With the extraordinary devastation of the novel coronavirus, it was inevitable that many companies would fall victim to poor timing with their initial public offering. Apparently, that will not be the case for ZipRecruiter. As one of the top online employment marketplaces, its direct listing, which will occur on or about May 26, 2021 under the ticker ZIP stock, may be one of the most fortuitous IPOs.
Back a little more than a year ago, the world came to a standstill as the Covid-19 pandemic infiltrated nation after nation. Suddenly, the concept of wearing facemasks in public — already common in many Asian countries — became an everyday reality everywhere. Moreover, millions of Americans found themselves working from home, getting a taste of the gig life while enjoying the benefits of fulltime employment.
Now the narrative is shifting. The vaccine rollout, while still encountering some friction due to anti-vaccination sentiment, has been largely successful. In turn, Covid-19 cases have dropped off a cliff — exactly what we want to see. This suggests that, at least for certain industries, the economy will bounce back, boosting the case for ZIP stock.
Another factor that aids sentiment for the ZipRecruiter IPO is the company’s underlying artificial intelligence algorithm. Frankly, no human resources manager wants to sift through hundreds of resumes that pour in by the minute. By utilizing directed AI initiatives, ZipRecruiter can cut down the busy work, facilitating more efficient use of HR managers’ time.
That’s going to be a godsend as people gradually return to their normal activities, including hunting for a job. Remember, while most white-collar workers were able to operate remotely, some folks got the axe. They’ll be eager to return to the labor force, which bolsters ZIP stock.
Still, I can understand why some are hesitant about this IPO.
Will Labor Change Unexpectedly for ZIP Stock?
As businesses of all sizes gear up for a potential return to the office, tension has started to brew. While management wants to get back to business as usual, ground-and-pound employees prefer to continue working from home. Naturally, remote operations have benefits for worker bees, mainly avoiding long commutes.
And let’s be honest: work from home allows employees to goof off or browse the internet. If the conflict between employees and management sustains, that may not be helpful for ZIP stock.
I believe that most employers prefer hiring fulltime in-person employees, not remote workers that they’ve never physically met. Well before the pandemic, many business experts cautioned against overreliance on technology. We humans are social creatures and better business practices involve physical face-to-face communication. So if work-from-home continues indefinitely, employers would rather hire independent contractors, where ZIP stock faces serious competition.
Nevertheless, I’m not sure that prospective buyers of the upcoming ZipRecruiter IPO will have to worry about this. As Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School, noted in an interview with CNBC, “Employers have virtually unlimited power.” Further, he added, “A year from now, will things look much different than they did before the pandemic? I don’t think so.”
Frankly, employees are out of line assuming that employers will allow permanent work-from-home. To the employers of America, I say go get them lazy bones!
A Potentially Cynical Catalyst
I also agree with Cappelli that employers have virtually unlimited power. Therefore, it doesn’t make economic sense for them to continue this charade. Why should they pay an employee a 100% pre-pandemic salary when they’re not even going to be in the office?
To me, that’s like paying a new car price for a used car. And I’m not talking about the Covid-19 dynamic — I’m talking about normal circumstances here.
What if employees refuse to go back to the office? Well then, employers will simply turn to platforms like ZipRecruiter to find people willing to work in the office. Trust me, following the devastation of the coronavirus, there will be many, many people willing to do that and more.
While the market environment is risky — and doubly so for the IPO market — if we don’t have a catastrophic collapse, ZIP stock is a debut that’s credible. I’ll be watching closely.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
