The Future of CareerBuilder

All these acquisitions make my head spin. Microsoft acquired LinkedIn, which acquired Connectifier and Rapportive. Randstad acquired Monster, which acquired TalentBin. Recruit acquired Indeed and SimplyHired, which they turned it into an Indeed-sponsored job board. What’s going to happen with CareerBuilder? Matt Ferguson, CEO of CareerBuilder, indicates that it’s alive and well in a chat with Todd from ERE.

CareerBuilder made its own set of acquisitions to diversify its product, but let me tell you. It’s not enough. CareerBuilder’s product showcase brand themselves as a constantly learning, fast-moving, agile software company with all its engineers, etc., while most people know it as the job board right behind Monster. You tell me what comes to mind first when you think of CareerBuilder.

https://www.youtube.com/watch?v=08Ml79vLtnA

 

The problem with big companies is that they are not as agile and flexible and are not positioned for innovation as much as they claim to be. Look at Google, arguably the most innovative company in the world today. Look at GoogleX or Google Ventures, self-driving cars, project tango, VR, AR, Google Brain, AlphaGo … even Pokemon Go stemmed from Google Maps. That’s an innovative company that is going to be around for a while. I mean Monster tried to get into the SaaS data game with the TalentBin acquisition and it got sold for $429 million, some three bucks per share and a long time coming too.

Another Randstad to Acquire CareerBuilder?

To stay in business in the face of changing technology, CareerBuilder has to make some drastic changes to its product, mission, and company. It has to restructure, get truly agile, and learn to stay strategically competitive for the long term, quite something like Twitter did here. Otherwise, CareerBuilder has to get acquired or die sooner or later, despite whatever it is telling you now. But who is going to buy them?

Will Microsoft acquire CareerBuilder? Probably not, because that acquisition wouldn’t offer Microsoft anything new worth the price that it already gained by acquiring LinkedIn. In fact Microsoft owns a piece of CareerBuilder and has access to its database already since 1999.

Would Google acquire CareerBuilder? The two companies’ current product and mission are a world apart. The same goes with Facebook, and any other tech giant I can think of. Salesforce could take the bite, but I don’t see why it would because it already has its fresh data pipeline established. Most big tech companies focus on attracting the millennial workers who are twice as likely to apply through their career site anyway than a job board.

NSHSS Scholar 2016 Millennial Career Survey

NSHHS

Will another Randstad acquire CareerBuilder? Yes, there will be more M&A between recruiting agencies and job boards, because job boards are still the No. 6 source of talent for recruiting agencies. It’s why Randstad acquired Monster, to push its own client’s job to sponsored and preferred ranking, getting more applicants. That’s why Recruit acquired Indeed and created Indeed Prime, essentially turning Indeed into a recruiting agency.

Microsoft-LinkedIn was all about a live stream of data to build up Cortana AI; that’s search engine wars. Randstad or Monster doesn’t have any AI capabilities, so they will do with Monster what Recruit did with Indeed.

Who is left is CareerBuilder, the third kid on the block. The same thing can happen if any of these big recruiting agency players decide to compete with Recruit and Randstad and follow suit. They are out there, trying to acquire job boards, referral platforms, and basically own the channel that will provide them with a guaranteed talent pipeline all the while replicating a proven model of Indeed Prime.

All of these acquisitions are happening now because of Microsoft-LinkedIn acquisition.

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All the major recruiting companies are using LinkedIn to recruit for themselves and their clients. Microsoft owns that hiring database now, and like I wrote in How Microsoft-LinkedIn Could Reboot Recruiting, every major player is looking for alternatives to move away from LinkedIn recruiting. Since the $28B acquisition, LinkedIn shut down super connectors, blocked every major competitor off of its platform, and made everyone pay for searching and additional search filters. If this doesn’t demonstrate that Microsoft doesn’t really care for anything in the general direction of recruiting or recruiters then I don’t know what does.

