In July last year I first blogged about how SEEK’s ownership of Onploy was causing waves with some of its recruitment agency clients. Subsequent to that initial blog I wrote a number of follow-up blogs, starting with a look at the behavior of SEEK’s part-owned subsidiary, Sidekicker, SEEK’s PR response to the agency pushback, I speculated on what SEEK’s long term strategy might be and in December when I wrote about SEEK’s first Onploy concession.
I haven’t written anything on the topic in 2018 because the February 2018 promotion to Managing Director, Australia and NZ for SEEK Chief Commercial Officer, Kendra Banks, has meant discussions have been on hold while the new MD acquaints herself with her job. Late last week the RCSA formally sat down with Kendra Banks for the first time to discuss the concerns of its members.
In the meantime Frontline Recruitment Group CEO, Peter Davis has lost patience and accepted my request for an interview to outline, in detail, his signicant concerns with SEEK’s actions and what he sees as a potential way forward.
Ross: Peter, Frontline Recruitment Group (FRG) has been at the forefront of the industry in pushing back against the SEEK Limited’s foray into recruitment technology businesses that directly compete against recruitment agencies; can you briefly summarise what SEEK have done to provoke the ire of you (and other agency owners) and then outline your primary objections to their actions?
Peter: Thanks Ross; to be clear: we must all live with fair competition, and it is inevitable that SEEK will expand its service lines. The issue is not so much what SEEK does, but how it unfairly applies data that only SEEK possesses, to advantage SEEK’s various new businesses.
Only SEEK gets to capture candidates’ profiles and activity data which derive from SEEK’s paying clients (ie recruitment advertisers like FRG) posting ads on the SEEK platform. SEEK is notified when a candidate becomes active, and that’s a huge competitive advantage for them. That advantage only comes about because recruitment agencies have no realistic choice; we must go where the candidates and their profiles are, so we must use SEEK. That unique market advantage should be fairly acknowledged by SEEK and they should not be allowed to use that advantage unfairly against their own paying clients, including Frontline Recruitment Group.
Can you expand on what you mean by ‘unfair”?
Yes. There are two things to mention here:
First; FRG was not advised by SEEK about a SEEK owned recruitment company called Onploy when we were negotiating our new ad contract with SEEK, shortly before Onploy was released publicly (in June 2017). SEEK’s ownership of Onploy clearly affects the value of our advertising, both to us and to SEEK. When we raised this with SEEK, we were told that Onploy is a “tech company” that “curates candidates”, and that if we wished we could buy candidate data from them for approx. $2500 per candidate. We even had Onploy present its services to us: quite frankly, we could not believe what SEEK were doing.
Second; we believe Onploy was given privileged access to the SEEK Premium Talent Search database. Soon after the launch of Onploy we found out that companies FRG was recruiting for were being approached by Onploy. Subsequently an Adelaide-based candidate contacted us to say “I applied for your role on SEEK, and then I got a call from a company called Onploy asking me if they could represent me… they said they were part of SEEK… I didn’t know that Frontline was part of SEEK.”
Not only is this confusing to candidates… it is unfair that SEEK companies have, what we believe to be, privileged access to the data that allows them to do this.
Now, almost every day, we get a candidate call along the following lines: “I only applied to your ad, but now I am getting calls from other recruiters and companies. What is happening?” They blame us, recruiters, for this happening to them as they think we have passed on their information to a third party without their permission. They don’t understand that when they registered on SEEK, sometimes some years before, they ‘chose’ to make their data public.
What should SEEK do to remove or minimise this confusion?
I believe every time a candidate applies to a role they should be specifically and prominently asked: “What do you want to happen with the data regarding your searching and job applications over SEEK”? Then if, properly informed, the candidate elects to tick a box to make their data open, then fine; they have unambiguously given their fully informed consent. But consent like this shouldn’t happen by default, and it shouldn’t happen when candidates are unlikely to understand the consequences of the choices available to them.
In your opinion, what is Onploy; is it a recruitment agency or a tech company?
Onploy has recruitment consultants; it lists roles; it presents candidates to its clients; and it gives a placement guarantee. So, it walks like a duck and talks like a duck.
As well as fully-fledged and already operating recruitment companies such as SideKicker and Onploy, we believe SEEK has many more such businesses in early stage development and we expect that they will be released into the recruitment market over the next few years.
