There was a lot of action this year in TA technology and, based on all the data we’re seeing, more growth, innovation, and collaboration will take place in 2020. It’s an exciting time to be in talent acquisition!
Here is our recap of notable moments from 2019, from triple-digit funding rounds to high-traction technologies to what we had brewing here in the Lab, as well as our predictions for the New Year. Enjoy!
TRIPLE-DIGIT FUNDING IN 2019
Cash, money, dough, cheddar, paper. Whatever your choice of word is, there was a lot of it flowing in 2019. This is significant because where investors are allocating capital is typically a good indicator of where product roadmaps and entrepreneurial energy are likely to go.
$100 million+ funding rounds
Andela, a Nigerian startup, kicked things off in January 2019 with a $100M Series D to help companies build distributed engineering teams in Africa. Not to be outdone, Jobvite followed suit and secured $200M in private equity and subsequently rolled up Canvas, Telemetry, and Rolepoint to cover more of the recruiting cycle.
In Q3 2019, we learned that RigUp, a temporary labor marketplace for the energy sector, raised an outstanding $300M. In effect, highlighting the strong demand for industry-specific contract workers. We expect this category to continue to grow exponentially as early adopters (e.g. technologists) give way to the rest of the economy, such as the energy and healthcare sectors.
- Jobcase – $100M Growth Equity Round (Source)
- Thumbtack – $150M Series H (Source)
- Checkr – $160M Series D (Source)
- Ziprecruiter – $156M Series B (Source)
Biggest TA News Headlines in 2019
2019 was a year peppered with notable TA Technology headlines. In fact, there were more interesting news stories than we have room to discuss. That said, the main flavors of headlines this year fell into two broad buckets: Acquisition/Capitalization and Legal/Regulatory-Related.
The best of #TATech, the worst, and the biggest #TalentAcquisition headlines are all in @TalentTechLabs' #YearInReview! Check it out:
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The talent acquisition technology landscape is not static, so we expect to see more deals and ‘cross-pollination’ between sub-verticals as vendors gobble up their competition and look for complementary offerings and new markets. While there were many, many deals this year, there weren’t any “Mega Deals” (a la Microsoft → Linkedin), though some of the largest tech platforms (Google, Facebook, Amazon) do seem increasingly interested in TA tech. It remains to be seen whether these firms make a more meaningful position.
- Silver Lake Buys First Advantage more than 1.5B (Source)
- Symphony Talent Acquires SmashFly (Source)
- Workforce Logiq Acquires ENGAGE Talent (Source)
- SHL acquires Aspiring Minds (Source)
- Bullhorn acquires Erecruit (Source)
- NurseFly acquired by IAC (Source)
- Shaker merges with Montage (Source)
- Figure Eight acquired for 300M (Source)
- Fiverr files for IPO (Source)
- Ultimate Software to go private in 11B acquisition (Source)
We predicted there would be consolidation in the Assessments space (we were right) and more to come in 2020. We believe there will be more overlap in raw functionality (and maybe a few more deals) between ATS and CRM companies, as both race to become holistic “Talent Acquisition Platforms.” In short, with an ecosystem of firms numbering in the thousands, there are going to be many more interesting combinations, and we will see more point solutions trying to merge and acquire their way into becoming full-service platforms.
Social Data: Who Owns What?
On the regulatory front, the preponderance of social data on the internet is making it easier to source candidates and train algorithms, but it also raises questions that have not been definitively answered about who actually owns the social data, who has access to it, and how it can be used.
With this said, we did receive a glimpse into what the courts are thinking in the hotly debated case of LinkedIn vs. hiQ. While a U.S. Circuit ruled that a social platform doesn’t own profiles, the EU has extended the individual rights to protect their personal information in profound ways for tech companies attempting to harvest information from them. How this will affect industry regulations, social sourcing solution providers, and company privacy policies going forward remains to be seen.
Artificial Intelligence: ‘Deceptive and Unfair’
The adoption of AI in recruiting and matching will continue to proliferate, despite complaints from consumers and Rights group about potentially “deceptive and unfair” recruiting practices.
In November 2019, the Electronic Privacy Information Center urged the FTC to investigate HireVue, the online video interviewing platform, regarding its facial-scanning technology. In their official complaint, the group cited ‘use of biometric data and secret algorithms is “unfair” because it “causes or is likely to cause substantial injury to consumers.’
Society is increasingly becoming wary of technology and “black box algorithms” (e.g. algorithms that make a decision such as whether or not to hire someone where inputs/construction are not transparent), so it’s imperative for providers to prove their solutions don’t have an adverse impact (e.g. favor/disfavor certain races, genders, ethnicities, groups). We believe there is a lot of opportunities for companies to “step up their game” in providing the necessary transparency to engender trust in these new wave solutions.
Let’s get ready to RUUUMBLE!