Microsoft could make LinkedIn better, but the way things are going it can also be LinkedIn recruiting death. What will happen when that happens? Can you imagine your recruiting agency without LinkedIn? The risk is big enough to force these companies that do a ton of recruiting and process millions of candidates every year to make a move on securing alternative sources of talent channels and not relying on LinkedIn Recruiter. It’s plain and simple strategy, risk mitigation.

CB

CareerBuilder, Looking Ahead

CareerBuilder is a great company with good technology … one that could complement the operations of a huge staffing agency significantly and give it an immediate boost and competitive edge over its competitors.

What is the alternative? CareerBuilder becomes the Switzerland in the war of staffing agencies that own job boards? The neutral zone that partners with everyone? This path would leave CareerBuilder squashed to the ground, since most job boards share the same Internet users, although I hear that CareerBuilder has a good foothold in India, U.S. and a couple of other countries like a lot of other job boards. You get the gist.

CareerBuilder’s Press Release doesn’t mention anything really. I am pretty sure it gets pings from different staffing agencies if it isn’t already talking to some of them. It’s just going to be a matter of price and time.

Parting Thoughts

I am excited to see what is actually going to happen in terms of who is going to make a move and for how much CareerBuilder is going to go for. Perhaps, I am completely wrong and CareerBuilder will do a substantial pivot and tough it out as their revenue falls. We might have the next generation of recruiting software as CareerBuilder’s key development reports on Bloomberg indicate.

If you enjoyed or found this article useful please like and share. Let me know your thoughts in the comments below.

(Updated Aug 13 to say job boards are number 6 and not the number one source)

Ninh Tran is the Chief Relationship Builder of Hiretual, a “Recruiter’s Best Friend” and an AI recruiting platform of choice, built by recruiters for recruiters, that continually proves to make the Internet recruiting friendly and your life easier. Ninh is also a SourceConERE Media, and Recruiter.com author, and has spoken on various subjects such as “AI & the Future of Recruiting”, “Today’s Sourcing Technology and Skills”, “Recruiting Workflow Automation”, “Hacking Authentic Leadership for Growth”, and “Selling is Human in the Digital World” at University of California, Berkeley, Stanford University, and global TA conferences. As Cal alumni, Ninh founded Trucksome to help emerging local food economies thrive while creating thousands of jobs for the unemployed right here in the US. Then he went on to Google before co-founding an executive search firm HireTeamMate where he leads the business and recruiting operations that placed hundreds under one year before founding Hiretual.
 
Reach Ninh via Twitter: @NinhTran09 

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10 Comments on “The Future of CareerBuilder

  1. I agree with most of what is mentioned in this post. Just one clarification I want to make. I believe the name of the company which owns Indeed is Recruit Holdings Ltd., not Recruiter. But yes, I believe Recruit Holdings has created the benchmark which Randstad appears to be attempting to replicate and could influence strategic partnerships or acquisitions in the foreseeable future.

  2. Considering Monster has a rich collection of partners delivering a huge amount of value to the recruitment ecosystem, Randstad can leverage this and grow it for their current and future ‘mutual’ customers. Access to Randstad’s customer base could be a huge win for Monster’s current partners, assuming Randstad is smart enough to leverage that resource… other than their investment fund I don’t hear much about them being good at partnerships – I hope that changes.

    Why would Manpower, Kelly, Allegis, etc. buy CareerBuilder? To let it “continue operating as a separate and independent entity” like Randstad is telling us they’ll do with Monster. I doubt it.

    1. Thanks for the comment Ward. Interesting take on the future. Can you give me an example of partnerships that created ‘solution stacks’ which are custom built? Usually partnership are require a whole lot of integration and generally lack in customization and long term support unless it’s an enterprise to client relationship.

      To answer your question, I think for same reasons why Recruit Holdings acquired Indeed and let it be an independently operating unit as well. Indeed has a great brand with job seekers, so does Monster, and potentially CareerBuilder. Why kill a brand that attracts 262.4M visitors every year and have a profitable business with healthy number of clients? A counterexample of LinkedIn-Connectifier acquisition. It’s brand is now linked forever with LinkedIn’s and for whatever reason most people are looking for alternatives.

