HireVue acquires rival to bolster skills-based screening tool and ethical AI

HireVue snapped up rival Modern Hire this week, building out its video talent acquisition platform by bolstering its skills-based screening capabilities and ethical AI efforts.

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The acquisition comes as the TA software landscape undergoes consolidation, with skills-based candidate screening driving many recent deals, says Betsy Summers, a principal analyst with the Future of Work and HCM for Forrester Research. 

Additionally, with employers increasingly looking at AI to automate and enhance business intelligence from everything from business operations to HR, ethical AI is of utmost importance.

HireVue, for one, knows the importance of ethical AI after being called out for the lack of it four years ago.

HireVue bolsters AI efforts with Modern Hire

Back in 2019, the Electronic Privacy Information Center (EPIC) filed a complaint with the Federal Trade Commission regarding HireVue’s use of facial analysis to screen candidates in job interviews. The complaint called such technology invasive and prone to bias, as well as not living up to claims that it could measure cognitive ability, psychological traits, emotional intelligence and social aptitudes. Two years later, HireVue announced it would discontinue the use of facial analysis in applicant screening.

In 2022, Modern Hire, then a competitor of HireVue, presented a differentiating point on how it approached AI ethics compared to its rivals in an interview with online tech site Protocol. Eric Sydell, executive vice president of innovation at Modern Hire, said, “We only score by the way the words people say that are transcribed, not the way they sound or the way they look. That is a hard line that we draw and have always drawn; my mentality, and our mentality as a company, is that we should only be scoring information that candidates consciously provide to us.”

See also: What a skills-based hiring approach can mean for the ‘Great Rebalancing’

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For Summers, HireVue’s acquisition of Modern Hire represents an investment in ethical AI practices.

“I see this as a shoring up of ethical AI practices and a signal to the market that we are taking this extremely seriously,” Summers says. “With the acquisition, they now have all the talent, principles, governance and structure they need to build out and shore up their own internal strategy around ethical AI practices.”

Kathi Enderes, senior vice president, Research and global industry analyst at The Josh Bersin Company, notes that “the two companies are each focused on research-based assessment methods and using AI in ethical ways, making them a great cultural match.”

Building up skills-based screening processes

With the acquisition, HireVue fills out its video interview screening platform with Modern Hire’s capabilities to do role-specific mock job simulations over video with its Virtual Job Tryout offering.

“The acquisition of Modern Hire will enable us to continue to push the boundaries of what is possible in hiring technology, by adding to our own best-in-class science, technology and industry experience,” said Anthony Reynolds, CEO of HireVue, in a statement.

Modern Hire’s 200 employees will be folded into HireVue’s workforce of 400 and report to a fully integrated leadership team, Amanda Hahn, chief marketing officer of HireVue tells Human Resource Executive

“We’re excited to welcome Modern Hire’s team members as colleagues and have fully integrated their leadership team, whether it’s in entirely new roles, the existing reporting structure, or as strategic advisors,” Hahn says.

The combined company, she adds, will continue to sell and support all existing products as it works to integrate the product suite.

See also: In the Fight Against Bias, AI Faces Backlash

Modern Hire is HireVue’s sixth acquisition

The combined company will also have over 1,150 customers globally—more than half of them Fortune 100 companies—that will be using HireVue’s interviewing, assessments and hiring automation technology, Alicia Mokwa, research director of talent acquisition and strategy for research firm IDC, tells Human Resource Executive.

For HireVue, Modern Hire marks its sixth acquisition as it builds out a single integrated HR platform, Mokwa notes. The company is part of the $30.1 billion global HCM and payroll applications market, which includes the TA market, which itself is expected to grow 4.6 percent between 2021 to 2026. The TA technology market is expected to rise 9.7% during the same time, according to IDC figures.

HireVue competes in the interview and assessment market, where it faces such competitors as Paradox, HackerRank, VidCruiter and Pymetrics, says Mokwa.

“HireVue’s recent acquisitions and expansion also extend its abilities into enablement for talent intelligence, candidate relationship management, talent pipelining and talent pooling,” Mokwa says. “HireVue’s capabilities do not natively manage end-to-end capabilities in these spaces, but the insights, data and analytics that HireVue provides contribute to clients’ ability to build out for these competencies.”

What the HireVue deal means for HR leaders and AI

The acquisition offers an opportunity for the newly formed business to cover a wider range of talent selection solutions, including AI-powered methods, says Sven Elbert, senior analyst HCM and Talent at Fosway Group.

“With tools like ChatGPT helping to optimize offer letters and applications of candidates, companies must rethink how they assess and select talent and strive for greater consistency and wider coverage of reliable tools,” says Elbert. 

Often, HR tech buyers must decide between best-in-class solutions and comprehensive platforms, Enderes adds. However, this acquisition allows them build a full, streamlined stack.

It also reflects the growing reliance on conversational AI and large language models for a range of HR focuses, as platforms including Eightfold, iCIMS, Beamery, Phenom and more tap AI for “holistic, scalable solutions” that incorporate everything from recruiting to internal mobility, L&D, workforce planning and more, Enderes says.

HR leaders will need to ask themselves what is the right mix of AI plus human involvement for their specific organization, Summers says. 

Developing skills and comfort around AI is something that HR leaders need to put on their radar. When Forrester surveyed HR leaders two years ago, it found only 19% of HR leaders had confidence in their team’s abilities around AI, Summers notes.

These teams will need to develop such skills as how to use AI products like ChatGPT, what they should be used for and when and why, or when not to use it and how to monitor it appropriately, she says.

Dawn Kawamoto, Human Resource Executive
Dawn Kawamoto
Dawn Kawamoto is HR Editor of Human Resource Executive. She is an award-winning journalist who has covered technology business news for such publications as CNET and has covered the HR and careers industry for such organizations as Dice and Built In prior to joining HRE. She can be reached at [email protected] and below on social media.