24 July 2017

The long game: is it Seek v Google (with agencies collateral damage)?

A couple of Seek-backed offerings, Onploy and Sidekicker, have created plenty of concern in the local recruitment industry over the past several weeks. Many meetings and phone calls have occurred between senior Seek executives and unhappy recruitment agency owners and the RCSA.

At the time of writing no definitive action has taken place but we are moving quickly in that direction.

One of the largest recruitment agency advertisers has requested that Seek discontinue their development of Onploy. The request is still being considered.

The Founder and Managing Director of Sidekicker, Thomas Amos, having viewed my blog last week containing exerts from a letter written to the RCSA about Sidekicker by Wendy Mead (Owner of Pinnacle People), broke from his annual leave and wrote to both Wendy and myself refuting the allegations that Wendy made. I have requested Mr Amos make his response public via the comments section of my blog. 

As the wagons are being circled I thought it might be worthwhile to dig into some public documents to understand more of Seek’s strategy and the execution of that strategy.

In last year’s address to the Seek Limited AGM (24 November, 2016), CEO Andrew Bassat elaborated on Seek’s progress in Phase 4 of its business model. Phase 4 is “Human Capital Management: Solving big problems around engaging and engaging and coordinating large pools of labour”.

Traditionally recruitment agencies have been the primary solvers of these “big problems”.

Clearly Seek want a piece of this action as  Seek’s vision is to be “the first choice for careers and talent”.


Seek is pursuing this vision riding hard on the back of the deep and unique pool of data at its disposal, as they make publicly explicit:  



It’s the use of this data that’s of big concern to recruitment agency owners.

This data has been gathered from the job ads of end users (ie recruitment agencies are end-user hiring organisations). These end users have paid Seek to run for these job ads. When candidates apply to the ads on Seek’s job site they are uploading their resume to the back end of the Seek site.

Every click and subsequent action on a Seek job ad by a candidate is valuable information. Every piece of updated resume information is valuable information. Aggregated across hundreds of thousands of job ads and hundreds of thousands of job seekers each year this information is of unquantifiable commercial value. No other company in Australia would come close to matching Seek’s “strong data moats”. 

The direct application of athis data are helpfully articulated by Anthony Ugoni, Seek’s Global Director for Analytics and Matching, in this video about Seek’s use of artificial intelligence and data analytics. Ugoni says that Seek have 28 to 30 algorithms that match candidates on their profile and their job seeking behaviour resulting in 5 million candidate emails each week, each containing an average of 6.5 job recommendations.

So is this data being used by Seek to inform the building of products by Seek, and it’s partly and fully owned subsidiaries; products that directly compete with Seek’s paying clients; recruitment agencies?

Although Seek has been explicit about its ownership of Onploy and Sidekicker this doesn’t apply to all Seek’s new products. Jora local which is owned by Hire Now Pty Ltd, a fully owned subsidiary of Seek , yet has no disclosure of its Seek ownership anywhere on its site. Why not?


Jora local is fulfilling the function of a recruitment agency, no matter what Seek might call it.

As at 6.20pm last Friday Jora Local had 811 live job ads posted on SEEK. This would make them one of Seek's largest advertisers, competing directly against Seek's recruitment agency clients. Compare Jora Local's ads to a sample of other established recruitment agencies' ads on Seek at the same time: Michael Page 833, Robert Walters 695, Hoban Recruitment 476, Frontline Retail 447, Adecco 429, Retailworld 395, Peoplebank 361, Smaart Recruitment 222.

You only have to look at the Onploy ads for Career Mentors to see that it’s really a recruitment consultant by another name; otherwise why ask for “3+ years recruitment experience”? 

These concerns might turn out to be small beer when you consider that Seek is now the majority owner of recruitment software provider JobAdder.

Seek has bumped up its 23% financial, non-controlling interest it’s held in the company since 2014 to a 60% controlling interest, now.

The two companies have "a highly successful working relationship", but will continue to work independently, Seek's group strategy director Simon Lusted said.

So let’s think about this a little. Seeks labels JobAdder as a “leading Australian applicant tracking and client relationship tool”. Remember what Seek told us it has:  

 

The public release, earlier this week of the long-anticipated Google Applicant Tracking System for SMEs, hot on the heels of May’s Google for Jobs clearly exposed the long game here for all the players involved – integrate job ads, candidate resumes and an ATS all in one easy-to-use online product offering.

What has Google used to inform the building of this offering? The vast amount of data it has at its disposal from many years of users’ Google activity.

A competitor with access to an equivalent bank of resources in the job ads, candidate resume and ATS areas would be a worthy and feisty opponent, especially if they had access to significant financial resources like a public company typically has.

A competitor that had access to such resources but had an ethical and customer dilemma in accessing, using and cross-pollinating some these resources might have to ask themselves some tough questions about which customer relationships are expendable and how much they are prepared to invest in legal fees and unhelpful PR to take on angry customers and an interested competition regulatory body.

Break out the popcorn; it’s going to be a fascinating few months ahead.   

2 comments:

  1. Thanks Ross - this is certainly a hot topic for on-hire & recruitment agencies in every sector of the economy.

    The potential implications of these behemoth businesses with vast access to large scale information begs the additional question about data privacy. Are the candidates applying through these facilities aware that their information (often very private information) is being (or could be) potentially shared without their explicit consent?

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