Magnet.me: the start of your career


The rise of the Internet has drastically changed the recruitment industry. The Internet made recruitment faster, cheaper and easier (Revell 2014). Companies can post job applications online for the world to see, while jobseekers can reply in seconds. On top of that, communication between companies and job applicants changed; companies can now for instance reach job applicants through e-mail or Skype, diminishing recruitment costs and increasing the reach of the company. The Internet therefore increased the range and the competition for talent amongst companies, for example through recruitment platforms. One of these recruitment platforms that makes locating and acquiring of job applicants easier, is Magnet.me. 

What is Magnet.me?
Magnet.me was launched in 2012 in Rotterdam by three students as a recruitment platform that connects students (and recent graduates) with companies. Currently, the platform has over 1,500 companies and 150,000 students using it, creating more than three million connections (Magnet.me n.d. a). So, how does it exactly work?

Companies create a profile, where they describe their business, selection criteria for students and add relevant news, jobs and other possibilities. Students, create a profile with their skills and interests and upload their resume. Magnet.me then checks if the student’s profile matches any companies. If so, the student will automatically receive a network request from the company. If the student accepts that request (and only in that case), the student will receive updates and information on available jobs, internships, business courses and traineeships offered by the company. The company can view the connected students’ profiles, send them messages or invitations to directly apply for job opportunities. In that way, a company can build a network of suitable candidates (Magnet.me n.d. a).

The video below summarises the idea behind Magnet.me as described above.

Thus, Magnet.me is a two-sided market, providing structure and rules that facilitate the interaction between students and companies (Eisenmann et al. 2006). The two groups attract one another, meaning that if the number of students grows, it will attract more companies, and vice versa. This is called the network effect, which suggests that the higher the number of users, the more attractive Magnet.me will be and the higher its value.

Business model
Magnet.me uses a freemium business model, meaning that basic functions are free for students and companies, but companies must pay a subscription fee for additional functions (Kumar 2014). Companies pay €190 per job per month to put their job offer on the homepage of all students who meet their selection criteria (Magnet.me n.d. b). Other premium options are the ability to approach and invite the best suited candidates to apply for jobs and user data insights. For these additional options, an inquiry must be done to determine the fee. However, the creation of a company profile and posting job offers is free.

This business model is beneficial for all platform players and thus creates joint profitability (Carson 1999). Magnet.me has many users and thus companies can benefit by recruiting more students that are better suited with less effort. Magnet.me is payable for both small and large companies since the subscription fee is relatively low compared to alternatives, such as recruitment agencies. Hence, switching costs are substantial since the convenience of Magnet.me is high; you can reach many suitable students at a relatively low cost. On the other hand, students benefit by the many job options Magnet.me offers and the ease with which they can look up jobs, while not having to pay a subscription fee. Finally, Magnet.me itself benefits from an increase of users since in that case it can collect more subscription fees.

Magnet.me is very customer-centric since students and companies can set selection criteria indicating what they are looking for. For instance, a student can filter job applications for the type of job, function, industry, educational level and company size, making Magnet.me parameter-based (Randall 2005). Thus, the platform takes care of institutional arrangements by giving power to platform players; companies and students can indicate what they are looking for and they can directly communicate, which makes recruitment more efficient.

In terms of the institutional environment, Magnet.me complies to social norms and regulations. Magnet.me hosts many well-known companies such as Unilever, KLM and Heineken and recently acquired one million euro from investors to grow the company, suggesting trust and enormous potential (Thole 2017). The company is also registered at the chamber of commerce and complies to the Dutch (Personal) Data Protection Act (Magnet.me n.d. c).

All in all, Magnet.me meets efficiency criteria and is still growing. Although there are many other recruitment platforms (e.g. LinkedIn), Magnet.me differentiates itself by focusing on students and matching them with companies instead of individuals. The potential of Magnet.me is enormous, last year the company expanded to the U.K., where it is now the number one student career website (Magnet.me 2017). So, one may wonder how far Magnet.me can go.

References
Carson, S.J., T.M. Devinney, G.R. Dowling and G. John (1999) ‘Understanding institutional designs without marketing value systems’, Journal of Marketing 63(4): 115-130.

Eisenmann, T., G. Parker and M.W. Van Alstyne (2006) ‘Strategies for Two-Sided Markets’, Harvard Business Review 84(10): 92-101.

Magnet.me (2017) ‘2017: Our year in numbers’. Accessed on 18 February 2018 on  https://magnet.me/blog/en/2017/12/21/our-year-in-numbers.html.

Magnet.me (n.d. a) ‘About Magnet.me’. Accessed on 16 February 2018 on https://magnet.me/press?country=nl&lang=en.

Magnet.me (n.d. b) ‘Attract talent, save time’. Accessed on 17 February 2018 on https://magnet.me/employers?country=nl&lang=en#.

Magnet.me (n.d. c) ‘Terms of Service (User Agreement)’. Accessed on 17 February 2018 on https://magnet.me/terms-of-service.html.

Kumar, V. (2014) ‘Making ‘’freemium’’ work’, Harvard Business review 92(5): 27-29.

Randall, T., C. Terwiesch and K.T. Ulrich (2005) ‘Principles for user design of customized products’, California Management Review 47(4): 68-85.

Revell, S. (2014) ‘5 Ways the Internet has Changed Recruitment Forever’. Accessed on 17 February 2018 on https://www.recruiter.com/i/5-ways-the-internet-has-changed-recruitment-forever/.

Thole, H. (2017) ‘Deze Nederlandse startup ziet de Brexit als grote kans – en krijgt €1 miljoen om te groeien in het VK’. Accessed on 17 February 2018 on https://www.businessinsider.nl/magnet-me-investering-startup-brexit-vincent-karremans/.

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