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How LinkedIn Is Eating the Recruitment Industry

by
Michael Overell
Oct 24, 2012, 5:17 am ET

Software is eating the worldMarc Andreesen

Marc Andreesen believes software is eating the world. In a seminal Wall Street Journal article, he argues the next 10 years will see every industry vertical disrupted by software, with incumbents replaced by fast-growing online companies.

Retailing? Amazon. Movie rental? Netflix. Video games? Zynga. Marketing? Google and Groupon. Telco? Skype and Apple. Recruitment?

Andreesen claims LinkedIn is the natural successor. The “fastest growing recruitment company in the world,” poised to eat the $400 billion recruitment industry. But this story is more subtle than the typical “disruptor beats incumbent.”

LinkedIn’s early growth was fueled almost entirely by the recruitment industry. Without recruiters, an IPO would never have been possible. But recruiters are now at the mercy of LinkedIn. Every new member, every new feature, erodes the traditional value proposition of third-party recruiters: proprietary access to talent.

This is not a “young-pup-eats-old-dog” jungle story. The relationship has more in common with high-school biology:

A parasitoid is an organism that spends a significant portion of its life history attached to or within a single host organism in a relationship that is in essence parasitic; unlike a true parasite, however, it ultimately sterilizes or kills, and sometimes consumes, the host.

But “LinkedIn Is a Parasitoid Sterilizing the Recruitment Industry” seemed a really unsexy title.

Why LinkedIn Needed Recruiters for an IPO

LinkedIn could not have IPO’d without the buy-in of the recruitment industry.

Recruiters were the biggest driver of initial revenue, as the early adopters of premium accounts to access information on potential candidates. In 2009, over 40% of LinkedIn revenue came from Premium Subscriptions.

The company has since diversified, and currently generates more than half its revenue from Hiring Solutions. Included here are job ads, career pages, and corporate recruiting products.

Of course, recruiters are not the only users of these products. But they were the early adopters of both Premium Subscriptions and Hiring Solutions. No recruiters = no revenue for LinkedIn.

Now External Recruiters Are Hooked on LinkedIn

Ninety-three percent of recruiters use LinkedIn for recruitment, up from 78% two years ago.

This statistic alone doesn’t prove recruiters’ dependence on LinkedIn. It’s less about LinkedIn as a “source of hire” (which is reported as low as 3.5% in some surveys), and more about where and how recruiters are maintaining their core asset: networks of people.

In the good old days, the biggest perceived asset of recruiters was their “little black books.” But these books were simply a tool for maintaining the real asset, which was their network of contacts.

As technology evolved, black books were replaced by big candidate databases. For many years, these databases became the secret sauce. They were expensive to buy and maintain, both in human and dollar terms. A big database could not be replicated easily by a client. It was a big factor in justifying crazy-high fees … it was a key selling point.

Now, proprietary databases are becoming increasingly irrelevant for most external recruiters.

Today, LinkedIn is the living, breathing database for most recruiters. Recruiters depend on LinkedIn to build, maintain, and contact a global network of potential candidates.

How do we truly know recruiters are hooked on LinkedIn?

Flip that question around. As an employer, would you engage a professional recruiter who had only a handful of LinkedIn connections? Didn’t think so.

Recruiters are heavily reliant on LinkedIn for professional relevance and effectiveness.

How LinkedIn Erodes the Traditional Value of External Recruiters

Here’s the punchline. Every new LinkedIn user. Every new feature. Every new connection you make, and company you follow. Every new piece of information LinkedIn collects. It all erodes the traditional value of external recruiters.

If this sounds threatening to some in the industry, it should! Simply consider LinkedIn’s primary objective: To connect talent with opportunity at massive scale.

Sounds like the type of statement you’d read on the websites of many recruitment agencies.

Conflicting purposes? Check.

So how does LinkedIn erode the traditional value of external recruiters? There are two fundamental reasons why companies turn to recruiters:

  1. To access talent they can’t find themselves; or
  2. To simply outsource the recruitment process.

Most of the value is in the first point: proprietary access to talent. Anything else considered a “value proposition” of external recruiters is just a sub-point to this. Industry connections; global reach; skills of persuasion. It’s all about access to talent.

And now, access to talent is becoming democratized, thanks to LinkedIn.

Companies are learning they can bypass recruitment agencies by directly accessing LinkedIn products themselves. And LinkedIn is releasing products, like Talent Pipeline, designed to make this easier.

With every new member, and every new piece of information, these products become more valuable to employers. For example,

  1. Pfizer reports up to 40% of its candidates come through LinkedIn.
  2. Accenture plans to hire 40% of 50,000 new staff through LinkedIn and Twitter.

Do you think these companies will go back to paying sky-high fees for someone else to find these candidates? Bersin reports half of all U.S. organizations decreased agency spend though 2011. Consider what LinkedIn itself says on this point:

“We believe our solutions are both more cost-effective and more efficient than traditional recruiting approaches, such as hiring third-party search firms, to identify and screen candidates.”LinkedIn S1 Statement, 2011

LinkedIn won’t completely remove the need for external recruiters. Recruitment is an inherently people-driven process, and many employers still want to outsource parts of this process. However, we are witnessing a massive shift in value away from traditional proposition provided by recruiters (access to talent), toward online tools that are now accessible to anyone.

Where to for recruiters? Innovators vs. Ostriches

The answer for recruiters is not simply “be better at your job.” That’s like telling a high-street travel agent to renovate their storefront, to compete with the likes of Expedia.

Travel provides a useful analogy. Travel agents haven’t been completely “eaten” by software. They still exist. You might still use to a travel agency to book a very important trip — your honeymoon for example. But they are completely irrelevant for the majority of purchases.

