Is the Ladders a Scam?

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.