Why do you think SEEK is going down this strategic path, a path that is causing much bad blood between SEEK and some of its biggest agency customers?
I believe that SEEK is deeply worried by new platform providers such as Indeed and Google. It is not surprising that they should try to consolidate their dominant position in Australia and leverage that position into related recruitment businesses.
I also don’t think it is any surprise that SEEK has chosen Hospitality and Retail as the first recruitment sectors to attack. Historically these are segments where smaller recruiters operate. I guess they believed that there would be less resistance from the smaller recruiters. We know SEEK has reached the stage of their development where they are now quite happy to cast off the agency recruiters: in fact, SEEK executives have said to us on a number of occasions that if we don’t like SEEK’s terms or way of doing business, we should take our advertising elsewhere.
What communication have you had with SEEK re these issues and what progress has been made?
Ross, since June 2017 I have had approximately 10 face to face meetings (and many more teleconferences) with SEEK executives including (Group CEO and co-founder) Andrew Bassat, (CEO APAC and Americas) Mike Ilczynski and (MD, Strategy and Platforms) Simon Lusted. They freely acknowledge SEEK’s strategy of expansion into related recruitment businesses, although they call their recruitment companies “tech companies”.
SEEK has been very accommodating in listening to our complaints. But SEEK hasn’t made any significant proposals to address our concerns, and at times has been quite dismissive and suggested that our concerns are just competitor whinges.
Frontline has now invested tens of thousands of dollars in our communications with SEEK. From early in our discussions with SEEK, we expressed the view that we believed their actions relating to use and marketing of information about candidate activity in response to recruitment advertising on the SEEK platform are illegal. We explained in detail why we believed that.
In response SEEK proposed to “delay the application signal” for 8 days. To be frank, we don’t know what the “application signal” is and SEEK have said that they won’t tell us unless we sign an NDA. We believe it to be the data signal that occurs when a candidate applies to an advertisement, and if that is the case, a delay might mean that the advertiser would have 8 days exclusivity with that candidate before that candidate is signalled on the Premium Talent Search (PTS) as being active – and then of course all users of the PTS can see the candidate is active and will get in contact.
It may be that SEEK already made this change, but we don’t know either way.
In summary, despite all my attempts across many months, to find practical solutions directly with SEEK executives over their company’s unfair actions, no meaningful progress has been made, unfortunately.
On a scale of 1 to 10, with 1 being low and 10 being high, how satisfied are you with SEEK’s responses to your concerns, to date?
Let’s give it a 1. We are very dissatisfied with what they have done, how they did it, and what they continue to do to.
Describe the strength of the relationship between Frontline and SEEK before all this blew up
Very strong. Frontline has used SEEK for almost 20 years and we have consistently spent well over half a million dollars each year with SEEK. SEEK helps train our consultants. I have attended more SEEK conferences than any other recruiter or SEEK executive. I know Andrew and (co-founder) Paul (Bassat) personally. Over the years I have known most of the SEEK execs so given the long and productive history between our two companies I find it very surprising that SEEK would so blatantly attack us.
Describe the strength of the relationship between Frontline and SEEK now?
Not sure… we have tried to conduct ourselves very professionally throughout what I am sure everyone appreciates is a very difficult period. SEEK did un-invite us from their conference last year, which was disappointing. This is the first time I have really gone public on the issue and I expect there will be backlash against me personally for “airing our laundry”, but I just can’t sit by and watch this all happen without at least speaking up.
What do you believe are the possible or likely implications for the wider recruitment industry if SEEK continue to push their various ‘rec tech’ products into direct competition with recruitment agencies?
Ross… the question is not quite right… it is not a question of “if” SEEK continue to push… it is… “as” SEEK continues to push… Onploy has not gone away; it has refocused into the IT sector. Sidekicker, another of SEEK’s recruitment companies, is continuing to rapidly grow and it continues to target Wendy Mead’s company Pinnacle People. This is happening now.
SEEK has an unknown number, probably 10-20, of what they call “early stage ventures” and among them there is probably quite a few recruitment companies. These are start-ups or investments often not specifically mentioned in SEEK’s public filings which are right now being built and primed ready for the assault on our industry.
