Recruit Holdings held its inaugural Investor Update FY2023 over the course of three days beginning March 26, 2024. Day 1 focused on Simplify Hiring, the company’s most important strategic pillar. Recruit Holdings President and CEO Hisayuki “Deko” Idekoba and leaders from all three strategic business units (SBUs) talked about how the SBUs are working together to create the underlying technologies and solutions that will make the job search of the future easier. Here is a summary of that three-hour event.
Using Technology to Improve the Hiring Process and Bring the Touch of a Personal Recruiter to Everyone
Deko, who also serves as the head of HR Technology SBU, kicked off the event by showing a video introducing the real voices of job seekers. “Getting the perfect job remains a challenge for so many. Last year, on Indeed alone, there were over 2.5 billion applications submitted. And over 30 million job seekers applied to more than 30 jobs each, all in the hope of finding ‘the right fit,’” reported Deko. He also noted how there is still a lot of manual work involved in the hiring process for employers. “On average in the US, it takes over 50 days to make a hire. On Indeed, we’ve seen some employers receive tens of thousands of applications per week. And… there were millions of individual jobs that had over 100 applicants each,” Deko cited. “This inefficiency in hiring highlights the true cost to society.”
“We believe that by understanding the needs of job seekers and the needs of employers more deeply, we [at Recruit Holdings] can improve the hiring process,” Deko stated. “Imagine a world where technology brings the touch of a personal recruiter or career companion to everyone, where looking for a job feels more human and hopeful for all.”
Regarding the potential of AI, which is expected to help overcome such challenges, Deko pointed out the gap between society’s expectations and the actual pace of change. “Everyone is excited about the potential of AI to solve challenges like this, and we are too. We’ve been working with AI for years, though, so we know it will take time for real change to happen.
“We are uniquely positioned to solve this challenge with our rich unique data,” he continued. “Data that includes everything from job seeker activity on our online hiring platforms to offline conversations between recruiters and candidates, allowing us to use AI in ways no one else can.” This points to the possibilities of leveraging AI that only Recruit Group can make a reality.
Recruit Holdings President and CEO Hisayuki “Deko” Idekoba
Indeed’s Ongoing Transformation from Search Engine to Two-Sided Marketplace to Get Closer to the Hire
In the following session, Indeed CEO Chris Hyams spoke about HR Technology SBU initiatives designed to realize the vision Deko shared. He began by reflecting on Indeed’s mission and its two-decade journey.
Founded in 2004, Indeed first started by bringing jobs all together in one place to create a simple, fast, and relevant search experience for job seekers. “This transformation from classified ads to search engine was Indeed’s core strategy during our first phase of growth. It was enormously successful in helping us to get to #1 in traffic,” Chris explained. “But by 2011, it became clear that we could only get so far as a search engine, and we embarked on the next phase of our strategy - which is the transformation from a search engine into a two-sided marketplace.”
Chris also touched on two strategic priorities: growing marketplace effectiveness and spurring more effective monetization of the marketplace.
Indeed CEO Chris Hyams
For the first strategic priority, Indeed Executive Vice President for Job Seeker Maggie Hulce and Indeed Executive Vice President for Employer Raj Mukherjee explained in detail their three-part strategy for growing marketplace effectiveness. The first focus is “offering broad reach.” Indeed is determined to be the choice of more job seekers by providing all job openings, real workplace reviews, career guides, pay information, etc. in one place. For employers, Indeed is already compatible with over 300 applicant tracking system (ATS) partners so data flows smoothly between their ATS and Indeed. “This opens up the possibility of broader reach to be chosen by millions more employers,” Raj noted.
The second focus is “best matching.” Indeed is providing job seekers with personalized job and career recommendations based on our understanding of their skills and preferences. “As part of creating personalized recommendations, we are also testing new generative AI experiences to help job seekers explore job and career changes based on skills or other considerations,” Maggie said, and then revealed that “our first experiment in the US already shows a 17 percent improvement in conversion to started applications versus an open-ended search on Indeed.”
In addition, Indeed is helping employers easily find qualified candidates with products such as screener questions, Indeed Assessments
to help employers reliably screen candidates for over 900 skills, and Smart Sourcing, which uses AI to provide instant candidate recommendations, and helps employers easily review and reach out to relevant candidates.
The third focus is “faster connections.” Indeed has tools to help job seekers showcase their skills, apply, interview, and ultimately get hired. Maggie added: “There are four elements in particular that help drive faster connections on Indeed — our mobile app, Indeed Apply, Indeed messaging, and Indeed Interview.”
Raj then shared some numbers related to employers. “Since we launched Messaging in 2019, there have been billions of messages between employers and job seekers right on Indeed. Over 8 million interviews were held on Indeed last year. The benefit is 44 percent faster hiring.”
Chris took back the stage and laid out some initiatives for more effective monetization of the marketplace. He explained that Indeed’s current “take rate” (the cost per hire as a percentage of first-year salary) is only 1 percent, and said: “There are multiple areas where we are charging less than the value we’re delivering, and that means significant opportunity to improve monetization by better capturing the value we already deliver.”
