LinkedIn Recruiter - fantastic source of talent or a blatant waste of money?

LinkedIn Recruiter - fantastic source of talent or a blatant waste of money?

As a startup, we have recently used the LinkedIn recruiter to try and find talent.  We have used LinkedIn to find 5 different roles over the last year.  To date, the posting of jobs have had mixed results but the trend appears to be that the quality of candidates, the cost and overall success are in significant decline.

To start, let’s have a look at some basic data from each of the roles posted.

Applications for Roles posted on LinkedIn
Table 1: Applications for Roles posted on LinkedIn (Source LinkedIn stats for each role, invoices and omologist analysis)

The second column shows the end month for when each role was posted on LinkedIn.  We should note that at the time of posting, the Feb-17 role still has 11 days to run so the final numbers for organic applicants may vary, however, as we don’t plan to pay for any additional sponsored ads, the numbers for sponsored applicants will remain unchanged.

Also, it is worth mentioning that as we are a startup, the roles we advertised did not include a salary but were offering equity (not a specified amount) and Co-Founder status in lieu of salary.  Even so, you can see from the numbers above that the number of applicants in most cases were similar to that of “similar jobs” on LinkedIn.

It would appear LinkedIn may try to suggest that each “similar job” is based on the title, job function and industry (ie Senior Software Engineer) as salary is not an input.  However, given all but our last role had the exact same number of “similar job” applicants at 39 we can only assume this may actually just be a broad average as each of our jobs advertised were different and we suspect we will end up with 39 for the final job when it finishes on Feb 18.

The total number of applicants has varied for each job and it would seem to be a function of LinkedIn spamming the job application to anyone with a vague relationship to the job title, function and industry leading to reduced quality.  The spamming (they would argue matching) is getting broader with the number of job impressions increasing to 0ver 45,000 in our 5th role.  LinkedIn seems to confuse matching with quality.  If a candidate is in Russia and my job location is Sydney Australia then that does not make for a perfect candidate, though Linkedin seems to think so.

Most important in this first table is the number of applicants in our stated location.  In each job advertisement, we stated that we only want candidates in Sydney Australia.  From the percentage, despite clearly stating this in the ad, the majority of applications are from outside our job location.  Interestingly when we posted our first ad back in Mar 2016, LinkedIn did not provide the feature to filter out candidates outside of the stated location for the role.

However, with the last three roles, this feature has been available which enables you to hide all jobs automatically outside the job location. As you can see in the example below, LinkedIn do actually ask you for the location of the role.  However, given they do ask for the location why do they then spam the role outside the job location?  In theory, given you provide the location for the job is should be the case that the applicants outside the job location should not see the ad and therefore the number of applicants outside the job location should be minimal rather than the majority (60% or more in three of our examples).

 

Example of first page of job posting page.
An example of the first page of job posting page.

Moving to Table 2 below, we have a look at the data around the numbers of views of each of our roles both organically as well as for those sponsored.  For those not familiar with sponsored ads, these are job ads that in addition to paying for the ad on LinkedIn, you pay an additional amount per click with a designated total budget.  The minimum per click is $1.00 that you can set it to, however, in 4 out of 5 cases ours ended up being below $1.00.  They usually they recommend much higher per click of course, usually starting at $2.00 and I believe the minimum budget is $50 (unable to recall exactly if it was $50 but maybe $100).  However, once you have started a sponsored ad and if you wish to add more to the campaign you can for a minimum $50 each time.  Most interesting is that LinkedIn promotes the “Sponsored Job” that will deliver the best results because it highlights the job to more “relevant” candidates, however, our view is this is not the case with the number of sponsored applicants being low and not always in the job location.

Once you have started a sponsored ad campaign if you wish to add more to the campaign budget you can for a minimum $50 each time.  Most interesting is that LinkedIn promotes the “Sponsored Job” that will deliver the best results because it highlights the job to more “relevant” candidates, however, our view is this is not the case with the number of sponsored applicants being low and not always in the job location.

