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SEEK Price Rise Causes Online Backlash

By May 19, 2011 6 Comments

Last weekend the Emirates Stadium in North London was the scene of widespread discontent amongst several sections of the Arsenal fan base.  The cause of this sentiment was not just the fact they lost their last home game of a stalled season to Aston Villa, but also due to the announcement of a price rise of 6.5% to next season’s season tickets.  The UK is experiencing severe financial constraints post-GFC and this piece of news will stretch some of the loyal fans too far.

 

At around the same time last week SEEK announced to their Australian customers:

 

“..From 1 July 2011 (or from your next contract renewal date) the price of a standard job ad will increase by approximately 9%….”

This was apparently justified by the change in market conditions and to reflect the levels to which the Australian economy is recovering post-GFC.  However, it has sparked something of a backlash in many quarters of the Australian recruitment industry.  A particularly lively discussion was initiated on the Linked In Australian & New Zealand Recruitment Network group by Piers Rown from Recruit Online questioning the validity of this price rise and whether SEEK actually return the value they once did (something many Arsenal fans are also wondering about their team’s performances lately).  Many commentators seem to agree that the volume of applicants via SEEK remains high but the quality is diminishing, and social media is an increasingly successful alternative sourcing strategy.

 

Things were then racked up another notch with Recruiter Daily tweeting yesterday:

 

“Was just approached to launch a campaign against SEEK’s price rise urging all recruiters not to use them for a week”

 

It seems something of a rebellion might be stirring across the ditch.

 

So earlier in the week I sent an e-mail to Janet Faulding, General Manager for SEEK in New Zealand, asking what their intentions were for New Zealand and whether we could expect a similar price hike.  I was informed she was in Australia this week so would reply next week.  It soon became apparent what she was over there to discuss because yesterday we in New Zealand received this e-mail:

 

“I am writing to let you know about some upcoming changes to our advertising prices. SEEK’s prices will increase by 3% across the board from 1 July 2011.

These changes will not impact your current SEEK advertising agreement and will only start to affect your account after your next contract renewal date.

We currently have more jobs than anywhere else – around 60% more than our nearest competitor – and the introduction of our new prices comes after 3 years of price stability. The price increase reflects inflationary changes and our ongoing commitment to getting your ad in front of the highest number of jobseekers.”

 

At first I was relieved.  Only 3% for New Zealand.  A third of the price rise for our Aussie friends.  Barely noticeable really.

 

But then I started to question whether any kind of price rise was justifiable at all?  The Budget announced yesterday is heralding a new era of austerity.  Businesses and consumers are not spending.  We are all repaying debt and learning to cut our cloth accordingly.  The economic recovery is steady, but slow, and patchy, and ever so fragile.

 

Does the price rise reflect inflationary changes?  I can assure you that salaries in recruitment have not risen by 3% or more in recent years, if anything they have retracted and are still there now (with some very rare exceptions).

 

But do we really have an alternative?  3% is not a huge amount, and knowing many New Zealand businesses, they would rather just quietly take SEEK’s punch on the chin, put their head down, and keep working harder.  SEEK still delivers the best results overall, even though they do also deliver the greatest number of timewasters, and clearly have a very questionable PR department.  Looking back over my last 15 placements, 3 of them applied to me through a SEEK advert.  Whilst I was surprised to see that only 20% of my last 15 placements came directly from SEEK, that is still 20% of recent revenue that I wouldn’t want to throw away by turning my back on SEEK and flouncing off somewhere else.

 

I do think they could have done a better job of communicating this though.  But that has never been SEEK’s strong point.  Just last week I attended a SEEK Forum for new product strategy and was openly informed by the presenter that they do not focus on the relationship with their clients (us in recruitment), but rather with the jobseekers.  Because they know (this was what I read into it anyway) that they can treat us how they like as long as they keep providing the jobseekers to fill our vacancies.

 

It may suck to be dictated to by SEEK but how many of you out there will honestly be brave enough to turn your back on this candidate sourcing method altogether, to make a stand on this issue?

 

As for Arsenal, it is customary after their final home game of the season for the players to conduct a “lap of honour appreciation” to thank the fans for their support throughout the season.  Last Saturday they witnessed many empty seats in the stands as large numbers of fans turned their backs on this tradition in protest at the season ticket price rise.  But do you know what?  When Arsenal kick off the new season in August, every one of those 60,000 seats will be filled again.  Somehow the loyal fans will find a way to pay.

