WayUp merges with Yello to diversify recruitment

Despite studies, statistics and oh-so-many pledges, a vast number of companies continue to struggle with recruiting diverse talent. Some say that it’s not the pipeline problem, it’s an issue with how recruitment rounds and technical interviews are conducted. Others point to success with hiring entry-level diverse talent, but then companies fail to retain and reinvest in those individuals as they progress through their career.

While entrepreneurs continue to poke at the gap between talented, diverse individuals and scaled recruiting, a new merger today between two venture-backed companies paints an ambitious picture of what a promising solution could look like.

Today, WayUp, a sourcing platform for diverse candidates, announced that it is merging with Yello, a recruitment software company. The two HR tech companies will operate under Yello as a legal entity but continue to keep their independent branding with a now combined 200 employees.

“We can send all the diverse applicants into applicant tracking systems or CRMs, but if companies don’t have the automation workflow, and the tools and analytics that they need to make sure that those candidates are truly making their way through, then these candidates are sitting in a black hole,” Liz Wessel, co-founder and CEO of WayUp, said in an interview with TechCrunch.

Wessel’s realization of the “black hole” that candidates fell into soon turned into conversations with Yello, which she describes as the “most robust [candidate relationship management solution] in the market for early career.”

Now, by combining forces, the startups will be able to create an end-to-end recruitment tool that helps aggregate a group of diverse candidates who have varied backgrounds from across core and non-core schools, ethnicity, majors, location, gender and ethnicity, and then place them with recruiters into a software-powered job funnel.

Wessel has spent the past seven years building up WayUp around the concept of “data-driven diversity.” The platform differentiates from other sourcing and job platforms by asking candidates to self-report race, ethnicity, gender and veteran status. As a result, employers, which are WayUp’s clients, can prioritize diversity when hiring, while early-career professionals can explore curated opportunities based on their profiles.

More recently, WayUp launched a dashboard to help employers see where their recruiting process loses diverse candidates. While that dashboard was WayUp’s first foray into the world of candidate recruitment management, today’s merger with Yello suggests it was just foreshadowing the partnership to come.

Yello handles recruitment processes for companies, from top of funnel events such as career fairs through virtual candidate engagement and interview scheduling. The company has landed clients like Johnson & Johnson, Tableau, eBay and Adobe for its sourcing, engaging and placing software.

“They provide a ton of automation workflow to make it so that companies can significantly, quickly, efficiently and easily get applicants through in a fair and equitable way,” Wessel said. “Companies often don’t struggle with, ‘how do I get more applicants’ at the early career stage, it’s really, ‘how do I get the most qualified, diverse talented candidates hired’.”

Yello’s been working on a sourcing arm for years in its campus recruiting solution. Now, with WayUp, the database will grow to over 6 million candidates across 7,000 campuses. Candidates, while self-reported, are 71% Black, Hispanic or female, along with “tens of thousands” of veterans, a statement about the merger disclosed.

“In addition to offering a powerhouse of data, recruiters will benefit from the automation opportunities of two solutions from a single company,” said Corey Ferengul, CEO, Yello, in a statement announcing the merger.

Yello, which didn’t previously have an explicit diversity angle in its software product, is now adding WayUp’s database of talent to its suite of services. And WayUp, which didn’t previously have a candidate relationship management tool, now can offer one to its talent.

Even with 6 million early market professionals in its sphere, the companies have a billion-dollar competitor worth paying attention to. Handshake, which last raised money at a $1.5 billion valuation, is a networking and recruitment platform for college students. The job recruiting tool recently passed 18 million users across thousands of universities, including some 120 minority-serving institutions, which include Historically Black Colleges and Universities, and Hispanic Serving Institutions in the U.S., as well as community colleges. Handshake’s focus on diversity isn’t as marketed as WayUp’s, but its footprint, as well as a curated network that brings HBCUVs into conversations with its 550,000 employer clients, shows its commitment to underrepresented groups. Canvas, another venture-backed startup in the HR tech world, similarly offers a recruiting platform that is based on self-reported data, aimed at helping diverse candidates land jobs.

With WayUp joining Yello’s brand, it is strengthening its competitive advantage over Handshake, Canvas and other competitors by adding software services to its recruiting tool. It’s been almost four years since both Yello and WayUp last raised venture capital money, but the move to merge doesn’t appear to be a lifeboat, as Wessel pointed out that her company beat sales expectations four quarters in a row.

“Yello isn’t competitive to Handshake at all,” Wessel said over e-mail. “I’ve never heard of one of them winning a deal over the other and we only compete with Handshake if a company isn’t prioritizing D&I as their main goal. [For what it’s worth], we’ve yet to lose an RFP for D&I sourcing.”

Long-term, it’s unclear what’s stopping more companies from combining CRM tools with talent tools, Handshake included.

“It’s really hard,” Wessel said. “We have both an Enterprise-grade software that took a decade to build to get it where it is today.”