In travel, there’s been a massive transfer of value away from the high-street, to more efficient and better ways of booking online.

In the same way, technology is unlikely to entirely consume the recruitment industry. Hiring requires people at its core. But models will change. Employers and candidates will continually search for more efficient ways of hiring, utilizing all the tools available to them. LinkedIn is only one.

The recruitment industry is split into two camps on this question.

The Innovators: Those who recognize the existential challenges facing their industry, and are adapting. They are investing heavily in social media, new business models, and other areas that employers cannot easily do themselves (including sophisticated sourcing techniques, using LinkedIn and other networks).

This will drive a very interesting period of rapid innovation in recruitment tools and processes.

The Ostriches. Those with their heads in the sand, claiming “everything is OK!” while forcefully arguing in blogs and conferences about the right of professional recruiters to an unchallenged monopoly in the business of talent.

A common reaction from this camp about the impact of LinkedIn is, “People said the same thing about job boards.” That’s true. But job boards were in the business of replacing newspaper classifieds, bringing job ads online.

LinkedIn is in a very different business. It has much bigger ambitions, and a track record of execution. LinkedIn is eating the recruitment industry. It’s going to be an interesting ride.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Martin Snyder

    Hogwash.

    1) Talk to top recruiters and they all say the same thing: LinkedIn is mostly played out and they have to dig elsewhere for fresh material.

    2) There is a world of difference in owning your own data and just using LinkedIn- if they have an interest in the data (and they do) they can never really be trusted. Nor are they going to go out of their way to tightly connect to rivals, which (of course) will exist. Nor is every other talent vendor in the world just going to roll over for them- we all will figure out how to move data in and out of the private database easier and easier.

    3) LinkedIn rose because they gave people social permission to maintain credentials/profiles online whilst not job-seeking, but that permission has eroded. If you suddenly take an interest in buffing your LinkedIn profile, its like waving a giant flag that says “I’m looking”

    4) LinkedIn has a history of monetizing first, asking questions later. They have a great business and will be with us for the foreseeable future, but there is something rotten in their DNA that keeps them thinking small, and maybe always will…..

  2. Shannon Wagner

    As someone who has been both an agency and corporate recruiter (starting in the field well before social networking), I believe there is still room for everyone in the sandbox–agencies, LinkedIn, and corporate recruiters.

    I am currently a corporate recruiter that supports the entire business (not specializing in one particular discipline), and my preference is to always try to find the hire myself, first. However, if the position is requiring a very niche skill and needs to be filled quickly, I always recommend to The Powers That Be that we simultaneously engage a specialized outside firm in the search, because they will have connections and pipelines already built up in that field, that I do not yet have.

    And while LinkedIn will provide me with access to many of these folks, getting responses is a slow process. It works, it just takes a lot of time.

    The disadvantage to using contingency firms, of course, is the enormous expense. One 20% fee (which is conservative) of a $100K hire, will more than pay for the appropriate accesses an internal recruiter would need on LinkedIn to conduct the search on their own. And 3 of these fees in one year can allow you to add another member to your recruiting team.

    I believe once companies start doing the math and seeing this, if contingency firms want to stay in business, they’re going to have to change their fee structures. I do believe there will always be a need for them–their business models just might need to change a bit.

  3. Nelson A. De Leon

    I spend most of my recruiting career as a third party recruiter. Specializing primarily in the recruitment and placement of Bilingual (English/Spanish) professionals for roles both in the US, as well as abroad. As a “one man” outfit, I was always an early tech adopter (LinkedIn, The Ladders, etc). It gave me the advantage needed to compete with the big players. As a corporate “Recruitment Advisor”, in my opinion, one of the main reasons we sometimes have to use agencies to fill very difficult positions is because we spend a considerable amount of time doing administrative work, that as an independent recruiter I didn’t have to. My main goal as a third party recruiter was primarily to identify, pre screen and present the right candidate to match my client’s needs, period.

    I would say, Redbox not Netflix is the king of movie rentals. Overall, great article. Thanks for sharing Michael.

    Nelson

  4. Mark Moyer

    Timely article by Michael, and valid points by Martin and Shannon.

    My take on this is simple. The top level of recruiters who actually develop professional relationships with their candidates and clients will always be in demand regardless of whatever software/hardware/websites can throw in their way. It is the lazy and inexperienced recruiter that faces the challenges from Linked In and its dramatic growth.

    I will try to be careful how I say this…most of the top-earning executive recruiters have little interest in going in-house, as the compensation does not match what they are accustomed to earning. The prospect of earning the $20k fee Shannon references just once a month makes a pretty comfortable living, and there are not too many corporate recruiters making $240k annually. A top level recruiter with a $20k carrot dangling in front of them (and generally the fees are substantially higher) has a much greater incentive to turn the professional world upside down to find an ideal candidate than a corporate recruiter being paid $60k annually. An executive recruiter will also be reaching out more effectively to the passive candidate that may not come up on Linked In searches, but instead is referred by one of their connections.

    Regarding fees coming down, the old adage “you get what you pay for” rings true here big time. Saving a $20k fee is not a bad plan if the hire turns out to be ideal, but if the company is only seeing those candidates brought in by the corporate recruiter, and not seeing the potentially superior passive candidates that a third party executive recruiter provides, the replacement costs and/or business lost as a result of the inferior hire will likely exceed the placement fee the majority of the time.

