Amidst growing interest in the Future of Work and People Analytics in the last decade, two companies emerged as the leading data providers in labor market analytics: Burning Glass Technologies and Emsi. Burning Glass Technologies is a KKR portfolio company whereas Emsi was formerly owned by Strada Education Network, a nonprofit. In June of 2021, the companies announced that they were merging to deliver on a joint mission to “to unlock opportunity, mobility, and equity for everyone.” On one hand, their merger allows them to bring together top talent and top technology in this space to better advise on talent strategy for employers, higher education institutions, and economic/workforce development professionals. On the other hand, there are concerns that their merger may create a monopoly whereby highly valuable data on labor market trends becomes too expensive for customers beyond a handful of large employers. I am less concerned about this.
I believe labor market data is becoming more and more commoditized. At their core, both scrape online job openings (e.g., from Indeed) and job profiles (e.g., from LinkedIn) and leverage AI to create actionable insights on labor demand and supply at a hyper-local level. Both companies have spent years developing the technology to gather, clean, and analyze billions of raw data points across 30+ countries in real time. However, the exponential growth in AI, the plummeting cost of computing, and the wide availability of the raw data the companies use is making it such that either (1) other competitors emerge or (2) companies gather the same data in-house if Emsi Burning Glass over-charges. After all, the largest cost as a data provider is the cost of technical talent such as data scientists and engineers.
By merging, they are better positioned to improve the quality of the data and make it more widely available, not to restrict those who have access to the data. In fact, I believe that the value of the merger is not going to be the data itself but the solutions it builds with the data for its clients. For example, I could see the merged company developing a platform to help companies with site selection, bringing together a view of the competitors for the same talent as well as the skill gaps and surpluses in a location.
With that said, I worry that, by merging, the companies will no longer represent two alternative sources of truth, who glean different insights from the same data sets. Having been a customer of both data providers through the McKinsey Global Institute, they had very different approaches to certain analyses. For example, if you asked both companies the “top emerging skills on the year,” they would come back with different answers, neither of which were wrong. Given that data is highly open to interpretation, I hope that the merger will still foster diverse perspectives on labor market trends.
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