I have no memories (first hand, of course) of their now seminal Super Bowl spot, “When I Grow Up,” mainly because I was growing up, and, being in middle school, paid infinitely more attention to getting girls than I did getting a job.
That was still over a decade away, one that, turns out, went a whole lot faster than expected – likely because I’ve intentionally blocked all memories of high school from my mind and was barely conscious in college. But inevitably, that day came where my ass had to go out looking for my first job.
The first site I found was Monster, which had become something of a verb (kind of like Google) in those halcyon days when construction starts were booming, Bear Sterns was the belle of the ball and credit was pretty much free.
I never experienced looking for a job without doing so online; the archaic stories I hear about recruiters waiting on faxed offer letters or being forced to scour classified ads in the paper to figure out who happened to be hiring are something, thankfully, I never had to endure.
The Secret Annex: Job Boards Aren’t Dead. Just Different.
We take online recruiting for granted – at least those crazy “Millennials” like myself do, I suppose. The stuff that we do now as a matter of course in TA, from CRM segmentation and lead scoring to social engagement to career site design and content marketing, is a world away from the traditional, transactional approach inherently underscored in most every job board’s basic business model.
These changes, though, are largely iterative, and often, create a new problem instead of solving an existing one – and while they might be sexy, aggregators like Indeed, employee review sites like Glassdoor or even PPA recruitment media plays like Advorto still function off of the fundamental currency of pushing applicants from publicly posted job descriptions into a searchable database – in other words, exactly what job boards like Monster have always done.
Make no mistake about it: Indeed is a job board (albeit one that’s reliant on a third party platform’s algorithm as well as associated AdWords spend in order to make money off of the margins). LinkedIn is a job board, offering job postings and a resume database, just like Monster has done for decades. Glassdoor, with its aggregated postings, job feeds on employer pages and searchable resume database, is also a job board, by any definition.
This begs the question, why is one of these companies the world’s most popular career destination (and by a wide margin), one is poised to celebrate one of the most successful tech IPOs of the year and one just got acquired for a whopping $28 billion, but Monster, well, they get chump change and the ignominy of getting left behind by a market they themselves made.
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As Dr. Dre once said, “I started this gangster shit, and this the mother f-ing thanks I get?”
Monster, surely, serves as a chronic reminder that things just ain’t the same for gangstas – although in online recruiting, we’re so busy hating the players we realize that the rules of the game are the same as they’ve always been. So what the hell happened, exactly?
A Recruiting Requiem: The Fiddling Beaver’s Last Dance.
First off, let me state that the only really surprising thing about the acquisition of Monster by Randstad is that Monster finally found a buyer, even one only willing to spend a bargain basement price to acquire a public company whose share price has tanked so badly it’s somehow gone from a component of the S&P 500 to the worst performing stock on the Street.
Monster Worldwide repeatedly put itself up for sale, most recently in 2014 under the disastrous junta run by Wall Street Insider and probable Gambino family member Sal Ianuzzi, desperately trying to preserve some value by offering to sell various pieces for scrap, more or less inviting in an LBO that never came.
Even value investors, after doing their due diligence, saw that there was likely no real value to be had – except, of course, for the one asset MWW did successfully dump: ChinaHR, which, you know, just happens to be the top online job board in China, the world’s second biggest economy and biggest labor market.
No big deal – at least they held onto that patent for BeKnown and even had enough left over to pick up a player like Goziak, whose major offering was automated job feeds on Twitter – something we all know every candidate just can’t get enough of.
This one proved about as prescient as their acquisition of HotJobs from Yahoo!, which amounted to more or less a three year deal to be the exclusive provider of careers content on a network that, perhaps not entirely coincidentally, only last week sold to what has to be the Randstad of the telecommunications industry, Verizon (joining AOL, which might be the better property to parallel with Monster).
Their acquisition of TalentBin, by contrast, was incredibly shrewd, successfully anticipating the explosion in federated search and CRM products in the market and negotiating for one of the most advanced products (and teams) in this burgeoning niche within talent technology.
It was just that, like their acquisition of Trovix, an early (and elegant) semantic search player which became the engine powering Monster’s SeeMore and 6Sense product offerings, Monster had no idea how in the hell to sell these complex solutions – far easier for an account manager on commission to push job slots and “enhanced job listings” to potential prospects than try to sell relatively complex enterprise software.
