In the intermittent series “recruitment prevention”, we take a look at Placement.com. Placement acts as a personal agent for jobseekers, enabling jobseekers to spend their time without having to search for jobs.
And by saving jobseekers time, Placement.com is saving the world. Let’s listen to their CEO getting at it in a TechCrunch article. Let’s comment on it, and start with zero points:
Our mission is to help millions of Americans unlock their earning potential.
The American economy is stronger than ever, but millions of people remain left out of recent economic prosperity. One in four Americans lives somewhere with little or no economic growth. Meanwhile, tens of millions of city dwellers are increasingly squeezed by rising costs of living.
I get it. Placement is here to save millions of Americans squeezed by rising costs of living, by unlocking their earning potential.
To be clear, with unlocking earning potential, they refer to relocating people to cheaper places, where they can buy more with what they currently make.
It’s hard not to think about why these places are cheap to live in. And it’s hard not to bother ourselves with the money Placement makes on a jobseeker ‘squeezed by rising costs’. And we have to be strict. Placement loses a point here.
Current score: -1
Let’s continue reading about Placement’s mission:
Placement provides a new way to move forward. We are Everyone’s Talent Agent, enabling our customers to land opportunities in fast-growing and affordable cities. By reducing friction and eliminating barriers to geographic mobility, our customers earn a bigger share of the country’s economic growth.
Placement is ‘eliminating barriers to geographic mobility’. In fact, Placement offers jobswitchers $5,000 financial aid if they relocate.
Although ‘eliminating barriers to geographic mobility’ is a hyperbole, Placement’s claim is substantiated. And at least they’re not calling it ’the transformative power of geographic mobility’, or something like that. Placement gains a point.
Current score: 0
Back at it:
We founded Placement because we experienced firsthand the transformative power of geographic mobility. With Placement, great opportunities become more accessible, with less headache and better results than going it alone.
Wait. They are calling it ’the transformative power of geographic mobility’. This almost costs them a point! But they promise less headache. These guys truly care. They win a point for considering my health.
Current score: +1
Placement is scoring a lot of points! But is it designed to align incentives? Let’s continue reading what the CEO has to say:
The Placement income sharing agreement is designed to align incentives, though
Its is! Another point.
Current score: +2
Great. Just great. If the checkout paragraph will hold, a positive score for Placement might well be within reach.
Let’s check out how incentives are aligned in the checkout phase. Let’s take an example:
Median household income in, say, West-Virginia is $44,000. Median household income in, say, Virginia is $72,000. That’s a whopping $28,000 difference. So, if you relocate a worker, there is, in theory, a lot of money to be made.
Let’s be modest and have Placement make an offer:
A typical reaction to this offer might be: Wow, thirteen thousand dollars a year extra spending power! Paying only 10% of my income for a few months, without even noticing it. Because what’s a few hundred bucks compared to $13.000 dollars? Did I mention I was getting $5,000 for relocating, sorry, for ‘eliminating my geographical barriers?’.
On closer inspection, a typical reaction might be somewhat more subtle. Below, $542 for 32 months is replaced by the product of these numbers:
Slightly altered calculation
A typical reaction to the slightly altered calculation might be: Wow, these guys get seventeen thousand dollars for forwarding my resumé?
Placement.com aims high, with high, unassailable ambitions, high spending power for jobseekers, high fees for themselves… But aiming high, even this high, will not let them escape the big question.
The big question is, of course: is the typical reaction to the original calculation the same as the typical reaction to the slightly altered calculation?
It isn’t. Placement loses a point and still has one point left, nearing the finish of this piece. But, come to think of it, loses two points for using the term ‘Everyone’s talent agent’ somewhere above.
Final score: -1
Placement.com is quite fascinating, but they have a bit of a challenge in aligning jobseekers incentives with their own in the checkout phase.
On top of that: Placement has zero to no obligations towards the jobseeker. The jobseeker, though, is tied for five years. And I can only fear that the jobseeker has to pay up, after he signed, even if he finds another job by himself.
Then again, the founder seems really committed to the welfare of the ten million people he might relocate in an $8,000,000,000,000 salary market.
32 months doesn’t add up to 5 years, does it? More like 2 years and 8 months. Still a very long time to be tied to Placement and forking out a considerable amount of money every month.
A fired/rehired ploy might work in getting you off the Placement hook.
One might assume such ploy would be covered in the small print.
Regarding the 5 years, I refer you to the linked techcrunch article you clearly haven’t consumed properly:
The Placement income sharing agreement is designed to align incentives, though. It’s vested in getting clients not only the best job and salary, but one they’ll want to stick with. As long as the startup nets them a higher adjusted income, clients pay 10% of their earnings. That lasts for 18 months, or 36 months if they receive Placement’s $5,000 relocation stipend and human support. There are also caps on the total Placement can get paid back, and the agreement dissolves after five years so clients aren’t locked in if things don’t work out.