    This argument will wage on as do those involving politics. Recruiters like me think we’re the answer to everyone’s needs, and the corporate side often thinks the opposite. And that’s all good…but the bottom line I think many of us can agree on is that Linked In has opened up numerous doors to the professional community, and we will all keep looking for ways to go through those doors as Linked In and the overall recruiting community evolves.

  5. Lori Nair

    It may take years but I believe it will happen for 90% of the external recruiter placements. The “very” specialized will be the only ones with a chance to thrive. Now is the time to tighten your belt and align yourself with smaller companies that don’t have a team of recruiters on-board doing the same thing you are doing everyday for several clients. It seems they should be more effective since they can walk down the hall and develop “real” relationships with the Hiring Managers and they are not juggling their time between clients or competing with every other recruiter racing to make a placement.

    We have seen fees forced down over the past 5 years and more recruiters arrive on the sense to try to make a living. This article feels like a warning and should be considered as a strong possibility.

    Great Article and Great Insight!

    Lori Nair

  6. Jeff DickeyChasins

    We saw a similar phenomena in the job board world: Indeed became viable by utilizing job board listings and then charging them for promoting posts; now they’re moving on to direct employers. FYI, I take a different look at the same issue in this blog post: http://www.jobboarddoctor.com/2012/10/23/is-linkedin-the-future-of-job-boards-maybe-or-maybe-not/
    Don’t know if I would be an innovator or an ostrich!

  7. Cathy Graham

    Not everybody is on LI – and surprisingly this is not an age related phenomena as in the course of my recruitment activities I frequently encounter early to mid career individuals who do not have LI profile, which I really cant’ understand! Why I ask them and the response I’m getting “I’m not on LI because I don’t want my employer to think I am looking for a job”.
    LI to work effectively needs profiles to be complete and accurate – Ha! I see lots of multiple profiles and out of date profiles. Let alone accurate – can’t determine that until I speak to the individual.
    As a longtime retained search consultant I love LI – and it is changing the game, maybe forcing the whole recruitment world, from agency to retained, to sharpen their skills and begin to offer real value for some of the crazy fees!

  8. Mitch Heinemann

    Mark Moyer is spot on. The first paragraph is a thing of beauty! Actually, the whole thing is. Very nice.

    New channels are interesting and useful but if you are a high touch exec recruiter that is very good at what you do software will not replace you. Nor will a database or etc. If you just sling resumes at corporations for a living you ARE being replaced. That’s it really.

  9. Darryl Clements

    Interesting points and comments. LinkedIn is a tool, not a panacea. Good recruiters, companies, and employees are simply going to learn how to use it for what it’s worth. Might I add that LinkedIn needs a couple of things to continue growth as a valued recruitment tool:

    1) LinkedIn needs more hiring manager and decision-maker participation before becoming the true “go-to” tool. Right now, direct hiring manager and decision-maker partipation isn’t high enough. When that happens, expect recruiters both internally and externally have to shift to becoming more adept at facilitating conversations/interviews to ensure ethical-legal-socially acceptable-financially acceptable standards and followed.
    2) LI could use an employee-insight function (similar to what GlassDoor does) so that perspectives can easily and quickly find out about the culture and practices inside companies. It’s a two-way street where candidates will demand more open access to company information than they can get now.

    There is merit to employee concern about employer perception about their participation on LinkedIn. It’s one reason why so many profiles are outdated and why people often don’t update it as religiously as they would a Facebook or other social account.

    My parting addition would be that WHEN more and more employees start to use LinkedIn, the competition for employees will be just as, if not more, intense. Only now, companies will see just how independent contractor-minded employees now are and must be. Many companies already comb LI to find out if or who’s looking, but they haven’t yet learned how to use that information. LI, therefore, is really an information (employee-centric) transparency tool that essentially has exposed the “hidden” people talent inside companies. However, LI doesn’t control the information or transparency – LI users do. If LI users sense this model helps them, they’ll use it. If not, they’ll avoid it. That’s neither innovator or ostrich – it’s a new situation-specific tool.

    Look for a bit of a pullback on this one for the next few years though as companies and employees are trying to protect themselves from either getting too much of an upper-hand.

    Lastly, don’t overlook that a lot of companies go to external recruiters because they don’t want to directly tap into other companies for fear of getting the same in return. That fear, perceived or real, is still there and likely will be for any company not named Google, Apple, and a few others, transparency could mean getting your own best people snatched without warning. If that happens, LI itself better be ready to stand alone as a recruitment organization because companies can and will quickly turn a cold shoulder. If a company that found 40% of it’s hires from LI also found that it also lost 40% of it’s talent (especially without seeing a tangible talent pool and skill upgrade) from LI, those same companies will put LI and any other source into a box any way they know how.

    This rides going to be bumpy before it takes a definitive direction.

  10. Keith Halperin

    Thanks, Michael. Very similar comments could have been made 15 years ago re: recruiters and “them new-fangled job boards”.
    Well, contingency recruiters are still here. In theory, contingency and retained recruiting work should perform the high-touch, high value-add work that can’t be effectively done by other recruiting efforts and compensated with 30% fees. (I say this as a contract, NOT a contingency recruiter.) In reality, I think that the vast majority of recruiting work is low-level work that in most cases would cost no more than $6.25/hr to outsource, e.g., jr. agency recruiters filling positions at 20% fees from candidates found on Monster, CB, DICE, or LI. Those folks don’t seem to be going away. As long as there are substantial numbers of greedy, arrogant, fearful, ignorant/incompetent (GAFI) hiring managers, there will be substantial numbers of mediocre recruiters and agencies.

    Back to LI:
    I’ve found an outfit that says they’ll get you LinkedIn contact information for $2.50 name/profile, you or they provide the profile- don’t think they have LI Recruiter, though.

