Key Product Strategy Takeaways from the Indeed Future Works 2023 Event

by Othamar Gama Filho

Indeed 's Future Works 2023 event in Atlanta last week focused on the topic on everyone's mind: artificial intelligence (AI) — its current capabilities, future potential, and associated risks, such as worker replacement, effects on diversity and inclusion, and the importance of maintaining the human touch.

The discussions were engaging and Indeed did not shy away from addressing topics that might induce anxiety for the talent acquisition community. The tone for the day was set when CEO Chris Hyams shared how he responded to a previous interview question about whether he was excited or concerned about AI. His answer, which I believe many leaders share, was simply, "Yes."

As the founder of an AI-First Recruitment Marketing Company and a TATech product builder, my goal was to delve deeper beyond the engaging conversations and see if I could peek into Indeed's short- and long-term strategies. After all, it's a platform responsible for nearly 80% of active job seeker traffic in most US industries and the primary means by which our high-volume and healthcare clients acquire their candidates.

Drawing from A.G. Lafley's playing-to-win framework, my primary takeaways are:

• Where Indeed Wants to Play: Artificial Intelligence for Recruiting
• How Indeed Wants to Win: Software is Cheap, and Data is the Key to the AI Kingdom.?

To me, Indeed's overarching product strategy seems to center on acquiring more proprietary data, safeguarding it, and leveraging it. This strategy is particularly astute, given Indeed's new research suggesting that Software Development is the top profession at risk from AI displacement.

The four product strategy takeaways I gathered from the event are:

1. Ride the early wave of artificial intelligence by incorporating low-hanging AI features into a Safe-For-Work Recruiting Co-pilot.
2. Go beyond mere candidate data; incorporate as much data as possible from the entire hiring process to create a 'recruiting walled garden' data environment.
3. Persist in trying to build the one-stop-shop for talent acquisition, leveraging AI to try to make it a reality.
4. Turn the impending advertising industry's privacy guidelines lemons into lemonade by leveraging Indeed's massive first-party data into new ad products.

Key Takeaway 1: AI as the Recruiting Co-pilot

Indeed is advancing the AI Co-pilot model, which serves a dual purpose. It ensures their primary users, recruiters, are not alienated and mitigates the potential risks of early AI adoption by keeping humans making the final decisions. The two primary AI applications are:

• AI-Enhanced Matching
• Time-saving tools, such as Candidate Outreach Email Composer, Job Description Composer, and Smart Summarization of Candidate Details.

As everyone in TA knows, candidate matching has been a hot topic for more than two decades. What Indeed’s AI matching aims to address, or at least improve, is the high rate of candidate ghosting among those who use the easy-apply feature. To achieve this, they plan to consider hundreds of variables and establish a two-way match (from candidate to job and job to candidate) instead of solely relying on resume-to-job description matching. It remains to be seen in practice how engaged the candidates are going to be.

A potential early challenge for Indeed is the perceived value discrepancy between better matching and candidate volume in a recruiter's mind. TA professionals will become concerned when they see a significant drop in the volume of candidates, regardless of the promise of a more qualified and engaged applicant pool. Indeed will need to work to prove that higher-quality candidates are applying and can't expect employers to buy into "Trust the AI; these are better candidates." In an industry where many employers still find it challenging to measure CPAs (cost-per-apply), measuring something like CPQE (cost-per-qualified-and-engaged) will require a lot of education.

Key Takeaway 2: Building A Walled Garden of Recruiting Data?

In recent years, it's been noted that Indeed no longer redirects candidates to off-platform jobs without an Indeed account. They can't mandate this for Recruiters and Hiring Managers, so the solution? Offer attractive features to keep them on Indeed. This strategy highlights the value Indeed is putting on proprietary data since a lot of the new features are free to use.

The feature that best illustrates this effort is the bi-directional ATS sync. Recruiters can now review and make decisions on candidates not only from those who applied through Indeed but also from all those who applied directly into the ATS, all within Indeed. Some of the other features that aim to entice both recruiters and hiring managers to be in the Indeed platform are:

• New suite of Candidate Engagement Tools, such as interview scheduling automation, and hiring manager collaboration.?
• Improvements in Tests, Assessments, and Interview Guides.
• Continued investment in Hiring Event tools.

While these features offer incredible value for small employers or individual recruiters, I'm curious to see how well large enterprises will be supported if they opt to use them, and whether they will integrate seamlessly with their current HR tech stack. Supporting an entire ecosystem of products across multiple user tiers is not only more challenging but also likely less profitable than their primary product. However, it's a strategic move to ensure access to invaluable data.

Key Takeaway 3: A One-Stop Shop for Talent Acquisition

Indeed is reintroducing Indeed Hire (the RPO/Recruitment Agency disruptor) after pausing it during the pandemic. While Indeed Hire makes sense as a business venture, I see its greatest value as an AI Automation Lab. It's analogous to Uber's self-driving car division for Indeed. What better method is there to develop and test fully automated AI tools that might raise concerns among your users than just providing the end-to-end result? The same applies to Indeed Flex, which disrupts staffing agencies.

Key Takeaway 4: Tapping into the First-Party Data Gold Mine

In line with global advertising trends that emphasize data privacy, Indeed is leveraging its substantial first-party data to offer targeted advertising. With two products,

• Employer Branding Ads: Indeed has been working on employer branding ads since Future Works 2022 with its sister company Glassdoor. This product allows companies to target specific demographics on platforms like Facebook and Instagram.
• Industry-Targeted Job Ads Networks: They are rolling out an open-web programmatic advertising solution to engage passive candidates beyond the Indeed platform.

Although products like these being offered directly to employers are innovative, I hope that the CPAs aren't excessively high. This is because products of this nature often involve many intermediary platforms, each taking a share.

This development underscores the importance of first-party data for all employers, urging them to utilize it beyond the occasional email or text message.

In conclusion, Indeed is a company many "love to hate" due to its overwhelming market dominance. However, one cannot overlook the speed and agility with which they are innovating, branching out into varied avenues, and basing their decisions on a well-structured strategy. Their speed over the last five years, transitioning from being merely a job aggregator to a multi-product entity, is impressive.

The real challenge will be their ability to support and play well with enterprise clients' HR Tech stack and very specific needs. When about 42% of the jobs in the US are in companies with over 1,000 employees, this is a segment they can't ignore or alienate. In the candidate traffic business, the separation of powers between Sales/CS and QA/Jobseeker Product has frustrated plenty of TA leaders; the same positioning will not work well for most of the new products.

A start might be tweaking their slogan for everyone working with enterprise clients from "I help people get jobs" to "I help you help people get jobs."