Help wanted: Recruiting on Craigslist

-- Deborah L. Cohen covers small business for Reuters.com. She can be reached at smallbusinessbigissues@yahoo.com --

By Deborah L. Cohen

CHICAGO (Reuters.com) -- In the past five years, roughly half the new hires at manufacturer Handi-Ramp have been recruited from the online city networking site Craigslist. For those battling to contain costs, it's becoming an increasingly popular way to recruit staff.

Handi-ramp, a 35-man operation in Libertyville, Illinois that has been expanding and has revenue of roughly $5 million, has recruited sales and accounting staff from the grass roots site; just last week it placed a listing for a sales manager. The draw? The classified ads cost the maker of ramps, handrails and treads only $25 a pop.

"I have to admit I'm cheap," says Thom Disch, the company's chief executive. "I look at it as a good resource."

Disch is not alone. While newspaper classified ad sales have fallen sharply in recent months due to recessionary cutbacks, Craigslist has picked up much of the slack. Its revenue is expected to increase more than 23 percent to over $100 million in 2009, according to one industry study. The privately held company does not reveal its results.

Small to mid-sized firms facing shrinking budgets are heavy users of the site, which is believed to garner the bulk of its revenue from classified recruitment ads for everything from barhops to bikini-clad models.

"Craigslist has become a very cheap and effective way for small businesses to hire," says Peter Zollman, principal at the AIM Group, the consulting firm that authored the study. "Given the price, there's not a lot of reason to be wary of it."

In AIM Group's latest issue of Classified Intelligence Report, an industry update sent to classified advertising clients, Zollman predicts that Craigslist will generate nearly $60 million in help-wanted ads in 2009. In 18 U.S. cities, including New York, Chicago, Los Angeles and Washington, D.C., the site charges $25 per ad; elsewhere in the country the service is free.

No wonder smaller companies are becoming increasingly savvy about how to use what once was viewed as a less-than-professional service leaned on primarily for part-time gigs and contract jobs. While across-the-board rate comparisons are tough to make, specific pricing examples are telling.

For example, a classified job posting in the New York Times begins at $395 for a single listing. That gives the buyer 30 days on the paper's online site and a scant four lines of print in the Sunday print edition. Individual job listings on Monster, the popular Internet job board, start around $385.

FRAUGHT WITH CHALLENGES

But using Craigslist remains fraught with challenges, including the deluge of responses that come from what is a no-cost service in many markets. The site is actually more effective for recruiters in regions where the nominal fee is charged, says Zollman; the cost serves as a deterrent to weed out some potential spammers, helping to legitimize its use.

Many businesses have worked out elaborate procedures to make Craigslist searches more manageable. In addition, not all searches are suitable for the site; they say they have better success with entry- to mid-level postings rather than searches for senior executives. And they're much more apt to have fruitful results with jobs oriented toward younger, tech-friendly applicants. Even so, the process requires a lot more screening than most other methods of recruiting.

"Is it time consuming? Yes, it is and frankly that's the biggest negative," says Ronn Torossian, CEO of New York-based 5W Public Relations, a fast-growing U.S. PR firm with a staff of 80. 5W uses Craigslist as part of a multi-pronged recruiting effort that includes a host of other sites.

"There's no question you get a lot of junk," Torossian says, noting that one of the company's best employees was recruited from Craigslist. "That's the price you pay for paying $25 for an add versus $400."