Introduction: The Future of Recruitment(Part 3)
Elon Musk recently shook the social media world by renaming Twitter as “X” in a bid to transform it into an all-in-one application. Drawing inspiration from the successful Chinese platform, WeChat, Musk plans to incorporate work, payments, and socialising into one seamless experience.
Recently, X Corp, which owns Twitter, took over a San Francisco-based talent platform called Laskie. The self-proclaimed ‘job-matching platform where tech jobs apply to candidates’ has been growing since its $6m seed round in 2021. This acquisition by Musk’s X Corp, hints at the approaching revolution in the recruitment landscape, much like what Uber did to transportation.
Is the Recruitment Industry Ready for its Uber Moment?
Creating a one-stop-shop app for everything is a formidable task due to the myriad of options in payments, social media, and recruiting. But it appears we’re on the brink of seeing an “Uber-like” transformation in recruitment. Here’s why:
- Growth of HR Tech Companies: According to McKinsey, the HR technology market, valued at $32.58 billion in 2021, is expected to soar to $76.5 billion by 2031. This rapid growth, combined with increased investments, indicates that HR tech firms are well-positioned to bring substantial change in recruitment. According to a report conducted by SD Worx the UK is primed to be impacted, their report found that more than two-thirds (68%) of British companies are investing in digital HR tools.
- Thriving Staffing Market: Staffing Industry Analysts (SIA) reports indicate a significant market share of large staffing firms, with the 100 largest firms accounting for 43% of global staffing revenue in 2020. As a result, this industry holds enormous potential for disruption by an all-in-one app. In the UK, SIA states that: “The United Kingdom is the oldest staffing market in Europe and the largest market in terms of size (by sales). It is highly fragmented with some 15,000 firms”. These firms had a combined revenue of £40b in 2022.
- Changing Work Preferences: Upwork’s research highlights the increasing preference for freelancing among Gen Z and Millennial professionals, suggesting that the workforce is ripe for an overhaul in how it connects with opportunities.
- AI continues to evolve: Large Language Models (LLM’s) and machine learning are evolving so quickly that new players are joining this space every week. Whether it be writing a job description, deconstructing jobs or even matching the technology has advanced so much in the last 5 years and shows no signs of slowing down. Deloiite found recently that in the UK 26% of 16- to 75-year-olds have used a generative AI tool, representing about 13 million people, with one in 10 of those respondents using it at least once a day. This is an unprecedented adoption of new technology.
Total Talent: The Superapp’s Core
A recruitment superapp is likely to be founded on the Total Talent principle, providing a seamless user experience with excellent integration. Total Talent is an all-encompassing approach to talent acquisition and management, combining various types of workers, including full-time, part-time, freelancers, and gig workers.
Elements of Total Talent:
- Internal Mobility: Encouraging growth and progression within the company.
- External Talent Sourcing: Utilising external sources such as staffing agencies and freelancing platforms.
- Holistic Workforce Planning: Aligning business objectives with talent needs.
- Data-Driven Decision Making: Leveraging data for insights and strategy optimization. This model brings resilience, access to specialised skills, cost-effectiveness, increased employee engagement, and solutions to talent
- shortages.
Creating a Recruitment Superapp: Potential Scenarios
The vast staffing industry may seem an obvious choice to initiate this change, but the industry’s history suggests a lukewarm response to technological disruption. Instead, the more probable catalyst could come from the HR tech sector, particularly through mergers and acquisitions.
Platforms like Upwork, Braintrust, Toptal, Gigged.AI, Hackajob, and Worksome could potentially form the basis for a superapp through M&A activity. Upwork, Braintrst and toptal are US based where Gigged.AI, Hackajob and Worksome have significant operations in the UK. Here is a deeper dive into some of the key players:
- Internal Mobility: Gloat, Fuel50, ICIMS and Gigged.AI have different solutions mainly targeted at large enterprises.
- External Talent Sourcing: Fiverr, Upwork and Toptal have been the largest in recent years with companies such as Gigged.AI and Gigster starting to take more market share and move away from the traditional contractor model.
- Holistic Workforce Planning: ,Worksome and VNDLY (acquired by Workday) are offering interesting models for workforce planning to disrupt traditional MSP/VMS solutions.
- Data-Driven Decision Making: Beamery (recently hit unicorn status) helps companies make decisions through skills data.
Alternatively, tech behemoths like Microsoft, X Corp, or Amazon, already having made significant strides in this space, could lead the charge. Microsoft already owns Linked In, X Corp has Twitter and now Laskie and Amazon has MTurk.
Conclusion
The rise of an all-encompassing recruitment superapp is imminent, powered by HR tech companies, changing workforce preferences, and a shift towards Total Talent management. While it’s exciting to envision this digital revolution, we must also consider the ethical implications and ensure we don’t lose the human touch in our pursuit of technological innovation. The new era in recruitment will value human needs, dreams, and aspirations as much as any algorithm.