In my opinion the sleeping giant in SEEK’s “tech push” is JobAdder. Originally an ad loader, now an ATS (Applicant Tracking System) owned by SEEK. SEEK is selling licences to use JobAdder to recruiters and corporates. The problem with any ATS, of course, is that its only as good as the data in it…well when the company that owns the ATS links that ATS to its PTS then we have an instantly populated recruitment database… but better than that… the poor dumb advertisers who pay for ads on SEEK will be giving those companies who are using JobAdder first look at the candidates who apply to their ads.
Ross, I have looked everywhere in my SEEK advertiser terms and conditions and I can’t see where it says I allow SEEK to share my ad responses with 1000 other companies who have access to the PTS and with all users of Job Adder.
There has been speculation about the legality of what SEEK are doing with respect to competition (ACCC) laws. What advice have you had and what are your options?
Ross, we’ve developed our views on this and shared some of them with SEEK. You’ll understand that legal advice is only privileged if it is maintained as confidential. Suffice it to say; at the moment we are confident that we have a good legal case.
Our preference always is dialogue and commercial resolution, but I do feel that this has now dragged out far too long. We can’t simply pull advertising on SEEK as there is nowhere else to advertise that will reach the most candidates. Hopefully the regulators will recognise that this is a real issue for competition law. We’d also like the recruitment industry to express its views, which is why I am doing this interview.
What do you think the RCSA should do to effectively represent their members on this issue?
I have spent many, many hours trying to get the RCSA involved in this issue. Initially the RCSA board view was that there was nothing wrong with SEEK’s actions. Now with the change of Board and with (new National President) Sinead (Hourigan) at the helm the RCSA has been trying to have dialogue with SEEK. This has been unsuccessful to date. The RCSA are telling me now that it is not in the best interests of their members to pursue this any other way than through consultation. I agree, but to a point.
I believe in this situation, the RCSA is both “conflicted” and somewhat “remiss” in its duty to the industry as the RSCA is sponsored by SEEK. I believe that SEEK may pull the sponsorship and give it to APSCo if the RCSA becomes too active.
The RCSA also has a duty to educate the members on issues such as this and then the members can form opinions, have discussion and make decisions. This means the RCSA needs to use every means available to communicate such as blogs like yours, Greg Savage events, conferences, RCSA breakfasts, its website and other means so that members can be informed and can then decide. It is not the RCSA’s role to lobby on behalf of the membership when the members don’t know what they are lobbying for.
I do sympathise with the RCSA’s position: they are, reasonably, quite worried about losing a sponsor but you know what, Ross, if the members feel strongly enough about this maybe we “Kick the Can” and who knows, maybe we could raise more than the sponsorship amount anyway.
What do you expect SEEK will do next?
Well, they probably won’t invite me to their conference this year!
Look, Ross, SEEK are on a journey to vertically integrate into the recruitment industry and I don’t know whether much will change that. What I want is to stop what I believe is the illegal behaviour which means I believe this issue needs to be brought to the attention of the ACCC and the Privacy Commissioner. At the same time advertisers, both recruiters and corporates, need to start complaining to SEEK and get active and find out what is really happening.
If effective action is not taken now what do you foresee in two or three years’ time?
SEEK… Indeed…Google… will develop bigger and bigger candidate databases and the industry will continue its move from advertising to sourcing. There will be less ad revenue and more search revenue.
But what will happen to recruiters is what always happens – we will adapt – tech will help us, it won’t hinder us. The change from newspapers to online was a huge shift, much bigger than what we are talking about here. Let’s face it we all have databases; we still need to find candidates and then have discussions with our clients and candidates. Artificial intelligence will do some of that work but we will still be here.
What is a potential solution to these issues with Seek?
I believe SEEK would be much better served by partnering with their advertisers, Ross. If SEEK asked me if they could use the responses to my ads then I would cut a deal. I would say “Sure, let me have the responses to this ad for three days and then you can sell it and in return reduce my price on the ad by 70%”. But for another ad I may want to keep the ad response for ten days in which case I get a 30% discount. And if I want to keep the ad response exclusively and permanently, then I pay full price. Now if a job board did that for me maybe I would stay loyal to them but don’t just take data from my ads and then threaten me when I complain because I am going to fight you first chance I get.
And please let candidates make their own mind up each time they apply to a role whether they want their data being sold.
What do you recommend concerned agency owners do right now?
Find out what is happening, form an opinion, discuss with other recruiters and think of solutions. If you feel strongly enough complain to SEEK and to the RCSA.
Thanks for your time, and candid views, Peter.