Later this month I will be traveling to Calgary, Canada on behalf of CareerBuilder to speak to some of their potential customers about the importance of search engine optimization (SEO) in the recruitment industry, or as they refer to it: “recruitment SEO.”  Recruitment SEO is the strategy that employers use to tap into the talent pools searching online for jobs.  Companies looking to outsource their job portals, or online recruitment strategies should read this post.

Many companies use an Applicant Tracking System, or “ATS” to manage their job applications and resume data.  Data is fed to the ATS either through internal sources, such as the company’s website, or through external sources like job and resume boards such as CareerBuilder.com.  The ATS makes it much easier for employers to manage the recruitment workflow, as well as data mining, collecting and reporting.

Problems with ATS

Applicant Tracking Systems (ATS) have been a little slow to the SEO game.  Some of the problems that have plagued their systems (and still do) are blocking the search engines from indexing the job content in the robots.txt file, putting searchable content behind password protected areas that a search engine cannot access, using improper URL structures that lack target keywords or that are overly dynamic, and much more.

Applicant Tracking Systems have also failed to address mobile content, and how to exactly integrate social media into the process. In essence, the ATS systems were built to manage the recruitment process, and not the online marketing process.  But this is where CareerBuilder’s Talent Network tool comes in.  They leverage your existing ATS by putting their platform on top of it, enabling you to leverage your online marketing components.  Not only that, but you also get CareerBuilder’s proprietary algorithms matching your job postings to qualified candidates instantly.

Want the top talent? They need to be able to find you.

According to ERE.net, a recruitment intelligence community, there are over 124 million job related searches through Google each month.  Below are some global search volumes for some general job descriptions, using the Google Keyword Tool:

I’m going to pick on Rackspace as an example of what enterprise companies are doing for recruitment, and then show you how it can be improved.  Rackspace is a big magnet for talent here in San Antonio, and attracts techies from all over the country (and the world) to come and work for the company with Google-style perks.

If I do a search for “jobs at racksapce”, it can easily find their job recruitment portal – www.rackertalent.com.  But what if I don’t know who Rackspace is, and I’m a java developer from New Jersey?  What if my wife and I are moving to Texas, and I need to find a job there?  If I search for “java developer jobs in texas”, not only do I not find Rackspace in the first page, but I don’t find them in the first 10 pages!  They are not listed in some of the other Job Search Engines (JSE’s) like indeed.com and others.

3 Ways Rackspace Could Improve Their Recruitment SEO

1.  Use unique URL’s with keywords. For example, on this Java Developer job listing, notice how the URL stays at www.rackertalent.com/careers/?  They would be better served with a URL such as www.rakcertalent.com/jobs-in-texas/software-development/java-developer/.  In this case, we would recommend “jobs in Texas” as the intermediary page that accumulates all of the jobs in Texas, then by category, such as “Software Development” – then onward to the job details page.

2.  Customize the Title Tags and Meta Descriptions. In this case, they are using the exact same title tag and meta description throughout the entire site.

3.  Create unique job description detail pages. This entire site is dynamically generated, which was probably a lot of fun for a developer, but does not create any SEO value.  In fact, according to Google, RackerTalent.com only has around 200 pages in their index to cover the 156 open jobs, the blog and other content on the site.  They are leaving all of the job position data out of the search engine index.

CareerBuilder’s Talent Network platform could alleviate these SEO issues, and immediately find matching candidates for their 156 openings.

Why Recruitment SEO is Important is a post from Pear Analytics, an SEO tools and software company.

This morning I attended the SATAI (San Antonio Technology Accelerator Initiative) STARs 2009 Technology Innovation Conference and listened to Rackspace CEO Lanham Napier and Founder Pat Condon talk about some of the interesting things about the growth of Rackspace, how they dealt with venture capital, and more importantly, how culture played a huge role in their current success. Some of the cool takeaways you would be interested in were the following:

1. Culture Matters. Even after the IPO last summer, the culture within Rackspace remained the same. It was crucial that nobody changed their screensaver from “The Matrix” to the Rackspace stock price (NYSE: RAX). This would create a very short-term outlook and take the focus off of the customer, and on to dollar value. Everyone is able to express themselves in just about any way they want to as a “Racker”, which to this day, companies still have difficulty with.  At Pear, we believe in the “no cubicle rule” – everyone including myself all sit in the open, and we have amazing collaboration with office mates Brandstack.

2. Hire Attitude, Not Skills. For the first two years, Rackspace hired people with a lot of technical aptitude to manage the support team. It turned out they needed a major shift in ensuring that he people who were talking to the customers truly loved their work.  Lanham says “how many times have you been to a ticket counter at an airline where you can just tell these people really don’t want to be here (with the exception of maybe Southwest and JetBlue)”?  Put the right people in the right place.  Pat Condon refered to the book “Strengths Finder 2.0″ by Tom Rath – a book they regularly use at Rackspace to make sure everyone is playing to their strengths.

3. Focus on Your Customers. Believe it or not, Rackspace didn’t always have Fanatical Support. In the early days when they were all jammed together in a small office, a customer called in one day asking for his backup. Well, they didn’t have the backup and this was the second time they screwed it up for this particular customer. After the phone call, David Bryce stood up and said “guys, we have to do this better for our customers. We can’t keep letting them down. We need to be more fanatical.” – and hence, Fanatical Support was born. This wasn’t something that came from the marketing department – this came from a real customer experience.

