A job board isn’t defined by the color of its website or the name on the incorporation papers; its effectiveness is typically framed by the quality of the people in the talent database.
Let me explain.
There’s a branch of mathematic called Topology that “… is concerned with the properties of space that are preserved under continuous deformations, such as stretching and bending, but not tearing or gluing.” For instance, a donut and a coffee mug are topologically similar — just like what Monster and Randstad will be once the two organizations are blended into one. What does it mean to the recruiting community?
While Monster appears to have the largest database of actual résumés in the market place, getting the exact number — and being able to publish it — isn’t the easiest of sourcing projects. Nonetheless, there are digital crumbs that point to the 2015 data, and from these one can glean a sense of the size of the database. For instance, in the 12-month period from September 2014 to September 2015:
- Monster added on average, 619,000 new resumes each month in the U.S.
- Monster added on average, over 1 million new resumes each month worldwide.
Adding these numbers to the conversations I’ve had with other recruiting leaders through the years makes it quite plausible that the size of Monster’s resume database is north of 150 million — a figure that puts Monster on the same numerical résumé packing level as LinkedIn (sorry — but LinkedIn does not have 450 million registered members who are real professionals). For those who are thinking that the quality of the Monster résumé is inferior to the information contained in LinkedIn profiles, I submit that neither platform addresses the veracity of résumé content; in the end, it’s up to us recruiters to drill down and determine what is fact and what is fiction.
Nonetheless, this is a substantial number of people. It’s also the core reason why I believe Randstad acquired Monster: Folks, Randstad is arbitraging the data in Monster’s database (a practice of buying something of tangible value in one place and selling it rather quickly somewhere else where it’s worth more). Adding the Monster database to is own is likely to positively support both is direct search and RPO (SourceRight) businesses for quite some time.
Of course Randstad’s challenges will be how to effectively merge/purge at least two databases (I’m assuming that our Dutch friends don’t possess a comprehensive master database, though I’m happy to be wrong) as well as to find ways to update the information contained therein while including all the cool social media gold that will guide recruiters to personalize their eventual outreach (classic CRM activities that can use some of Monster’s assets to create and steward). This is no small task, but when completed will offer to the world quite an accessible cadre of people … for a price. Again, arbitraging means someone is going to pay up.
What this acquisition and industry consolidation mean to others:
- If you’re a rabid Monster user, you’ll likely end up paying more in the long term (no one pays less after an acquisition) but I suspect — or rather hope — that the quality of the people you procure through Randstad will improve.
- With the potential for all this new gold, it might actually make sense for more companies to outsource their recruiting to SourceRight/TalentFusion — as long as the people data is voluminous and of higher quality.
- We might be seeing the birth of a real threat to LinkedIn. With the combined people databases, Randstad will likely have far more real people in its talent database; all that is needed is a well-architected and designed software platform tapping into this database and the right API, and ladies and gentlemen we have ourselves a horse race. Other elements of the Randstad Innovation Fund are certain to find their way into this larger offering to companies.
From my armchair quarterback couch, I see the moves by Randstad and those of Recruit reminding me of similar consolidation that has taken place in the airline, banking, healthcare, and oil & gas industries. After initial periods of bumps and bruises, several trends emerged from these industries:
- The ability to cherry-pick the better industry performers
- Less variability in pricing
- Improved marketing to the customer
Whether we’ll see the same longer term impact of consolidation in the recruiting industry is uncertain, but given the ease with which entrepreneurs like to tackle HR and recruiting technology problems, I sense that consolidation might actually aid in not only finding the audiences who would benefit from new solutions to our inherent industry problems but also in convincing those who believe that the only way to recruit is to line up behind everyone else. I can also see more companies doing what Randstad has done by creating innovation funds and developing their own incubation labs to seed the next generation of recruiting.
In the end, M&A activity in our industry fosters a Charles Darwin-like mentality that “… it is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Our industry is changing — and more often than not, the change is not what it appears to be.
