Indeed, a world-leading job site has announced a “Pay for results” (P4R) pricing model. In a competitive market, the move could see Indeed attract an even greater market share and provide a higher entry level for new competitors. Research by Indeed has shown that employers are more attracted by a Pay for Results model (51%) than either a Pay for Clicks (12%) and Pay a Flat Fee per Job Post (33%).
However, “results” does not mean paying for completed hiring like a search agency. The P4F has two strands of payment, a pay-per-application (PPA) and a pay per started application (PPSA).
The PPA method means that only candidates that apply for a role incur a cost for the employer, rather than the PPC option, moving it away from an advertising-type engagement and more of a service.
The PPSA method is targeted at large employers and incurs a charge when higher-intent job candidates start their job applications. It reflects indexed jobs posted to Indeed on an employer’s behalf.
Paying for Results
Importantly, employers can limit the number of applications they receive and therefore cap the cost. It will mean, however, that the creation of job entries becomes more important as part of the selection process. Employers will need to ensure that they display requirements clearly and do not receive applications they reject out of hand. They can use quantifiable criteria to filter and reject applications that do not meet their requirements. How nuanced these filters are is not clear.
Importantly, employers have a window to reject applications without incurring a charge. That window is currently set to what seems a generous amount of time, 72 hours. However, this may allow for elapsed time rather than working days. However, with bank holidays, this could seem short for some employers. It may lead to more posts going live at the start of the week.
Chris Hyams, CEO of Indeed, commented, “Our vision is to make the hiring experience as easy as pushing a button which is why we’re on a journey of evolving into a comprehensive matching and hiring marketplace. As a company whose mission is to help people get jobs, we want to get paid when we deliver qualified candidates, which means opening up new payment options that fit the needs and preferences of employers.”
Customers seem receptive to the new payment scheme. Aurore Lerivan, HR Director/Administrations at Ultra Physical Therapy and Hand Center, commented, “I was pleased to see something a little bit out of the box with regards to how you actually bill for candidates.”
Addressing the talent shortage with tight budgets
Indeed helps its customers complete 20 hires every minute worldwide, twice that from 2019. This increase reflects the customer satisfaction that Indeed delivers, with 69% of employers believing they hire their best candidates from Indeed.
While the research indicated a preference for P4R, 79%% believe they should only pay when they receive a quality candidate for a position. Hence the delay allows them to validate the applicants quickly. P4R is already available for some customers and is being rolled out to UK and US customers shortly. It will extend the business model globally during 2023.
Finding talent is not easy, and while the Indeed Hiring Lab indicated recently that there is a slowing down in the hiring market, it will return. Despite this, talent is getting harder to find, and organisations are looking for candidates with soft skills that are harder to analyse than hard skills. In addition, candidates, especially the latest generation, have increased expectations of employers with flexibility and sustainability important for many.
The Indeed Employer Survey, in March 2023, noted the following current challenges facing recruiters:
- Poor quality of candidates (52%)
- The time it takes to hire (43%)
- Competition from other companies (38%)
- Not enough applicants (34%)
- Lack of people resources to manage the hiring process (22%).
Enterprise Times: What does this mean
This is the latest iteration of the Indeed platform that seeks to simplify the recruiters’ job. It already automates many of the tasks during the selection process. This latest move sees organisations obtaining more visible value from their job advertisements rather than a fire-and-forget method with a poor return on investment.
While P4R does not guarantee finding the right candidate, it means that the process is more cost-effective. It may allow smart recruiters to modify their advertisements if their job posts are misaligned with their requirements.
Ultimately, this falls short of delivering a service that charges once a candidate is found and recruited. It will be interesting to see whether Indeed partners with an applicant tracking solution to take this a step further, perhaps offering a scale of charges that increases as applicants move through the selection process to onboarding.