Ever since Recruit Holdings, the Japanese HR conglomerate that owns Indeed, announced last month that it was acquiring Glassdoor, speculation has run rampant that the parent company would inevitably combine the two properties into an even larger online recruiting behemoth, perhaps as a defensive move against Google’s new job search feature. Matt Charney at Recruiting Daily, in his massive, four part “Requiem for Glassdoor,” concludes that even with their powers combined, Indeed and Glassdoor have no hope of competing with the search engine where 80 percent of job searches begin. With so much control over the front end of the funnel, Google has the power to render its competitors in the job search aggregation market virtually invisible to most users. No matter how much traffic Indeed buys, Charney reasons, “that traffic will ultimately be controlled (and priced) by … Google.”
Still, other observers see the Glassdoor acquisition through a different lens, viewing the site’s impact not so much in terms of volume but rather in how it has mainstreamed transparency and accountability on the part of employers in their interactions with candidates. That’s how the Washington Post’s Jena McGregor described it in her column after the news of the acquisition broke:
Analysts say the $1.2 billion pricetag for Glassdoor reflects a company that sits at the nexus of a number of trends: A tight labor market where many workers have their pick of jobs and employers have to work harder to attract them. A growing demand by recruiters and H.R. departments in an era of big data to back up their decisions with metrics. And a technological and cultural zeitgeist where an appetite for transparency and accountability have only grown
These trends were illustrated in a report Indeed issued just a week after the announcement: How Radical Transparency Is Transforming Job Search and Talent Attraction, based on a survey of 500 US jobseekers, highlighted findings like these: 95 percent of candidates said insight into a prospective employer’s reputation would be somewhat or extremely important in their decision making. Among Millennials, 71 percent said transparency was extremely important, while 84 percent of Millennials aged 25 to 34 said they would automatically distrust a company on which they could find no information (even among Baby Boomers, 55 percent agreed that transparency was crucial). No reviews, Indeed found, are even more harmful to an employer’s reputation than bad reviews, since candidates are at least willing to consider an employer’s response to a bad review.
The growth of online pay information sources like Glassdoor is also a central theme in our upcoming work on pay transparency at CEB, now Gartner.
In our study, we use Glassdoor as our default pay source, as it was the site most commonly mentioned by members in our interviews (Indeed and LinkedIn also came up). We found that the number of workers using online sources had exploded since 2014, with the number of employees saying they had looked at an online source growing 1.85x globally and 2.5x in the US in the past four years. Unsurprisingly, this growth was primarily fueled by Millennials and Generation Z, 33 percent of whom said they had used an online source in the last year in 2018. We also found significant numbers of Gen-Xers and Baby Boomers using these tools (19 percent and 11 percent, respectively).
Companies often asked us: “So what? What does this actually mean for me?” and the answer is, potentially a lot. In our employee survey, we found that 42 percent of employees who had consulted an online source had thought about leaving their current employer as a result.
Putting this all together, online employer review and pay transparency tools like Glassdoor are not going away. Late last year, Google added salary information aggregated from sites like Glassdoor, Payscale, and Paysa to its job search results, and LinkedIn did so in 2016, so no matter which company prevails in the online recruiting war, this information has become part of what candidates expect to find when they search for jobs online.
This is a permanent change in the online recruiting landscape that challenges companies to seriously rethink how they share pay information. Easier access to job searches and easier application processes, combined with pay information and reviews, will make it easier for those employees who are just “thinking about leaving their job” to submit an application.
For employers, the real takeaway from the story of Glassdoor and its acquisition isn’t about which tech giant owns the largest share of the job search market in five years, but rather how the trend set by Glassdoor and other sites like it is transforming the way employees think about and apply for jobs. In today’s hyper-competitive talent market, transparency is no longer optional.