Disadvantages of Online Recruitment (Plus 4 Reasons Recruiting Agencies Fail)

May 31, 2024

The disadvantages of online recruitment are:

1. Overwhelming volume of job candidates 

2. Generic process, no personal interaction 

3. Harder to distinguish lies from facts 

4. Very dependent on technology 

5. Risk of scammers and fraudulent applicants 

6. Limited candidate access 

7. Expensive systems 

8. Logistical issues 

9. Operating costs quickly add up 

10. Hard to measure effectiveness 

11. Changing demand trends 

The online recruitment market is steadily growing at an 8.20% rate annually. 94% of job seekers use their phones to apply for jobs. It's a growing trend. There are many obvious advantages of online recruitment. However, the downsides should also be considered. 

Two years ago, people already think it's pointless to apply through online channels. Some are unsure if companies read the resumes submitted through online recruiting platforms. The biggest downside of the online recruitment method is the volume of applicants. Competition is tougher. So, it's common for newbies to get rejected for someone more experienced. 

AI innovations in employee recruitment also raised screening challenges. This guy pointed out that robots do the resume screenings, not humans. Potentially good candidates get sifted out because they don't meet the criteria. These are just some disadvantages of online recruitment that job seekers deal with. 

This article tackles 11 of the most common disadvantages of online recruitment. The top 4 reasons why recruitment agencies fail are also discussed. I'll share 5 relevant statistics that negatively affect the online recruitment market. Recruitment frauds are also covered, plus 3 practical ways to spot them. 

What are the Downsides of Using the Internet to Recruit Applicants for a Job?

Overwhelming Volume of Job Candidates

Online job postings are open to all applicants. It has a global reach, so employers get an overwhelmingly high volume of applications. This includes many unqualified candidates. Companies receive about 250 resumes per job post, but only about 4 to 6 will get interviewed. 

Generic Responses, No Personal Interaction 

Online recruitment often lacks personal interaction. This makes it hard to assess candidates and how well they fit into the organization. The lack of personal touch leads to a mismatch in employer-employee expectations.

Harder to Distinguish Lies From Facts  

Online recruitment puts employers at risk of scammers and fraudulent applicants. A CareerBuilder survey found that 75% of HR managers have caught a lie on a resume. This problem has only gotten worse because of the accessibility of online applications. 

Very Dependent on Technology

Another downside of online recruitment is its heavy reliance on technology. Technical issues like server downtimes or software bugs will disturb the recruitment process. It may even cause delays, data, and financial losses. 

Risk of Scammers and Fraudulent Applicants

The anonymity of online applications places employers at risk of scammers. Low barrier to entry attracts fraudulent applicants who want to exploit companies. Automated systems may not detect fake information that humans could catch in a face-to-face review.

Limited Candidate Access

Not everyone has equal access to digital platforms. Some are digitally illiterate. Online recruitment can discriminate against candidates who have poor internet access and computers. As a result, great candidates from low social status might not have the chance to apply. 

Expensive Systems

It’s expensive to maintain sophisticated applicant tracking systems (ATS). Running and managing recruitment software can also be costly. Most ATS require subscriptions or licenses. Small to medium-sized companies could spend from $10 to $30 per employee per month for a basic ATS.

Logistical Issues

It’s challenging to schedule interviews with applicants in a different time zone. This can lead to scheduling conflicts and delays in feedback. Overall, the hiring process may take longer than usual. New hires should be integrated into the company without physical interaction. 

Operating Costs Quickly Add Up

Ongoing expenses on software upgrades and subscriptions quickly add up. It includes HR staff training. This significantly increases the overall cost of online recruitment. 

Hard To Measure Effectiveness  

It's hard to track and measure the effectiveness of online recruitment strategies. Determining the return on investment (ROI) requires robust analytics. Not all companies will be able to implement it. 

Changing Demand Trends

Online recruitment must continuously adapt to changing job market trends to maintain the advantages of online recruitment. What works today might not be effective tomorrow. Recruiters should always be updated with the latest strategy and adjustments. 

5 Relevant Statistics That Negatively Affect Online Recruitment

  • A study by CareerBuilder found that 42% of employers receive a large number of unqualified resumes through online recruitment platforms.  
  • The FBI has reported that online job scams are on the rise. Thousands of job seekers fall victim to fraudulent job postings every year. Singapore reported  9,914 job scams in 2023. This number is up by 52.7% compared to the previous year. 
  • 57% of job seekers feel that online recruitment processes are too impersonal.  This is according to a survey by the Society for Human Resource Management (SHRM). 
  • MIT and Stanford University found that AI and algorithms show biases. They are potentially discriminating against certain demographics. 
  • Pew Research Center found that 21% of adults in the U.S. do not use the internet. This is a limitation of online recruitment because not everyone can apply for jobs online. 

What are the Disadvantages of Using the Internet to Find Jobs?