      1. Re: Solution Stacks – considering the average SMB has 10+ HR tech solutions to help them run their business, in most cases they are all different ‘stacks’ built to what they want, or what their advisors told them to use. If these advisors are their key vendors and some of their partners, e.g. the HRMS or ATS and their partners, then they tend to recommend certain providers over others.

        F1000 types have 30-100 solutions stacked up either commercial tools or internally built via Sharepoint etc., and the big HR solutions / components tend to be recommended by Deloitte or other HCM consultancies. For the future I see the SMBs getting better 3rd party advice from a new breed of ‘solution stackers’ who create custom built solutions tailored to the customer’s unique needs, not necessarily what their core HR or ATS has available or recommends. And don’t think for a minute the current incarnation of ‘marketplaces’ are going to solve any of these problems except for the pure transactional plug-and-play type offerings like background screening… maybe!

        If you look at HRchitect, Hive Tech HR and TalentMinded – these are the types of boutique firms that will be driving most of the ad-hoc partnerships required to deliver ‘build to suit’ type solutions. If they don’t rise to the occasion, the employers will continue to be frustrated that their solutions don’t talk to each other and subsequently blame the vendors for what ails them… and they’d be partly right placing the blame with them.

        1. Ward, thank you for much for the comment. You shared some deep insights into the ERP purchasing behavior and the role of solution consultants. Is there enough market for the ‘SMB solution stackers’ to make this a viable business worth their effort? Could they recommend all of the 10-30 HR solutions?

          “In 2012, according to U.S. Census Bureau data, there were 5.73 million employer firms in the U.S. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.6 percent.”

          The SMB HR Tech market is very fragmented because the needs of SMBs are so diverse. There is no silver bullet solution at the moment, and that’s why ‘solution stacking’ makes sense. At the same time fragmented markets are ripe for disruption. We will see a companies who do their one thing really well as to even become the golden standard in the industry.

          I can only assume that capturing the SMB market in-house requires a client acquisition powerhouse. I am thinking of Zenefits or InDinero whose focus is the SMB and in my opinion they are working that market quite successfully. Former is a market place and latter provide their own solution. These companies are actually fighting the financial advisers and enrolled tax agents/accountants equivalents to ‘SMB solution stackers’ for market share. Obviously financial advisers and tax agents provide a whole stack of solutions for their clients over time. Will technology ever catch up? Maybe. I know for sure that technology will augment and make the work of consultants easier.

          Let’s just say that what Martin Burns’ “RERP” is true. How do you see HRchitect, Hive Tech HR or TalentMinded competing in this new environment? Are they only going to focus on HCM for SMB?

          https://staging.eremedia.com/ere/what-the-randstad-monster-deal-tells-us-about-the-talent-industry/

          1. There is no way anyone can maintain deep knowledge of enough SMB solutions to handle more than a few solution stacks, therefore, much like a good chef, they’ll need to find a few recipes that are ‘delicious’ and that work well for the desired consumer profile. The reality is everyone has different tastes but if consumers don’t want to cook up their own recipe, they’ll have to buy some cookbooks, buy fast food (like ADP’s marketplace) or go to a fancy restaurant (boutique consulting firms).

            You get what you pay for…

        2. Thanks Ward for the shout out. Absolutely agree…we (Hive Tech) look for the right solution based on what we HEAR from our clients, not on who’s paying us to direct them. That could mean a one-stop shop vendor, or it could mean a stack of solutions that checks off as many of the requirements boxes as possible without being cumbersome. And if I find someone who can navigate marketplaces in coming up with a brand new stack with integration points nobody has considered…maybe I’ll hire her/him. 😉

        3. Thanks, Ward for mentioning HRchitect. I certainly would echo Jeremy’s comments. It is all about finding the right solution stack for our client’s unique business and maintaining vendor neutrality is a key element to guiding the client to find the right fit.

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