There has been some well-deserved excitement surrounding LinkedIn’s new applicant tracking system (ATS) TalentHub, announced at this year’s Talent Connect event. Supported by dramatic music and full pyrotechnics, Sarah-Beth Anders the Product Marketing Lead for Talent Hub and the Recruiter System Connect products walked the audience through an overview of why they were launching the ATS in the recruiting technology market now, the core features at launch, and LinkedIn’s vision for its future. TalentHub is the result of pent up customer demand. For years, customers have been asking LinkedIn to integrate an ATS to manage their hiring workflow, and by the middle of 2019 they will have access to one. As exciting as it is to have LinkedIn enter the ATS category, it didn’t surprise anyone that closely follows the market.
I caught up with Anders just after the conference. Having watched the video of her announcement and read the analyst brief sent prior, both left me with a lot of questions about customer and industry impact, as announcements like this normally do.
I have to say I was impressed with the conversation. Sarah-Beth is a talent industry veteran having run product and customer marketing for both Achievers, a leader in employee rewards and recognition, and Greenhouse, one of the leading new modern ATS and recruiting tech platforms. She brings a depth of understanding of the HR tech market that, while strong in recruiting, extends further into talent management. This is important context for LinkedIn customers for two reasons: the value she brings for them in understanding their needs in recruiting and what’s possible in the world of recruiting technology, and the potential future linkages between TalentHub, LinkedIn Learning, and LinkedIn’s latest acquisition of the Glint product – an employee engagement survey and analytics tool. Talent Hub isn’t being developed in a vacuum, without insight into the relationship recruiting has, and impact it has, on an employee’s ongoing experience.
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One of the biggest questions I had was about LinkedIn’s commitment to becoming an enterprise software provider.
While LinkedIn will have some cultural shifts to address internally, managing the changes that will inevitably come along with becoming an enterprise recruiting tech provider in part of their business, they seem poised for success in this regard. LinkedIn is really more of a business-to-consumer (B2C) tech play in its core social/professional network, advertising platform, learning content destination, recruiting tool and job board. Giving customers access to features that leverage LinkedIn’s data set is a much different product development and go-to-market endeavor than delivering a product that is accessed by anyone involved in the hiring process. Business-to-business (B2B) tech customers have a way of wanting more and more incremental features over time. The balance between customer satisfaction and product innovation isn’t as easy as one would hope. Customers’ feet are on the ground moving candidates through a process, wanting the core promise of an ATS to work seamlessly and easily. That core ATS promise doesn’t sound incredibly innovative to most tech developers. Moving candidates through steps and stages of the hiring process, enabling communication with candidates and hiring teams, and keeping the hiring flow moving is yeoman’s work, but just not as sexy by comparison to becoming the world’s leading professional social network. This customer satisfaction/innovation conundrum is why most core recruiting startups hit the market with an innovative idea, get noticed as a new bright and shiny object that solves a sliver of the problem, and then get bogged down having to do the real work of delivering features to customers that actually help them recruit and hire. To some extent, LinkedIn’s depth in job advertising and candidate profile data allows them to approach hiring workflow and the ATS category from a completely new angle.
LinkedIn may have a “new angle,” but will have to become source-agnostic to be a truly valuable ATS.
A true ATS can’t have just one source. The demonstration I watched in the Talent Connect video showed incredible talent insights and candidate matching capabilities. Talent Hub was clearly built with search and user experience in mind, and it showed. (To really understand that check out this incredible piece from Shannon Pritchett over at SourceCon) However, as impressive as it was, everything was based on a closed environment of jobs entered into LinkedIn and candidates found there. In its current form, you have to add “only on LinkedIn” to the end of every insight the system gives you. For example: “After creating the job, we see the qualified and available talent and the average time it takes to fill similar positions… only on LinkedIn.” LinkedIn is a major source of talent, especially in the market segment Talent Hub is focused on, but it is not the only major source of talent. In order to provide real value and insights for customers they will need to distribute jobs to other competitive sources of talent, and accept talent from those same sources. LinkedIn’s Talent Insights product may show a customer that the right thing to do is double down on a source other than LinkedIn in certain job categories. As an ATS LinkedIn metrics will shift from showing the time a job took to fill after posting on LinkedIn to the time it took to fill after the job was actually opened by the client. Both metrics are valuable, the latter a more critical metric, and the former showing performance only on LinkedIn. Anders reports that LinkedIn is ready. She views Talent Hub as a system of truth in hiring, and to back it up LinkedIn has aggressive plans to build out integrations and a large tech ecosystem.
