Bengaluru: Recruitment company Randstad Holding NV said on Tuesday that it would acquire US-based jobs portal Monster Worldwide Inc. for $429 million in cash in a bid to widen the portfolio of human resources (HR) services it offers.
The transaction marks the acquisition of yet another icon of the first Internet boom. Yahoo Inc.’s core business was bought in July by Verizon Communications Inc. for $4.83 billion.
Monster will retain its brand and work as an independent entity after the purchase by Amsterdam-based Randstad. The deal value is a significant comedown from the $7.5 billion valuations Monster Worldwide commanded in 2006.
According to the agreement, Randstad will buy all the outstanding shares of Monster for $3.40 per share in cash. This represents a 22.7% premium to Monster’s closing stock price on 8 August, the company said in a statement. It is, however, a climb down from the $51 the shares were priced at in 2007, and the $91 peak they touched soon after the company’s initial public offering in the late 1990s.
The deal is a continuation of the trend of consolidation the online jobs space has seen. Monster recently acquired Jobr. Japanese firm Recruit Holdings, through Indeed.com, acquired Simply Hired.
But the sale also reflects a larger theme in the world of online recruitment. The transaction comes at a time when the way companies hire is undergoing a dramatic change, thanks to the rise of social networks such as Twitter, Facebook, and LinkedIn.
Over the last two years, job portals have conceded a great deal of market share to social media as a sourcing channel.
According to the 2014 India Skills Report (compiled by PeopleStrong, an HR company, skill assessment firm Wheebox and the Confederation of Indian Industry), job portals were the most preferred sourcing channels, as nearly 34% of employers used them to find new hires. And only 7% of the surveyed employers used social media as a source.
But in 2016, job portals’ share fell to 20% while about 15% of employers used social media for hiring.
Hitesh Oberoi, managing director of Naukri, India’s largest jobs website, said the merger wouldn’t have any impact on it.
“As things stand today, Monster is a distant No. 2 and the merger will not really impact Naukri either positively or negatively in the short run,” said Oberoi, adding that he perceives both professional networking site LinkedIn and job aggregators as a threat in the long run.
LinkedIn India, used for recruitment of mid- and senior-level professionals, was set up in 2009 and is snapping at the heels of job sites, with about 30 million users in the country.
Naukri has 45 million registered users across levels.
A spokesperson for Monster India did not respond to calls, text messages and mails seeking comment.
Besides social media, many companies are also looking to incorporate insights from Big Data and analytics to hire people—and a bunch of start-ups is helping them do so.
Experts say online job sites have just not kept pace with the movement towards social, mobile and analytics platforms in recruitment.
“The way employees engage with their employers is changing and mobile is driving that. There is a clear signal to evolve, and some of these job sites have not adapted to the changing world of work as they have not adapted to the way employees engage over the mobile,” said Rituparna Chakraborty, senior vice-president of TeamLease Services, a staffing company.
That same criticism is also being levelled at HR services firms.
Jacques van den Broek, CEO of Randstad, said in a statement: “In an era of massive technological change, employers are challenged to identify better ways to source and engage talent. With its industry leading technology platform and easy to use digital, social and mobile solutions, Monster is a natural complement to Randstad. The transaction is aligned with our Tech and Touch growth strategy and reflects our commitment to bringing labour supply and demand closer together to better connect the right people to the right jobs.”
The board of directors of both Randstad and Monster endorsed the merger and recommended that shareholders accept the offer too.
The Dutch multinational HR consulting firm with operations in 39 countries said Monster will continue to operate as an independent entity and retain the Monster brand.
“Joining Randstad provides a unique opportunity to accelerate our ability to connect more people to more jobs,” said Tim Yates, CEO of Monster, in the statement.
“Together with Randstad, Monster will be better positioned to fulfil our core mission, and our employees will benefit from becoming part of a larger, more diversified company. Equally important, this transaction offers immediate value to our shareholders.”
Monster has 3,700 employees in the 40 countries that it is present in, according to its 2015 annual report.
