Recruiting: Enough to Make a Monster Tremble

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Meanwhile, on June 25, HotJobs launched a "pay-per-performance" product whereby recruiters pay only for qualified candidates.

Unlike listing jobs on the big boards—a process that one recruiter describes as "post and pray"—companies can now choose sites with more distinct services. Along with specialized sites such as TheLadders and Dice, which focuses on technology and health care, there are job search engines such as SimplyHired and Indeed, which trawl the job boards and corporate employment sites to grab every available posting. The employment sections of corporate Web sites have also become more sophisticated. And craigslist has cornered the market for lower-paying jobs with free postings in most areas. By one estimate, there are now 50,000 job sites in the U.S. alone and an equal amount abroad.

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Perhaps the biggest threat comes from LinkedIn, a six-year-old social networking site with a distinctly professional bent. In January the privately held Mountain View (Calif.) company consolidated the various tools it had been selling to corporate hiring departments into a suite of services called Talent Advantage, which now boasts more than 1,000 customers, double the number it had last year. For $7,000 per user at a client company, hiring managers get a customized Web site, or "dashboard," and souped-up search capability so they can reach out to qualified candidates, individually or in groups. (Recruiters can also buy job postings.) The network even "pushes" candidates to employers who meet preset criteria. While some LinkedIn members may not want to hear from a recruiter, they'll often send the message along to someone else in their network. "Finding passive candidates—that's our sweet spot," says David Hahn, LinkedIn's director of product management. Recruiters agree. "We could not believe the candidates we got" from LinkedIn, says Scott Morrison, director of global recruiting programs at software giant salesforce.com (CRM). "This is a gold mine for us."

Twitter is also gaining traction in the realm of job search. Kara Nickels got an e-mail one morning from an insurance industry client that needed 40 lawyers immediately for a big document review. The legal recruiter quickly sent a message—or "tweet"—to her 150 followers, which was re-twittered by legal blogs that follow her. By the time she arrived at her Chicago office, Nickels had 10 replies and filled every post by lunch. "With job boards it takes a couple days before people look," she says. "But Twitter is immediate. I'll still use the job boards, but if you don't use social media now, you're behind the curve."

With that kind of competition, analysts are skeptical that Monster can retain its top spot. "I'm not convinced [Monster's] new projects are going to revolutionize its portfolio to the point where users and recruiters think about Monster in a new light," says William Morrison, an analyst at investment bank ThinkEquity Partners. "If the job boards don't innovate more often and more quickly, they are going to have a very difficult time growing their businesses over the next several years."

Iannuzzi knows this. "We are not done," he says, hinting that acquisitions could be forthcoming. But even Monster's architects see the writing on the wall. Bill Warren, the founder of an early job board that morphed into Monster, is now executive director of the DirectEmployers Assn., a consortium of corporate employers. He's partnering with the owner of the ".jobs" domain and will launch job sites under that domain later this year. Says Warren: "The days of the big, expensive job boards are over."

Boyle is deputy Corporations editor for BusinessWeek.

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