Finding the right talent is a make-or-break situation for any company — especially smaller ones, which might not have the robust tools (or pocket books) of larger companies like Google that have a complete system in place. Recruiting platform Greenhouse hopes to make that process a little bit easier, and it has caught the attention of investors.
The company said it has raised a new $50 million financing round from Riverwood Capital, bringing its total funding to $110 million. Greenhouse definitely isn’t the only company that’s starting to pick up a significant amount of funding recently by trying to crack open the process of talent acquisition and make it a little more data-driven. But as the cost and difficulty of collecting enormous amounts of data on different kinds of human activity has dropped with the emergence of new machine learning tools, the problems behind recruiting may also be one that can get a lot of help from employing the same data science rigor that powers a smart Google search result.
“Hiring tools and software in the market had been built for the previous generation, with an applicant tracking mindset to cover the basics of collecting resumes on your website,” Greenhouse CEO Daniel Chait said. “We saw that winning companies in the talent market were ones who were able to attract the right talent, identify difference makers in a sea of LinkedIn profiles, make really smart decisions in who to hire, deliver winning experiences, use data to optimize. They needed tools to accomplish those goals and much broader than the recruiting software.”
The typical consumer’s experience with Greenhouse has probably been a bunch of job listings on a website somewhere, where an employee can submit an application or additional information that the company wants. Under the hood, Greenhouse provides companies with ways to find the right funnels for their applications — whether that’s something like GlassDoor or smaller niches on the Internet with more isolated pockets of talent — and discover the right employees for the roles that are available. Data is collected on all this behavior, which in turn helps Greenhouse give better recommendations for companies as to where to find potential recruits that fit their needs.
All that has to be packaged together with a generally nice user experience, both for the typical consumer and for the companies. That can boil down to actually understanding the right questions to ask, the right requirements to post in a job listing, and also making sure the process is pretty quick for people that are applying for jobs. Greenhouse implements scorecards to help interviewers — which can turn out to be a big group, depending on the position — determine whether or not candidates are the right person for the job in a more rigorous manner. And Greenhouse also hopes to work with companies with its tools to eliminate bias in the recruiting process to produce a more diverse set of hires.
“Companies are continuing to invest in recruiting and talent acquisition software,” Chait said. “As issues of talent and hiring have become more central at the C-suite, companies continue to invest in this area. Companies are starting to see the difference between HR and talent acquisition as its own specialty. If you’re a big company that has an all-in-one HR suite, it’s all well and good to have payroll and benefits in your org chart in one place, but when it comes to hiring, it’s very dynamic.”
Greenhouse is still pretty dependent on its partners, but the startup has a wide array of companies that it works with to ensure that all the right tools are available to clients to find the right candidates. If a change is coming on LinkedIn — one of the biggest homes of candidate profiles on the planet — Greenhouse is going to work with the company to ensure that nothing breaks, Chait said. Greenhouse provides an API-driven ecosystem to ensure that its tools reach all the right spots on the Internet to help companies find the best talent.
But Greenhouse isn’t the only recruiting-driven company to attract a significant round of funding. It isn’t even the only one to do so in the last month — Hired, another recruiting platform, said it raised $30 million just weeks ago to create a sort of subscription model to help funnel the right candidates to companies. But all this interest, including Greenhouse, is a product of attempts to try to find the right talent in what might be unexpected spots powered by machine learning tools that are now getting to the point where the predictions are actually pretty good.