They have taken customer input, and are continuing to do so, on which talent sources and job boards are critical at launch next year. Anders’ team has a long list of sources to integrate. They’ve prioritized it and are executing aggressively. They’re simultaneously working on background check integrations, e-signatures, and the list goes on. LinkedIn is focused on building out a partner network, or eco-system, of tech vendors that is driven by customer input and demand. Many vendors talk about eco-systems, but with LinkedIn’s existing reach and already proven ability to provide and manage application programming interfaces (APIs) it isn’t hard to envision it as robust at launch or shortly thereafter. The bigger challenge is probably cultural – embracing Anders’ concept of being the system of truth, when you’ve been competing to be the source-of-hire for so long.
LinkedIn’s customer focus will lead them to customer growth, market share, and the next big step.
LinkedIn is approaching the TalentHub launch with a laser focus on employers with 1,000 employees and below, and an initial focus on vertical industries that have a high percentage of knowledge workers. Talent Hub isn’t for everyone. Anders went as far as giving examples of LinkedIn customers that were excited about Talent Hub, but given their profile were introduced to other ATS partners, vs. being encouraged to give Talent Hub a try. This kind of focus is what will ultimately result in more rapid success both in product adoption and their go-to-market (sales and market share). Understanding and defining your customer, then staying committed to that and saying “no” to those that don’t fit is discipline that is rare in any tech market. It’s also what builds success, product depth, and momentum that carries vendors into adjacent market segments. To be fair, LinkedIn has a captive audience in any market segment they choose to focus on, an advantage most upstarts never realize. I expect LinkedIn to capitalize on this quickly and aggressively.
What will the impact be on the ATS category?
Here’s the challenge for any ATS that is focused on employers with less than 1,000 employees: Your new competitor probably already has an existing contract with most, if not all, of your customers. They have deep pockets, a history of innovation, and are a trusted brand in the industry.
Here’s the good news: The U.S.-only total addressable market segment of employers with between 5 and 1,000 employees is 233 times larger than the segment of employers with 1,001 employees and above. I haven’t met a platform that could please everyone, or be successful in every industry niche, and while I expect that LinkedIn will be successful with this product, there is plenty of room for success. I suspect LinkedIn will never go as deep on features and function as a point-solution ATS. We’re going to find out just how much value this segment puts on integration and ease-of-use.
Here’s a dose of reality that should calm most vendors: When Google launched its Hire by Google capabilities earlier this year, also focused on a similar market segment, it was met with great industry fanfare. Having a large captive audience of small and medium sized businesses using its G Suite of products, being the leading search engine for everything, including jobs, and providing customers with key hiring workflow features integrated throughout the G Suite is a very similar model to LinkedIn. The Google products had an impact on the ATS category in the SMB, but the segment is just so large that if Google entering the space has proved anything it’s that no one vendor can “own every recruiter’s screen.”
This is going to be fun to watch.
Whether it’s the possible evolution of Talent Hub, the battle brewing in the SMB between LinkedIn and Google, the moves that the current SMB-focused ATS players will make to compete, this move by LinkedIn is good for the industry. We’re sure to see employers benefit, both directly from adopting Talent Hub and by the innovation it is going to spur from new modern ATS vendors.
If I have one prediction for the future, it’s that ATS vendors focused on large middle-market and large enterprise employers should consider themselves on notice. Even if reluctantly, LinkedIn will get pulled up stream by customers as LinkedIn adds more features and integrations. It will take time, but now is when those vendors should be focused on learning where they can go deep with solutions that customers value that LinkedIn won’t ever be able to touch.
