Item 1. Business
Item 1. Business
Information Availability
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy and information statements and other material information concerning us are available free of charge on the Investors page of our website at www.dhigroupinc.com. Our reports filed with the SEC are also available by visiting http://www.sec.gov.
Introduction and Summary
This section provides an overview of DHI Group, Inc. (“Company” or “DHI”). Please see our consolidated financial statements included elsewhere in this report for additional discussion regarding our results of operations for the year ended December 31, 2020.
(in thousands) FY 2020 FY 2019 Change
Revenues $ 136,878 $ 149,370 (8) %
Operating income (loss) (1)
$ (29,605) $ 17,025 (274) %
Income (loss) before income taxes $ (32,434) $ 16,324 (299) %
Net income (loss) (2)
$ (30,015) $ 12,551 (339) %
Diluted earnings (loss) per share (2)
$ (0.62) $ 0.24 (358) %
Net cash flows from operating activities $ 18,683 $ 22,923 (18) %
Adjusted EBITDA (3)
$ 29,924 $ 34,859 (14) %
Adjusted EBITDA Margin (3)
22 % 23 % n.m.
(1) Operating income for the year ended December 31, 2020 includes impairments of intangible assets and goodwill of $38.8 million. Operating income for the year ended December 31, 2019 includes disposition related and other costs of $1.7 million and a loss of $0.5 million related to the sale of Hcareers.
(2) Net loss and diluted loss per share for the year ended December 31, 2020 includes the negative impact of $37.9 million, net of tax, and $0.78 per share related to the items identified in number 1 above as well as the impairment of an equity investment and the impact of discrete tax items. Net income and diluted earnings per share for the year ended December 31, 2019 includes the negative impact of $1.6 million, net of tax, and $0.04 per share related to the items identified in number 1 above as well as the impact of discrete tax items.
(3) For a description of these non-GAAP measures and reasons why management believes they provide useful information to investors, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources, and Non-GAAP Measures” located elsewhere in this report.
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2020 Highlights
DHI's primary goals for 2020 were to invest in and to deliver even greater value to both clients and candidates of its three brands, Dice, ClearanceJobs, and eFinancialCareers, including marketplace capabilities and other innovative services to help employers build their tech workforce and technologists to manage their careers, amidst uncertainty and remote work. The Company also invested significantly in improving its sales and marketing capabilities to drive future growth, while maintaining EBITDA margins. Key results include:
Deliver Innovative Career Marketplace Features
Dice delivered additional career marketplace capabilities with the launch of Recruiter Profile, allowing clients to enrich profiles with photos, personal information and details, creating greater transparency and personalizing the recruiter behind the role; and Messaging to allow real-time career connection conversations within the platform.
Dice Remote Jobs launched in May, enabling employers to tap into pools of remote workers across the U.S. to increase talent pipelines and diversify work forces as part of a nationwide shift toward remote work while allowing easier filtering for technologists to apply for remote-only jobs.
ClearanceJobs further enhanced its dynamic career marketplace launching Favorites, allowing clients to flag top candidate prospects and receive alerts on activity; Automated Recruiter Workflow, allows recruiting teams to automate recruitment processes like connecting with potential candidates, sending introduction messages, or tagging candidates to a specific job opening, eliminating 3.5 hours of administrative task time per recruiter per day; and Client Team Dashboard, enabling clients to see the full view of their recruitment team activity, linking activities to successful hiring patterns.
eFinancialCareers completed the foundation of the marketplace, launching Job Alerts, which help candidates find jobs that fit their skills and interests, Enhanced Candidate Profile, enabling finance professionals to create a richer profile and eFC Follow, Voice, Video, a rich set of communication tools for recruiters and professionals to engage in career discussions virtually.
Strengthen Go-To-Market Capabilities
DHI transformed its sales function under new leadership with expansions of sales teams, account management (customer success), sales operations, and sales enablement. Specifically, the Company added 20 sales reps focusing on Dice SRC and commercial accounts, and ClearanceJobs.
