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Is the Ladders a Scam?

by Feb 15, 2011, 11:08 am ET

A couple of weeks ago, The Ladders invited (and paid T&E for) a number of influential bloggers, writers, speakers, and consultants in the HR and recruiting profession to join them for a day of “insightful and spirited conversations.”

If the reason for the invitation sounds like PR double-speak, that’s because it is. In spite of its rapid growth, The Ladders has a real image problem in our profession — if you type “the ladders ” into Google, the first autocomplete suggestion is “the ladders scam.” The Ladders’ invitation seemed like an attempt to step beyond that and change the conversation into something more positive.

The changed conversation lasted for a whole 37 minutes, when the first caller into a HR Happy Hour online radio show being broadcast from The Ladders’ own conference room ignited the scam debate all over again. Since then, the debate has spread around the HR blogs, and it has become obvious that this criticism is a genie that will not go back into the bottle until The Ladders addresses it directly and publicly.

Here are the the big charges leveled at The Ladders, along with some thoughts on each.

Is it Ever OK to Charge Jobseekers?

The most basic accusation leveled at The Ladders is aimed at the heart of its business model. The company charges job-seekers $35 for a month of service — or less for longer subscriptions. This rubs many people the wrong way, and I understand why — it just feels wrong to profit from the misery of people’s job search, especially when record numbers of people are jobless. It feels much more acceptable to charge big corporations than the little guys desperately seeking employment.

But is that all there is to it? If you believe that The Ladders is providing a worthwhile service, then it should have the right to charge for that service. And those who do not believe it to be worthwhile should have the right to tell them to go to hell. It’s a decision that every single one of makes every day with hundreds of products and services.

In the end, this ends up being a matter of degree, much like the financial companies that provide loans and credit in poor communities. Are they taking advantage of poor people with usurious rates? Or are they providing a valuable service by providing credit to people who would be unable to buy homes or start businesses without them? There’s a line in there somewhere that should not be crossed, but it is a blurry line at best.

In my opinion, $35 is not an exorbitant amount to charge for a product that is delivering value, which brings me to the second accusation leveled at The Ladders:

Is The Ladders’ Product Delivering Value for Paying Jobseekers?

There are a lot of people out there with a beef about the actual product at The Ladders, and the sheer volume of complainers gives them authenticity.

Mark Stelzner, one of the attendees at The Ladders’ event, writes:

In the interest of gathering some market intel prior to attendance, I put out an informal request to my JobAngels network to gauge their impression of TheLadders.
The results were shocking to me but may not be to others. I received over 800 messages in less than two weeks…
… and not one of them was positive.

I can think of a lot of reasons why that would be — not the least of which is that instinctive reaction to think that charging jobseekers is shady — but that is pretty damning. I wonder how many of those complainers had actually tried using The Ladders? (Stelzner believes that most had tried the paid service.)

The main complaint that I hear about The Ladders’ paid services is that many of the jobs on the service are gathered by a spider from other websites, often without their knowledge. The vast majority are not unique to the site, and some are not truly the 100k+ jobs that the site advertises.

Exclusivity

Employers don’t give “exclusives” to websites. It’s just not the way this game is played, aside from a few high-end executive search firms. I don’t see The Ladders promising exclusive jobs in its marketing, and when you search on their site it states explicitly that they mark all exclusives. In my searches, I did not see any marked jobs — they neither claim to, nor do they have many exclusive positions.

To the degree that The Ladders expertly curates the jobs on its site (more on this in a moment), it is providing a valuable service so people do not waste their time with positions that are not at a high enough level.

Feel that $35/month entitles job-seekers to exclusive job listings that non-subscribers don’t get? Good luck finding that anywhere.

Sub-100k Jobs

I’ve heard multiple stories about sub-$100k jobs on The Ladders, and for a service whose entire raison d’être is the $100k+ market, that’s a big problem. As I stated above, a major value of The Ladders service is the curation of the jobs on its site. It undermines their brand every time someone applies for a position and finds that it pays less than advertised.

