Indeed's Changes Sting Small Businesses --- Job-search site's switch to pay-per- application model led to surprise charges

"The largest job-search site has run afoul of the small-business community.

Indeed.com began changing how it charged employers for connecting them with job seekers, pitching the shift as better for small businesses because they could choose which applications to review and pay only for the ones they liked. Instead it created confusion and unexpected costs for many business owners, and now Indeed is trying to minimize the fallout.

Bonanno Concepts, a Denver-based restaurant group, said it cut spending on Indeed by roughly 90%, largely because of the new pricing strategy. 

One pain point: Indeed gives employers 72 hours to reject applications they don't like -- or incur a fee for each application. For some employers, those charges have added up to hundreds or thousands of dollars.

"I don't have someone who is checking that inbox seven days a week," said Jennifer Frye-Brunner, who leads the two-person human-resources team at Bonanno, which has nine restaurants and about 250 employees. A chef or general manager who posts a job Friday morning may not have time to review applications until the following Tuesday, she said. 

"It's really terrible if you need one line cook and get 500 applicants overnight."

Indeed formally rolled out the new approach in October, when the company said it planned to shift all small businesses to the new pricing over time and relegated the option to choose its longstanding pay-per-click pricing option to the fine print. After customers complained, the company changed course, and next month it will begin a test of the new and old models side by side instead of making pay-per-application the default choice.

The company said the new model is part of an effort to help employers hire quality candidates more quickly, while providing job seekers with more immediate feedback. A related offering, aimed at larger employers, will charge companies for each started application.

Raj Mukherjee, an executive vice president and general manager at Indeed, acknowledged the company made missteps in the rollout and said Indeed is working out the kinks. "This is still a product in evolution," he said. "We are taking feedback from customers."

Mr. Mukherjee said the new approach provides value to small-business owners because they aren't charged for applications they reject and can set minimum requirements for the applications they receive. 

He said the company has been offering refunds and credits to employers who complained on a case-by-case basis.

The changes come as hiring has slowed and large companies such as Meta Platforms Inc., Walt Disney Co. and McDonald's Corp. are laying off employees. In March, Indeed, a unit of Recruit Holdings Co., said it expects to lay off about 2,200 employees, or 15% of its workforce, citing a decline in job openings that it expects will last for two to three years.

Competitors also are rethinking their strategies. LinkedIn this year raised the fees it charges recruiters for subscriptions. A LinkedIn spokeswoman said the company periodically adjusts pricing for improvements made to its products. "We built new features to help hirers find skilled candidates faster and improve talent representation," the spokeswoman said.

Indeed has coupled the new pricing model with a service that lets small businesses set "deal breaker" questions to winnow the pool of potential candidates. Yoon Choi, co-owner of Infinia Dental Inc., a maker of dental prosthetics in Germantown, Md., said the new feature saves him time and money. The 72-hour window for rejecting candidates helps limit costs, he added.

Nearly 40% of small-business hiring managers say postings on Indeed and other major job boards are a key source of new hires, according to market-research firm IDC.

Buckeye Innovation, a software engineering and design firm in New Albany, Ohio, said it was hit by more than $1,000 in credit-card charges when an employee missed the fine print explaining Indeed made pay-per-application the default option. Indeed refunded nearly half of the charges after Buckeye complained, said Buckeye President Brad Griffith. He continues to use Indeed but said he would no longer share his credit-card information.

The Better Business Bureau said it received 105 complaints about Indeed between Jan. 1 and April 10 this year, compared with 44 for the same period last year. Many complaints came from small-business owners. A doctor's office said it was charged roughly $2,500 for a month and a week of listings. Another small business was charged $8,000. "This morning after a weekend away, I woke up to a $5,000 bill!" a third small-business owner said.

Mr. Mukherjee said in addition to offering refunds and credits, the company added a feature that allows employers using the pay-per-application model to set a limit on how much they want to spend. In February, Indeed capped charges at $1,000 per job posting for employers who don't set their own limit.

Some employers say another source of confusion is the per-application charges, which can range from less than $10 to $95 or more.

Mary Jo Finley, HR and recruitment lead for Partner Forces, a government contractor, said she was charged $30 per applicant for a posting for a cybersecurity consultant and $77 per application for a senior analyst. The position with the lower per-applicant charge required fewer years of experience but called for an additional certification and carried a slightly higher salary range.

Indeed says it uses dynamic pricing to set per-applicant charges, weighing job title, location, experience, demand and other factors. Requiring more years of experience typically reduces the number of job seekers, resulting in a higher per-application cost, Mr. Mukherjee said. Roles in healthcare and technology tend to be the most costly, the company said.

Matt Matone, co-founder of Matone Counseling & Testing in Charlotte, N.C., said he likes the idea of paying per application, but is frustrated by the cost because of the high number of no-shows.

Paying $95 per application for a Ph.D. psychologist is particularly painful because the number of people who show up for interviews and are hired is so low, said Mr. Matone, whose most recent Indeed bill totaled $600.

Mr. Mukherjee said Indeed doesn't guarantee that candidates will show up for an interview regardless of the pricing model customers choose. He said he reviews about 10 customer complaints each morning to get a better feel for pain points and other concerns. "We have not fixed everything," he said.

Peter M. Zollman, founding principal of AIM Group, a recruiting-marketplace consultant, said Indeed's changes are a step in the right direction, but the way they were implemented wasn't ideal. He said he gives the company credit for changing course. "They got hammered and they took that to heart," he said." [1]

1. Indeed's Changes Sting Small Businesses --- Job-search site's switch to pay-per- application model led to surprise charges
Simon, Ruth.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 01 May 2023: B.6.