Dice further cemented its position as a trusted market leader through stronger communication of new products and enhanced digital marketing initiatives. The result was over 10% year-over-year increase in candidate visible profiles, demonstrating greater trust in the platform and more than 45% growth in applications, delivering more relevant candidates for employers to grow their tech workforces.
Pivot to Growth ClearanceJobs began selling directly to the federal government in addition to the government contractors that make up its historical customer base and in the process, added a potentially significant new market and growth vehicle.
Despite overall uncertainty in markets for the majority of 2020, Dice exceeded booking targets in the fourth quarter, indicating a pivot toward growth for 2021.
The Company maintained strong EBITDA margins of 22% while continuing to make strategic investments to maximize growth opportunities.
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Company Profile
DHI was incorporated in Delaware on June 28, 2005 and is a leading provider of software products, online tools and services to deliver career marketplaces to candidates and employers globally. DHI's three brands — Dice, ClearanceJobs and eFinancialCareers— enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology, those with active government security clearances and in financial services. Our mission is to empower technology professionals and organizations that hire them to compete and win through expert insights and relevant employment connections by delivering three key value propositions:
• Providing the best search and match solution for recruiters and employers;
• Delivering the most relevant and personalized technology career related content; and
• Aggregating and analyzing workforce intelligence data to deliver specialized insights.
The majority of our revenues today are generated through the sale of recruitment packages, which allow customers to post jobs on our websites and source candidates through our resume databases. Recruitment packages are typically provided through contractual arrangements with annual, quarterly or monthly terms.
Our Products and Services
We help organizations find the best talent, and we help technology, financial and security cleared professionals find the best jobs to advance their careers. Our vision is to create indispensable career marketplaces that match the highest quality candidates with the right career opportunities. Our solutions are available individually or bundled in packages, including:
• Talent databases. Each of our brands provide candidate databases with search capabilities that return relevant profiles, resumes, and social and web profiles that allow for a broader pool of talent. We help clients quickly find and connect with top talent to make their recruiting efforts more efficient.
• Job postings. Our job platforms are focused on specific verticals tailored to technology, finance and security-cleared individuals, making it easier for professionals to search for relevant jobs. In turn, the applications received by clients are more likely to be relevant and qualified compared to applications received on generalist sites. Providing professionals with the most relevant job postings benefits both the talent and the recruiting organization.
• Employer Branding. Each of our brands has a suite of offerings that help clients amplify their brand to reach more professionals. Possible solutions include display advertising, email, enhanced job postings or company profiles, and social targeting.
• Managed Services. This premium service delivers sourced and screened candidates to recruiters and employers.
• Content and data. Each of our brands provides tailored content to help professionals manage their careers and provide employers insight into recruiting strategies and trends.
Industry and Skill Focused Brands
During 2020 we offered our talent acquisition and career development products and tools through the following key brands:
Service Yrs. in Operation Specialized Focus Primary Source of Revenues
Dice 2
30 Technology and engineering in the U.S. Recruitment packages¹, career fairs and open houses
ClearanceJobs 18 Security-cleared professionals Recruitment packages¹
eFinancialCareers 20 Financial services and technology Recruitment packages¹ and job postings
¹ Recruitment packages are a combination of job postings and/or access to our searchable database of candidates.
2 Includes Career Events
Dice has been a go-to destination for technology and engineering talent in the United States for the past 30 years. The job postings available on Dice, from both technology and non-technology companies across many industries, include positions for software engineers, big data professionals, systems administrators, database specialists, project managers, and a variety of other technology and engineering professionals. Dice had approximately 58,000 job postings as of December 31, 2020 and during 2020, Dice had, on average, approximately 1.5 million monthly users.
Customers can purchase recruitment packages, job postings or advertisements. Approximately 94% of Dice revenue was derived from recruitment packages in 2020. Recruitment packages offer our customers the ability to access the candidate resume database and post up to a specified number of jobs. Customers are encouraged to purchase our recruitment packages on
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an annual basis. Candidate Match and Search on Dice is powered by IntelliSearch, a proprietary machine-learning technology that is foundational to many Dice products and services.
