The first love of Tinder and eHarmony Inc. might have been online dating, but the companies are moving on to a more buttoned-up type of romance: the lucrative human resources industry.
EHarmony launched Elevated Careers on April 1, a job site that uses algorithms to connect job candidates with companies by matching skills, personality, and company culture. Last month, Tinder acquired contact management app Humin for an undisclosed amount, which could help Chief Executive Sean Rad with his ambitions to use Tinder’s swipe-to-connect feature for a forthcoming networking app.
Motivating those moves are the respective companies’ attention to the bottom line as they push up against the edge of the large – but limited – dating market. EHarmony’s market research indicates that the U.S. dating industry worth anywhere from $4 billion to $5 billion. That’s less than one-tenth of the $60 billion to $80 billion U.S. job recruitment industry.
“Elevated (Careers) has a much larger potential,” said Neil Clark Warren, eHarmony’s chief executive and co-founder.
But executives at online recruitment companies said eHarmony and Tinder might struggle to break into an industry crowded with competition.
“For new entrants, there is a high wall to get over,” said Ian Siegel, chief executive of Santa Monica online job-listing aggregator ZipRecruiter. “Job seeking (through search engine optimization) – it’s one of the most hypercompetitive categories online.”
Driving traffic to Elevated Career’s website will require eHarmony to appear high in organic search engine results. The West L.A. company would also need to outbid rivals in targeted paid search and banner advertisements, tasks which are difficult and expensive in the crowded online recruitment industry.
Dozens of online recruitment startups are launched each year, yet many of those budding companies are short-lived, according to those in the field.
Having built plenty of runway with their core dating businesses, eHarmony and Tinder appear undeterred.
“We are very excited about this,” said Warren, 81. “We had a lot of outside experts look it over and they’ve given it such positive feedback. It could change a whole lot of what goes on in this area.”
Rad, 29, has talked for years of building a professional networking app, and his West Hollywood company has been making strides toward that goal.
Tinder updated its app in November to allow users to include education and job information on their profiles. In August, it launched a pilot networking app of sorts for all past and current members of Forbes’ “30 Under 30” list. The app included a member directory, a social platform to share links and ask questions, and a messaging feature. The acquisition of Humin last month moves Tinder even closer to launching a public networking app.
The company has been coy about its efforts to break into the professional networking realm, declining to disclose its plans for Humin’s technology. Nonetheless, Rad has spoken about the company’s plans previously.
“You know that we deliver on the process of meeting someone new,” he said in an interview with Forbes in 2013. “It’s a very natural extension to say, ‘We’ve been doing that for relationships. Now we’re going to start doing that for your business life.’”
EHarmony has a similar outlook.
“We are delighted with the fact that (eHarmony) seems to fuse easily with this new product,” said Warren. “People see what we’ve done in the past joins with this product.”
Warren said Elevated Careers can shake up the online recruitment industry by automating and quantifying many of the intangible parts of hiring, such as finding compatibility between hiring managers and employees, as well as matching candidates with a company’s culture.
And it plans to do this by employing the same approach it used to build its dating site: an online survey that takes about 30 minutes to complete, said eHarmony’s Dan Erickson, the new division’s general manager. The platform’s algorithms will then match applicants to compatible companies.
EHarmony has been working on Elevated Careers for about two and a half years and plans to market it to the more than 66 million users that have signed up for its dating service, Erickson said. It is still working out pricing, but will likely charge companies between $2,500 to $5,000 a year. The site is free for job seekers though premium features might be added at a later date.
Despite making headlines and engaging millions of users, online dating services have struggled to generate revenue.
Case in point: Tinder had 9.6 million daily active users as of September, but on average, only 332,000 of those users paid for the app’s premium features each month in the first nine months of last year, according to a regulatory filing,
Those features cost $10 a month for those under 30 years old, and $20 a month for older customers.
Parent company Match Group of Dallas doesn’t break out Tinder’s revenue in its regulatory filings.
In contrast, the online recruitment industry is flush with cash as American companies spent nearly $4,000 on each hire in 2014, according to a study by Deloitte.
“You see extraordinary prices being charged by companies that are actually delivering candidates,” said ZipRecruiter’s Siegel.
Jason Corsello, vice president of corporate development and strategy at Santa Monica’s Cornerstone OnDemand, a human resources software developer, said the recruitment market is growing anywhere from 10 percent to 15 percent a year.
“It’s a very healthy market,” he said. “Recruiting is a big problem for companies.”
Still, rolling out new products in the online recruiting world won’t be easy, said industry insiders. In particular, the 30 minutes it takes to fill out Elevated Career’s questionnaire might deter job seekers.
“If you add one question to an application process, beyond submitting a resume, there is a double-digit drop-off in submissions,” said Siegel, noting findings from ZipRecruiter’s platform. “(Job seekers) are volume players. They are not quality hunters.”
EHarmony contends applicants will sign up because Elevated Careers gives feedback on work values and job satisfaction.
“Even if you are not interested in a particular job, when you fill out the survey you learn how you fit at your current job,” said Erickson.
For its part, Tinder will have to face down industry giant LinkedIn Corp. to break into the professional networking industry.
“It takes a lot to displace them in the career area,” said Mark Marcon, senior equity analyst at R.W. Baird & Co. Inc. in Milwaukee. That’s because recruiters might be reluctant to invest time into an unproven professional networking platform, especially considering they are often locked into yearlong contracts with LinkedIn, which cost more than $9,000 annually, he added.
Ultimately, eHarmony and Tinder will have to substantially differentiate their products from a crowd of competitors, said Siegel.
“Everyone believes that if you just put jobs out there then candidates will find their way to them. But, it’s a very mature market,” he said. “I think jobs is a lot tougher than it appears on the surface.”
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- ZipRecruiter Raises $156 Million
- ZipRecruiter Gets $63 Million in Series A Money
- Silicon Beach Regional Report: ZipRecruiter Moves to New Coastal Headquarters in Support of Rapid Growth
- Dating App Looks to Employ Job Information
- Mobile Dating App Hopes It Has Romance’s Number
- Dating App CEO to Hook Up With Accelerator
- Tinder Acquires Contact Management App
- EHarmony Wants to Find Your Dream Job, Too