Indeed has been part of the recruiting landscape for so long that most companies probably don’t spend much time questioning whether they should use it. The bigger question has typically been how much they should spend.
But Indeed’s evolving pricing model has me thinking about that differently.
Indeed has been moving Sponsored Jobs toward what it calls Pay Per Started Application (PPSA). Instead of simply paying when someone clicks on your job, qualifying jobs are charged when a candidate takes an action to start an application. On the surface, that sounds like an improvement. Paying for someone who actually shows interest in your job certainly sounds better than paying for someone who simply looked at it.
But here’s where I think employers need to pay attention:
A started application is not a qualified candidate.
According to Indeed, a started application can include clicking an Apply button, opening a link to start an application or taking another action that begins the application process.
That’s a pretty important distinction.
Application volume isn’t our biggest problem anymore.
For many employers, getting people to click Apply isn’t particularly difficult. We’re dealing with the opposite problem.
Candidates can apply to dozens of jobs quickly. AI can help create or tailor resumes in seconds. Easy-apply functionality has dramatically reduced the amount of effort required to submit an application. At the same time, recruiting teams are dealing with candidate fraud, applicants who don’t meet basic qualifications and huge volumes of applications that still need to be reviewed.
So if we’re going to pay based on applications being started, employers need to be asking a much bigger question: Are we paying for activity, or are we paying for access to better talent?
Those are two very different things.
The metric that matters isn’t cost per application.
It’s cost per qualified candidate.
If I spend $1,000 and receive 200 applications but only five candidates meet the basic qualifications, I don’t really care that my cost per application was $5. It cost me $200 to produce each qualified candidate.
And even that doesn’t account for the recruiter hours spent reviewing the other 195 applications, scheduling screens, managing communication and determining who is actually viable. Take it one step further. How many of those five candidates were interviewed? How many made it to final interviews? Did we hire someone? Did they stay?
That’s where the real ROI starts to become clear.
Indeed is a tool. It isn’t a recruiting strategy.
Indeed can absolutely produce great candidates. I’ve seen it work extremely well for the right positions, and there are roles where it should absolutely be part of the recruiting strategy. But posting a job and generating applications isn’t the same thing as recruiting.
Recruiting is understanding the position and the business. It’s knowing the market. It’s challenging requirements that don’t make sense. It’s identifying where the right talent works today and reaching out to people who may never apply to your job. It’s also knowing when Indeed is working and when it isn’t.
If you’re continuing to increase spend on a position that isn’t producing qualified candidates, the answer isn’t always another increase in the budget.
Sometimes you need a different strategy.
Companies need to start looking at what they’re actually buying.
This is the part I think matters most, particularly for small and mid-sized companies. Recruiting budgets aren’t unlimited. Every dollar spent generating another application is a dollar that could also be spent actually recruiting someone. There is a big difference between paying a platform for candidate activity and paying for recruiting expertise, sourcing, outreach, screening and someone who is accountable for moving the search forward.
That’s a conversation I think more companies should be having as recruitment advertising continues to evolve. Don’t just ask how much you’re spending on Indeed. Ask what you’re getting for it. How many qualified candidates? How many interviews? How many hires? And how much internal time is being spent managing everything that comes through?
Because ultimately, companies don’t need more applications.
They need hires.
And if you’re spending thousands of dollars hoping the right person applies, it may be time to consider putting some of that investment toward someone who will actually go find them.
That’s the difference between posting a job and recruiting.