Imperfect? Highly. A scam? Doesn’t seem like it. In Nick Corcodilos’ transcript of a conversation between a Ladders customer service rep and an angry customer, the rep says:

First of all, we make no claims that all of our jobs are submitted directly to us. Many of the positions on our site are linked directly to from external job boards. Since we don’t have a direct way of knowing the pay range of each of these positions, we make an estimate based on a rigid set of criteria.

In this case, I see that the position requires a Bachelor’s degree and five years of experience. This is well within the experience range of a Marketing Manager who expects to make $100k per year.

Clearly that isn’t the case with this position and I thank you for letting me know about it as I am definitely going to remove it from the site immediately.

People running a scam would not remove the job post.

I spoke with The Ladders Vice President of Corporate Communications Lou Casale today, and he pointed out that the company has two full time employees dedicated to vetting the jobs that they post on the site. Still, I’d like to see The Ladders make changes to address this specific criticism more forcefully, because the presence of sub $100k jobs on its site is a major flaw in its model, and it clashes with what its core services purport to be.

Can 200,000 Customers Be Wrong?

Of course they can. But people vote with their dollars, so this question goes to the heart of the controversy over The Ladders.

The company has built an $80 million business mostly from jobseekers paying $35 a month. By my back-of-the-envelope calculations, there are between 200,000 and 300,000 job-seekers paying for the service at any given point in time. That’s a lot of people. As an experiment, I created a paid account at theladders.com and then cancelled the service. The cancellation process was easy and painless, which is not the experience I would expect from a service trying to lock in unhappy customers.

When people have a beef, they can be counted on to complain loudly. When people are satisfied, they tend to … well, be satisfied. The Ladders is a subscription business, and unsatisfied customers do not renew subscriptions. From the numbers, job-seekers appear to be coming back for more.

Full Disclosure: The Ladders did not pay my T&E for attending their event. Like many companies in the recruiting industry, they periodically advertise on ERE.net and at our events.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Joshua Letourneau

    @Nick: Lol, that’s exactly what I thought you’d say in the face of an open challenge. Being from NJ as well, not all of us are “Jersey Shore” types. Good luck with those “Harvard MBA Execs” . . .

  • Ron Mcmanmon

    @nick: Hi Nick, NO… [I believe] most recruiters don’t provide other services because they have been taught, told or directed to focus exclusively on the “placement” because of the “if it’s not broken don’t fix it” mentality. This is usually driven from the top down. I whole heartily agree with healthy activities but I also believe in strategy and evolution. Having one product vs. a product line is always a better scenario in sales… yes? If this is not true why then did we lose 80% (or whatever) of the executive search industry when tech crashed?

    BTW GUYS… I usually don’t participate in these forums because of this very distasteful condescending, “I’m better than you are” ego driven BS. Bottom line is, we can build a better machine (with smart guys like you and Josh) if we seriously try and learn from one another. What is good for me might not work for someone else but we should respect our counterpart. My challenge for you two is to find the common ground? This usually makes for a solid foundation:) IMHO Peace-Out!

  • Sandra McCartt

    Let me say this about Ron’s comment about a better machine. To you Josh, before you jump out there and totally denigrate those of us who brought this profession from a bunch of little old ladies sitting in cubes, charging people to find them a job, then collecting those fees at 25.00 bucks a week, to smart people working for employers. We brought this profession a damn long way. We did it without technology. Then we embraced technology. It made us better, more informed,expanded our reach and our ability to place people not just in our own little puddle but all over the world.

    I sincerely hope that you guys and gals who are making all the noise about the current “new school” of recruiting make as many millions of dollars, bring as much value as we have, gain the trust of the people you work for (both employers and candidates) and learn as we did that every new clever idea is not going to work. Some do some don’t. If it had not been for those old “employment agency” types who laid the first foundation for what would become executive recruiting we might all be selling insurance. They gave us something to build on as i hope we have given you something to build on.

