Job site Indeed is rethinking its “pay-per-application” system for employers following complaints from businesses stating the service caused a slew of confusion and unexpected costs, The Wall Street Journal reported.
In October 2022, Indeed announced that it’d be switching from a pay-per-click pricing plan (paying when applicants click on a job ad) to a pay-per-application model (when a candidate starts or submits an application). The shift was intended to improve the quality of candidates and allow small businesses to only review (and pay) for applications that seemed promising. However, the new model led to some businesses incurring hundreds — and in some cases thousands — of dollars in unexpected costs.
One problem for employers with the pay-per-application model was that they had up to 72 hours to reject applications, otherwise, they’d be required to pay a fee per application.
“I don’t have someone who is checking that inbox seven days a week,” Jennifer Frye-Brunner, director of human resources at restaurant group Bonanno (which has cut spending on Indeed by nearly 90% since the new pricing model took hold), told WSJ. “It’s really terrible if you need one line cook and get 500 applicants overnight.”
Buckeye Innovation, a software engineering company based in Ohio, also told the outlet that it faced over $1,000 in charges after missing the fine print stating Indeed made the pay-per-application model the default. While Indeed refunded the company for about half of the charges following the complaint, Buckeye president Brad Griffith told the WSJ that he would cease sharing his credit card information with the job site despite still using the platform.
Now, Indeed is backpedaling on its pay-per-application model and announced a new pay-for-results system to mitigate the confusion and unexpected costs experienced by businesses since the former model took hold.
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The new pay-for-results model will not charge employers for applications rejected and offers an option for employers to set a limit on how much they want to spend. Additionally, businesses can set predetermined requirements for candidates and automatically reject applications that don’t meet the company’s needs.
“As a company whose mission is to help people get jobs we want to get paid when we deliver qualified candidates, which means opening up new payment options that fit the needs and preferences of employers,” said Indeed CEO Chris Hyams in a statement.
The Better Business Bureau, an organization that aims to minimize deceptive business practices and prevent fraud, told the WSJ that it received 105 complaints about Indeed from January to mid-April this year — more than double the recorded 44 complaints for the same period in 2022.