On the recent investor call held by Ziprecruiter there was a lot of talk about how layoffs will affect their business going forward. On one hand revenue is going to slow down, but on the other hand, job seeker activity will go up. Its part of life for any job board.
So it makes sense what Ziprecruiter has been doing with all those ad dollars going into building a consumer brand. They are priming the pump and building their own database of seekers to rely on should massive layoffs come in 2023.
I took the liberty of transcribing this exchange between an analyst and ZipRecruiter’s CEO;
An analyst asked the following:
I’m gonna try left field question, which is I think we’re likely to see a fair number of layoffs from sectors of the economy, that there were a few of ’em that really benefited from the Covid crisis. And I’m thinking about online advertising and online retail, maybe some subscription businesses. And then that’s where you’re gonna start seeing pretty material layoffs. I think today’s news from Facebook (layoffs) is just an example of that and I think we’re gonna see more of that. So just talk about that. I’m trying to figure out what that means for ZipRecruiter your exposure to that on the job seeker side. I think that’d be really positive. Just talk about if that’s material to your business.
Ian Siegel, CEO responded by saying;
I think the answer to that question is similar to the answer to the previous question in that we’re entering a period of labor market rebalance. Basically the onset of Covid when the economy reopened shortly thereafter and all these businesses had to hire back, there was an abundance of jobs and very few skilled job seekers available to do the work. It was a golden age for job seekers, and it was very tough to find talent. Now we’re entering a period where there’s gonna be less jobs, and it’s gonna happen across a number of skilled categories as well as a number of unskilled categories.
And so effectively every sector of the economy is gonna feel the pain, as it were from a job seeker perspective. Precisely ZipRecruiter. This is actually in some ways a silver lining boon because what it does is it puts more talent into our marketplace, which really lets the algorithms that we have been training and retraining and optimizing really flex what they’re capable of.
Fundamentally, what our service is … is a matchmaker. So the more inventory it has to match for employers, the more opportunities it has to bring the right employer together with the right job seeker, the more constructed stuff. And we feel really good about the awareness we’ve created with job seekers over the last couple years. Again, over 70% awareness, which pushed us in rare air with the elites inside of the category. And we think there’s gonna be a pretty sizable wave of increased job seeker activity over the next 18 months, and we expect to be one of the recipients of that.
Our business looks like the US economy, both on a geographic basis, on industry basis, on a job skill level basis. So we have a good mix. Tech is a good size chunk, but so is healthcare, so is travel, leisure, construction, et cetera, et cetera. And so what we see right now already at this phase of the cycle is that tech is a little weaker than healthcare as an example which is a little stronger in the current environment.
IF the economy tanks next year your sales are going to go down. BUT your job search traffic is likely to skyrocket. This is a critical time to prepare for by making sure your signup process is optimized and you are able to convert as many candidates into registered profiles as possible. Your goal should be to build up that side of the business as much as possible while we wait for hiring to rebound.
Right now hiring slowdowns are affecting the tech and advertising sectors the most. We have yet to see it affecting things like healthcare, hospitality or manufacturing. So it could be a soft landing in 2023 but start to think more about creating content that job seekers will want.
They are coming.