16 January 2012

SEEK's new 'executive' pricing: smart or monopolistic?

Just as everyone was winding down for the summer break, the undisputed #1 Australian job board, Seek, decided to liven things up a bit with a pricing announcement that has made a few waves.

Having axed Seek Executive at the beginning of October 2011, a decision was taken to incorporate a $150k job tab into the flagship Seek site and charge a 25% premium for the privilege of having jobs listed within this tab.

As explained by a Seek Account Manager in an email to one of their recruitment agency clients:

The $150k loading is 25% of your contracted job rate. This loading only applies to high value roles, placed over $150k salary bracket (or $75 per hour) and are featured on the $150 + Jobs Tab. If your salary bracket goes to $149,999 then this additional loading will not apply and your ad will be featured on the main part of the site.

This change reflects not only the retiring of SEEK Exec, where we removed the split in the market, but also that we are aligning our prices to value.

As one IT recruitment agency executive succinctly put it in response:

SEEK have systematically manufactured this extra cost. As you know, some time ago SEEK made salary or contract rate input compulsory; recently disbanded the "Executive" category was clearly not making enough money for SEEK - as most senior/executive roles were simply being advertised and found through the standard, less expensive "General" category.

SEEK was obviously struggling to validate the value add brand of "Executive" and therefore get enough advertisers to pay the extra cost so simply decided to take the choice away from advertisers, change the structure and blatantly up-charge their customers. This is a complete rort and wholly a function of their industry monopoly.

And another: 

Why is $75 per hour considered the same as $150k a year? It isn't even in the same league, $75 x 8 hours x 210 = $126,000. 210 days (at a push 220 days) is considered a full 'working' year. $150k is the equivalent (on a 12 month contract) of between $85 - $89 per hour so Seek have got the maths wrong from the onset. 

What happens if the contract role is for 2 weeks? 2 Months?  

Does this premium mean we get a better looking advert, more responses, better responses? Can we have a refund of the 25% if it results in the same applicants or no suitable candidates? Does the 25% buy us anything different - stats? Does it cost more to produce these adverts (no of course)? What do we get for 25% extra?

It was interesting timing in that Seek announced this change just before Christmas as owners and Seek Account Managers/Executives (not to mention recruitment news sites) were all heading off on holidays.

Is this smart commercial practice or monopolistic behaviour?

5 comments:

  1. Having worked at Seek myself for 5 years I can tell you that positioning Seek Exec was always a battle and one that the business so it still seems now has never really solved. I can agree that a higher paid position is of more value and the candidate themselves attract a premium but Seek are selling ad space, the same ad space that the general part of the site functions on. With no added value other then a tab which already existed. It does seem though that the price of an Exec ad has come down (correct me if I'm wrong) so the attack on Seek may not really be that warranted. In saying that Seek do own the active candidate audience as a whole but at the level of $150k+ are these candidates all that active and if they are, are they using Seek or their own network or LinkedIn?
    Seek's move to $150k+ is quite clever really. Removing the Exec component has meant that I.T sales roles for example can now be charged at a premium and I can bet that Seek will be monitoring this closely.
    But if you don't like it I guess you could use CareerOne or MyCareer, oh wait, do they even still exist????

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  2. Smart? No don't think so. Seek know they are holding the upper hand as far as online job advertisement is concerned, and are seeking (pun intended) to exploit it as much as possible. Aside from the $150k limit, I am confounded as to why they have set a contracting rate at $75/h. With IT being a significant repository of contract labour, and with a fair majority of intermediate roles (forget senior roles) at that rate, it is staggering why they have decided to set the limit at this relatively low figure. It smacks of upping revenue - nothing else.
    I predict Seek will lose market share to the likes of LinkedIn and others as savvy recruiters and employers move away from this form of advertising.

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  3. Anthony Sochan17/1/12 11:12 AM

    As a company we are moving away from seek anyway and would rarely use seek exec. You could say we are neither here nor there about the service. To answer your question if you have dominant market share you could argue it is smart to be monopolistic. Their style of business may only have another 3-5years or profitability so they owe it to their investors to cash in whilst they can.

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  4. Been using seek for years. All of a sudden I have to pay more for something I've been doing the whole time. i.e pay a subsidy for a 150k + role. When it comes to Sales the OTE will very often be more than 150k yet the base is less and the OTE is not guaranteed! How can recruiters standup to Seek and not tolerate this bullying!

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  5. We need to get this on today tonight or some other equally amateur current affairs program to cause an uproar. Seek are shameless

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