Tuesday 9 May was a big day for the HR tech sector. This is because it marks the moment talent experience giant HireVue announced it was buying hiring platform Modern Hire – thereby creating a one-stop-shop for the entire recruitment process that also leverages the latest scientific research into AI, automation and other technology.
Talking about the acquisition, founder and principal analyst of Aptitude Research Madeline Laurano commented: “HireVue’s leadership and reputation in hiring is undisputed — they led the way with video interviewing and have continued to innovate with assessments and a commitment to ethical AI.
“Adding Modern Hire’s complementary science-backed solutions further solidifies their market leading position and creates a new high-water mark for what great enterprise hiring can look like.”
But UNLEASH was keen to get inside the deal and find out why now was the right time for HireVue and Modern Hire to join forces. Here’s everything you need to know about the acquisition from HireVue CEO Anthony Reynolds.
The perfect fit
Of course, Modern Hire isn’t HireVue’s first acquisition – in fact, it is its sixth, with the last one being AllyO in 2020. This begs the question, why was now the right time for a new acquisition? And why was Modern Hire the right fit?
Reynolds shares: “For us, at HireVue, we just see a massive market opportunity getting the right people in the right jobs at the right time.
“And as we looked at our strategy for growth over the next few years, we were very demonstrative about how we grow organically – but also, are there things that we can acquire in the market to give us more scale in our business?”
After looking at different options and opportunities, HireVue realized that Modern Hire was “such a good fit” for a few reasons. First, both companies are customer obsessive, both in terms of companies and candidate.
Secondly, across Modern Hire’s 450 customers and HireVue’s over 700 clients, the overlap is very small – less than 2%. This tells Reynolds that “there’s just a massive opportunity in the marketplace for us to serve our different customers”.
As a result of the acquisition, the joint company serves over 60% of the Fortune 100, plus eight of the ten largest federal agencies in the US.
The deal has widened HireVue’s footprint in Europe and Asia-Pacific – the latter “has been a small, but growing area of business for us”.
It also really gives the joint companies a truly “global scale and support” for multi-national companies. Fortune 100 companies “want to work with vendors that are able to service them around the clock in any geography”.
A shared background in science
Another plus is the complementary nature of the two companies’ recruitment tech platforms, both of which are founded? in science.
Based on the research of its 60 psychologists, “Modern Hire is known for its science-based assessments, it’s Virtual Job Tryouts, which gives you a realistic preview of a job” – Reynolds is excited to take this to add value for HireVue customers.
Likewise, HireVue has been focused on AI and automation for around seven years – it is an industry leader, and has been focused on being “open and transparency on how we build our artificial intelligence”.
Reynolds believes that this industry leadership, plus “all the automation features that we’ve brought into HireVue” (including through the AllyO acquisition) are a great opportunity for Modern Hire.
Plus, as a result of the deal, “you have basically an assessment for any job”. And that is, of course, great news for the combined company’s 1,000+ customers.
Doing more with less
UNLEASH was keen to find if any of HireVue or Modern Hire’s customers had expressed concern about the acquisition. “All the customer commentary I’ve heard, the team’s heard, has been very positive – a lot of excitement”, Reynolds replies.
Part of the reason for this, according to Reynolds, is their desire to do more with less; “There’s definitely a sense in the market [that companies] would like to do more fewer vendors”, he shares.
The HR tech market is full of niche solutions – but big Fortune 100 companies don’t want to work with all these vendors individually, “they want to be able to standardize on platforms and solution sets”.
Now, with Modern Hire, HireVue can give them that scale, both in terms of depth and breadth.
The conversation moved onto logistics.
Although this acquisition was announced on Tuesday, it has been in the works for a few months.
“A lot of work goes into an acquisition, there’s still a big piece of work to do in integrating these two companies together and being able to take our solutions to the customer”, explains Reynolds.
He has set a 30-day and 100-day deadline for certain deliverables, and will use that time to think about the future of the HireVue team, and any operational efficiencies around process.
Ultimately, completing the integration – without any disruption to customers – is top of mind for Reynolds, and the executive teams of both HireVue and Modern Hire.
Reynolds’ focus is on Modern Hire, but that doesn’t mean HireVue isn’t keeping an eye on the market. “We will look at opportunities to further broaden out reach where we think there’s other solutions that we can take to our customers”, notes Reynolds.
“We have a wonderful [investment] partner in Carlyle; and they’ve made it very clear that if we find things that are complementary to what we’re doing today, they’re willing to invest”.
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