job search site.

However, in many cases the acquisitions are going the other way. The Hotgroup became the UKís largest online recruiter in September when it bought rival Workthing, from the Guardian Media Group for 6m.

Newspapers are frightened to go back into online investments again, says Paul Jones, analyst at Numis. Having been burned in the dotcom crash they are afraid they will just be laughed at if they announce large investments in IT or the internet.

In any case, even if newspapers did want to get back into the market, there are very few online recruitment sites left to buy following a year of furious consolidation. The Hotgroup in particular has been an aggressive buyer in the sector and has added seven online recruitment companies to its stable in the past year.

Now the group is looking at bulking up increasingly in the offline world of traditional recruitment agencies. The company operates five traditional businesses in this sector, and last month appointed a new managing director to this division.

The goal for online recruiters such as the Hotgroup, says Mr Jones of Numis, is to offer a hybrid model where the tens of thousands of online CVs help feed an offline recruitment business, which can bring in higher margins.

If this model works, it can produce better results than either of the two types of recruitment alone, says Mr Jones. However, it is still too early to know if the Hotgroup can achieve this.

The other glittering prize for online recruiters is to get into the remaining areas of recruitment that have yet to embrace online ads - particularly the NHS.

They say the NHS is the worldís largest recruiter after the Chinese Red Army and Indian railways, but they have a lot of catching up to do in terms of harnessing the internet, says Joe Slavin, the managing director of Monster.co.uk, another of the UKís leading online recruitment sites.

The NHS has been reluctant to move strongly into online for recruitment because of fears that there is still a digital divide, with many in the UK lacking online access. However, with an increasing percentage of UK homes now connected to the internet, Mr Slavin says these concerns are well on their way to being resolved.

Also, with an online strategy, the NHS could solve some of its recruitment problems - there are a lot of trained people in Hungary and Poland, for example, who would love to work here, he says.

Whether or not the NHS will be quick to change its recruitment patterns remains to be seen, but the determination of online recruiters to make a landgrab far beyond where they operate today, is becoming increasingly clear.

Article by Maija Pesola, article sourced from