In another sign of the growing role artificial intelligence (AI) is playing in recruiting, the AI-powered talent platform Phenom announced it has closed a $100 million funding round, making it HR tech’s newest unicorn.
The Series D round announced on April 7 was led by B Capital Group, with participation from Dragoneer Investment Group, OMERS Growth Equity, and GoldenArc Capital.
HR tech unicorns emerge
The latest funding round gives the company, which is headquartered in the Philadelphia area, a reported valuation of $1.3 billion, according to Bloomberg. Phenom also has offices in India, Israel, the Netherlands, Germany, and the UK.
Investors are showing a lot of confidence in the talent management space, as a number of other HR tech companies have achieved unicorn status over the past year.
Eightfold AI, another AI-powered talent intelligence platform, raised $125 million in Series D funding in October 2020, bringing the company’s valuation to $1 billion. Other talent management solutions have also raised significant sums to achieve valuations of over $1 billion, include Papaya Global’s $100 million Series C round in March and Personio, which raised $125 million in Series D funding for its recruiting and HR management platform in January.
What Phenom does
Phenom’s platform includes modules that help companies manage different areas of recruiting—including marketing job openings, filtering candidate profiles, and nurturing prospective hires—with the assistance of AI.
It also has tools for managing a company’s existing employees, such as career pathing and succession planning. The platform’s intelligence is based on a vast dataset that includes 1 billion candidate profiles in 180 countries, 400 million jobs, 154 million job titles, and 27 million skills, the company says. They say the platform was adopted by 25,000 recruiters last year.
AI’s role in recruiting grows
AI is one of the hottest trends in recruiting software, as companies look to adopt technology that will give them an edge in making high-quality hires in a post-pandemic job market. G2’s Talent Intelligence category has more than three dozen products that leverage AI for a variety of tasks related to recruiting and talent management.
Companies that are adopting these more advanced recruiting tools understand that posting a job opening online and hoping for the best isn’t good enough anymore.
On the candidate side, personalization has become a key focus. Recruiters want candidates to have customized experiences that speak to their career aspirations and what they are looking for in a company. Software can help with personalized branded career pages, recruiting chatbots to answer questions, and automated interview scheduling.
From the recruiter perspective, AI is powering more advanced candidate sourcing tools that allow recruiters to mine vast datasets for insights throughout the process as to which candidates are most likely to be a good fit for a certain role.
Competition for talent is likely to be fierce in the rest of 2021 as COVID-19 vaccine distribution helps the economy reopen and businesses ramp up hiring accordingly. The signs of job growth are already materializing, as the U.S Labor Department reported 916,000 new jobs created in March, beating analyst expectations. The unemployment rate also fell to 6%, down from a high of 14.7% in April 2020.
One of the key differentiators between these products is likely to be how easy they are for recruiters and talent managers to get up and running. Even the most insightful AI systems aren’t useful if the business can’t customize it for their needs and see immediate ROI for their recruiting.
G2’s data suggests there is room for improvement on the implementation side. In G2’s Spring 2021 reports, reviewers gave talent intelligence products an average score of 88% for ease of setup, which was the lowest among G2’s “simple six” satisfaction ratings, although still respectably high. Overall, products in the Talent Intelligence category had a “likelihood to recommend” score of 91% on average, suggesting that users are finding a lot of value in these systems.
Source: G2 Spring Grid® Report for Talent Intelligence, Spring 2021
AI certainly has great potential to improve recruiting and talent management by making them more efficient and personalized. It could bolster companies’ efforts to build more diverse teams, or hinder those efforts. For their part, investors are showing confidence that AI will play a growing role in how companies manage their talent for the foreseeable future.
Want to read what real users think of recruiting solutions, performance management, and other aspects of the talent lifecycle? Explore all G2 Talent Management categories.