 

And so it is with SEEK.  We may not like it, but we don’t have much choice, and come 1st July when the prices go up, we’ll all be there grazing in their paddock as usual.

Jonathan Rice

Jonathan Rice

MD at New Zealand rec-to-rec firm Rice Consulting and co-founder of on-demand recruiter offering Joyn. Recruitment agitator and frustrated idealist, father of two, husband of one, and lover of all things Arsenal and crafty beer.

6 Comments

  • Avatar Aaron Dodd, Mindset Group says:

    Jonathan

    Good post. On the 12th of May, I was one of the first to post my thoughts (via twitter) on Seek’s Australian price hike. Eloquently I wrote;

    ” Seek have announced a 9% price increase “in line with market
    conditions”…euphemism for “we have a near monopoly…like it or get
    f*ed” ”

    This comment was retweeted by several others over the days to come, with many others adding their own spin.

    In twitter converstaion with Greg Thompson of Morgan Consulting later that day I posted this;

    ” @GregThompson13 Will be interesting to see if they increase prices in NZ where Trademe has an equal or bigger market share ”

    Clearly the predictable lower 3% rise in NZ is due to NZ being a more competitive market place. Conversely the exorbitant hike inflicted on the industry in Australia is in effect an abuse of their market power, and is confirmed by Seek’s actions in NZ.

    The recruitment industry is so fragmented and disjointed that a boycott of Seek would not work effectively. There is no industry body that will be willing or able to organise it.

    In  Mindset’s case, we charge on advertising to our clients anyway, and only about 30% of our roles are actually advertised these days anyway. Most cadidates are found via conventional reseearch and/or social networking. In charging advertising to clients we are making it clear to them that it’s Seek’s fault, we are also showing them the email. Our clients are very negative about Seek’s actions, but not Mindset’s as they can clearly see where the fault lies.

    I urge all recruiters to do likewise! tell your clients about Seek’s actions, show them the communications from Seek. It will deflect any negative feelings about the price of rec advertising to Seek not you and clients will appreciate your transparency and openness.

    Aaron

  • Avatar Carey Eaton says:

    Thanks for your article Adam. By way of disclosure I’m the recently-resigned soon to be ex-CIO of SEEK.

    If I could add a couple of points to your comments. The first is to note that the SEEK price rise in New Zealand is the first in several years and is based around rises in the Consumer Price Index. If you take a 3% rise over the years, 

    Given that increase the number of candidates delivered by SEEK to our advertisers over the same period has risen by over 30% – 10 times as much as our price rise – in New Zealand.

    In Australia, the 9% rise is the first in 2 years – 4.5% per year. During those years, the volume of candidates SEEk delivering to advertisers has risen over 80%.

    Anyone who works in the recruitment idustry will also know that during the last reporting cycle, every single recruitment firm who publicly discloses results has delivered a record profit.

    So with recruitment agency profitablity is the highest it has ever been, and SEEK growing its value delivered by 80%, a 9% price rise over 2 years –  that’s a 1.2% price rise per year over CPI.

     
    Recruitment Agencies enjoy price rises every year in line with wage inflation. They just never have to send a ltter to their customers about it.

  • Avatar Athoseby says:

    I have been consistently citical of SEEK’s technology which has moved at a slower pace than their competitors, though, thankfully, ths has fragmented the market a little. SEEk seem to either be unsure of which market they are serving, or are deliberately ambiguous.  They buil their business on the backs of recruiters and now openly court direct employers.  While on one level there is nothing wrong with this, it is disruptive, employers don’t have workflow systems for recruitment, the capacity to properly handle volumes of applicants and rarely have the skills to filter quickly – so they come back to recruiters.  As for us at 1st Executive, we have invested in technology which I believe will remove any real requirement to use SEEK within 12 months, and which we are happy to introduce to other recruiters.

  • Avatar Daniel says:

    Hi Jonathan,
    Just thought I would let you know that we subsequently cancelled our Seek account, and I hope more people do too.  After terrible customer service/contact/treatment, the price hike was the straw that broke the camel’s back.
    Daniel James

  • Avatar Paul says:

    9% is a bit steep. I wouldn’t have too many complaints accepting a 3% increase.

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