Despite their best efforts to rebrand and reposition themselves as an integrated talent management SaaS solution, Monster’s customer base (and larger market) never thought of them as anything other than a job board – and that short sighted approach is likely what killed the company’s long term viability and sustainability.
For many years, the product roadmap was less important to senior management than share price or hitting quarterly growth targets, similarly hindering the company’s ability to take the impairments or opportunity costs often required to ensure that a business and bottom line remain healthy, even if that comes at the short term expense of shareholders. Of course, Ianuzzi and his Wall Street cronies had such a significant position in Monster Worldwide at the time, that was unlikely to ever happen.
And so, paradoxically, the value of the company continued to drop. Enter Randstad.
Tulips, Fiddling Beavers and Dykes: Why Monster Is Going Dutch With Randstad.
I know this analysis is a day late, and there have already been many excellent posts deconstructing the Randstad-Monster deal, which is surprising, considering that this ranks up there with Oracle and Netsuite as the world’s most yawn inducing corporate marriage.
I probably would have put out something faster, but that this is news to many in our industry is a damning indictment of the relatively narrow view we take of the world of work.
Much of the coverage and insight so far has centered on the marriage of each company’s respective product suite, which is the central thesis of the press release announcing the acquisition, in which Randstad’s CEO, Jacques Van Den Brock (which sounds like an apartheid era politician or a 16th century Flemish painter) issued the following statement:
“With its industry leading technology platform and easy to use digital, social and mobile solutions, Monster is a natural complement to Randstad. The transaction is aligned with our Tech and Touch growth strategy and reflects our commitment to bringing labor supply and demand closer together to better connect the right people to the right jobs. We look forward to welcoming the Monster team and working together to shape the evolving global job industry.”
I question, however, whether Monster’s patents, product portfolio or anything even remotely related to technology had a damn thing to do with why Randstad made this acquisition, despite the suggestions otherwise. Let’s face it – you want the social, digital and mobile stuff, there are a lot better options than Monster that cost a lot less.
Trump Card: 3 Reasons Why Randstad Really Acquired Monster.
Randstad, as the arbiter of the world’s largest VC fund dedicated to early stage HR Technology startups, has to be acutely aware of this.
Furthermore, online job postings, media like display ads or retargeting on ad networks, or even resume database access, has really crappy margins and low deal size compared to selling professional services like BPO, MSP or contingent workforce planning, which are the core competencies which allowed Randstad to grow into the world’s second largest HR services firm in a relatively short period of time.
Here are three things I think Randstad is most likely to do with its newly acquired Monster holdings – again, this is wildly speculative, but when your topic is “temp firm buys job board,” well, there has to be a little bit of panache in there somewhere. Even if it’s just vacuum deduction.
1. Buying A Book of Business.
Think about Randstad’s global RPO business – they’re already hiring for literally hundreds of thousands of positions a year by playing the “technology agnostic” route (much like IBM does with Kenexa), embedding their recruiting teams onsite with some of the world’s biggest brands while simultaneously using the ATS and HCM systems that employer already has in place.
The cut they’d get from providing the software pales in comparison to the hourly rate for a global onsite BPO deal, which is why even though Randstad in fact has several proprietary or homegrown technology solutions in its portfolio, these generally only come into play if that client does not already have a system of record or engagement in place (and in these situations, the tech is often severely discounted, rightfully seen as a loss leader in a professional services environment).
So, get it out of your mind that this is a data play, or a way to increase revenues through Monster’s suite of products, search technology, ad inventory or point solutions. See, the thing is, when Monster bought Goziak and TalentBin – a social recruiting and CRM tool – they publicized the hell out of both these purchases, used both products heavily in collateral and, in the case of TalentBin, transformed this acquisition into a showcase product for analysts, customers and investors. It was, it appeared, the look (and direction) of the new Monster, one that was developing into a SaaS and data play instead of a recruitment marketing also ran.
At the same time, however, Monster made one more acquisition, and one that they kept so hush-hush their press release archives contain nary a mention of it, although their SEC filings confirm that, during the same quarter they were becoming that “digital, social and mobile” powerhouse Randstad alluded to, they actually acquired an RPO firm of their own.
