CareerOne’s jump to our side of the recruitment industry: bad news or not?

     

“We’re not a job board anymore”: CareerOne  

CareerOne has abandoned its job board in favour of a “skills
marketplace” …….. the company is now actively working to change
perceptions about its business.

ShortList  , 11
March 2014

   

CareerOne strategy “Flipping 180 degrees”  

CareerOne is refocusing on its core job board platform as part of a
strategy and website overhaul, with renewed hopes it can rival
SEEK’s dominance.

ShortList  , 7
July 2015

   

CareerOne launches “full recruitment service”  

CareerOne has launched a new offering that it says will provide a
full recruitment service for the same cost as advertising a job
online.

ShortList  , 3
August 2016

   

CareerOne on recruiter hiring drive  

CareerOne is currently  advertising
for recruiters
  for
its new service, offering a 30% commission rate for the first 100
people accepted as a “recruitment partner”.

Its  advertisements  say
the recruiters will be independent contractors, and it is appealing
to seasoned recruiters, along with graduates, parents returning to
the workforce, and mature-age workers with great networks.

ShortList  , 31
August 2016

   

Indeed forays into full recruitment  

Global job board Indeed is testing the waters with a full
recruitment service.

Indeed Hire  is
a pilot project where employers can effectively outsource their
recruitment to the job ad giant and bypass agencies…

ShortList,  
2 September 2016

 

One thing about recruitment; it’s never boring.
Nothing stays the same for very long.

 

The past month has seen the announcement of CareerOne
(majority owned by Acquire Learning Ltd) moving from job board to
recruitment agency (CareerOne Recruit) and Indeed (owned by Recruit
Holdings, the fifth largest recruitment agency in the world, by revenue)
on that same

path
in the US.

 

No doubt the executives of both CareerOne and Indeed
have thought carefully about the change in their respective business
models that both companies are undertaking and the impact that this
change will have on their traditional core constituency, recruitment
agencies.

 

I won’t make any comment on Indeed Hire until there
is an announcement about its intentions for the Australian market. For
the time being I’ll focus on CareerOne.

 

Recruit2Retail  founder
and director  Stephen Moir  has already made his   opinion
clearly known by sending CareerOne a terse email, after one of his
referrals conflicted with a CareerOne referral of the same candidate to
a mutual client:

 

This industry is already competitive enough,
without having to compete with a job board, a job board that mind you, I
pay a monthly fee to. 

 

I am happy to be told I am wrong, but CareerOne
needs to make a decision, are you a job board or are you a recruitment
agency?  The saying “Don’t shit where you eat” comes to mind.”

 

The CareerOne commercial model of a $3000 placement
fee, payable as 12 monthly instalments of $250, minimum two placements,
or one-off $4k placement fee, (you can view the CareerOne Recruit terms

here
) can only be sustainable   on a low cost base and high volume.

 

The low cost aspect is the candidate sourcing and
screening service to be run out of Manila. The volume will come from
sectors with a large volume of roles (hospitality, retail, health care
would be the obvious ones) identified and pursued by a locally based
sales force; who are licensees of the CareeOne product (much like the
traditional insurance sales model of independent business owners being
exclusive sales representatives of a specific insurance company).
Whether this means we will be seeing CareerOne Recruit ads
on Seek or LinkedIn remains to be seen.

 

CareerOne will undertake all the invoicing, remitting
the agreed commission back to the licensee.

 

When I met
Dorian Van Zyl, CareerOne’s
recently appointed Head of Recruitment Services, it was clear that the
goals were lofty. Van Zyl is aiming for CareeOne Recruitment Services to
reach 200 employees by the end of the next financial year, only 22
months away and to break even before then. A road show is currently
underway along the Australian east coast to kick start the company’s

recruitment drive
. Achievement of the growth target would, to my
knowledge, represent the fastest growth of a recruitment agency, from
scratch, in the history of the Australian recruitment industry.

 

Van Zyl wants CareerOne to deliver a world class
recruitment service for the CareerOne clients.

 

The challenge will be doing this without a wholesale
departure of their recruitment agency clients, sufficiently annoyed by
CareerOne’s play for ‘their clients’, to withdraw their custom (as
Stephen Moir has done).

 

What does this all mean for the traditional
recruitment agency?

 

I choose to look at it through the prism of
Treacy and Wiersema’s

three value disciplines
(modifications of Michael Porter’s Generic
Strategies, 1980) that create customer value and provide competitive
advantage.

 

These three value disciplines are: 

  1. Operational excellence (eg McDonald’s)
  2. Product leadership (eg Apple)
  3. Customer intimacy (eg Market Life, my local fruit
    & veg retailer)
CareerOne have chosen Operational Excellence to be
their competitive advantage. The agencies likely to be significantly
impacted will be those agencies that compete in that same ‘Operational
Excellence’ space (ie the transactional recruitment market).

 

Hays are clearly the current market leader in the
recruitment ‘Operational Excellence’ category in Australia. Given the
Hays dominance in the mid-market category (say $60k-$120k annual
salary), you would think the obvious path for CareerOne to take would be
to aggressively target the under $60k SME market where they would be
bumping up against the likes of Adecco, Manpower, Workpac, DFP
Recruitment, Programmed/Skilled and parts of the Randstad and Chandler
Macleod businesses. There’s a much larger volume in this segment of the
market, compared to the mid-market, but the competitors I have named are
well-established and formidable , let alone the many locally-owned
regional or suburban specialists also operating in this segment of the
market.

 

It’s pretty easy to see where traditional agencies
will be vulnerable to the CareerOne offering – the localised writing and
posting of job ads followed by the manual assessing and screening of
both ad responses and database/online search results. This process is
currently high cost and, mostly, inefficient. Continual improvement in
this area, using both technology and human skill will be critical as
margins continue to be under strong downward pressure from clients and
competitors.

 

Any agency who genuinely focuses on Customer Intimacy
as their value driver (as loosely identified through having an agency
having large majority of exclusive and retained work at above-market
fees and margins) will have little to be concerned about by CareerOne
Recruit, they simply aren’t competing for the same clients.

 

The Australian recruitment industry has grown in size
and relevance over the past sixty years or so because of the
entrepreneurial spirit of the many thousands of recruitment agency
owners who have provided a service to their respective clients and
candidates.

 

This has been the case, regardless of economic
cycles, government regulation, overseas competitors and, now,
recruitment vendors-turned-recruitment-agency.

1 Comment

  1. Anonymous on 08/09/2016 at 7:08 am

    Ross, thanks for letting us all know about this.

    I just did a quick google search on the CareerOne spokesperson you have mentioned – Dorian Van Zyl.

    Seems he likes to comment on Michael Page's ski trip https://postimg.org/image/umchjf8a3/

    Best CareerOne start to work out how they want to treat the recruitment industry before trashing everyone else.

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