Talent Acquisition: A Category Forever in Transition

If your understanding of talent acquisition is a few years old, it might as well be 100 years old. That’s how fast things change in the world of recruiting software and services. The posture for any organization that serves talent acquisition is to pay attention and be ready to change at a moment’s notice. Today’s talent acquisition market is moving fast. It’s also growing fast.

In 2015, there was $2.2 billion in HR technology investment from VCs, private equity investors, and other sources (exclusive of M&A activity). In 2016, the investment numbers ended the year at about $2 billion, according to analysis from The Starr Conspiracy. We believe that about 25 percent of this activity was in the talent acquisition area. In other words, about $1 billion has just gotten pumped into the market. Then consider some of the major changes that have taken place over the past year:

• LinkedIn was acquired by Microsoft for more than $26 billion
• Randstad acquired Monster for less than $500 million
• CareerBuilder acquired WORKTERRA to expand its offering beyond talent acquisition
• Gild got bought and shuttered by an investment firm looking to use its technology in-house

However, the talent acquisition market is at odds with itself. Why? We’re seeing the first clashes of humans vs. robots. While it isn’t quite The Terminator, it’s certainly entertaining in its own way. Recruiters are always on the lookout for an edge. They try new things, anoint the latest “next big thing,” then quickly move on. The market can feel like it’s always chasing the new shiny object.

Talent acquisition departments have budget and can spend it. And they do, on all kinds of technology. Some of it is foundational, like a candidate management technology such as applicant tracking systems or candidate relationship management solutions. Others, like the latest sourcing tool or assessment, might be around for a while. Recruitment process outsourcing, staffing and headhunters, and contract labor can surround all of this, as the gig economy plays out in labor strategy. And while organizations pursue a more flexible labor practice, candidates want a better, more consumer-like candidate experience. They expect to be treated like they were walking into an Apple Store or a Nordstrom — instead, they get treated poorly, if they even get noticed at all.

Of course, the underlying assumption for all of recruiting technology to this point has been the recruiter as Jedi. Because of experience, skills, moxie, hustle, and intuition, the recruiter knows best — which as study after study has shown — just isn’t true. The algorithms (or the robots, if you will) best recruiters and hiring managers (the humans). However, there’s knowing this fact and then there’s accepting it. That’s where the market is today. The technology is moving faster than people’s ability to accept it.

The Starr Conspiracy Intelligence Unit has engaged with talent acquisition providers for more than a decade. The challenge of staying relevant, ahead of the pack — but not too far ahead — is something we’ve seen the market struggle with. We offer this brandscape to help vendors, investors, and users understand which brands and technologies are poised for success today, which are emerging as tomorrow’s solutions, and which are yesterday’s news.

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What does today’s talent acquisition market look like? The Starr Conspiracy Intelligence Unit sees talent acquisition self-organizing around five key areas that are essential to organizations:

• Candidate Discovery — These solutions facilitate the discovery of candidates, typically job boards, sourcing tools, and recruitment marketing applications. Example: LinkedIn
• Candidate Connection — These solutions connect organizations and candidates in a more holistic manner or let organizations tap a community of like-minded individuals. Example: Stack Overflow
• Candidate Management — These solutions manage the process of hiring employees, rejecting candidates, and nurturing relationships. Example: Lever
• Candidate Intelligence — These solutions vet candidates, especially focused on background screenings and assessments. Example: SkillSurvey
• Recruitment Process Outsourcing (RPO) — These solutions and services supplement organizations’ hiring initiatives with a strategic and ongoing approach. Example: Cielo

We use the term organizing loosely because there are gross overlaps. Traditional ATS players are adding assessments and discovery elements to their systems. RPO adds a technology layer that is essential to truly being a partner. Candidate connection is trying to add a holistic and human element to all of these areas.

Every organization does something different with these combinations of technologies and services. And it changes constantly, with the largest recruiting organizations switching out noncore technology as often as once a quarter.

Buckle your seat belts and get ready to shift gears. Talent acquisition is changing. Not every brand or technology will be able to keep up.