    Cheers,

    Keith keithsrj@sbcglobal.net

  11. Ash DeVane, CPC

    Perhaps this has been mentioned earlier and I just missed it. As LinkedIn continues to bill itself as a recruiting platform instead of just a professional social network, all the employees who have posted their profiles there, who we recruiters see as potential candidates, will continue to flee. Just as the best candidates (and ALL passive candidates) abandoned on-line resume databases. They become sick and tired of all the solicitations.

    I’ve been on LinkedIn since 2004, and have found it to be a tremendous resource, but it is certainly not an exhaustive resource for all available candidates, and never will be. For each time I am amazed at who I have found there, I have an equally discouraging experience where there are no responders. In these instances the search must be completed the old fashioned way, networking over the telephone, or not at all.

  12. Holger Frohlich

    Top talent will always be supported by top level Executive Search Firms and vise versas. You can buy a luxury car over the internet but nothing replaces the on hand experience. LinkedIn is like a big ocean where you can fish for talent and clients but the process stays the same. It helps but does not replace it. You need to have the in person communication like phone contact and personal visit regardless. The individual touch will always be needed. It is a combination of all resources which makes it interesting. But finding the right pieces for the puzzle will never stop.

    hf

  13. Craig Robins

    One Recruiter summed it up quite nicely: “Companies having access to LinkedIn will put Recruiters out of business. Baloney! It’s sort of like running around yelling “OMG! THEY SELL WRENCHES AT SEARS!! ALL THE MECHANICS ARE GOING OUT OF BUSINESS!!” Having access to a toolbox does not mean I can fix my car.”

  14. Kes Thygesen

    You bring up some good points in this article, but it’s important to remember that LinkedIn is also running a business. If the way they run their business, with new products and services, is going to run recruiters out of their business, then recruiters must adapt and learn as you suggested. I don’t know that this is necessarily the case, but it’s an interesting point to consider nonetheless.

  15. Robert Dromgoole

    The death of the recruiter is a myth. Finding people or applicants has never been the issue. We’ve ALWAYS known finding people is easier.

    Recruiting is a SALES function. It’s always been a supply & demand issue.

    Recruiters must actively sell to happily employed people.
    Recruiters must actively sell interested talent to clients.
    Recruiters must actively sell & close said talent on an offer.

    3,000 years from now recruiters will be used to sell someone.

    We will never be outsourced because companies desperately need this capability.

    My $.02.

  16. Jack Smith

    Craig – classic response! “OMG! THEY SELL WRENCHES AT SEARS!! ALL THE MECHANICS ARE GOING OUT OF BUSINESS!!” Having access to a toolbox does not mean I can fix my car.” So true!!

    There will NEVER be a software that automatically recruits, coordinates the interviews, organizes the feedback, negotiates the offer, runs the backgrounds and then on boards them.

    LI is another tool (much like the job boards were) but it will never take the place of a true recruiter.

    When you find the software that cuts out a recruiter (and all the high level steps above) then let’s call it disruptive. Until then happy recruiting.

    - Jack

    Jack Smith | Creative Guy @ COMPAS Technology
    jack@mycompas.com| http://www.myCOMPAS.com

  17. Michael Overell

    Thanks for these interesting comments! I’d love to respond to each individually, but the comments system here makes it difficult.

    First, I’d like to repeat a key point that some of the comments seem to have missed:

    “LinkedIn won’t completely remove the need for external recruiters… Hiring requires people at its core. But models will change. Employers and candidates will continually search for more efficient ways of hiring, utilizing all the tools available to them. LinkedIn is only one.”

    I never argue LinkedIn will replace all recruiters. But it is certainly forcing some (many?) to revisit their business models.

    Second, a few additional points:

    1. I am not simply cheerleading for LinkedIn. I AM bullish on the company long-term, and believe it is fundamentally reshaping the way many people connect with opportunities. However, it is only one piece of the puzzle, not the full picture.

    2. A question/challenge for those questioning the value or disruption of LinkedIn. This year LinkedIn will clear $500M revenue, with half from Hiring Solutions.

    Where do you think that revenue has come from?

    Is LinkedIn…
    (a) Growing the overall market for recruiting products, as companies increase their overall recruiting budgets? Or,
    (b) ‘Stealing’ share from other products/services, as companies reallocate funding from other categories (like job boards and external recruiters).

    I’m betting (b).

    We know this because Bersin reports overall talent budgets increased (only) 6% over 2011, and also that +50% of all US organisations *decreased* spend on agency recruiters.

    Large corporates, in particular, are diverting budget away from external recruiters, towards tools (like LinkedIn) that make them more efficient at recruiting internally. We observe this anecdotally and statistically.

    As hinted in article, I’d simply encourage people not to have their head in the sand on some of these macro trends.

  18. Peter Macdonald

    What a bunch of ostriches writing in here! I have been in recruitment for over 30 years and am very tech savvy, and the future is not bright for the external recruiter, in fact they are going the way of the dinosaurs. Nearly every big business in OZ now employs internal recruiters who use linked-in and job boards etc. It is only the labour hire & niche recruiters who will survive in the new world. Thinking of buying a lawn mowing franchise!

  19. Robert Ritchie

    It really depends on what market you are in. You can not replace the human element in recruiting. What percentage of candidates do not have a Linkedin profile? By not being on Linkedin is one invisible? Executive Recruiting is not going anywhere. Traditional HR departments are simply not geared for the level of recruiting that a retained search firm offers. Keep sending those inmails while I pick up the phone :)

  20. Bill Fitzgerald

    I wonder what would happen if someone who owned a 160M person database ever decided to get into to direct placement business with 5% placement fees while offering a high relationship/high touch experience?

