Last week 21 Fidelity Investments fund managers announced they were reducing their holdings in Facebook, after barely six weeks. Some were bailing out altogether. The moves are unusual for a company like Fidelity, whose funds tend to be conservative and with a focus on the long term. But Fidelity was only the most recent large investor to have lost money on Facebook. What Fidelity’s move signaled was that the firm has low expectations that Facebook can generate the kind of money it was supposed to. I guess they don’t have much faith in Facebook’s new job board to succeed.
It wasn’t supposed to be this way. Social media is supposed to be this boundless source of plenty — sales, candidates, solutions for every problem. For some years now you can’t attend a recruiting conference without some guru expounding on what a dinosaur you are if you don’t buy into the hype. Expressing reservations was considered heresy. No criticism was acceptable.
It was like being in the old Soviet Union where anyone who questioned the communist system was automatically labeled insane since only a crazy person could not see what a great place it was. When I mentioned in an article that research on social networks suggested that some of the most active users were also people with low self esteem, one genius wrote a comment that if this was true then most of America must be people who were depressed. Well comrade, that’s certainly true of most investors in Facebook.
Pay No Attention to the Man Behind the Curtain
What’s changed now is that as a public company Facebook can’t sustain the myth that social media is a great source of anything. It is a source for sales, candidates, and solutions — but one of many that may work for some and not for others. Some still cling to the dream that Facebook provides access to 900 million candidates. Sounds impressive, but think about it for a moment and you’ll realize that this is just more of the same hype: 99.99% of those candidates are neither qualified, available, or interested in any job that’s open. The simple fact is that most jobs are still filled by people who live within commuting distance of the job site, so even if every person on the planet was a member it wouldn’t really matter much.
There are about 135 million Facebook users between the ages of 18-64 in the U.S., representing about 69% of working-age population. That seems like a lot, but their reasons for belonging to a social network are mainly social (surprise). Research by the Pew Internet & American Life Project shows that the overwhelming reasons people use social networks are to connect with friends and family. They’re not interested in buying anything — further confirmation of it came from a recent study that found that four out of five Facebook members have never been influenced by ads run on the site.
The Pew data also shows that engagement and activity on Facebook is heavily skewed toward users under 35, and women, suggesting that targeting those demographics as candidates is more likely to be effective than others. But the same study found that women are significantly more likely to choose private settings, so targeting efforts may not be very effective after all. So the claim that Facebook provides access to 900 million candidates is, well, an eight-letter word for bovine waste.
Remember the Social Part of Social Networks
The Media research firm Ipsos found that people on social networks are most influenced by their friends — 22% of people say they bought a brand because a friend follows or “likes” the brand. That should be no surprise. A close friend represents a trusted source so a recommendation from one carries far more weight than any advertising. The same should be true for jobs: a friend who suggests a job usually has some idea of a candidate’s skills and interests. If it’s a job with their own employer, then the friend’s referral implies that it’s a good place to work, or at the very least gives the candidate better information than they will get from any corporate career site.
Our own research shows that this is how candidates prefer to use social networks to find jobs. That is, by making connections involving their friends. And these candidates are more satisfied with their decisions in the choice of a job. Of course this isn’t a straight line from recruiter to candidate. Involving third parties slows down the process and is a lot more work, but the results are better than posting jobs on social networks.
One can’t blame people for following the yellow brick road to the social network version of Oz. Too many people were spreading too much hype and it was easy to get sucked in. Even highly successful investment analysts bought into it. But anyone who still thinks that social networks are an easy solution to filling jobs should be reminded of that most memorable line from the Wizard of Oz: “What would you do with a brain if you had one?”
Related Conference Sessions
- Think Tank: Leading a Social Media Initiative
- Expand Your Department’s Social Media Strategy To Reach Social Network’s “2nd Layer”
- Think Tank: Leading a Social Media Initiative (continued)