Why job boards buy and sell candidate traffic with each other

The recruitment advertising industry is dominated by job boards a/k/a recruitment marketplaces. Most of the largest players in this industry are highly dependent on each other. Outsiders are often amazed at those dependencies as they discover the details on how job boards generate revenue and deliver candidates who are likely to apply to advertised jobs, be interviewed, and be hired.

Leading job boards like Indeed, LinkedIn, ZipRecruiter, Talent.com, Stepstone, and College Recruiter play a pivotal role in this ecosystem. Their business model, in part, is akin to that of third-party recruiters a/k/a agency recruiters. These recruiters, for as long as that industry has existed, have cooperated with each other through the use of what they call “splits”. A split is just a revenue share: the recruiter who has the relationship with the employer, and therefore receives a fee when the employer hires a candidate referred by the recruiter, splits that fee with the recruiter who has the relationship with the candidate who gets hired. Through this cooperation, the candidate, both recruiters, and the employer all win.

The Business Model of Job Boards: An Overview

The essence of job boards’ operations can be likened to a marketplace. These platforms act as intermediaries, connecting employers with potential candidates. When an employer pays for services like cost-per-click (CPC) or cost-per-application (CPA) job posting ads, the job board aims to deliver sufficient candidate traffic to meet the employer’s expectations. If a job board can’t generate enough traffic on its own, it collaborates with other job boards, sharing the revenue. This process ensures a diverse pool of candidates for employers and more job options for seekers.

The ‘Splits’ Strategy: Maximizing Opportunities

The concept of ‘splits’, borrowed from agency recruiting, is central to understanding this business model. In recruitment agencies, one recruiter might have a strong relationship with an employer, while another has a vast network of candidates. They collaborate, or ‘split’, to fulfill the employer’s hiring needs, sharing the recruitment fee upon success. Job boards adopt a similar approach. By exchanging candidate traffic, they enhance their ability to present relevant job opportunities to candidates and deliver a higher quantity of qualified candidates to employers.

Benefits for Job Seekers: More Doors Open

For candidates, this model offers an expanded universe of opportunities. When job boards exchange traffic, a job seeker’s profile or application can reach a broader array of potential employers. This not only increases their chances of finding suitable employment but also exposes them to opportunities they might not have found on a single platform.

Advantages for Employers: Quality Meets Quantity

Employers benefit significantly from this exchange. The collaboration among job boards brings a richer, more diverse candidate pool to their job postings. This increases the likelihood of finding well-qualified candidates, making the hiring process more efficient and effective. Employers can also enjoy a wider reach, ensuring their vacancies are visible to the best candidates, regardless of the platforms they use.

Challenges and Ethical Considerations

While this model is advantageous, it’s not without challenges. There’s a need for transparency in how candidate data is shared and used. Job boards must navigate privacy concerns and ensure ethical practices in data handling. Additionally, ensuring the quality of candidates amidst increased quantity remains a priority.