Professionals can post their resumes, search jobs and access our career-related content, news and tools. Skill Center, a tool implemented by Dice, uses data aggregated from across the web to show skills trends, giving professionals insights into potential skills gaps and development areas. Salary Predictor and Salary Calculator offer real-time salary tools leveraging predictive analysis to help tech professionals and employers discover tailored salary estimates based on skills, job titles, years of experience and location. Job Search and Job Alerts deliver tailored and personalized career opportunities to candidates.
ClearanceJobs is a leading Internet-based career network dedicated to matching security-cleared professionals with the best hiring companies searching for employees. Authorized U.S. government contractors, federal agencies, national laboratories and universities utilize The Cleared Network to quickly and easily find candidates with specific, active security clearance requirements to fill open jobs in a range of disciplines. ClearanceJobs NextGen platform provides opportunities for employers and candidates to engage in real-time through messaging and employers to promote brand differentiators through BrandAmp and Pulse. The majority of candidates with resumes in our database have high-level security clearance. ClearanceJobs had approximately 53,000 job postings as of December 31, 2020 and during 2020, ClearanceJobs had, on average, 621,000 monthly users.
eFinancialCareers is one of the world’s leading financial services careers websites, operating websites in multiple markets in four languages mainly across the United Kingdom, Continental Europe, Asia, Australia, the Middle East and North America. Professionals from across many sectors of the financial services industry, including asset management, risk management, investment banking, and information technology, use eFinancialCareers to advance their careers. Employers can engage with financial services professionals through real-time messaging and promote their employment brand through Recruiter Profiles. eFinancialCareers had approximately 14,500 job postings as of December 31, 2020 and during 2020, eFinancialCareers had, on average, 2.0 million monthly users.
During 2018, our results also included the activities related to the following brands:
Service Specialized Focus Primary Source of Revenues
Dice Europe 2
Technology and engineering in the U.K. and Germany Job postings and advertising
Rigzone 3
Oil and gas Recruitment packages¹ and advertising
BioSpace 4
Biotechnology Job postings and advertising
Hcareers 5
Hospitality Job postings
¹ Recruitment packages are a combination of job postings and/or access to our searchable database of candidates.
2 Dice Europe ceased operations on August 31, 2018.
3 Rigzone sold the RigLogix portion of the Rigzone business on February 20, 2018 and DHI transferred majority ownership of remaining Rigzone business to Rigzone management on August 31, 2018.
4 DHI transferred majority ownership of BioSpace on January 31, 2018 to BioSpace management and sold its remaining minority stake in BioSpace to BioSpace management on April 30, 2020.
5 Hcareers was sold May 22, 2018.
Our Industry
We primarily operate in the talent discovery and acquisition segment of the broader market for human capital management services through career sites for technology professionals. There is a shortage of skilled professionals worldwide and we believe that the overall demand for talent acquisition and career development products and services has significant long-term growth potential.
We also believe that certain industries that employ highly-skilled and highly-paid professionals will experience particularly strong demand for effective recruiting solutions due to the scarcity of such professionals. For example, as of December 2020, the seasonally unadjusted U.S. unemployment rate was 3.0% for computer-related occupations and 3.1% in the finance sector, as compared to the overall national average of 6.7%, seasonally adjusted. Historically, the unemployment rate for college graduates has been lower than the unemployment rate for the U.S. overall. As of December 2020, the seasonally unadjusted unemployment rate for college graduates was 3.6%. We believe that there are four major trends that will continue to shape demand for talent acquisition services:
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• Greater competition for professional talent . The candidate-employer relationship has changed, with the balance of power shifting towards the candidates. As more companies leverage technology to advance their business, employers will increasingly need to hire tech talent to compete. According to analysis from Microsoft, world-wide digital jobs are expected to grow from 41 million in 2020 to 190 million in 2025.
• Continued professional interest in career brands specific to industry and skills. Our services focus on domains or industries that require specialized skills and knowledge and, thus, customized content, profiles and search parameters. In addition, the technology professionals often share a sense of personal identity and community that goes beyond the confines of their careers. We believe that both specialized skills and the sense of personal identity and community lead professionals in our verticals to prefer specialized career brands over generalist ones.
