What the Randstad-Monster Deal Tells Us About the Talent Industry

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So, a little something happened in the industry recently. Something that, if it had happened, say, nine years ago, would have been yuuuuge, as some might say. Instead, the “what took them so long?” reaction was the most common theme of Randstad’s purchase of Monster. It seemed blasé. People told me their biggest surprise was hearing that Monster still existed.

Here’s the thing. I think what’s happening with this acquisition is a signal about some strategic shifts that are happening in the industry. It feels similar, ironically, to how things felt when Monster launched the first real job board. Big changes afoot, y’all.

There are a few things going on that I don’t see slowing down:

  • The emergence of recruitment marketing as the driving factor in modern corporate recruitment strategy
  • Automation tools that look to reduce — if not remove — low-level sourcing activities
  • The potential to rapidly create, and then productize/marketize, large amounts of people-data

To make it nautical (hey, it’s summer, and I work in the fishing town of Gloucester, Massachusetts): we’re sailing around Cape Horn. There’s good stuff behind us, and we hope more to come, but right now we’ve got to watch out for the occasional iceberg and rogue wave. Also leopard seals, who are, apparently, terrifying.

To my mind, Randstad just made a pretty serious course adjustment.

A Little History

First, there were newspaper ads for recruitment (alright: first, there were raids on neighboring villagers — the war for talent used to be fought with rocks). The ads showed up on Sunday, might get lost or just become bird cage liners, and you had no good idea which ad you ran was running better. You just ran ads blind.

Things changed when somebody came up with the idea for an online classified. Employers posted jobs, and it went well. Competitors showed up, and it was off to the races. Things boomed. Then, the market shifted on the boards. New social media sites for professionals (ahem, LinkedIn) were actually sneaky job boards, with captive audiences to market jobs to. No-cost job board aggregators came up with freemium models, and every job in the world. Suddenly, the original innovators were losing revenue.

Then the economy crashed. Most of them barely made it out alive. And, to rub salt in, a lot of that damage was self-inflicted.

Sea Changes, and Survival

And, here we are, at that particular pivot. Randstad, one of the largest global RPOs, has acquired Monster. You may remember Monster. It started the job board craze.

What motivated this is complex — part of it has to do with RPOs moving to compete with job boards like Indeed, as well as offering some level of unified solutions to their client base. Randstad also gets a small RPO business that Monster acquired a few years ago — TalentFusion. But I don’t think that’s the larger play here. That’s driven by how our industry is shifting.

The RPOs are nervous. They’ve had several good years, particularly in the EU and Asia-Pac, about 13 percent year-over-year growth for the last few years. The Americas are flat, but not losing money. That said, corporations are like sharks: they have to keep moving, or they’re dead. Their markets are maturing, and new tools and approaches are threatening. Randstad is beginning a transformation, to keep moving. I think it’s driven, in part, by the list I kicked this post off with.

In order to win business, an RPO has to prove value. The promise of the model (scalability and speed without sacrificing quality, all at a lower cost) has gotten beaten up a bit as it has gone into real-world testing. It’s a workable approach, but it’s not the be-all, end-all. There are companies that are taking it back in house, because they can control recruiter quality, and in part because they feel they can do their own brand, better. Also, they have access to a myriad of new marketing platforms that give them the confidence to do it on their own. Along with this, there’s the promise of sourcing automation. AI comes to recruitment.

(Last fall, PwC flew a bunch of us out to San Jose to sit in a room full of PhDs and the nerdiest Partners, along with some folks from Google and the AI scene in the Valley. It did this because the Big 4 are freaked out by AI. They think block chain technology will disrupt much of the audit function within 10 years, and disrupt them the same way Uber does to taxis. They also think AI is going to change how they recruit.)

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Disruption is coming at the RPOs. There are several recruitment automation initiatives out right now — from serious players — that I’ve tested, and they work. They’re very real, and effective. Just ask Goldman Sachs about how it’s automating much of its campus recruitment program this year. Since a large part of the RPO business is low-level tasks, it’s nervous about this trend in its clients.

As a company’s talent acquisition leader, tasked with a sudden upswing in hiring, you can run every marketing campaign via your RPO (and pay a fee each time), drive in thousands of resumes that you get charged for, while the RPO offshores the resume screening to a facility somewhere, which adds in more costs. It then moves them into process, scheduling interviews. All of this is manual, and costly.