    We didn’t do it by throwing around big words, going to conferences, beating our chests and wanting to debate about whose is biggest. We did it by doing it and doing it well.
    We didn’t have to say we’re “paying it forward”. When somebody fell through the office door we just stopped for a few minutes, reviewed their resume, made suggestions as to the resume and where they might go to find a job. It wasn’t then and it isn’t now “value add” it’s just helping somebody when they need help. It’s what we do because we know how. And believe it or not we are pretty damn good at it. That’s not ego it’s just experience..we should be at this point.

    When one of our clients called us upset because they had to lay off people and wanted us to help. We did and we do. Sometimes we get paid for it and sometimes we don’t.

    Were we and are we better than the folks who hired us originally. Probably. Will those of you who can take this profession to the next level be better than we are. Probably, i hope so. I would hate to think that i spent all these decades in this profession trying to clean up the image of the recruiter, shoot straight, not scam people with big promises of what i didn’t intend to do for them, only to have it go the way of the dodo bird and disappear up it’s own anal orafice because the young lions were so busy beating their chests about how much better they are that they lost site of where we came from and where we need to go.

    As to the original headline of this post. Is the Ladders a scam? Those of us who have been around this industry for a long time have seen a lot of these deals come and go. As each new one pops up, we start to hear and experience first hand some crap that makes us cringe. Anything close to our industry that looks like shysters out for a fast buck, we simply hate it.

    It is a truism that the reason scams, con games, ponzi schemes and the lottery works is because not everybody loses.If nobody ever won the lottery it would be over pretty quick. If nobody ever got a job through the Ladders or no recruiter ever got a candidate that they could place it would have died on the vine pretty quickly.

    Do I think it’s a Scam, yes i do. I have worked too hard not to misrepresent a job, a salary or a candidate to feel any other way about anyone or anything that misrepresents what they are selling….for any price. Personally i have interacted with five people (not a big number out of all those thousands) who were scammed by being presented my job as a viable job when it had been filled for over three years. I know personally that many jobseeker resumes i was forwarded or contacted were not 100K a year candidates so to me that’s a scam to tell me they are or should be. I don’t care who they charge, who they fly to New York or how many millions they spend on nasty commercials, or how much money they make. In my book, based on my personal experience ,they misrepresent what they do and what they sell. That may not be your definition of a scam but it is mine so to hell with them.

    That Mr. Josh does not make me one of the “sheep, blindly following group think”. If you have success with them and you have a different opinion dandy. That’s why scams work if it works for more people than it scams is it a scam. In my book if five were scammed it’s a scam. End of story.

    Now i am going back to work to try and fill about nine jobs that are not going to be listed on the Ladders. In my own style, thank you very much. It will in fact take a transaction or two to make that happen. Most business deals do require a transaction or two. I also have to see if i can come up with a solution for a recruiter friend of mine who is in the ditch due to getting all caught up in all the new hype. All she needs to do is make a placement or two by doing what we do.

  • Joshua Letourneau

    @Sandra: Sandra, believe it or not, our opinions and thoughts on helping people are actually quite closely aligned. I agree with what you’re suggesting here. It’s no mistake that the best Recruiting Trainers (imho) have been around for such a long time. You’re also right that we need to know where we came from to know where we’re going. By no means do we stand apart in this regard.

    Regarding the title of this post, I respect your take. In fact, I acknowledge many of your concerns. I don’t objectively agree with all, but believe it or not, I’m aligned with you on many. The point of my original FOT post was to point out some positive elements because there is so much controversy about TheLadders. That being said, I didn’t realize that the emotions around this company were synonymous with discussions of ethics and law in our space. Now I know, and that’s no understatement.

    My objection was to the statements that, “Headhunters (executive recruiters) don’t help anyone find a job”, and, “I don’t know one good headhunter who has time on his or her hands.” I agree with neither.

    I will admit I made a mistake positioning the difference as “Old School versus New School”. I say that because I believe we need a massive injection of “Old School” to counter the deluge of Candidate criticisms we’ve started receiving given the explosion of new media. I should have said “Transactional versus Beyond-Transactional.” And you’re right that transactions are a part of the business. It’s just my opinion that the transactions occur as a result of us going above and beyond purely the search assignment. To Ron’s point, there is certainly common ground here among the majority of us.