• Talent attraction and retention becoming more of a strategic priority for companies. The PWC 23rd Annual Global CEO Survey found that 32% of CEOs in North America are 'extremely concerned' about the availability of key skills as a threat to their organizations’ growth prospects. In this environment where top talent is hard to find, organizations are increasingly prioritizing retention of talent and upskilling. According to the PWC report, only 18% of CEOs believe their organizations have made progress in establishing upskilling programs to develop employees' capabilities and employability with technical, soft and digital skills. These programs are an effort by organizations globally to address the aging labor force and short supply of technical, digital and soft skills.
• Increased use of data and analytics in human capital management and increased need for insights. As many companies prove the power of analytics in marketing and other business domains, organizations are seeking to gain a competitive advantage by applying data-driven insights to improve their hiring, retention and leadership capabilities.
In this environment, we believe there is an opportunity for career management and talent acquisition tools that leverage the common interests, goals and skills of select professional communities. We believe that a focus on professional communities allows organizations to more efficiently identify talent, with more complete data and insights about that talent.
Our Value Proposition
We are a leading provider of data, insights and employment connections through specialized online professional communities organized around common professional interests and skill sets powered by technology. This specialized approach provides technology professionals with more relevant career related information and opportunities, enhancing their ability to maximize their careers. Through engaging with professionals, we are able to build rich and unique data sets around valuable talent pools. The combination of our focused online professional websites and rich data sets allows organizations to find and hire professional talent more efficiently and effectively, and therefore incentivizes them to source talent through our online professional communities. The benefits our services provided to both professionals and recruiting customers create a robust marketplace.
Benefits we provide to Professionals
Relevant employment connections . When professionals post their resumes or apply for jobs on our websites, they can make valuable connections with organizations who prize their skills and expertise. Professionals can avoid having to “sort through the clutter” on generalist career sites and get the most out of their time by using our more focused services.
Skills/industry-specific career management tools, information and insights . We provide professionals with targeted and relevant career development tools, content and news. For example, Dice and ClearanceJobs provide professionals with market and salary information and local market trends. In addition, the Salary Predictor allows professionals to evaluate their market value and map out which skills will increase their value. eFinancialCareers provides industry-specialized online career content, as well as career guides targeted to college and graduate students. We believe our career development services and tools provide professionals with the insights they need to propel their careers forward, and thus increase the engagement of professionals with our sites.
Benefits we provide to our Customers
Large pools of qualified and hard-to-reach professionals . We seek to improve the efficiency of the recruiting process for our customers by providing efficient access to large pools of highly qualified and hard-to-reach professionals. Because the communities of professionals who visit our websites are highly-skilled and specialized within specific industries, we believe our customers who post jobs receive applications from candidates who are better qualified for the positions, and that they receive fewer irrelevant applications than when using generalist sites. In addition, since our resume data and resume search
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functions are highly tailored by specialty, we believe that our customers can more efficiently identify talent using our resume databases than by using broader services.
Relevant information on prospective candidates . We believe that the specialized nature of our job posting and resume search products makes them inherently more relevant and efficient for recruiting. Using all of these products together gives our customers the most complete view of a prospective candidate, and allows them to not only identify the best talent but also tailor their recruiting approach to each individual.
Hyper-targeted candidate outreach and employer branding . We offer recruiting customers the ability to target hard-to-find professionals with messages in the online forums they frequent. Our social targeting service leverages our social aggregation capabilities to assemble candidate target lists based on specific factors like skill sets, work experience, location, or interests; then executes hyper-targeted employer branding or job search campaigns in online forums where specific potential candidates spend time.
Our Strategic Goals
Since arriving in April of 2018, CEO Art Zeile has led an aggressive effort to focus and build on our legacy of market leadership in technology talent acquisition and reinvigorate the business in multiple respects, including delivering best-in-class candidate quality and match capabilities; transforming Dice and eFinancialCareers from their job board legacies into indispensable career marketplaces modeled on our market-leading and high growth brand, ClearanceJobs; investing in functional excellence to drive growth and product innovation; and transforming/expanding our sales team to drive renewed growth.