4. Do More With Less. In the early stage Rackspace had no problem raising capital. Interestingly enough, the pool dried up. Their first try at going public in 2000 failed and VC’s were not writing checks anymore, and if they did they wanted a 3x preference. They were down to about 2 months worth of cash and had to focus on focus on their customers to get through.  I talked with Pat Condon specifically about this and he says that there is a tendency to want to raise more money than what you really need, but at the end of the day, raise what you need to build your product and get customers.  This way you’re not on a spending spree running up your burn rate.  When you bootstrap, you really have to come up with creative ways to make the cash stretch – and that’s what they did.  They cut their $1m per month burn rate way down to stretch the cash, and ultimately got some local VC’s to offer a better deal, which forced the larger institutonal ones to fall in line.

5. Want Money? Have a Product Ready. You’re not going to be attracting any angels or VC’s unless you have an actual product.  PowerPoints are not going to sell you anymore.  If your product has customers, is in beta, or even generating revenue, even better.  Show that you can put something together with ingenuity, creativity and financial stewardship.

Hope this helps you.  What is your company culture like?   Do you have the right people in the right place?

Rackspace CEO Lanham Napier Gives Tips for Entrepreneurs is a post from Pear Analytics, an SEO tools and software company.

Hubspot successfully analyzed over 1 million websites, 1 million Twitter accounts, raised another $16 million, and yet they only have 1750 customers.

Did anyone else notice this?

I’ve always been impressed with Hubspot, and I have much admiration for Dharmesh Shah and the other founders.  I’ve read just about all of their stuff on inbound marketing, permission marketing, conversion tracking and other juicy stuff.  But I was shocked to read the news about their $16 million in additional funding with less than 1750 total customers.  Boy, with all of the inbound marketing webinars and conversion improvement whitepapers, it seems as though Hubspot may need to eat more of their own dog food.  Don’t get me wrong – their customer growth rate looks like the “hockey stick” we would all love to have, and a 350% growth rate in revenue is not too shabby – but I expected more than 1,700 customers.  And it looks like it takes 2-3 months to acquire 250 new customers, some of which will churn I would imagine.

After the first two rounds of funding, they’ve essentially spent $10,000 to acquire each new customer, but as you will see further below, their average annual sale is only about $6,000. As good as their product might be, I’m sure they are not counting on customers sticking around for 20 months so they can break even, so they will need to sign up more customers faster than ever to decrease their cost per acquisition and get this thing profitable – and fast.  This is the risk by taking on so much funding – how much runway do I need to get our cost per acquisition down and our lifetime value up?  They spent the first $17 mil on engineering the product, perfecting it, building brand awareness, positioning themselves as experts with endless whitepapers, webinars, videos and more, and understanding the model to where they could go and raise more money.  Surely they know for every dollar they put into inbound marketing efforts, how much revenue and profit they will get on the backend.

Now, since this is their third round of funding, their gong to have to sell for about 10X their current value so the first two VC’s get their money out of the deal, at least so I am told.  Wow!  An “SEO Company” for $335 million?  I suppose they could always go public.  Remember when Rackspace (NYSE: RAX) did that last year?  I’m sure being in a niche space where comparisons are hard to come by makes it difficult for analysts to evaluate the company, and even harder for investors to invest in.

So if a customer today is costing them around $10,000, but they are only getting $6,000 per year per customer on average, how long will this model last?  Let’s take a look at their pricing model that is directly from their website:

If you segment customers across this type of pricing model, or a “freemium” pricing model, you will find that most of them  are in the low to mid tiers, with a handful at the top tier.  You spend most of your time trying to figure out how to upsell and convert your lower-tiered customers up into your higher profit top tiers.  Let’s assume Hubspot has a 60-20-20 split here from low to high.  So of their roughly 1,750 customers, that would put 1,050 at the low tier, 350 at the mid tier, and another 350 at the top tier.  If you do the math, that’s a little over $10.5 million in annual revenue, or $6,000 per customer per year, on average.

Hubspot claims an annual revenue growth rate of 350%, which to get to the $300 million mark is going to take about 2-3 years, assuming the growth is constant and they can get to about 50-60,000 customers.  So as you can see, the 250 new customers every 2-3 months isn’t going to cut it – they will likely need to get to around 750-1,000 new customers every month.

The guys at Hubspot are surely savvy enough and have enough brain power (and resources now) to pull this off, but it seems it will be a helluva feat.  Is Hubspot the next SalesForce?  Will they have to go public?  It seems like Hubspot is in the right position for extreme growth – a refined product, brand recognition, a seasoned team, cash in the bank – how could they go wrong?

Best of luck to ya, Hubspot.

Update 10/26/09: I just found this great blog post by Ben Yoskovitz: Raising Startup Capital is an Achievement, But Not the Most Important One.  He explains that Dharmesh is more of a “bootstrap guy” versus a venture capital guy, where he states “Closing a funding round is not value creation.  It’s the opportunity to create value.” – I happen to agree with Dharmesh on that 110%.  After you get your funding – whatever round or stage it is in – that’s when the real work begins.

Hubspot: High Stakes or High Profit? is a post from Pear Analytics, an SEO tools and software company.