  21. Neil Bullock

    Michael, a great article that has generated some insightful comments and opinions. The essence of your article that the Recruitment model we know today needs to change is absolutely correct. External recruiters will change how they work as will internal recruiters. LinkedIn is part of the jigsaw it is not the core around which the industry will evolve.

    To Ash’s point, LinkedIn had originally positioned themselves as a professional networking platform, now they are a no holds barred Recruitment Platform. ‘Professional networking’ was what got people to sign up ‘Recruitment Platform’ is what will see them leaving. I would love to see LinkedIn’s data on profiles being created versus those been taken down – they do have this data. You make an argument around LinkedIn’s revenue growth, what will be interesting is how long that will be sustained. I am sure I am not the only recruiter who has been tempted to try or actually paid to post an ad on LinkedIn, paid for Premium accounts for my consultants or even paid to try the Talent Pipeline type of tools from LinkedIn. I don’t pay to post ad’s on there anymore – the response was worse than a job board and only select consultants get a Premium Account. If the talent that in-house or external recruiters are looking for is no longer on LinkedIn they will need to look elsewhere. This is where the model shifts back to recruiters who offer real value not just the ability to search LinkedIn and post a job ad. LinkedIn has also grown over the last 4 years when we have been through one of the worst global economic situations for many years. How much has LinkedIn’s growth been down to a desire by employers to find an alternative to the traditional recruitment model in order to cut costs. When things recover and ‘cutting hiring costs’ loses management priority to ‘identifying and securing skilled talent for growth’ – will we still see the level of current spend on LinkedIn services?

    I am sure we will look back at this as a time when global economic conditions, combined with the growth of social media, LinkedIn, Twitter and Facebook all served as a catalyst to refine how the recruitment industry and hiring in general actually works. We will see perhaps a tiered approach to how we access and price recruitment services depending on who, what and how you are recruiting. Achieving both value for money and access to skilled recruitment services. In house and external recruitment methodologies may work alongside each other to achieve the hiring outcomes (seriously – it can be made to work). Agency recruiters offering true domain expertise, search and talent selection services, you will be needed, although you may have to charge a little less in return for less contingent and more retained or exclusive work. LinkedIn will be one of the tools people utilise, but LI may have to charge a little less. Job Boards, Dice, Seek et al you will need to come to the party with a review of service offerings and pricing. If you are a recruiter who is an expert at sending in-mails with a really good response score – find someone who looks old in the office and ask them to teach you how to gather names over the telephone.

    To the chap who mentioned the Lawn mowing service. It is a good analogy. When cash is tight, it is prudent to mow your own lawn and maintain your mower. When things are good, why do it yourself? Get the lawn service in so you can play footy with the kids and enjoy a beer on the patio.

  22. James Lord

    LinkedIn is a powerful tool that has phenomenal potential, yes. BUT this article is suggesting that people will change their attitudes and push the traditional business models out of bed… Not straight away they won’t.

    Changes in attitude like this suggest (employers using LinkedIn opposed to a recruitment agency) don’t happen overnight. They take time.

    We should all be improving & innovating anyway. But if you pay too much attention to all the stuff that might happen you’d never get out of bed in the morning. Take it with a pinch of salt.

    Broadly this is evolution. Something new, better, faster and/or cheaper will always come along. We are human, we will always want more and to improve on the old model.

    But I don’t think recruiting will be impacted as hard as other industries have by technology. The bottom line is we all always pay for CONVENIENCE – that won’t change.

    It’s easier for me to order my food online and have it delivered to my door over going to the grocer. It’s easier for me to rent a film online and have it posted to me opposed to driving to a shop. But recruitment is and will always be a people business. It will always be easier for me to pick up the phone and ask someone else to get on with the hard work.

    James Lord
    @Jameswlord

  23. Alex Charraudeau

    You make some pretty bold statements and the article did have many good points, however I am more of the opinion that recruitment is evolving and LinkedIn is one of the driving forces behind this. Business, recruitment, technology has always changed. It has to. Without change and innovation we would still be living in caves eating woolly mammoths.

    This year market conditions have dipped and peaked making the way people recruit, the way businesses hire and the way candidates look for work different from the previous year. The same can be said for every year which passes.

    LinkedIn and social media are not new. They have found a role to play in our work and personal lives. Today LinkedIn is certainly a crucial channel to consider when marketing your recruitment business or your corporate employer brand. It is, however, only one of the tools available to you in your recruitment marketing and communications arsenal. It isn’t to be feared. It is to be used and embraced. It won’t replace the need for job boards and it won’t replace the need for recruitment agencies. It will become part of the recruitment marketing landscape.

    LinkedIn is here to stay… for now at least; or until recruitment evolves again and finds something new. Get used to it and enjoy it while it lasts.

    I wrote a response to his blog post here : http://bit.ly/S7E9Ux

  24. Mitch Sullivan

    Unless I’m missing something here, I think it’s the rise of the internal corporate recruitment function that’s eating the agency industry, not LinkedIn.

    If agencies want to prosper, I think they need to start thinking like internal recruiters. For some that’s going to be a really tough thing to do.

  25. Brian Kevin Johnston

    A Name/Lead Contact Is Useless Without Influence And Persuasion Skills. (Not To Be Confused With Control And Manipulation) Therefore, Linkedin Is Simply Just A “Tool”, A Very Valuable Tool…

  26. Morgan Hoogvelt

    LI is a great tool to add to the toolbox but not the end all of recruiting. I have said it and will keep saying it…nothing can and ever will replace the human element which only a live human recruiter can do.