Or you hire a smart marketer in-house/get someone from marketing assigned to help the TA team. Couple them with a marketing platform and recruitment CRM. As results come in, you have an AI filter weighing yes/no, and then scheduling interviews; minimal people costs. Your initial investment in the software may be high, but as the saying goes “Buy once. Use often.” Ultimately, it’s a very competitive alternative to RPO, and allows the TA leader to say “I did this.”

For RPOs, clients choosing automation may kill off the offshoring advantage. Marketing automation may kill the need for outside direct sourcing. I say “may,” because I don’t think that’s exactly what will happen — a manufacturer in central China isn’t going to jump on using a SmashFly CRM or HireVue automation to find talent, so there are markets left. But there are a lot of verticals who will look to automation, marketing, etc. And that will happen.

The answer: Come up with solutions for clients that do just that: automate, and market. Do them at scale, offer savings, fewer IT admin headaches, and offer your more traditional “seats in chairs” model to supplement. Become a hybrid — not really a product company, but products so well integrated, and cutting edge, that they’re a compelling alternative in an era of sourcing automation and marketing-on-demand (MOD! I like that. That is mine. You can use it.) Along with this, I think Randstad is setting up an offering that we all are interested in: true Recruitment ERP (RERP!).

RERP might matter. For the past few years, Randstad’s Innovation Fund has been making some really smart investments. RolePoint. Gr8people. Onboarding, and offboarding, solutions. Assessment tools. Marketing. Etc. Add in Monster’s tools, and it is suddenly on the cusp of addressing every single step, and sidestep, of the recruitment process. That’s a win. Imagine a vendor who can track a candidate, from the very outer edge of the funnel, all the way to hire, and then track them into their employee experience. You may get to quality of hire, the Holy Grail metric. If nothing else, there’s the potential of really, really clean source data.

It hasn’t gone after an automation vendor, yet, but it needs to. Frankly, I would have bought CareerBuilder over Monster, just for the Textkernal tech, and set that up as a foundation to AI, but that’s me. And I am a giant geek who dreams transferring his brain into a robot (with missiles, and lasers), so take me with a grain of salt. But I suspect that’s the next move.

Here’s kind of the summary: The Monster acquisition is a signal, in the noise. And it signals change.

Martin Burns is strategic consulting leader for HireClix, a consumer advertising agency with a focus on recruitment. A career-long practitioner, he combines significant expertise in strategy, technology, and marketing. His career has included leading, as well as consulting with, recruitment for some of the world's most significant brands. Prior to HireClix, he led talent acquisition technology transformation for PwC U.S. Prior to PwC, he led global recruitment for Mobiquity, a mobile services firm with offices on four continents, and spent a significant amount of time in the EU. He speaks at global conferences on recruitment, maintains an active presence in the global recruitment community, and is considered one of the most forward-looking thinkers in the U.S. talent acquisition industry.

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1 Comment on “What the Randstad-Monster Deal Tells Us About the Talent Industry

  1. Martin, It was a treat to read your sidebars and an insightful learning experience tracing the relationships among the moving parts of recruiting in today’s environment. You’ve highlighted an even broader concern which goes beyond the world of recruiting and talent management professionals– what happens when technology provides even more support and there is not enough work to keep all the available talent challenged? What does it mean when it is cheaper and better to assign work to a tech-based solution? What will humans be doing to fill up the time,typically 8 hours or so daily, that used to be dedicated to earning an income. How will humans acquire the monetary resources to support themselves and purchase necessities if there isn’t a job for them to be paid to do? I realize this goes way beyond your article’s focus and intent, but really, what is going to happen when there’s a universal elimination of labor? What will be the consequences for our society? What will people do with their time? I haven’t seen this work out in societies that have attempted to dictate where and how it’s population is assigned to live, be trained, buy necessities and do work assignments in exchange for entitlements. The individuals who don’t have a job to do, shift around aimlessly, get into mischief and eventually that society composed of idol individuals faiis.Humans need to feel worthy. A job well done fis satisfying on a personal level AND contributes to society. The takeaway is, if we have a solution that replaces humans, we must plan what those people will be doing instead. It is not just a win for a single business that is the issue, it is the broader implication for our society’s health and well-being..

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