Talent Talk: Australian Online Employment Classifieds Market

Frost & Sullivan released new data on the Australian Online Classifieds market.  I asked Phil Harpur, Senior Research Manager, five questions.

Q. Revenue in the Australian employment classifieds market dropped by 21% in 2009.  Why is the drop so drastic?
A maturing market strongly linked to macro-economic factors.  Of the major online classifieds segments, employment has proved most vulnerable to economic conditions, with the volume of adverts directly linked to employers’ willingness to hire staff. Employment was by far the worst hit segment by the GFC.

Q. What is your reading of the current employment classifieds market? What are the likely numbers for 2010?
A rebound in the market is predicted for 2010 as employment conditions continue to improve, however the market is not likely to fully recover from the impact of the economic downturn until 2011. Growth for calendar year 2010 for the total online classifieds employment market of around 7% is predicted by Frost & Sullivan.

Q. Online classifieds cannibalised the print market, do you think social media is doing the same to online classifieds? How serious is the threat from social media?
A very  interesting question. Organisations in Australia are now increasingly using social networking sites such as Linkedln, Twitter and Facebook to source staff. These social networking sites are providing employers with alternate avenues of sourcing candidates directly, thus bypassing the traditional online classifieds channel and creating a structural change in the online classifieds market.

So, there is no doubt that are strong parallels here with the migration from the print to online channels that has been occurring over the past decade in the online classifieds market. However I see social media as becoming more of a niche and complementary channel that will co-exist alongside the traditional online classifieds channel. There will be some cannibalisation, but nowhere near to the extent seen in the print classifieds market.

Q. You are predicting that by 2013 the employment classifieds market will reach $238 million, which is not a lot considering the market is currently worth $172 million, is the employment classifieds market maturing?
The employment sector is expected to reach only $238 million by 2013. CAGR for 2009 – 2013 is predicted by F&S to be only 8.5% for employment, a substantially lower rate than the previous 5 years, and indicative of a market that is now reasonably mature.

Q. What do you think job board operators need to do to stay competitive?
In 2010, with the state of economy improving but employers still cautious about recruitment, online recruitment sites will need to focus on the delivery of quality, rather than quantity of services, at a low cost per service and cost per placement. Recruitment websites that deliver quality candidates at a low cost will be able to retain the recruiters with smaller advertising budgets. Even more employers will use job boards directly rather than engaging recruiters as it becomes easier to source quality applicants directly. Websites that are highly visible, easy to use, and cost effective, will no doubt be the winners in this market.

Phil is a Senior Research Manager for Frost and Sullivan’s ICT Practice, where he covers the Digital Media sectors for the Australia and New Zealand market, including both the online advertising and e-commerce sectors. He has 15 years of ICT research experience as a market analyst. His most recent position was Senior Analyst at BuddeComm where he covered a wide range of areas in the telecoms sector for the ANZ markets. He has also held a number of ICT market analyst positions at Gartner/Dataquest over a six year period as well as co-founding an independent Research Consultancy in the ICT space.