Truth vs fiction for job boards in a downturn.
by
Brett Iredale
October 7, 2008
There has been some interesting commentary over the last few weeks about what is going to happen to job boards as the world markets hit the skids. No doubt there will be a lot more commentary too. A couple of notable examples are:
(1) An article in Shortlist last week ran the headline that "Niche job boards will come to the fore in a downturn".
(2) An article in the Sydney Morning Herald this morning quotes a Deutshe Bank analyst downgrading SEEK from a buy to a hold, predicting that SEEK ads will drop up to 9% over the next 2 years.
The first point is naive and largely just incorrect. The second point has some merit but I don't believe is truly reflective of SEEK's market position.
The reality for job boards is that the strong will get stronger and the weak will get weaker. In a downturn advertisers will be rationalising all expenditure including software, wages, rent and of course advertising. Part of the process of rationalising expenditure will be analysing where your applicants and placements are coming from and spending more of your budget with your successful sources and less money with speculative sites such as new generalist boards and fringe niche boards.
If you have a strong niche site with a strong audience in a market that is still in demand then you will prosper. A good example of a strong niche site that will probably continue to do well is Engineering Jobs Australia - www.engineeringjobs.net.au.
If you are starting a new niche board now or are trying to establish a generalist site over the next couple of years then you really have your work cut out for you. It is not impossible but it certainly won't be easy.
Regarding the Hold on SEEK I think it is probably fair. However following the line of thought that the strong get stronger and the weak get weaker I think dominant businesses like SEEK will come through this downturn in even stronger positions. They might see a temporary decrease in ad numbers and even in revenues however it will have a far greater impact on SEEK's competitors, thereby potentially weakening them and placing SEEK in an even stronger position relative to their competitors. Not many recruiters will be getting rid of their SEEK contracts over the next couple of years but I can guarantee other job sites won't be so lucky.
Another ace SEEK hold up their sleeve is an almost limitless opportunity for new products or services. SEEK haven't needed to innovate or offer additional products over the last few years however a downturn might mean they need to polish off their keyboards and come up with a few new products that they know people are willing to pay for.