Delivering best-in-class candidate quality and match capabilities for technology roles. We believe candidate quality is the essential foundation of success in our industry and we intend to differentiate our business by leading in this respect. In 2020, we dramatically improved the quality of our Dice candidate database to a level we believe is best-in-class and plan continued vigilance and innovation to drive continued improvements. We are also building on our unique legacy and intellectual property in the technology jobs space to create match capabilities for both candidates and clients that are reducing the time and effort required in job searching and talent acquisition. Our proprietary and patent-pending machine-learning technology, IntelliSearch, powers many Dice and ClearanceJobs products and is foundational to providing relevant job opportunities for candidates and efficient search and match solutions for clients.
Building indispensable tech-focused career marketplaces . ClearanceJobs has established a unique franchise in the market for cleared professionals, many with tech experience. Built on a unique cohort of candidates and specialized employer and recruiter tools together, ClearanceJobs is a highly interactive two-sided marketplace environment. These attributes provide clear and measurable ROI for clients and has contributed to ClearanceJobs more than doubling its revenue over the past five years. With over 18 years in the market, we believe ClearanceJobs is a highly defensible and valuable business. We are in the process of transforming our Dice and eFinancialCareers brands into similar career marketplaces customized for the needs of their unique candidate and client communities. In 2020, we delivered the final components of eFinancialCareers marketplace capabilities focused on driving adoption with clients and candidates. We delivered foundational career marketplace features for Dice in 2020, focusing on landing launches and driving adoption with customers. We expect these changes to transform the way our stakeholders use these solutions and to drive results as adoption increases.
Investing in functional excellence and product innovation. Since joining DHI, CEO Art Zeile has built a leadership team capable of driving growth and supporting a culture of high performance. Over the course of the year, the team reinvigorated their functional areas to drive results in the business, working towards the common goal of launching and landing innovative products in the market. Specifically, in 2020 the Company released a number of products to help employers find tech candidates and technologists further their careers. These include, at Dice: Recruiter Profile and Instant Messaging; at ClearanceJobs: Favorites to flag top candidates; and at eFinancialCareers: Job Alerts and Voice, Video and Follow allowing employers and candidates better opportunities to connect in real-time. As a pandemic forced professionals everywhere to work from home, Dice fast-tracked its Remote Jobs product, enabling employers to tap into pools of remote workers across the U.S. to increase talent pipelines and diversify work forces and technologists to continue to further their careers through finding remote work opportunities.
We are investing to further increase the pace of innovation by adding engineers to our technology team, centered around a domain-driven development model to increase the quality and speed of product delivery. Our marketing team is focused on delivering results at lower cost in terms of driving traffic to Dice and eFC, growing visible profiles and applications with less spend and with more to come as we leverage new capabilities in customer relationship management (CRM), product marketing, and digital analytics, among others.
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Transforming our sales and customer success efforts to drive growth. As early leaders in online talent acquisition, DHI’s brands have a legacy of strong recurring clients and revenue and, as a result, renewals have historically provided the majority of the Company’s revenues. We believe there is significant opportunity to grow our customer base and expand to new revenue opportunities, particularly with commercial accounts, or clients who recruit for their own needs, with an expanded and better enabled sales force. Our customer success team implemented new strategies to drive proactive external engagement and report real-time feedback to better include the customer voice to influence our product roadmap. We will continue to grow our sales team as opportunities arise.
Marketing and Sales
We focus our long-term consumer marketing efforts on growing the number of professionals who visit and engage with our websites, which we believe increases the attractiveness of our websites to our customers. We use a combination of direct marketing, branding and communications initiatives, including content, to increase our brand awareness, traffic, new and updated profiles and applications to job postings. We primarily engage in digital media including search engine marketing, online advertising, social media, email and content marketing. Many of our brands use strategic alliances with relevant publishers, trade associations and industry groups to increase reach and traffic. Some of our brands have also invested in broader awareness campaigns through digital media and partnerships.