    LI is another story of the typical behavior in America – everyone rushes to it as it gains popularity and then moves away when it gets old. I love LI, I really do, but I dont and wont rely solely on it nor will I think it will eat recruiting.

  27. Lori Nair

    I think everyone agrees that the “human element” will always be a part of recruiting. The point is -the recruiters are internal, on staff, a part of the companies we are working for. So once again, I say “NICHE” and very hard to find talent will still be outsourced to recruiters. Where does that leave you and your staff?

  28. Carol Schultz

    There is so much wrong with the author’s logic here, I hardly know where to start.

    First, I love how someone with exactly ZERO recruiting experience seems to know so much about how recruiting should be done.

    The overall theme that companies won’t need recruiters is totally flawed. “Little black books” are more than just names. They contain RELATIONSHIPS. LinkedIn may be a database of names. It is NOT a database of relationships. If you think a database lessens the value a what a true recruiter offers in the way of strategic skills and abilities, I have a bridge in Brooklyn for sale.

    When you say, “There are two fundamental reasons why companies turn to recruiters:
    To access talent they can’t find themselves; or To simply outsource the recruitment process.”, it confirms my assertion that you don’t have any insight into search.

    When you ask, Do you think these companies will go back to paying sky-high fees for someone else to find these candidates?” this confirms you don’t have any idea about search. Nothing can happen unless and until you can get someone to talk with you.

    The comment by LI, “We believe our solutions are both more cost-effective and more efficient than traditional recruiting approaches, such as hiring third-party search firms, to identify and screen candidates.” is nothing more than propaganda. They are hoping (and it’s probably a pretty good bet) that recruiters are too clueless to realize that there’s more to posting classified ads as a way to hire people.

    There are multitudes of people not on LI. Great recruiters and sourcers know how to find them, and smart companies know this.

    Since you obviously don’t know anything about recruiting, let me give you a brief overview of the process:
    1. Find names
    2. Get people to have a conversation with you
    3. Determine if there’s a potential fit or interest in your part and the candidate’s part
    4. Prepare them for the interview process and debrief after each interview
    5. Qualify them throughout
    6. Negotiate the deal
    7. Qualify them so that you don’t have an offer generated that won’t be accepted.
    8. Ensure there is no possibility of a counteroffer they may accept (this is actually part of qualifying)
    9. Make sure they start the job.
    10. Keep in touch throughout the first 90 days

    LinkedIn may not be quite the same as a classified ad and may have big plans, but it will not replace a quality recruiter.

  29. Keith Halperin

    @ Bill F: I think we’re very close to that point now. These firms won’t be located in North America, Europe, or Australasia, though…The elite executive recruiters have nothing to fear (FOR NOW), it’s the domestic companies filled with jr. agency recruiters filling positions at 20% fees from candidates found on Monster, CB, DICE, or LI who’ll have to re-invent themselves or move most of their ops offshore to compete on price- I think it would be very hard to operate domestically like this with 5% fees.

    @ James L: Well said.

    @ Brian Kevin: Also well said.

    @ Morgan: “I have said it and will keep saying it…nothing can and ever will replace the human element which only a live human recruiter can do.” Never say “never”. Also: that recruiters are alive- I’ll grant you, but “human”?…..

    @ Carol: Once again, you’ve hit it out of the park!
    Also: “LinkedIn may not be quite the same as a classified ad and may have big plans, but it will not replace a quality recruiter.”
    However, there are a hell of a lot of recruiters out there who AREN’T quality. (Fortunately, that doesn’t apply to anyone reading this….)

    Cheers,

    Keith

  30. How LinkedIn Is Eating the Recruitment Industry « Johnwilliam's Blog

    [...] How LinkedIn Is Eating the Recruitment Industry. Like this:LikeBe the first to like this. [...]

  31. John Hoskins

    Thought provoking,indeed – no pun intended. Confirms why Recruiters need NEW tools to differentiate themselves from others and combat the perception of Linkedin’s panacea promises. Resumes are relics. Odd how entire industries were born of them; job boards, ATS software, and now Linkedin. Organizing candidate databases by resumes alone without more scientific evidence of competence wears thin for the user. Its a garbage in, garbage out process wrought with error. The great recruiter’s value is presenting “qualified candidates” and not wasting the hiring managers time with unpromising applicants. The fewer frogs kissed the happier the client. Recruiters need to adopt methods for their practice that help them leap frog their competitors. They should consider more hiring science and not revert to searching 1000′s of profiles filled with half truths and raw data not relevant to predicting on-the-job success.

  32. Andrew Kable

    I completely agree that Linkedin is eating people’s lunch and I don’t think this has nearly played out yet. Those who really have to look out are

    1. Job Boards
    Linkedin is developing an incredible job-board function and I think this is poised to take market share very quickly at the high end. In fact I suspect their growth curve is already pretty steep.

    2. ATS/CRM providers
    Your recruiters probably already spend more time on Linkedin than they do on your proprietary database. Linkedin makes it very hard for existing providers to integrate effectively with Linkedinthis makes me think that their strategy is to kill off the traditional ATS/CRM altogether. If your database does not provide you with competitive advantage why bother to maintain your own? All Linkedin has to do now is allow recruiters to create dummy profiles to manage candidates who don’t have an existing profile…add a few extra ATS/CRM features and they are done.

    Linkedin will eat away at the share-of-wallet of recruitment firms and because they are a better tool than anything that has come before, they will extract more of a recruitment firm’s total margin than other tools have previously. You can see that with the Linkedin recruitment tool, which costs at least as much as a job board subscription and a conventional cloud ATS/CRM subscription combined.

