Indeed killed its pay-per-application model. What happened?

After a year of re-explaining and re-clarifying its pay-per-application model, Indeed told its clients in December that it would discontinue the payment scheme — perhaps showcasing that, at least for now, the recruiting world may not be ready for it.

“As of December 18, we no longer offer PPA,” Indeed said in a statement sent to HR Dive regarding the discontinuation. “Our journey remains focused on delivering exceptional products to help both job seekers and employers.”

According to a help center page on an Indeed website, jobs that still use the pay-per-application model will be paused on Jan. 15 if they are not switched to a daily budget model. Any employers that subscribe to Indeed Resume now have access to the company’s matched candidates product, as well, the company said.

“While the pricing model has delivered results for many employers, it requires more iterations to maintain high performance for our customers who sponsor on Indeed,” that help page center says in an FAQ section regarding why PPA was pulled.

So what happened? Ultimately, it may have been a case of too much change in the face of the still-unchanging reality of how applicants approach the job hunt, Peter Zollman, founding principal of AIM Group, a business intelligence firm, told HR Dive.

Why didn’t it last?

The original rollout of the pay scheme came paired with confusion and frustration by Indeed clients, various sources show.

Pay per application — in direct contrast to pay per click, the current standard of most job boards — made it so employers would only need to pay for applications they actually accepted. In theory, this would allow employers to only pay for quality candidates.

Such a model ideally incentivizes job boards to “have more skin in the game,” so to speak, especially regarding candidate quality, Raj Mukherjee, general manager and executive vice president of Employer at Indeed, previously explained to HR Dive.

The reality was not so peachy. Hiring managers were confused by the sudden changes in pricing when it was first rolled out; Zollman previously explained to HR Dive that employers accustomed to paying in the range of hundreds of dollars may have been suddenly hit with a bill in the thousands after forgetting to reject certain applicants.

Single-person HR teams and small businesses were especially flabbergasted by the shift. While managers had 72 hours to reject an applicant, small business owners, especially, may not have been able to monitor an application inbox constantly.

Anecdotally, candidates were still dodging typical applicant tracking system filters, creating more work for hiring managers who had to reject swathes of resumes — or else pay for them.

“They ticked off a lot of their small business clients, and made it very complicated for people to get what they needed at the price that they needed it,” Zollman said of Indeed. “The ultimate goal was a good one. But they handled it badly.”

These outcomes may be a sign that the tech simply is not there yet, Zollman noted, as there is still no guarantee that the applications submitted will even be any good. “You’re stuck spending your time rejecting them or paying for them, one which is a minor nuisance, and the other is a major nuisance” — problems that could evolve quickly into a “severe financial problem,” Zollman said.

Job seekers are used to having to fight ATS filters to get their applications behind walls, and hiring managers are used to sorting through dozens, if not hundreds, of garbage applications. Until these habits are forced to change — perhaps via more stringent filtering technology — something like pay per application may remain a pipe dream.

“The Indeed turmoil certainly is going to be a setback for that, globally,” Zollman said. “Every job board in the world was watching what would happen with Indeed.”

But this setback may just be a bump on the road, in the long term, Zollman said.

What’s next?

Pay per application may not become widespread anytime soon, Zollman said, “but cost per action, over time, will still become the preferred pricing model. Frankly, Indeed was right when they said employers will embrace it. The word that I will add is ‘eventually.’”

As far as Indeed’s focus moving forward, the company highlighted artificial intelligence in its statement sent to HR Dive — reflecting an industry-wide push toward AI implementation. Competitor LinkedIn announced its own AI-assisted tools in October of last year. 

These tools, including Indeed’s, often focus on crafting messages for applicants, improved candidate search and even creating job descriptions or job posts.

That said, eyes will remain on Indeed regarding what comes next, considering it is “the most powerful and largest” job site in the world, Zollman said. “When they try something, people notice.”