With Glassdoor acquisition, Recruit Holdings looms large in recruiting space
The job listing and review site may be one of the Japanese company's biggest coups yet — and it has some lessons for HR professionals.
Glassdoor quietly broke the news it was being acquired by Recruit Holdings Co. on a Tuesday evening outside of standard U.S. business hours — an exercise in understatement, considering what it signals to the recruitment industry.
Arran Stewart, co-owner of Job.com, put it simply: Recruit is out "to come steal everyone’s lunch. Fact."
Recruit Holdings, a Japanese company, bought Indeed in 2012 for an undisclosed sum. Estimates put the amount between $750 million and $1 billion. Since then, the conglomerate has continued its buying spree, acquiring a number of smaller companies, including Interviewed and SimplyHired, to beef up its recruitment suite and expand its profile. The Interviewed acquisition led to a new product announcement from Indeed this week.
But Glassdoor may be among Recruit's biggest coups yet.
Why Glassdoor — and why now?
The job board industry faced a mild reckoning when Randstad acquired Monster in 2016. Since then, acquisitions have become a public, viable strategy for big recruitment companies, especially as the big names vie for space in an increasingly competitive market. The acquisition of Monster may have set the stage for Recruit to pair Indeed with Glassdoor.
"Basically, Indeed just bought Glassdoor," Sarah Brennan, CEO of Accelir and HCM industry analyst, wrote for the HR Tech Blog. After solid growth, Indeed has solidified itself as one of the bigger players in the space even as encroachers like Google and Facebook seek to carve out their own market share and disrupt the space.
So what does Glassdoor bring to the table for Indeed?
"Indeed is definitely the delivery mechanism," Stewart said. "It is the site that delivers candidate results." While Glassdoor can tout some unique users — and it is likely the second largest job board after Indeed — Stewart isn’t convinced that's the reason Recruit has opted to buy the property.
The real money is in the 40 million reviews and "insights," as Glassdoor calls them, on nearly 770,000 companies. The job postings listed on Glassdoor may ultimately be cannibalized by Indeed and Recruit’s other major holdings, but the brand relies more on its reviews — and Recruit is banking on that, observers said.
"This announcement is a re-confirmation that transparency and reviews are crucial for job seekers. For users it’s important that they get insights on what it’s like to work at companies and for organizations it’s important for them to be transparent and to communicate their employer brand out," Moritz Kothe, CEO of kununu, told HR Dive in an email. "This is something that Recruit Holdings saw as important."
Glassdoor also has a catalog of employer clients which Recruit may find useful — around 7,000, according to its website. "I believe Indeed is going to use Glassdoor like a giant resource of clients," Stewart said. "It’s about a land grab."
Glassdoor’s real offering: data
Another huge get for Recruit out of this deal: Glassdoor’s wealth of data analysis. Brennan also noted this in her blog post, writing that Glassdoor and Indeed both produce solid content on business topics and that it would likely be in Recruit's interest to have Glassdoor continue to produce its analytical reports, which compete with LinkedIn on quality, Brennan said.
In reality, Stewart expects the money that could be made out of Glassdoor the platform is likely small — but it brings enough synergy to Indeed that it could help Recruit create its own full agency solution in the U.S., if it opts for that.
"The market data piece is something Glassdoor has on every platform on the market," he added. If Recruit plays its cards right, the acquisition could solidify the company as a prominent player in the U.S. recruiting world.
For the industry at large
The Glassdoor acquisition signals how hot the online recruiting industry is right now. Glassdoor has raised $200 million in venture capital since it first appeared on the scene in 2007 — and it was just bought for more than five times that.
"[Recruit] is doing it because they are creating this giant business model that is going to go head to head with other major players," Stewart said.
The data treasure trove that Recruit now has access to should be the thing Recruit’s competitors keep an eye on most, Stewart added, as it may soon showcase clear vulnerabilities in other platforms. Recruit, through its myriad acquisitions, may soon be able to craft a database of information, including which companies are recruiting and when. In response, other big names may consider acquisitions, and perhaps at a faster rate than originally intended.
"The writing is on the wall," Stewart said. "How quickly are these other major staffing agencies going to get their checkbooks out?"
HR professionals also need to consider the broader trends at play. The popularity and clear market viability of Glassdoor’s review-based model points to the need to build better company cultures and to focus on retention rather than massive recruitment alone, Kothe said.
"What I see in the global marketplace is that companies rely too much on job boards and their access to candidates via these tools," Kothe said. "In a market where candidates are a scarce resource, we've always felt its a wise decision to think about ... your culture, employer value propositions and your candidate experience overall — this deal enforces that this needs to be key in your strategy."
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