  • The online job market is very competitive. With the large volume of applications, it’ll be harder to get noticed by employers. 
  • It’s harder to showcase unique qualities and personalities online. 
  • Finding legitimate job opportunities can be tricky. Scammers can post fake jobs to get personal information from applicants. 
  • Technical issues with online recruitment can delay the application process. 
  • Job seekers should be digitally literate to apply for jobs. Those who have little digital knowledge will get left behind. 
  • Online applications expose candidates to cybersecurity risks and data privacy breaches. 
  • ATS automatically filters applications based on specific keywords and criteria. This automated system can wrongly disqualify some candidates. 
  • Misleading job descriptions may cause misunderstandings between the employer and the new hire. 
  • Online recruitment is prone to fraudulent job postings and scams. 

What is a Recruitment Fraud?

Recruitment fraud is a type of scam where fraudsters pose as legitimate employers. Their goal is to exploit job seekers for money or personal data. Fraudsters may ask for information like social security numbers and bank details. They may also ask for payments for supposed background checks or application fees. They may even ask for money in exchange for job placements. Some ask candidates to perform tasks without the intention of paying them. 

The modus is to post fake listings on legitimate websites. They send unsolicited offers via email and set up websites that look like real companies. The FTC reports job scams as among the top 10 fraud categories in the United States in 2020. BBB says the average loss of every recruitment fraud victim is around $1,000. Fraudsters leveraged the pandemic to grow this scamming business. The huge demand for remote work was an opportunity for them to scam unsuspecting job seekers. 

3 Red Flags of a Fake Job Post According To Delilah Bell

The three red flags of a fake job post are (1) unrealistically high pay, (2) poorly written job posting, and (3) suspicious email address. An overly high pay for an entry-level job should immediately trigger suspicion. Scammers often use above-average compensation to attract potential victims. A poorly written job ad is also a red flag. Listings with typographical errors and grammatical errors are likely to be scams. This means the poster did not try to create a credible listing. Finally, stay away from recruiters that use suspicious emails. They usually have email addresses from providers like Gmail and Yahoo. This is a red flag because legit companies use company email addresses. 

Indeed Explains The Online Hiring Process: What Happens After You Apply?

After you apply, a software scans the resume. This software looks for keywords related to the listed job. If your resume passes this test, a human recruiter reviews it to check your qualifications more closely. The hiring manager then chooses the best candidates. They are then ranked and scheduled for an interview. Employers may opt for a video interview, a phone call, or an in-person meeting. 

While waiting for a response from the employer, keep your portfolio updated. Make a follow-up if you don’t get a feedback or response in two weeks. 

What is the Hardest Step Employers Go Through in Online Recruitment? 

The hardest step for employers is sifting through a broad applicant pool. One job opening attracts around 250 applicants. Recruiters only spend around 6 seconds to review each resume. In the end, only 4 to 6 are selected for an interview. An applicant tracking system (ATS) helps speed up this process. The ATS filters out about 75% of the resumes before a human reviews them. 

Are Online Job Fairs Effective?

Online job fairs are effective because they are cheaper and more accessible. They allow companies to connect with candidates from different parts of the world. Statistics show that 70% of job fair participants receive a job interview offer. This highlights the success rate of candidates in landing a job. Online job fairs reduces logistic costs. Everything's done on a virtual platform so employers and employees can interact more. 

Is Recruitment Agency a Good Business? 

Yes, a recruitment agency can be a good business. The global recruitment services market is expected to be worth $450 billion by 2025. Recruitment agencies benefit from companies who want to outsource their hiring process. Profitability in this business depends on the pricing model. The most common one is the contingency-based model. Agencies make around 15% to 30% based on the new hire's first year salary. The fixed-fee model is also attractive for companies on a budget. Employers only pay a onetime fixed fee, regardless of the candidate's salary grade or job level.

Small to medium-sized agencies make around $500,000 annually. This estimate is based on the industry average. You can also enroll in an online recruitment course to understand more about this industry. 

What Do Recruiters Say About the Business on Reddit?

This Reddit commenter shared he made $600K in his first year. He has a 12-year background in recruiting. He also previously worked as a business development manager. 

Another commenter shared about the downside of the business. He's been a recruiter for 6 years. It took him 9 months to get the business going. It could be a good business for those with experience and a network. However, complete beginners might struggle and prematurely give up. 

Why I Prefer Local Lead Generation Agency Over Online Recruitment

I prefer a local lead generation agency over online recruitment because the business is a lot easier to manage. Online recruitment is a highly competitive industry. It's hard to find repeat clients who will stick with you for years. Local lead generation is the opposite. The biz is less competitive because you're only targeting a localized niche.

Online recruitment can get you into legal complications. You need to understand different employment laws and study the regulations. Local lead gen has lesser restrictions because you're only handling digital assets. Recruitment agencies demand time and effort to manage. Digital assets are more hands-off and don't need constant monitoring. 

The number 1 online business for me is local lead generation. It builds simple websites for small businesses and ranks them on Google. Ranked digital assets are as valuable as prime real estate in the physical world. It earns passive income through rentals. Leads generated from ranked sites are sold at 85% margins. This business is a lot better than running a recruitment agency. It has the potential to scale and last for years. The best part? You can start with just $500. 

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Ippei Kanehara

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

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