Our customer marketing efforts are primarily focused on lead generation activities, such as digital media, email campaigns and participation in industry events. We use marketing communications, such as media relations, social media, and thought leadership content, to enhance brand awareness and client relationships. Many of our ongoing customer marketing efforts focus on driving increased customer understanding of our product innovation and tools to drive increased product usage.
We sell our products primarily through our direct sales force. We have a number of direct sales teams globally organized by brand, market segment, and geography. Our field sales groups target Fortune 1000 companies, large staffing and recruiting firms and other large and mid-size businesses. Our strategy in 2020 focused on implementing new sales processes, methodologies, and forecasting to drive improvements to better address market opportunities and our clients' needs. We increased our focus on customer success to drive renewal rates with existing customers. Our in-house sales teams focus on generating new business from recruiters as well as small and mid-size companies, renewing customer contracts, increasing the service levels customers’ purchase and servicing the needs of our largest clients. As of December 31, 2020, we employed approximately 111 sales personnel in the United States and approximately 29 in the rest of the world. In addition to our internal sales organization, we also use ad networks to help generate ad sales.
We also invest in fraud detection initiatives and maintain teams of account managers and customer support specialists who work to ensure customers get the most from our products and services by providing training and assistance. In addition to technologies we leverage for fraud detection, our customer support departments perform some compliance functions, such as reviewing the websites for false or inaccurate job postings.
Customers
We currently serve a diversified customer base consisting of approximately 9,500 customers in total. No one customer accounted for more than 10% of our revenues in 2020. Our customers include small, mid-sized and large direct employers, staffing companies, recruiting agencies, consulting firms and marketing departments of companies. As of December 31, 2020 notable customers of the Dice and ClearanceJobs businesses included AT&T, Adecco, Amazon, Cisco, GEICO, Kforce, Manpower, Microsoft, NCI, Procter & Gamble, Samsung, UnitedHealth and Verizon. Notable customers of eFinancialCareers included Bank of America, Bank of China, BlackRock, Bloomberg, BNP Paribas, China Construction Bank Corp, China Credit Suisse, CitiBank, Goldman Sachs, HSBC Holdings, JPMorgan Chase & Co., Morgan Stanley, Mistusbishi UFJ Financial Group and Standard Chartered.
Technology
We use a variety of open source and proprietary technologies to support our website services. Our websites provide a multitenancy technology platform with multiple application services developed to perform at scale. We primarily utilize Amazon Web Services (AWS) as our cloud infrastructure platform, which enables us to scale our compute, network, and storage capacity on an as-needed basis. Our application services and data connections are continually monitored 24/7 for performance and stability. Our application and infrastructure architecture enable us to ensure global reach, as well as advantages in resiliency and cloud delivery. Job seekers and customers can access our websites with any standard web browser, mobile web browsers, and iOS and Android applications. Our websites also utilize AWS disaster recovery, redundancy, and
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resiliency services, including multi-availability zone, multi-region, redundant storage and networking solutions, and self-healing capabilities.
Competition
The market for talent acquisition services is highly competitive with multiple online and offline competitors. With the evolution of the online recruiting model, there has been an increasing need to provide ease-of-use and relevance to professionals, as well as an efficient and cost-effective recruitment method for direct employers, recruiters and staffing companies. Additionally, further technological advancements and evolution of social networks increasing the interaction between candidates and potential employers have made it easier for new competitors to emerge, and advertisers have many alternatives available to reach their target audiences. Our ability to maintain our existing customer base and generate new customers depends to a significant degree on the quality of our candidate databases and audiences, the quality of our services, our ability to enhance our websites and the underlying technology of our websites to meet the needs of a rapidly-evolving marketplace, our pricing strategy and ability to introduce value-added products and services, contracting alternatives such as subscription or consumption based models, and our reputation among our candidates and our customers and potential customers, who are increasingly sophisticated and demanding. Our competitors include:
• social and professional networking sites, such as LinkedIn, Facebook, Twitter and Google;
• niche or specialist professional networking sites such as GitHub and Stack Overflow;
• generalist job boards, some of which have substantially greater resources and brand recognition than we do, such as CareerBuilder, Monster, StepStone, and Seek which, unlike specialized job boards, permit customers to enter into a single contract to find professionals across multiple occupational categories and attempt to fill all of their hiring needs through a single website;
• aggregators and distributors of job postings and profiles, including Indeed (owned by Recruit), TalentBin (owned by Monster Worldwide), Entelo, ZipRecruiter, Google and Craigslist;
• career-focused community sites such as Glassdoor;
• newspaper and magazine publishers, national and regional advertising agencies, executive search firms and search and selection firms that carry classified advertising, many of whom have developed, begun developing or acquired new media capabilities, such as recruitment websites, or have partnered with generalist job boards;
• specialized services focused specifically on the industries we service, such as FT.com, Doximity, Upwork and JobServe;
• new and emerging competitors with new business models and products;
• our customers, who seek to recruit candidates directly by using their own resources, including corporate websites; and
• general business sites and print publications, as well as technology news and information community sites, such as Google News, Digg.com and Reddit.com.
