In the past decade, workforce demographics have shifted dramatically; unemployment is at 4 percent, 10,000 baby boomers retire every day, millennials switch jobs every few years and the gig economy emerged as a truly viable employment option. As a result, many workers are seeking more flexibility and working on-demand gigs through platforms such as Lyft, Upwork and, my company, Shiftgig.
While the human capital management space is constantly evolving, it will likely experience seismic shifts in the near future with tech giants like Microsoft, Facebook, Amazon and Google making significant investments in the HR technology space. They’ve realized a majority of their users are job seekers and are taking advantage of the opportunity. As a result, there has been a convergence of staffing and digital businesses.
One of the first big investments that sparked this trend was Microsoft buying LinkedIn in December 2016 for $26.2 billion. This purchase marked a commitment to reinvent productivity and business processes. Already they’ve launched Résumé Assistant which offers job seekers insights from LinkedIn while building their résumé in Microsoft Word.
In early 2017, Facebook launched a hiring feature that allows users to review job opportunities for companies on Facebook business pages. Interested applicants can apply directly through Facebook and businesses can review applications directly through the Facebook messaging platform. A year later, Facebook’s job portal is active in 40 countries.
Amazon began investing in this space about 15 years ago when they launched Mechanical Turk, a crowdsourcing marketplace that allows individuals to perform tasks. Five years ago, they spent $775 million to buy a robotics company to disrupt their warehouse staffing. In March 2018, Amazon invested in its own housekeeper marketplace, Amazon Home Services.
More than 30 percent of job searches originate on Google. Historically, much of this traffic was directed to a company’s applicant tracking system, job aggregators and job boards. In July 2017, Google made a big splash in this space announcing its own ATS. More recently, Google launched a candidate discovery tool that helps businesses identify past candidates that would be a good match for new roles within their company. These initiatives are a part of their Hire by Google business, which strives to improve job candidates’ experiences.
With nearly $500 billion of cash sitting on the balance sheet of Microsoft, Facebook, Amazon and Google, what do these initiatives mean for the human capital industry? Job boards, aggregators and recruiting and staffing firms need to consider reinventing themselves. Traditional players shouldn’t be afraid to change the status quo; otherwise they’ll risk being disrupted.
Here are three ways HR leaders can adapt to tech giants’ advances in the industry:
Buying a talent platform or digital HR asset is one way to stay ahead of the tech giants. Acquisitions allow traditional players to quickly onboard new technologies and innovations. We saw this happen when Randstad bought Monster, Adecco Group bought Vettery and Recruit bought Indeed and more recently Glassdoor.
If acquisitions aren’t the right option, then an investment in building a talent platform may be better. Companies that have been in this industry for years have tenure, industry knowledge, client relationships and active workers that the four tech giants might not have today. Utilizing this advantage in a strategic manner can help build a game-changer solution in the market.
Finding a way to partner with businesses who do have unique technology is also an option. Staffing firms have historically thrived off partnerships; for example, MSP’s, or managed service providers, have proved fruitful. This is an example of how a mutually beneficial relationship can work out in the industry’s favor.
Companies that have been operating the same way for the past 20-plus years might not survive in the future state of the industry. Investments from tech giants are only beginning, so don’t expect their impact to slow down any time soon. Traditional players must innovate and embrace change immediately. If they don’t change or move fast enough, they will likely be disrupted.