“Sponsored Jobs is a pay-per-click solution that enables you to highlight your jobs in front of more relevant candidates by bidding for prime placement in the jobs presented to them. We automatically match profile information with content in your job description and put your Sponsored Jobs in front of the right candidates, even if they’re not actively searching for a new position.” –

LinkedIn Sponsored Jobs
LinkedIn Sponsored Jobs –  source https://www.linkedin.com/help/linkedin/answer/33127

 

Table 2: Job application activity (source LinkedIn Stats, Invoices and Omologist analysis.
Table 2: Job application activity (source LinkedIn Stats, Invoices and Omologist analysis)

In table 3, we show the disappointing results of a sponsored ad relative to an organic ad.  In the case where applicants are from any location in the world, organic ads generated applications at 11.2% using a simple average, verse views of just 1.8% for sponsored ads.  Even if we only look at those applications from our stated job location, the number of applicants averaged 4.2% of views vs just 1.8% for sponsored views.  I am sure LinkedIn may try and pose the argument that somehow the applicants from sponsored views were higher quality.  However, the case is, 7 out 10 applicants that we received over all the jobs we advertised were not in our job location.   Of the remaining three, all did not meet our criteria for the roles.

 

Table 3 - Views of ads relative to the number of applicants (source - LinkedIn stats, omologist analysis)
Table 3 – Views of ads relative to the number of applicants (source – LinkedIn stats, omologist analysis)

In Table 4, we break down some of the costs.  If you run just an organic ad, the costs are the column “Ad Costs” in table 4.  If you choose to do a sponsored job then in addition to the Ad cost you will have what you decide to spend on a sponsored job.  As you can see from the table 4, the amount we spent on a sponsored job varied from $50 to $220 without a significant difference in cost per sponsored view except in role 3 which was significantly higher.  Cost per organic view is significantly lower with a simple average of 1 cent per view Vs 89 cents for a sponsored job ad with zero benefits despite the claim from LinkedIn that I should get my job ad in front of more “relevant candidates”.

 

Table 4 Shows the costs and relative costs of Job ads and sponsored jobs (Source - LinkedIn Stats, invoices and Omologist analysis)
Table 4 Shows the costs and relative costs of Job ads and sponsored jobs (Source – LinkedIn Stats, invoices and Omologist analysis)

Taking this the next step and looking at the data per applicant in Table 5.  The cost per applicant is obviously significantly higher for a Sponsored Job.  The simple average comes out at $61 per applicant Vs $5.71 for organic applicants or based on those organic job hunters in our location at $14.87.  The cost of a Sponsored Job applicant Vs an Organic applicant is 410% higher for ZERO improvements in the quality of the candidate.

Table 5 Cost per applicant - Sponsored Jobs Vs Organic Applicants - Source LinkedIn Stats, invoices and Omologist analysis.
Table 5 Cost per applicant – Sponsored Jobs Vs Organic Applicants – Source LinkedIn Stats, invoices and Omologist analysis.


We did raise the following concerns with LinkedIn.

  • The fact that there are so many applicants outside of our job location – organic and sponsored.
  • That the Sponsored Job failed to provide any improvement in the quality of the candidates.
  • That sponsored job ads should be targeted geographically based on my choices.  For example, if we only want to find a candidate in Sydney Australia, then we should be able to target the advertising spend on the sponsored job to just candidates in Sydney Australia.  Having an applicant from the US click the sponsored ad and apply is a waste of our money.

Our recommendations for employers

  • Do not use Sponsored job ads.  They are a waste of money and do not improve the quality of candidates.  They simply relieve you of significantly more funds than you need to.
  • If you have used LinkedIn sponsored job ads, review your data and raise your concerns with LinkedIn.  They seem to be choosing to ignore the message for now, but if a great number complain we just might see some change.

We did ask for a refund but they promptly tried to argue a range of different and false arguments which was extremely disappointing.

Personally, we see there is a lot of potential here to actually have the capability to source high-quality candidates.  However, the problem is that LinkedIn chooses to ignore the opportunity because they can continue to earn revenue from suckers like us who gave Sponsored Jobs a crack on the assumption it would generate a better quality candidate.  Until there are a number of fixes to LinkedIn recruiter it will be a mediocre candidate source at best.


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