Intellectual Property
We seek to protect our intellectual property through a combination of service marks, trademarks, copyrights and other methods of restricting disclosure of our proprietary or confidential information. As we continue to develop and improve our technology, patents may become a more significant part of our intellectual property in the foreseeable future. We generally enter into confidentiality agreements with our employees, consultants and vendors. We also seek to control access to and distribution of our technology, documentation and other proprietary information.
We generally pursue the registration of the material service marks we own in the United States and internationally, as applicable. We own a number of registered, applied for and/or unregistered trademarks and service marks that we use in connection with our businesses. Our trademarks and registered trademarks in the United States and other countries include DICE, CLEARANCEJOBS.COM, and EFINANCIALCAREERS. Registrations for trademarks may be maintained indefinitely, as long as the trademark owner continues to use and police the trademarks and timely renews registrations with the applicable governmental office. Although we generally pursue the registration of our material service marks and other material intellectual property we own, where applicable, we have trademarks and/or service marks that have not been registered in the United States and/or other jurisdictions. We have not registered the copyrights in the content of our websites and do not intend to register such copyrights.
The steps we have taken to protect our copyrights, trademarks, service marks and other intellectual property may not be adequate, and third parties could infringe, misappropriate or misuse our intellectual property. If this were to occur, it could
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harm our reputation and affect our competitive position. See Item 1A. “Risk Factors—Misappropriation or misuse of our intellectual property could harm our reputation, affect our competitive position and cost us money.”
Investments
DHI has made no significant investments through acquisitions during the past five years. See also Note 6 of the Notes to Consolidated Financial Statements.
Regulation and Legislation
User Privacy
We collect, store and use a variety of information about both professionals and customers on our website properties. Within the websites, the information that is collected, stored, and used has been provided by the professionals or customers with the intent of making it publicly available. We do not ask professionals or customers to supply social security numbers. Our business data is separated from website operations by a variety of security layers including network segmentation, physical and logical access controls, firewalls, and many industry-accepted, best-practice information security controls.
We post our privacy policies on our websites so that our users can access and understand the terms and conditions applicable to the collection, storage, and use of information collected from users. Our privacy policies also disclose the types of information we gather, how we use it and how a user can correct or change their information. Our privacy policies also explain the circumstances under which we share this information and with whom. Professionals who register for our websites have the option of indicating specific areas of interest in which they are willing to receive offers via email or postal mail. These offers contain content created either by us or our third-party partners.
To protect confidential information and to comply with our obligations to our users, we impose constraints on our customers to whom we provide user data, which are consistent with our commitments to our users. Additionally, when we provide lists to third parties, including to our advertiser customers, it is under contractual terms that are consistent with our obligations to our users and with applicable laws and regulations.
U.S. and Foreign Government Regulation
We are subject to a number of government regulations, both domestic and foreign, that regulate our products and online service offerings, including content, copyright infringement, user privacy, advertising and promotional activities, taxation, access charges, liability for third-party activities, and jurisdiction. In addition, federal, state, local, and foreign governmental organizations have enacted and also are considering, and may consider in the future, other legislative and regulatory proposals that would regulate the Internet. Areas of potential regulation include, but are not limited to, libel, electronic contracting, pricing, quality of products and services, and intellectual property ownership.