For ridesharing firms and the myriad of temporary labor marketplaces built in their image, California’s passage of Assembly Bill 5 calls into question the underlying economics of the model. The bill requires these companies to hire workers as employees, not independent contractors.
Not going down without a fight, the three gig companies launched an impressive $90M campaign in October 2019 to shut down the bill. Will they be successful? It’s hard to say given the strong outcry from both sides of the issue, but if other jurisdictions follow California’s lead, expect Uber rides to get a lot more expensive.
News from Talent Tech Labs in 2019
Here, at Talent Tech Labs, we believe in “Go Big or Go Home,” and this year we’re definitely going out with a BANG. As we reflect on what we’ve created and whom we’ve served, we are honored, humbled, and inspired.
We’ve doubled our client-base and team-size, quadrupled our research report output, and collectively spoke in 16 countries and met with TA executives in nearly 143 cities! This last one is mind-blowing and largely due to the growing excitement for recruitment technologies.
Website Refresh + New Member Portal
In April, we launched a new website and Member Portal, designed specifically for UI-friendliness and collaboration. The process was a grind, but it forced us to really think through our offerings, value proposition, and long-term strategy. In effect, giving us with even greater clarity and focus on how to best serve a community of TA leaders hungry for new technology and insights.
New Lines of Research
We launched two new lines of research–Provider Resumes and Playbooks. Both were designed to provide TA leaders with even more granular insights for specific technology platforms and strategy implementation.
Ecosystem 8.0 Release
We pioneered the Ecosystem in 2014 and it took off like wildfire, quickly became an industry resource for TA teams in the market for new technology. This year, the biggest change was to the actual companies that are highlighted: 74 companies were cut and 110 were added. Download your free copy.
Partnership with Sixcel
In October, we announced a partnership with the HR software implementation agency Sixcel, so we could extend the value we provide to our members. Initially focusing on staffing companies, our mission here is to enable firms in that sector to better adopt and implement new technology. Sixcel’s expertise in people and process change management further ensures clients that the technology they implement will drive better outcomes.
FASTEST GROWING TECHNOLOGIES IN 2019
(According to our 2019 TA Adoption Survey)
Bots have shown promise, and appear poised to increasingly transform the recruiting department in 2020 and beyond. In our survey, we learned only 16% of survey respondents are using Bots, but that figure was 2X the level of the previous year. This is an area that will continue to experience rapid growth, mostly driven by the need to automate recruiting processes and increase output while maintaining headcount.
Candidate Relationship Management systems was once an upstart idea. In 2019 adoption exceeded 60% of enterprise organizations who responded to our survey. It’s soon to be expected to compete with the ATS as an anchor system in talent acquisition.
As more of the recruiting life-cycle gets digitized, it will undoubtedly create more data that could be used to make decisions and optimize recruiting campaigns. As a result, new lines of businesses such as analytics (particularly those that are predictive), social search, and AI-based candidate scoring/matching.
Deployment platforms have emerged to digitize staffing and they’re experiencing phenomenal growth. We estimate these technologies will generate between $10M and $30M in net SaaS revenue at the close of this year.
There was a lot of action this year in #TATech and the pace will only continue to pick up in 2020. Take a look at @TalentTechLab's 2019 #YearInReview:
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WEAKEST TECHNOLOGY IN 2019
Shared Talent Networks
Shared Talent Networks, part of peer-to-peer recruitment, is still an unproven sub-vertical with many challenges to their business model and value proposition. It came onto the scene in 2016 with the debut of HireVisor, followed by Stella.ai in 2017 who raised $10M. Since then HireVisor has shuttered and Stella.ai has been pretty silent, and we’re not surprised.
The concept is simple–leverage the screening and shortlisting efforts of TA peers from other companies to gain access to qualified silver medal candidates. Sounds great, right? Not so fast. There are serious network effects at play with this model, namely:
- No value in being the first company in the network
- Employers tend to hire in a specific industry
- Most companies keep their star candidates to themselves
Check out our recent blog post to learn more.
Predictions for 2020
Lastly, and most requested, are our predictions for 2020. Here’s what we believe will unfold in the next decade (we haven’t been wrong, yet!):
- Bots will break into two categories–robotic process automation and conversational artificial intelligence
- The emergence of a new system called “Recruitment Marketing Platforms” that are distinct and separate from CRMs
- Programmatic Advertising will become the new standard for job distribution
This is an exciting time to be in talent acquisition. For technology providers, it means building upon the foundation that was laid by early disruptors and taking it to the next level. For TA leaders, it means having new tools and solutions to become better, faster, and more agile in attracting and retaining top talent. For job candidates, it means improved matching for jobs and quicker turnaround times for interviews.
And, for us at Talent Tech Labs, it means more opportunities to partner with smart TA teams at today’s leading brands. We are passionate about talent acquisition technology and very much looking forward to working with you in the New Year!
(Don’t agree with something we’ve said? We’d love to hear from you! Send your feedback to firstname.lastname@example.org.)
The Talent Tech Labs Team