  • http://www.resumeconfidential.ca Karen Siwak

    The debate has gone off a tangent that, while interesting, muddies the already muddied waters. Some of The Ladders’ business practices are misleading, if not downright duplicitous. The question is whether The Ladders are duplicitous by happenstance or by intention, and how motivated the company is to move away from its shady roots and start providing genuinely transparent value-added services to candidates and employers. Until there is some evidence of a culture shift, many of us in the career services industry will continue to steer our clients away from The Ladders.

    Josh, you are arguing that The Ladders’ intentions are good, but by continuously denying that the shady roots exist, your credibility as a champion for The Ladders is shot, especially since you seem to base your position on “They wined and dined me, therefore they are good”.

    Since you now have a direct line to The Ladders’ executive offices, why don’t you invite them to participate in a public debate, where they can defend their practices or indicate how they are changing. This would be much more useful than the public slugfest with Nick. I understand that there is an open invite to The Ladders on The Recruiting Animal show.

  • Sandra McCartt

    Ok, damnit, i need to go to work but i am going to address a couple more things here.

    Unless candidates pay you to find jobs for them ,as an executive recruiter/headhunter you do not find jobs for people. All of us once in a while get a good candidate whom we know will be a good fit for a company so we market them to an existing client. The distinction here is ,that even if we market that candidate,the employer is going to pay us. If you or any recruiter is being paid to find jobs for people you are not a recruiter you are an employment agency or a paid career consultant or something else or maybe you are both. I don’t double dip cause i don’t want to. By definition a recruiter finds people for companies, or recruits for the army or students for a college. It may be semantics and certainly we help the candidates we represent find a job if we can place them with one of our clients. We give a lot of free advice but if somebody asks me if I find jobs for people, no i don’t. I find people for companies to fill jobs that are listed with me.

    As to any good headhunters having time on their hands. I dont’ know any either. Everybody i know whom i would classify as a good headhunter or even some mediocre ones who barely make their draw are busy as cranberry merchants right now. Did a lot of good headhunters have some time on their hands last year. Yes they did.

    And what the fuck is Transactional VS Beyond Transactional.
    Everybody goes beyond just reading the job order and throwing crap against the wall. The first transaction is when the phone rings and we get that job order. Sorry, i am so old that i still call it a job order but i can live with search assignment. The last transaction is when that person i placed 30 years ago right out of school who is now one of my hiring managers, dies of old age and we do the final transaction to the beyond. :)

    As to the title of this post. Those are facts to me, something that happened, not concerns. They happened to me and five other people who got scammed. Just like when my damn horse stepped on my foot last night. It was not a concern that he might or a maybe or hearsay. He freakin well did it. It’s a fact. I will be very careful when i work with him next time because he did it once so i know he may, can and will do it again. Or i can send the sucker down the road even if there are some positives about him. If you think he is a little darlin cause he never stepped on your foot you can have him but you are forewarned that the big black bastard will in fact stomp your foot cause he has done it before.

    Ok, you didn’t have any idea how strongly a lot of people felt about this bunch. There are some that are out there that you may have never heard of. All i can say to you is before you start pointing out the positives of what might just be a turd and get it all over yourself, take a look at your own experience with the one candidate. It sounded pretty scammy to me.

    I appreciate your post here that you may have used the wrong approach with the old school VS new. From an old headhunter to a young lion > How about you look at who you might piss off or miss what you really wanted to say by the way you state something before you jump out there.

    As i said to my young son when he, as a reasonably new staffer with a big 4, sat in my office bemoaning the fact that nobody would listen to his great and revolunary ideas about the tax world. “My dear, you barely know enough at this point to balance your own checkbook. ” “Now go back to work and listen to those old bastards whom you think are so old school, stodgy and boring.” “When you know everything they know then get after it, change the world.”

    We laugh about that conversation at least once a month and he uses it with his “young lion” staffers almost daily.