There are a number of U.S. and foreign laws and regulations that affect companies conducting business online. Certain laws regulate commercial electronic messages. Such laws frequently provide a right on the part of the recipient to request the sender to stop sending messages, and establish penalties for the sending of email messages that are not compliant with such laws, including messages that are intended to deceive the recipient as to source or content or that do not provide an electronic method of informing the sender of the recipient’s decision not to receive further commercial emails.
We are subject to domestic and foreign laws and regulations regarding privacy and protection of data. Our privacy policies and terms of use agreements describe our practices concerning the use, storage, transmission and disclosure of user data. Any failure by us to comply with our privacy policies or terms of use agreements, or privacy-related laws and regulations, could result in proceedings against us by governmental authorities or others, which could harm our business. The interpretation of these privacy and data protection laws and various regulators’ approach to their enforcement, as well as our products and services, continue to evolve over time. We face the risk that these laws may be interpreted and applied in conflicting ways in different jurisdictions or in a manner that is not consistent with our current data protection practices, or that new and unclear laws will be enacted. There currently are a number of proposals pending before federal, state, and foreign legislative and regulatory bodies. In addition, the European General Data Protection Regulation (“GDPR”) took effect in May 2018 and applies to all of our European operations. The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Union that are different than those previously in place in the European Union, and include significant penalties for non-compliance. Similarly, there are laws as well as a number of legislative proposals in the United States, at both the federal and state level, that impose obligations in areas affecting our business, or may do so in the future. For example, California adopted the California Consumer Privacy Act of 2018, or CCPA, which became effective on
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January 1, 2020. The CCPA has been characterized as the first "GDPR-like" privacy statute to be enacted in the United States because it mirrors a number of the key provisions of the GDPR, and it includes penalties for non-compliance, as well as creating the right for consumers to bring a private action in certain circumstances. More recently, on November 3, 2020, California enacted the California Privacy Rights Act ("CPRA"). The CPRA, which goes into effect on January 1, 2023, expands upon the protections provided by the CCPA, including new limitations on the sale or sharing of consumers’ personal information, and the creation of a new state agency to enforce the CPRA’s protections.
In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements.
Complying with these varying domestic and foreign requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our users’ privacy and data could result in a loss of confidence in our products and services and, ultimately, in a loss of customers, which could have an adverse effect on our business, and could subject the Company to penalties or liability.
Furthermore, favorable laws may change, including, for example, in the United States where the FCC voted to repeal net neutrality regulations. Given uncertainty around these rules, including changing interpretations, amendments or repeal, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense, or otherwise negatively affect our business.
The application of laws and regulations affecting online business to our products and services is often unclear, and these laws and how various jurisdictions interpret these laws continue to evolve. Compliance with these laws may be expensive and could harm our business. Any failure by the Company to comply with these laws and regulations could result in actions against us by governmental authorities or other entities, which could harm our business, including governmental or court orders that we cease certain activities.
See Item 1A. Risk Factors "Our business is subject to U.S. and foreign government regulation of the Internet and taxation, which may have a material adverse effect on our business” and “Capacity constraints, systems failures or breaches of our network security could materially and adversely affect our business. If we fail to manage our technical operations infrastructure, our existing customers may experience services outages, and our new customers may experience delays in the deployment of our solution.”
Employees
As of December 31, 2020, we had 524 employees. Our employees are not represented by any union and are not the subject of a collective bargaining agreement. We believe that we have a good relationship with our employees. We offer flexible work schedules, abbreviated hours on Fridays and remote working opportunities for all team members to promote work/life balance. Throughout the COVID-19 pandemic, we have made it a priority to support our employees as they work from home, including increased flexibility surrounding personal and family commitments. The Company’s Diversity, Equality and Inclusion program is based on promoting a culture of inclusivity, and includes Allyship training and Unconscious Bias training, which teaches team members how to better support marginalized groups. The internal policies of the Company encourage hiring diverse candidates and ensuring that all team members are treated fairly and equally, amongst other things. We aim to inspire.
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