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Job site’s business model ‘tied our success to the success of our customers’
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Indeed President Chris Hyams speaking at Indeed Interactive 2017.
AUSTIN, Texas—Indeed Interactive 2017, a conference for recruiting professionals held by Indeed—the world's most trafficked job site—focused on recognizing the power of human connection in hiring as technology continues to automate aspects of the process.
SHRM Online caught up with three of the company's executives during the event—President Chris Hyams, Senior Vice President for HR Paul Wolfe and Senior Vice President for Marketing Paul D'Arcy—to discuss Indeed's predominant place as a source of hire, evolving industry trends and Google's launch into the job search space.
SHRM Online: What is your reaction to the speculation that Google's job search engine will be an "Indeed-killer"?
Hyams: First, I love the fact that people recognize where we are such that "Indeed-killer" is a conversation. Ten years ago no one would have said that. I see that realization as a testament to our success.
I have a huge amount of respect for Google as an organization, and we would be arrogant to think that just because we're No. 1 in job search [now] that we will always be No. 1. What Google is doing is logical for them, and we welcome competition. The difference is that we have 5,000 employees who are focused solely on helping people get jobs. Google is a big organization, but they don't have 5,000 people focused on employment.
Hiring and employment is a very specific, difficult problem, and it's very different around the world. We've spent 12 years building a global presence, with sites in more than 60 countries in 29 languages and offices in 14 countries.
Average turnover in the U.S. is 4.6 years, for example. In Japan, that number is 19.5 years and in India it's one year. Understanding the differences around looking for a job and hiring around the world is very different. We've spent so much time doing this that any company that dedicates itself 100 percent to the challenge will take some time to even solve the basic problems.
If we stopped today, I promise you we would get killed. We cannot rest on our market leadership and keep the likes of Google away. But if we are running at full speed and we keep growing, then I'm optimistic.
One of the biggest challenges that we have spent a lot of time and energy on is applying through a mobile device. Today 60 percent of all job search is on a mobile device. Five years ago it was 20 percent. The most important thing is that if somebody is doing a search on their mobile device, they need to be able to apply. That requires that people have an identity that they're logged in with that they can apply to a job with. We've got 90 million people [in Indeed's resume database]. More than half of the users of our app can log in and apply right now to a job.
This could be an area that they put a lot of time and energy toward and [then] maybe get there. But Google Plus clearly has not been successful. And even if they had all of the jobs that we had, and all of the search relevance and all of the domain expertise, they still couldn't have people effectively apply to jobs from a mobile device. We solved that issue five years ago. I think they can build a successful business, but if they want to be the place people go to for job search, to post jobs, and apply for jobs and get hired, they have their work cut out for them. Look at the history of the different areas they've gone into outside of search. Gmail has been very successful, but other than that, their biggest successes have been acquisitions—YouTube and Android. They didn't build those in-house. I can rattle off 10 different things they have tried to do that were not successful.
SHRM Online: Ten years ago, Monster stood where Indeed stands now, but it has faded since. Why do you think that is, and what are you doing to prevent a similar fate?
Hyams: We spend a lot of time asking ourselves that question. The reason that Indeed succeeded where the old job board model has not goes back to the basic ideas that started the company. From a job seeker perspective, they want [to see] all the jobs. Any site where you can go and find some jobs, it means you have to go to multiple sites to find them all. The initial idea to create a search engine as opposed to a job board was the first thing that differentiated us.
Second is the business model. From an employer perspective, the job board model works like the classifieds. You pay for placement regardless of performance. Indeed was founded as a pay-for-performance model. Since the jobs on Indeed are on the site for free, every paying client has chosen to opt in to be a client, [but] not because they needed to pay to get the jobs on the site. Last year, we had more than 400,000 paying customers and that number has grown dramatically every single year. People come back because it works. If it didn't work, they would stop spending. The combination of having a business model that tied our success to the success of our customers was, from a business perspective, the best decision. Anyone who doesn't put job seekers first has no chance of becoming the primary source that job seekers go to. That's why we have won.
Thinking about the future and competition, we just have to continue to do what we have done—relentlessly focus on how we can improve the experience for job seekers and how we deliver more value to our customers. We don't get distracted by someone else's new feature that sounds cool, or whether someone else is getting a lot of press. The only thing that we care about at the end of the day is the source-of-hire report.
Last year, according to SilkRoad data, 58 percent of all online hires were coming from Indeed, and that number has grown each year for the last five years. As long as we deliver more hires than anyone else, and as long as our business model is focused on delivering more quality for less cost, I don't see any dimension on which we could get disrupted. We see competitors coming from all sides. We have no arrogance around the fact that just because we're big and successful that we can't be disrupted. Indeed was that disrupter, so we're certainly not overconfident. We pay attention to that. We think that as long as we are single-minded about our core mission, we will stay on top. The only way we make money is helping people get hired. We don't have an advertising business or a business to generate sales leads. We don't do anything else.
SHRM Online: Indeed Prime, which offers employers vetted tech talent, has been live for about 18 months now. What can you tell our readers about it?
D'Arcy: Prime is in 22 cities now. We opened our first international markets in Dublin, Ireland, and London. Prime solves a particular problem, which is that in a number of roles, specifically technical roles, there is an incredible desire for top talent. We filter and highlight the top 10 percent of that category on Indeed Prime. It works well for [candidates] because they get more job opportunities, and hiring companies are exposed to incredibly talented people who are actively looking for jobs. That has proven out and we continue to expand globally. It's important for us to go city by city, because for it to work in any marketplace, we must have the talent and the employers there at the same time. Candidates are chosen either through a review of work history and credentials or through a coding competition scored through HackerRank. That democratizes the opportunities. While you could be chosen because of the work experience you've had or where you went to school, there is also a path for nontraditional candidates with the same skills, ability and potential. Once chosen, people from both paths do equally well when looking for jobs. Resumes are still an imperfect way to match candidates with opportunities. We think about it a lot, how to allow nontraditional candidates to prove themselves and earn the jobs they deserve. That's a big area of research and innovation for us.
We think that the model has application in other areas, but we want to build a base in technology-related jobs before we expand.
SHRM Online: I'm curious, what are your thoughts on recent trends in talent acquisition, such as employers not asking for candidates' previous salary?
Wolfe: If you asked me this question a year ago, I would have said I didn't like it. I've evolved my thinking since then and support it now because I think it gets at some of the pay inequities in organizations. We're in the middle of a pay equity study and analysis here at Indeed. I like that it levels the playing field. We've got set salary ranges for all of our roles, and certainly in the conversation with candidates, we're going to set the right expectations upfront about what our ranges are and if they choose to disclose at that point we can have that conversation.
Initially, from a cost perspective, I was concerned. But it's a question of do you spend the money to fix inequities over time or do you do it at the beginning? It's important to start that relationship with candidates off right and transition from a positive candidate experience to a positive employee experience. That's why my thinking evolved.
SHRM Online: What about the growing use and acceptance of artificial intelligence, machine learning and chatbots in the recruiting process?
Wolfe: Technology has changed recruiting over the last 20 years for the good. It has taken inefficient processes and made them easier and offloaded them from a recruiter. Then that recruiter can take the time and focus on candidate experience, and build a more personal relationship with the candidate. Technology, when used in the right way, like chatbots in an initial phone screen that frees up recruiters' time, I think that's great. Initial phone screens take a lot of time. We hired 2,500 employees last year, and phone-screened about 25,000 applicants. If you can take some chunk of that and offload it, but still keep the right human part of the experience in play, I'm all for what technology can do to help recruiting.
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