Should a foreign owned company earn around £50 million from recruitment advertising largely paid for by schools located in England? I previously wrote about the published accounts of the tes a couple of years ago Teacher Recruitment: How much should it cost to advertise a vacancy? | John Howson (wordpress.com) This morning, Companies House published the TES GLOBAL Ltd accounts for 2020-21 covering the period up to the end of August 2021. The turnover in the UK of the Group was some £54 million; up from pre-pandemic levels of just under £52 million. Most of the income comes from subscription advertising, where schools pay the company an annual fee. Transactional advertising income continued to form a much smaller part of the company’s turnover.
Now, as regular readers of this blog are aware, I am not unbiased when it comes to the issue of recruitment advertising and the teacher vacancy market, having helped create TeachVac www.teachvac.co.uk well before the DfE started their job board.
There is an interesting question as to why schools are prepared to use TeachVac and the DfE site, but still pay shedloads of cash to the owners of the tes job board? For some it will be just inertia: nobody ever got fired for using the established player in the market. For some it will no doubt be a belief that tes has more teachers looking for vacancies than any other platform. TeachVac requires registration, so we know a lot more about our active job seekers than job boards that don’t require a sign-up. Interestingly, there seems little data in the tes accounts about usage of their platform by teachers. TeachVac regularly publishes data on matches, having passed the one million for 2022 earlier this week.
TeachVac has been dedicated to prove the concept that job boards don’t need to be expensive, and its current pricing model of £1 per match up to a maximum of £1,000 per school per year for secondary schools, and less for primary schools, is much cheaper than a subscription to tes.
Interestingly, tes has admin expenses of around £60 million, not all spent on the recruitment side of the business. However, it is vastly more than the £150,000 TeachVac costs to do a similar job of matching vacancies to job seekers. With the possibility of 75,000 vacancies on TeachVac this year, that’s a cost of little more than £2 per vacancy for TeachVac, compared with perhaps £4-500 per vacancy listed by the tes extrapolating from the information in the published accounts. This despite the company further reducing its headcount from 191 to 160 at the end of the accounting period.
In their accounts, tes’s owners cite software and development costs of £43,000,000. I wonder what that values that places on TeachVac’s software when we come to do our annual accounts later this year?
Overall, TES GLOBAL Ltd has returned to losses in 2020-21, after a profit in the year before, when they sold their teacher supply business. The company still has a large interest burden effectively being serviced by schools.
The question, as ever, is, how long will schools be prepared to pay these prices for recruitment advertising when cheaper options are available?