Cobbling together a recruiting software empire

Employ Inc. was created earlier this year to lead a growing portfolio of recruiting software companies that aim to sell to any customers, no matter the size.

Talent acquisition has become one of the most challenging areas for HR as employers struggle to fill job openings in a volatile labor market. A private equity firm is capitalizing on this market by acquiring recruiting software firms; its most recent addition is Lever Inc., a San Francisco-based talent acquisition provider.

Lever is now one of four recruiting software brands under the umbrella Employ Inc., in Waltham, Mass. By adding Lever, Employ believes it can provide recruiting technology to SMB through enterprise markets. Employ has 850 employees and 18,000 customers with the addition of Lever.

Behind this effort to create a new recruiting software entity, which began in 2018, is private equity firm K1 Investment Management in Manhattan Beach, Calif. K1 acquired Jobvite and then made a $200 million investment in that firm, which included acquiring Talemetry, a recruitment marketing firm; Canvas, a text-based interviewing platform; and RolePoint, an employee referral firm. Jobvite later added the talent analytics platform Talentegy.

In 2021, Jobvite expanded with JazzHR, a recruiting software provider for the SMB market, and NXTThing RPO, a recruitment process outsourcing firm. Earlier this year, K1 created Employ, a parent for all these firms.

The strategy is "to provide comprehensive solutions for the entirety of the recruiting market, irrespective of customer size, recruiting complexity, product needs, technology and services," said Pete Lamson, CEO at Employ and former CEO of JazzHR.

Market consolidation, market confusion

The Lever acquisition gives Employ three applicant tracking systems (ATS), two CRM systems, employee referral and communication capabilities, analytics and an RPO, said Madeline Laurano, founder and chief analyst at Aptitude Research.

"There is market confusion with so many different brands and no plans for real integration," Laurano said. "This strategy seems to serve the provider more than it serves the customer."

[The strategy is] to provide comprehensive solutions for the entirety of the recruiting market, irrespective of customer size, recruiting complexity, product needs, technology and services.
Pete LamsonCEO, Employ

Matthew Merker, research manager for talent acquisition and strategy at IDC, said the Lever acquisition makes it a "little less clear" how Employ will differentiate the products. Employ's initial acquisitions seemed focused, he said. JazzHR focuses on the SMB market, and Jobvite focuses on larger enterprise firms.

But with Lever, Merker sees overlap, particularly with midmarket firms. He believes Lever will focus on the midmarket and Jobvite on the enterprise. "Will it work? It could," he said.

Merker said that Lever customers might gain from the merger because Jobvite technology can "fill the capability gaps that Lever has," such as onboarding.

Lamson said the products "are distinctly separate," with "different value propositions" for small, midmarket and enterprise customers.

JazzHR is oftentimes a company's first ATS, and Lever's ATS and CRM are for businesses that "are slightly larger and with more complex recruiting needs," Lamson said. He sees Jobvite as an upper midmarket and enterprise platform. Employ currently has no plans to combine the products into one platform.

Lamson said the brands will share technologies across the recruiting software brands where it makes sense, but he doesn't want to unnecessarily disturb purpose-built systems. For instance, he doesn't want to add product development to JazzHR's SMB focus that will "overcomplicate and overprice [a product] for that market." But he believes the firm will make it easy for customers to migrate data from one platform to another as their needs change.

Patrick Thibodeau covers HCM and ERP technologies for TechTarget. He's worked for more than two decades as an enterprise IT reporter.

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