Recruiting: Enough to Make a Monster Tremble

Online job-search and headhunting is changing rapidly, and frontrunner Monster is losing ground to LinkedIn, CareerBuilder, and even Twitter

Iannuzzi: While traffic at the site is up, revenue is down Shawn G. Henry

By Matthew Boyle

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Corporate recruiter Elisa Bannon of US Cellular in Chicago used to spend up to $4 million a year to post jobs and screen résumés through the three heavyweights of online job search—Monster (MWW), CareerBuilder, and Yahoo! (YHOO) HotJobs.

But with her 2009 budget slashed to $1 million and 2,500 openings to fill, the wireless carrier's director of talent acquisition ditched the big job boards and instead inked a deal with social networking site LinkedIn. For an annual fee of $60,000, Bannon's team now has access to the network's 42 million members, many of whom are employed—the so-called passive candidates that recruiters covet, since conventional wisdom is the best people already have jobs. Using LinkedIn, Bannon made a hire in 30 days for a position that typically takes six months to fill. "It's a great product at an attractive price," she says.

SHRINKING SHARE

For Monster, a publicly traded online job site with $1 billion in sales and 80 million résumés on file, the growing appeal of LinkedIn to recruiters is just one more headache to contend with. Other social media sites, such as Facebook and Twitter, are also becoming popular destinations for employers. And niche sites such as TheLadders and BlueSteps, both of which target high earners, are gaining followers among recruiters and job seekers alike. While traffic to Monster is up because of the growing ranks of the newly unemployed, its share of job listings among the big three has declined from nearly 40% in December 2007 to 34% in May of this year, according to job market research and analysis firm Wanted Technologies. And the site saw a 31% drop in revenue last quarter. (Monster gets 90% of its revenues from fees it charges recruiters to post jobs and search its résumé database; the rest comes from advertising.) "The big job boards have peaked," says Gerry Crispin of consultancy CareerXroads.

Monster CEO Sal Iannuzzi, a Wall Street veteran who in 2007 came to the top job, is trying to fight back. "I've spent a significant part of my career fixing things," he says. He has slashed $400 million in costs over the past year, even eliminating paper cups in the break rooms. Iannuzzi also lowered prices for some key customers and hired 130 salespeople—a 31% increase—to win back business. In January, Monster unveiled a cleaner site that, among other things, reduced the number of steps required to upload a résumé from 20 to 4. A career-mapping feature shows job hunters how they can transfer from one field to another.

PLAYING CATCH-UP?

Iannuzzi is also trying to improve customer service, moving call centers back from India to South Carolina. Those efforts pleased customers such as Michael O'Connell, a recruiter in Los Angeles whose firm works for Disney (DIS) and Toyota (TM). He was close to scrapping Monster last month but stayed on thanks to better service, a monthly payment plan, and a price cut. O'Connell is also a fan of LinkedIn—"I use it all day," he says—but argues that it's not yet big enough to supplant Monster. And he stopped using TheLadders two years ago when the company began charging recruiters. (Originally, TheLadders charged only job seekers.)

Iannuzzi's next step is to address the one-size-fits-all nature of Monster's site, which gets about 12 million unique visitors a month. It's rolling out "contextual search" technology that distinguishes between, say, someone who went to Harvard and someone who lives on Harvard Avenue. Iannuzzi calls the technology "game-changing," but rivals beg to differ. "It's an attempt to catch up," says Matt Ferguson, CEO of CareerBuilder, which saw its North American revenue drop 27% in the first quarter.

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