Why Online Job Portals Are Not Effective

There are three elements necessary to run a successful online job platform. The first element  is freemium which is based on the many who use its basic  services for free. The next element is called premium which is based on the idea that some users will end up paying for differentiated features. We are going to discuss the third element in isolation , for now lets focus on the first two. Using the first two elements, job portals attempt to convert free users to paid users.To get paid users , the platform needs huge number of free users.No free users equals to no paid users.Just plain old logic.

But how you convince the free users to pay? Not a rocket science again. Tell the free users that if they pay for some premium services, their chances of getting ‘noticed’ by the recruiter increase 10 fold. Here, the catch word happens to be “chances” or ‘probability’. Note that there is no promise but a proposal which sounds like ‘ pay and increase your chances’. The second word is get ‘noticed’.It is easy to understand that getting noticed by a recruiter doesn’t  necessarily translate to getting a job. Paid users are still subjected to probabilities or luck.

Now coming to the third element. The portals need some recruiters who pay for the service. If there are no free users , no database of job seekers then there is no real value proposition for recruiters. Note that recruiters do not differentiate between paid users and free users as long as they have access to the database. Why would they? it would be foolish to assume that people who pay are better than those who do not.There is no concept of freemium for the recruiters though, all recruiters have to pay for the access to the database.

Here is some bad news. The portal is designed in a way that the free users will be always at a disadvantage. The portal wants to tell the free user that, “hey look , it won’t help you to be a freeloader , why not pay and see the magic”. But have you thought what is the probability of screening one from thousands of other resumes? . For the paid users, the service gets only marginally better. To get that into perspective, imagine this hypothetical situation- What if every free user converts into a paid user? the differentiated benefits simply cease to zero . The portal is not acting in the favor of a paid user either, as a matter of fact, every additional premium user incrementally reduces the chances of existing premium users.

So here is how the model unfolds for the various stakeholders:

Portal: Wins

Recruiter: Wins

Users: Are always at a disadvantage. The system is designed for a free user to fail. Their odds of getting noticed are reduced to lower single digits.While paid users can keep their fingers crossed and test their probabilities. Some more food for thought to conclude: why would a recruiter limit herself to the paying segment of users? to maximize the chances of selecting the best, wouldn’t she go for screening the whole database and make the process democratic.