    Perhaps you and i will laugh about this someday. It would be nice to have a little levity. I think the whole world is funny, i’ve been in the recruiting bidness so long that if i don’t laugh i will go crazy. I am gonna , really, really i am, gonna go do a transaction or two before i go to the great beyond.

  • Joshua Letourneau

    Karen, the following is not my logic: “They wined and dined me, therefore they are good”. Dave wrote an objective analysis here, while I wrote a subjective analysis (at FistfulofTalent.com) of the positive things I observed . . . only because I understood the level of controversy surrounding the firm.

    They did not ask me to write anything, but given such negative op-ed blogging in our space about them, my approach was to shine a slightly different light among the overwhelmingly (and justified) concerns. In that sense, my post was an effort to providing a more balanced perspective (hence “More Cirque de Soleil than Evil Empire”.) As I can now attest, there is no room for this perspective in our space. An example was the lack of the “Mahogany Row”, where all Execs work in the same room together in what I’d consider a constant brainstorming session. I found that unique. I’m certainly not a champion of all-things TheLadders, but did notice some positive things amidst all our concerns. Nothing more, nothing less.

    If you’re asking me to call an Exec at TheLadders and tell them there is an open invite to an “Animal Show”, I’m not sure how far that will go. Frankly, I don’t know what BlogTalkRadio shows are listened to by anyone on their staff.

    However, here is my objective recommendation that I think may have a chance of working well: Tweet it out to their PR presence on Twitter (@TheLaddersNews) if you’re getting no response. This is the only reasonable thing I can think to do. Leverage Social Media to your advantage and get people RT’ing it and Liking/Sharing it on Facebook. Generate buzz on the open web, not here on contained blogs because most have zero exposure to them. I imagine if you generate enough buzz, perhaps one of their PR people will consider. I can’t confirm that this may definitely work, but if your approach is sound and balanced, I believe this may offer the best shot.

  • Sandra McCartt

    The Ladders News just posted an interesting link to their take on the “Position Accomplished Summit”.

    I am glad to know that you guys were in agreement with The Ladders. The spin is on.

  • http://financialrealityrevisited.blogspot.com chris web

    I don’t know if you can call the ladders a scam but it is a business model that tries to rip people off by claiming to provide a product or service that it can not or at least does not provide. I am speaking from experience of trying the service and seeing that the subscription model is the only way they could survive. the are fabricating an air of exclusivity and their results as well. They don’t have all 100,000 plus jobs and anyone hiring for 100,000 plus jobs would be foolish to limit their search to the ladders.com. maybe you could actually call it a scam.

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  • John Galloway

    The strangest aspect of all this is that there is no mention of The Ladders success rate of actually finding people jobs. That is after all what matters isn’t it? Their site currently (in the promo to upgrade from free to paid) says “apply for any of the 934 jobs listed”. Uh 934 jobs nation wide? That seems pretty small doesn’t it?

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  • Kris Kaznaski

    The Ladder’s Resume Service is a scam. I have known quite a few co-workers who initially used their critiquing service and received the SAME crituquie with only minute differences. These differences were in places where they simply pulled information from the resume and posted it in one of the sections to “personalize” it. They scare people into thinking that their resumes are sub-par and then try to get you to pay enormous fees to have THEM write it for you. This service preys on people fear of being inadequate and not finding a job.

  • John Galloway

    I don’t think TheLadders.com is a scam as such, it just isn’t a site that works to find you a job. I paid the $50 for a 3 month membership and did not get a single relevant (i.e. interesting, looks like it has potential, etc) job inquiry. I got all my inquiries from LinkedIn and got plenty from that (including the one I finally accepted). The few other Ladders members that I know all have said the same thing, the site is worthless. I will give the operators the benefit of the doubt and say that they are trying to make it worthwhile, i.e. its not being operated as a scam, but my recommendation would be to skip it.

  • Kathy Boykin

    I have never heard of this company yet they have taken money from my checking account. I am trying to find out how that is possible. Can anyone explain this?