Indeed gets into staffing – for real this time

Indeed gets into staffing. Sound familiar? Of course it does. The company introduced Indeed Flex roughly five years ago (via the acquisition of UK staffing platform Syft) as their foray into the world of staffing – specifically tech staffing. And then it faded from view. 

At the time, many in the staffing industry were both worried and puzzled. Remember – staffing firms are key buyers in the job board world, responsible for lots of postings. They wondered – was Indeed putting a toe in the water of the staffing world? Or was this a major shift in the job board’s expansion plan? As they say, signs were mixed. Yes, Recruit Holdings, Indeed’s parent company, was a major force in global staffing. Yes, Indeed was known for effective execution of business expansion efforts. And yes, a move into staffing in many ways would be a logical way to expand down the hiring food chain. 

But nothing of note seemed to happen, and folks in the industry – as they tend to do – moved on to worrying about the next big threat.

Until last week. Indeed – after a dismal spring in which the company laid off 8% of its employees and saw revenue drop – announced that it was pivoting to a more staffing-like model. Why? Well, let’s see what the CEO says: “Today, for hires we measure on Indeed, the average take rate is less than 1%,” Indeed CEO Chris Hyams told analysts at the event. “The 1% might seem reasonable until we consider market pricing for traditional hiring platforms. Direct hire placement fees average roughly 20%, and executive search firms charge up to 40%.”

In other words, it’s all about revenue. Never mind that staffing firms have contributed mightily to Indeed’s coffers. Never mind that Indeed’s experiment with staffing thus far has been…underwhelming. Never mind that running a staffing firm is quite different from running a job board. At the end of the day, history is repeating itself. Indeed’s first pivot, from job boards’ best friend to job boards’ primary competitor, was successful. Will Indeed’s new pivot be another success?

I don’t think so, and here’s why: it appears that Indeed wants to keep whatever brand equity they have by selling this as ‘Indeed Staffing’. They could have acquired an existing staffing brand, such as Kelly, and let it run autonomously (just as Indeed runs on its own under the Recruit umbrella) – but they seem to be rejecting that model. Instead, they want to carry the brand ‘Indeed the job board’ into the staffing world and turn it into ‘Indeed the staffing company’. Historically, it is very hard to change the perception of a brand in your audience’s mind. If you have spent decades telling the world that Indeed = world’s largest job board, then you may find it hard to say, “oh, wait a second! We actually meant Indeed = world’s largest staffing company“.

Let’s say that it could be done – given enough time and money. But it is likely to fail. An audience’s mind is a stubborn thing – if you own a specific slot (such as ‘big job board’), it’s hard to convince them that the slot is actually ‘big staffing company’. See any book on position and branding to discover how many companies have failed in this transition.

But Indeed doesn’t have time and money. Remember – layoffs. Failed launched of pay per application. Drops in revenue. The CEO is thinking this pivot will be a magic button that creates lots of extra cash. I suspect it will produce…confusion. Drops in revenue. Revolts from existing staffing firm clients. And a major opportunity for Indeed’s competitors.

Indeed gets into staffing. And perhaps into more than they expected.

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