While it only had about 20 or so clients at the time of the acquisition, TalentFusion was a well established RPO firm with a 14 year track record of success, a proven model and, most importantly, existing enterprise accounts that could form the foundation of Monster’s play into the recruitment services and RPO space. TalentFusion by Monster has continued to grow – albeit behind the scenes – growing a beachhead in the UK and EU markets in addition to their established accounts in North America.
A recent search for open positions available at Monster the day the acquisition was announced suggested the company has aggressively been hiring for all roles across TalentFusion, particularly for project managers and account services jobs, suggesting the company has been successfully winning and growing their RPO business in markets across the world while keeping an inexplicably low profile about what must have represented (from a perfunctory look at their financials) a significant chunk of Monster’s revenue.
This means Randstad isn’t necessarily just buying some tech partner – they’re doing a fairly traditional professional services acquisition and getting an existing book of business with recurring revenues to boot. This is why I think this is actually a smart buy for Randstad, financially speaking – ostensibly, their scale and expertise in the RPO space will help with renewals, upselling and new business acquisition which could very quickly surpass the value of the acquisition itself.
With MSP contracts often costing companies north of a billion dollars these days, it’s not far fetched to believe that one single, high value client that Monster somehow signed (or more likely, was a legacy client from TalentFusion) could be all the justification Randstad really needed to pull the trigger on this move.
2. Lead Generation.
Think about what Monster potentially represents for a firm like Randstad – basically a giant funnel for inbound lead generation for exactly the kinds of leads that form both the sweet spot for Monster advertisers and Randstad’s contingent workforce solutions: high volume, low skilled labor which provide more butt in seat than business value (except for the billable hours Randstad can charge back for their temp practice).
This is generally referred to as the “on demand RPO” model, and it’s one both Randstad and Talent Fusion by Monster have traditionally provided as core offerings to their respective client bases. And it’s worth way more money, at way better margins, than any job post in the history of ever (that is, if you’re the vendor).
A quick search of open positions on Monster reveals that most of the available positions are for questionable, non-market specific positions like “Financial Services Representative,” “Call Center Support” or seasonal/temporary labor, all of which are attempts of direct employers to disintermediate having to go to a temp firm in the first place by doing contingency hiring directly in house.
For Randstad, this means that every job posted on Monster can hypothetically function as a warm lead for trying to sell their contingency services, offering to kind of do the heavy lifting and assume liability and the manifold other selling points temp firms use to build their book of business – only instead of competing with DIY job listings or internet search, Randstad can essentially use the Monster platform and ad inventory to augment, rather than replace, what’s really their cash cow: contingent labor.
3. Vertical Integration: Making Monster Work.
With a database of millions upon millions of these resumes sitting in Monster, too, Randstad can actually leverage the biz dev capabilities inherent to their core business model on both sides – once they open a search or identify a client need, they’ll also be much more effective at finding temp and non-exempt workers given the scope and reach of Monster’s resumes likely far exceed even Randstad’s own internal system, allowing them to fill temp roles more quickly, which means more billable hours for them, quicker turnaround for clients and, of course, happier Monster users – Randstad owning both the temp placement process and job platform actually make it far more likely that the average Monster user is going to actually get hired.
But beyond all that, 6Sense and the rest of Monster’s properties constitute a killer CRM and lead list, but once the post-acquisition integration of these two entities is complete, expect that Randstad will be using Monster’s data to sell staffing services, rather than Monster using Randstad data to push product, as other industry pundits have speculated since the deal was announced.
I have seminal memories of Monster, as a candidate, recruiter and employee – and while I’m not sure about the future, all I know is that I can’t help feel a little bit nostalgic for the past, and thankful for the company that launched our industry, my career and helped literally tens of millions of global job seekers land over the course of its existence. It survived recessions, bull markets and busts, but it was always a constant presence in the insular, incestuous world of recruiting, and that was kind of reassuring in an industry that moves as quickly as this one.
While I don’t know what the future holds for this combined entity, let’s all go ahead and agree that it’s probably a good omen that we’ve set a precedent for Trump losing in 2016. Whether or not recruiters or candidates can win from this marriage of convenience, it seems, remains to be seen.
All I know is, I’m going to be pouring one out for all my dead homeys. Monster, you’ll be missed.