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.
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?