What Does Glassdoor’s Acquisition Mean for HR?

Indeed reclaims Google-powered search results with purchase of employer-review site

Roy Maurer By Roy Maurer May 10, 2018
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The parent company of Indeed has purchased Glassdoor—an announcement making a big splash across the recruiting industry, but not expected to affect talent acquisition professionals very much, at least in the short term.

Pricing for employers is expected to continue to go up for both services, but the integration of the two marquee platforms eventually may lead to price breaks, the elimination of duplicative offerings, and Indeed becoming the destination for managing employer brand.

[SHRM members-only online discussion platform: SHRM Connect]    

What Happened

The talent acquisition technology market shrank after Japanese HR conglomerate Recruit Holdings finalized a deal May 8 to acquire the employer review site Glassdoor for $1.2 billion.  

Recruit Holdings is the owner of Indeed, the world's largest job search engine.

Glassdoor will reportedly remain a "distinct and separate part" of Recruit Holdings' HR technology business segment and Glassdoor CEO Robert Hohman will continue to lead the company. The all-cash deal is subject to regulatory approval, expected to close by September.

Glassdoor—where users anonymously share feedback on their employers—grew in recent years beyond employer reviews to include salary data and job listings. Its revenue comes from employers sponsoring jobs (it's the second-largest job site in the U.S., behind Indeed) and managing company profile pages to promote their brand to candidates.

Even though Recruit Holdings said there were no plans to integrate Glassdoor and Indeed, other than for "specific challenges" in the future, experts believe consolidation is in the cards to ward off competitive threats posed by online recruiting behemoth LinkedIn (bought by Microsoft in 2016), Facebook, and especially Google for Jobs, which debuted last summer in the U.S., and recently began expanding to major international markets.  

Industry watchers say the acquisition of Glassdoor shouldn't be a surprise because Indeed had lost Google's organic job search traffic after the unveiling of Google for Jobs. Google aggregates content directly from employers, applicant tracking systems and multiple job boards including Glassdoor, but—pointedly—not  from Indeed.

"Now Recruit Holdings owns two of the biggest job sites as it prepares to take on Google in the new battle for online job supremacy," said Chris Russell, a recruiting technology and job site consultant with RecTech Media in Trumbull, Conn. He explained that companies like Recruit Holdings are concerned about Google and Microsoft controlling online recruiting. "Recruit wants to defend their turf and expand it, thus guaranteeing a place in the hiring cycle."

Consolidation should concern employers; costs could rise and the quality of traffic could fall if channels to find talent are limited, Russell said.

Pricing Projections

The loss of free traffic to Google has already affected employers who rely on Indeed for candidates, explained Jonathan Duarte, an HR technology veteran and co-founder and CEO of GoHire, a chatbot development company in San Francisco. "You're having to pay more, and get less," he said. "The cost of acquiring candidates will continue to go up for them and they are having to push that cost to customers." The days of Indeed scraping employers' careers sites for free is being phased out, he added.

"Glassdoor gets a lot of traffic, but it generally comes from Google, and through this acquisition, Indeed will be able to again leverage that free traffic," he said.

Indeed's play for Google's SEO should bring the costs to employers back down, but it remains to be seen whether the partnership between Google and Glassdoor changes or stays the same. "What if Google stops indexing Glassdoor because they see them as competitors?" Russell asked.

In the near future, prices are expected to keep increasing. "If history is any guide, clients of Glassdoor should expect price increases once the dust has settled," Russell said. "I've heard that Glassdoor has already been raising prices on clients. Now that they have a new owner, that pressure will increase."

Christopher Kurtz, the founder and CEO of PeerThru, an employment brand and Glassdoor management consultancy, had multiple clients asking about price increases after hearing the news. He agrees that the deal could add price pressure in time. "There are only so many properties on the Monopoly board, and if you own all of them, you can charge a premium for rent," he said.

But an integration could also lead to a bargain for employers, explained William Tincup, a leading HR technology expert and the president of RecruitingDaily, a media company focused on talent acquisition.

He envisions a scenario where Indeed customers could buy ads on Indeed and Glassdoor, and get a license on Glassdoor to manage their brand—all at a discount. "If they package their offerings together, they could come up with something unique. Combine these two and you've got reach. But it's like any puzzle: How will they be put together?" he asked.

Joel Cheesman, a recruiting technology industry veteran and the founder of Ratedly, which monitors employer review sites, pointed out that a pricing shift for job advertising may be coming anyway, from paying for posts to paying for a more comprehensive solution. "Pricing in the next few years will likely change from pay-per-post, pay-per-click and pay-per-applicant to a monthly subscription model where you can post your jobs, manage your candidates, and maintain a branding profile."

On the other hand, Google and Facebook are free sources of candidate traffic. "Employers can start to use Google and Facebook as a counter to these other guys who are charging more," Russell said. "If I was hiring for entry-level and blue-collar positions, I'd dedicate a recruiter to post jobs and source from Facebook. And if your jobs are not optimized for Google for Jobs, what are you waiting for?" 

Employer Reviews Matter

The acquisition could also impact the lucrative employer branding market. "Indeed and Glassdoor make up about 80-90 percent of employer reviews," Cheesman said. "It almost creates a monopoly for where you have to go to manage your brand. You almost have to use one of the two, or both."

Research shows that employer reviews have weight. The result of a recent study from social recruiting firm CareerArc shows that only 21 percent of candidates would apply to a 1-star rated company and just 34 percent would apply to a 2-star company. More than 90 percent of candidates seek out at least one resource to evaluate an employer's brand before applying for a job.

"From a user experience, it could bring harmony to the employment brand products of both Glassdoor and Indeed," Kurtz said. "I often hear from employers that they will have one rating on Glassdoor and another rating on Indeed, with different volumes and a disparity of comments. We could get a harmonized, consolidated profile for companies, which would be great."

There could even come a day when Glassdoor is completely folded into Recruit Holdings, as it aligns itself to be the top destination for employment branding solutions.

"My guess is Indeed will emerge as the flagship brand with resources and content from Glassdoor eventually coming under one roof," Cheesman said. "I'm sure everyone at Glassdoor has been told nothing is going to change, but I feel this deal is Recruit setting itself up to be the fourth horse in a four-horse race with Microsoft/LinkedIn, Facebook and Google."

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