Last November, JobStreet.com announced that it had won a tender to supply the Singapore government with an online recruitment service worth S$134,000 (RM325,000) over a period of two years. Typical of the way CEO Mark Chang runs his business, there was no press conference or hyped-up press release to proclaim the significance of the win.

For JobStreet, it was a significant win but it did not make a big deal out of it. Its CFO Gregory Poarch says the deal enhances JobStreet’s credibility in the Singapore market. “It was a very competitive bid and to win it against global players just shows the government’s trust in us,” says Poarch.

There could also be potential upside in the deal as it will give the company the opportunity to work with about 100 government bodies in Singapore, each of which will have slightly different recruitment needs. “We can help them modify and customise to their recruitment requirements,” says Poarch. Singapore has an option to extend the subscription of the online services by periods of one year but not exceeding three years. While Singapore looks good, JobStreet is still behind the market leader, JobsDB.com. In typical JobStreet style, Poarch says, “We are number two in the market and we will just keep trying harder.”

It is also trying harder in China, where it has indirect exposure through its 17% stake in 104 Corp, the leading Taiwanese online recruitment company. “It is the dominant player in the Taiwanese market and have been in operations since around the time we started in Malaysia,” says Chang. In fact, JobStreet has just gotten shareholders’ approval to raise its stake to at least 20% in 104 Corp so as to confer it affiliate status and therefore bring its profits into JobStreet’s accounting.

With so many Taiwanese companies operating in China, 104 Corp has a firm foothold in mainland China.
When asked about going direct into China, Chang says he has observed that only three types of groups make money doing business in the mainland. “You have the mainland Chinese, the Chinese from Hong Kong and the Taiwanese. This shows that you really need to understand the market there.

So, we feel pretty secure about riding on 104 Corp to enter the Chinese market,” says Poarch. Indeed JobStreet has invested almost RM50 million into 104 Corp to help it grow the business.

While Chang is not about to waste resources with a direct presence in China, JobStreet has already established itself as a “strong No 1” in the Philippines. “They have a nice story going there,” says Poarch, referring to the booming business process outsourcing and contact centre industry there which he says is estimated to create one million new jobs over the next five years. “That’s good for our business.”

Indeed, with JobStreet only collecting money from companies which post job listings on its website, it is easy to see why it likes its Philippines business. JobStreet set up in the Philippines about four years after Malaysia and has almost two million users there (meaning résumés posted on its Philippine site) and has about 70% market share, says Poarch.

JobStreet’s definition of users is when someone registers on the site, posts his or her résumé and creates a profile of what jobs they would be interested in, and they must leave an email ID where JobStreet can reach them should it find a job match. But if the email bounces or is full, JobStreet does not consider them a registered user, explains Poarch. Typically it has 10% of its user base actively seeking jobs, but Poarch notes that in December, this goes down to almost zero as people are waiting for their bonuses.

Asked about how the recession has impacted business, Poarch says the company was fortunate to have a near-record cash position and this allowed it to expand while others were scaling down or going into defensive mode. He notes that it began to see a recovery in companies hiring since last March.

In total, JobStreet had about 5.7 million users at the beginning of 2009 and ended the year with almost 6.8 million users.
This large number is akin to the circulation of a newspaper which keeps attracting companies to post their listings with JobStreet, notes Poarch. “It is not a very sexy model but it works for us,” he says. Mark Chang couldn’t have put it better.

This article appeared in netv@lue2.0, the technology section of The Edge Malaysia, Issue 788 jan 11 - 17 2010