    I also think that Linkedin is going to increase job market liquidity generally. The transaction cost to reach passive candidates with highly targeted offerings has been reduced for both the approacher and the approachee.

    Linkedin also creates the space for recruitment firms to develop their own highly targeted employment brands…incredible things are possible now for the intelligent recruiter.

  33. Jerry Miller

    Wow, @Carol, being a little harsh aren’t you? Here is the author’s background. “Michael Overell is cofounder and CEO of RecruitLoop, a curated marketplace of independent recruiters available on-demand. He is a former McKinsey consultant, having prior experience at PwC and Ernst & Young.” Sounds like he may know a little bit about recruiting.

    As far as your 10 point process goes, #1, Finding Names has always been one of the biggest challenges for in-house recruiters. LinkedIn now gives them that ability. And good recruiters, in-house or third party, can handle points 2-10. But not everyone, especially C-level talent, is on LinkedIn. It’s a tool. It won’t replace recruiters butis certainly changing the dynamic of how recruiting is done.

    For example I attended an informercial for LinkedIn’s recruiter package in which a panel of users presented. One of those user firms was Korn Ferry International, one of the premier executive search firms in the world. And I was quite surprised to hear that they use LinkedIn extensively to find talent. It’s a matter of adapting to use the tools available.

  34. Bill Fitzgerald

    Is LinkedIn the silver bullet and the answer to every recruiting challenge? Good heavens no. Can we learn a lot from what we are seeing? Absolutely yes.

    I’m attempting to develop a list of what we have learned from or about Linked In based on facts, not personal opinions. For example:

    The idea of being part of a public data base appeals to lots of people – at last count 160M.
    Not every professional is on Linked In.
    Linked In revenue is growing.

    What other learnings come to mind?

  35. andy nick

    A couple other learnings:
    -nearly 60% of the people on LinkedIn are outside the U.S.
    -10% are entrepreneurs
    -39% are at the manager, director, VP or owner level (i.e. – the top rung)

  36. LinkedIn, or else! « Hiring Karma

    [...]  And if you’re on LinkedIn, you’d better keep your profile updated and active.  This article is a little lengthy, but you’ll get the point pretty fast. Rate this:Share this:Like [...]

  37. Ken Schmitt

    Outstanding article and thank you for addressing the obvious – if we recruiters don’t adapt, eventually we will lose our edge. I am happy to say that I am member #4m out of the 180m users in LinkedIn, having embraced this incredible tool from day 1. I remember back in the day -ok, just 10 years ago – working for one of the “Big4″ in retained executive search, when we would have to pay “sourcers” for name gen. It was something like $75/hr + phone expenses. In my opinion, LinkedIn has replaced the need for sourcers, by granting us access to 180m incredibly bright professionals. It is our responsibility to leverage that network, provide value, contribute to our network, and yes, even provide free advice and introductions from time to time. I began teaching LinkedIn classes to job seekers about 6 years ago – at a cost of $69/workshop. We now offer the same workshop for free, and have expanded to providing onsight workshops to sales, marketing and HR professionals – for a very small fee! As recruiters, it our knowledge of this incredible tool that will provide more visibility and access to target clients by educating our peers and colleagues. Thank you LinkedIn for providing us with such a valuable tool to share with our network and clients!
    Ken Schmitt
    President/Founder, TurningPoint Executive Search
    http://www.turningpointsearch.net

  38. Philip wilson

    I noticed Mycon Flash Recruit is an easy- to- use recruitment software. This amazing software may help any Managers, Recruiters and CXOs work together to meet hiring targets, reduce time to hire and lower recruitment costs.This is just an amazing tool where all resumes can be stored, logs can be listed and whole reruitment process( sourcing, selection, interview,logs, approval) is automatically maintained.Just peace of mind to concentrate on core recruitment.

  39. Thea Bensel

    I love some of the comments mentioned here. It’s true, recruitment is a sales function, requiring dual knowledge of sales and human resources. Here is what no one is saying – third party recruitment exists because we are not obligated to play by rules. As an HR function, we find the best candidate for the job, and then sell that same candidate to the hiring manager – often bypassing internal human resources. Linkedin can’t change internal policies that make it hard for hiring managers to find the right candidate. Assuming no barrier to internal hiring, recruiters are skilled at developing and maintaining relationships with hiring managers to find and place candidates. Linkedin is a resource, and it will not be “eating” the recruitment industry anytime soon.

  40. Roderick Smyth

    Thanks Michael, Great post and some good comments, demonstrating there is still a divergence of opinion out there. Rather than a short comment, I decided to contribute with my own post http://www.arithon.com/blog/2012/is-linkedin-eating-recruitment/

  41. Bill Fitzgerald

    Linked In is an attempt to disintermediate the recruiting industry. Its just the beginning with lots more to come. Lots of opportunity.

  42. Is LinkedIn Eating the Recruitment Industry – or Sharing a Nice Meal? « Shireen's Blog

    [...] read with interest the article “How LinkedIn is Eating the Recruitment Industry” on ERE.Net. The author, Michael Overell , raises salient points. LinkedIn is taking a piece of [...]

  43. How LinkedIn Is Eating the Recruitment IndustryMedepage Blog

    [...] I am a member of a number of HR groups on LinkedIn and recently found a discussing on the following story “How LinkedIn Is Eating the Recruitment Industry”. [...]

  44. Diane Viterisi

    Linked in is a professional facebook. They have built their success on paid memberships but lack what truly would set any competitor apart from them– customer service. I have a paid subscription and have had a problem with my account and the inbox since August and can’t get a life person to talk to. I am sent email after email saying their engineers are working on the problem. For the all of us in the staffing field- it is unfortunate that the people that built their success can’t customer service from the largest professional network that exists. Shame on you Linkedin.