Chris pointed out some possible ways to seize this opportunity: growing paid ads, growing ATS integrations to Indeed Apply to attract more corporate clients, introducing value-based pricing for high-salary jobs, and growing the adoption of “closer to the hire” solutions, including Indeed Flex and Indeed Hire. He closed by saying: “No doubt we have a lot of work ahead of us, but the opportunity to grow hires and revenue is inspiring.”
Chris Hyams, Maggie Hulce and Raj Mukherjee from Indeed
Recruit Leverages Technology to Transform Japan’s Unique HR Market
Next, two leaders from Recruit’s HR business – President and Representative Director Yoshihiro Kitamura, who heads the Matching & Solutions SBU, and Masamichi Yamaguchi, who oversees HR products – shared how the company is working to simplify hiring in Japan, the second-largest HR matching market in the world after the United States. Since its founding, Recruit has been involved for over 60 years in the Japanese HR matching market, which has many unique characteristics, including a low percentage of people changing jobs and a highly fragmented HR matching market by employment type and region.
“While maintaining the benefits of traditional segmented HR matching services, we are leveraging our unique data and technology to respond to changes in work styles and skills-first matching,” Yoshihiro explained. “We are exploring ways to evolve so that a diverse range of job seekers and jobs can be matched more efficiently.”
He then spoke about one promising current initiative with Indeed introduced earlier this year: Indeed PLUS, a job distribution platform that efficiently matches job seekers and employers. As Yoshihiro noted, “Indeed PLUS combines the power of our HR Technology platform with the data and insights of our various Japan-based HR solutions like Townwork and Rikunabi NEXT. These job boards in HR Solutions are now linked to Indeed PLUS.”
Masamichi then gave a more detailed explanation about the merits of linking to Indeed PLUS: “When employers post a job through an ATS linked to Indeed PLUS, the job is automatically distributed to the most suitable job boards within the Indeed PLUS network based on the job's content, characteristics, the status of views and applications, and other criteria*. By standardizing the data format of job descriptions and resumes, offering broader job board reach, and optimizing matching with AI and machine learning, Indeed PLUS allows job seekers to choose from a wider range of jobs, and employers can expect to hire the most suitable talent more quickly and efficiently, from a larger pool of candidates.
“Most of the job boards and two ATSs, AirWORK ATS and JobOp, that we operate in Japan are already linked to Indeed PLUS, and we have plans to link 26 more ATSs to Indeed PLUS. We also expect the number of job boards linked to Indeed PLUS to increase as third-party job boards outside Recruit Group join this network to provide more opportunities to the job seekers who use their services.”
Yoshihiro concluded his presentation by noting: “The labor market in Japan is undergoing significant changes, and we are committed to matching job seekers and employers more efficiently. By leveraging our diverse service offerings, we will not be limited by the constraints of existing recruitment mechanisms.”
*Jobs are automatically distributed to the job boards (“Indeed PLUS Job Boards”) that are judged to be the most appropriate by Indeed based on, but not limited to, the content and characteristics of the job. Jobs may be posted in a single job board rather than multiple job boards, and are subject to Indeed's terms of service, publication standards, and usage restrictions.
Yoshihiro Kitamura (left) and Masamichi Yamaguchi from Recruit
RGF Staffing Harnesses Recruit Group’s Technology to Supercharge Staffing Business Efficiency
RGF Staffing CEO Rob Zandbergen took to the stage to share RGF’s potent initiatives in the staffing business. A holding company of Staffing SBU, RGF Staffing is the world's fourth-largest staffing company in terms of revenue, and ranks first in the world in productivity based on conversion rate.
“Since our last material acquisition in 2016, adjusted EBITDA growth rose by 40 percent, mainly driven by organic growth and increased productivity,” Rob announced. “The staffing business still has many labor-intensive and complex processes with a lot of human interactions and manual work. The large, highly fragmented temporary staffing market covers only a very small part of the working population and is prime territory for growth and disruption from a tech-led provider.”
Rob then revealed RGF Staffing’s strategy for the future. “In the past years we did this as a standalone business unit. However, for our next steps, we will leverage the technology developed within Recruit Group, such as an unparalleled matching engine. We are uniquely positioned to transform temporary staffing with the use of technology and collaboration across the Group. With this, we will increase our focus on leveraging data and further automating our end-to-end process.”
One cross-SBU initiative Rob raised as an example was Indeed Flex, a joint initiative of Indeed and RGF Staffing in the US and UK since 2019 that offers temporary staffing services from a digital marketplace. Another example he mentioned was the testing now underway at one of RGF Staffing’s major operating companies in Japan to implement Recruit’s AI-based matching engine, which has increased the number of applications by 90 percent.
“We see many opportunities to boost productivity and temp work efficiency, the key to our future,” he added, and shared the new vision of RGF Staffing. “We aspire to be the number one, most innovative platform in the staffing market.”
RGF Staffing CEO Rob Zandbergen
Recruit Group’s Commitment to Help Transform the Job Search Experience
Deko concluded the first day of the event with the following statement:
“Looking ahead, we are optimistic that the next decade will witness advancements in technology, especially AI, that will transform the job search experience into something completely different from what it is today. We are committed to leading this transformation and will do so with a deep sense of responsibility.
“A job is important for everybody. Our goal is to ensure that everyone can find not just a job, but a job that sparks passion and changes lives.”
Please watch the full recording of the event including the Q&A session.