https://www.quora.com/How-does-ZipRecruiter-make-money

How does ZipRecruiter make money?http://pando.com/2014/07/03/bootstrapped-and-massively-profitable-ziprecruiter-steps-out-of-the-shadows-to-reveal-its-true-might/

UpdateCancel

ad by Toptal

How can I hire a great freelance talent over mediocre ones?

There are several methods that can help you find the right freelancer for your project:

Use a curated talent platform. Pre-vetted talent networks like Toptal have refined process...

(Continue Reading)You dismissed this ad.

The feedback you provide will help us show you more relevant content in the future.

Undo

Answer Wiki

3 Answers

Pradeep Chauhan, helping job-seekers find the best staffing recruiters

Updated Mar 18, 2018 · Author has 100 answers and 348.2k answer views

Here’s what I think their business model is.

ZipRecruiter’s Target Market is Small BusinessesZipRecruiter (Zip) caters to small businesses that may not have the brand to attract a lot of candidates or the sophistication or recruiting resources to learn about job boards, ATS, etc.

These businesses just need a few people intermittently and although their budgets are small, they constitute the bulk of hiring activity in the US. According to Zip's CEO they target the 5m small businesses in the US that have <500 employees and constitutes half the US workforce. This segment primarily uses Craigslist.org, staffing agencies, their local newspaper, mailing lists, flyers, etc.

ZipRecruiter’s Unique Strategy

All job boards are essentially two-sided marketplaces that connect job seekers to hiring managers at customers. For a marketplace to be successful, it needs to create a large enough demand (jobs), supply (candidates) and liquidity (people getting matched to jobs). In the face of really strong incumbents, ZipRecruiter had to come up with an alternate model of creating supply and demand to existing job boards. For example, Indeed did this by aggregating demand by making all jobs accessible on one platform. LinkedIn did this by aggregating supply - by changing behavior and getting everyone to create and post their resume online.

Building Demand (Getting job requirements from employers)

Zip offers small businesses a very attractive and unique proposition. Their proposition is that for $129/month, they can get your job advertised on 50 different job boards. There are three main advantages that ZipRecruiter has

Post Once - Distribute EverywhereCustomers only need to post once and ZipRecruiter takes care of distributing their jobs to all the relevant job boards.

Low and Simpler Price Model vs. Monster, Indeed, etc.Zip charges a business $129/job compared Monster’s single job post for $300 or Indeed’s per

click pricing which is complex, but most small businesses don't know about Indeed ppc and the high cost of Monster.com scares most small businesses away.

Better Applicant Diversity from Multiple Job BoardsIt is also advantageous to get a variety of applicants from various niche job boards vs. a single major job board because different people tend to go to different job boards, especially for niche skills.

Building Supply (Getting the job seekers)

Zip is a not a popular portal by itself as they don't have content like employer reviews, salaries, forums, etc. which is how Indeed and Glassdoor get their traffic.

Get Traffic from Other Job Boards

They get their initial traffic by cross posting their customer’s jobs to free job boards or by sponsoring their jobs on Indeed, etc. (update-in the old days) As a job board, you could get traffic from Indeed starting at $0.15/click, so if you have a decent conversion rate. i.e. you make more money on a single applicant (>$0.15) than the cost of acquisition ($0.15), you have a case for arbitrage. Something Indeed did with Google long ago.

Image- Indeed allows other job boards to sponsor jobs (see the first sponsored listing below the search box)

Converting Visitors into Subscribers for Job AlertsWhen Zip gets a new visitor searching for job on their site, they immediately snag their email, location and title which is pretty common on most job boards now. This gets them a very large email list of targeted jobseekers that they can send job alerts to with their custom alerts.

Snag Job Seeker’s Emails from Applications tooFor candidates that land on a job page through a link, they have an easy application process which also snags their email and resume.

Build Targeted List of Job SeekersThen they quickly get the candidate to apply for some more similar jobs with their 'One Click Apply'. Every extra job the candidate applies to, reduces the cost of candidate acquisition and increases their margin.

Build Resume DatabaseThey also get the candidate's permission to add their resume to Zip's database- which they are

building up (4m right now) and can monetize from recruiters that would rather search a resume database.

Matching Supply & Demand

This is where Zip's magic starts.

Once they have managed to get an active job seekers email, location and the type of job they are looking for (they have 3M subscribers now), they blast them with over 15m emails/day with targeted jobs 'scanned' from 200 other sources.

This satisfies the active job seeker who values this free service and gets Zip even more clicks, more applicants and more margin. The employers are satisfied by the number of applicants and benefit from getting a good mix of candidates for a fraction of the cost.

For all this to work though, Zip needs to have a pretty good matching algorithm, because if the quality of resumes goes down or the jobs being transmitted to job seekers are off- they will quickly get replaced by some other job-alert service.

So how does ZipRecruiter actually make money?Once Zip gets a customer to post a job, they just need to produce enough resumes to justify the $129 price tag. They have probably figured out the response rate at which the client is satisfied or delighted, the probability of finding resumes for that job, etc. and their algorithms ensure every job is getting sufficient exposure and producing an appropriate flow of relevant applicants.

If they are not able to on their own, they have the budget ($129) to leverage sponsored jobs on indeed.com, or other sources. They may even decide that the job is unfillable (say a data scientist

is a rural town) in which case they don't spend any money at all and either get to keep the $129 or have to refund it completely.

Lets take an example where they know they can satisfy the customer - Say they need to produce 50 applicants for a customer service job in a big city and they see 30 applicants applied from the free jobboards, they now just need to get the balance 20 applicants from sponsored jobs (Indeed, etc.). This would cost them $40 if they pay $0.50 a click and have a 25% conversion rate on their site (80 clicks x 25%).

$129-$40=$89 gross profit margin/job

What Zip is doing is not new compared to other job boards, but their choice of strategies in selecting a market, tactics and execution is what makes them successful.