  45. Suzanne Sears

    LinkedIn hasn’t hurt the recruiting business one bit: it has actually increased recruiting orders.

    LinkedIn is just a list of names.

    If that’s all it took to find talent: a pool of names: no one would ever need a recruiter to fill their spaces.

    Presumably any firm can cheaply hire a 9-5 recruiter to sit in the office and make phone calls one by one of everyone on the list they think fits their bill who works for their competition……….and see how many actually will take those calls during work hours and talk freely about their career goals with their direct competitors.

    By definition only a candidate who is totally ticked off that day with his firm is usually going to open up and spill the beans that he wants to dump his firm and move to the competition.

    Truth is: most are terrified to talk to recruiters from competitors for fear the word gets out: there is no expectation of confidentiality.

    Recruiting isn’t about a list of names: its about having a CONFIDENTIAL list of names of ideal fits for your firm that are willing to talk to you.

    Anyone who works in outside recruiting knows you probably need to talk to at least 40 people to find one candidate to put forward………

    How many people does your 9-5 corporate recruiter talk to in one day?

    How many are doing interviews Sunday nights because that’s the only time the candidate can talk?

    I hear this all the time: the rage about excessive recruiter fees……..

    What gets forgotten is that the average search takes at least 2 months to execute: and I have never seen one that didn’t cost the recruiting firm at least $10,000.00 to conduct before any profit is added on.

    There is a massive time investment to deliver those candidates as fast as these firms want them: usually they want prequalified candidates in less than 2 weeks turnaround.

    That’s hundreds of hours of work: nothing one 40 hour corporate recruiter could ever pull off.

    Still it goes further than that:
    Someone has to SELL your opportunity to a candidate. We aren’t talking about the unemployed here. We are talking about fully satisfied employees with your competition.

    What’s in for them? Because in truth: you probably ARE NOT paying more than your competition. You don’t have better benefits. You don’t promote more often. You aren’t a better option most of the time. Recruiters have to convince people to throw their lives into your hands.

    Still more: when a recruiter specializes in an industry: they know “who’s who”…..who wants to make a move soon: who is well thought of……..who is politically connected to whom so shouldn’t be approached.

    LinkedIn isn’t any different than your own corporate data base.

    It doesn’t keep a list of “people who want a new job in 2013″ or people a firm are getting ready to shed.

    If a database of names was all anyone needed: we wouldn’t really need to pay LinkedIn either……Facebook might be enough.

    The real kicker is: LinkedIn has over 100 million people it: but still: some schmuck has to weed through them all to find a diamond. Let’s face it: no one finds that fun and the more names that get added: the more pure “search” work goes on…….its such a giant list: how many people do you have to pay to just keep up to the new additions daily?

    Most firms are giving up doing it themselves as everyone hates doing it…….except outside recruiters.

    This dream of cheaper in-house recruiting has been floating around forever….and if it worked: firms wouldn’t keep hiring more and more and more of them: to the point where now in many cases it’s CHEAPER to hire outside: the overhead of maintaining so many recruiters is massive and for the most part ineffective for the reasons about.

    What in fact I am seeing is the trend for more and more firms to DUMP their in-house recruiters. 9-5 recruiting has proven to be a spectacular failure.

    Again: LinkedIn is just a list of names: it doesn’t do any of the real work of recruiting.

    I say: Grow LinkedIn Grow! The list of names is valuable: but it’s no more than that.

  46. Death of a Dinosaur – The Traditional Recruitment Firm « deliberatepractice

    [...] that LinkedIn has had on the recruitment industry held much interest.  You can read this article here. So times have changed dramatically in the recruitment industry Every member of our team has [...]

  47. Hardeep Sodhi

    Is it only me or are others also seeing another factor ( not yet a trend,for sure ) …- critical executives being discretely / clearly told to take off their CVs/ Profiles from the Net ? .. indeed in some cases being sidelined due such presence ….and employment agreements which lean heavily towards assuring long term employment alongside clear performance markers ?

  48. Why LinkedIn Will Never Kill the Professional Recruitment Industry - ERE.net

    [...] How LinkedIn is eating the recruitment industry suggested that LinkedIn, an essential tool in a recruiter’s arsenal, is actually going to devour the recruitment sector like an aggressive parasite. This is a very popular viewpoint — and an understandable one given the state of the jobs market, the focus on reducing recruitment spending, and the undeniably impressive growth of LinkedIn’s revenues and share price. [...]

  49. Why LinkedIn Will Never Kill the Professional Recruitment Industry - Social Smashing

    [...] How LinkedIn is eating the recruitment industry suggested that LinkedIn, an essential tool in a recruiter’s arsenal, is actually going to devour the recruitment sector like an aggressive parasite. This is a very popular viewpoint — and an understandable one given the state of the jobs market, the focus on reducing recruitment spending, and the undeniably impressive growth of LinkedIn’s revenues and share price. [...]

  50. elizabeth johnston

    What creates job opportunities is the fact that there is a 30% turnover rate in executive positions. This does not mean executives are necessarily getting terminated, they could be getting transferred, promoted, leave for another opportunity, the company could be purchased and re-managed or the company could be expanding domestically or internationally or just be re-arranging the deck chairs. In any case the national average is a turnover rate of 30%, which means if you look at 100 companies and an average transition time of 120 days there is approximately 10 job openings at any given time. This is often referred to as the “hidden or non-published job market.”

  51. Summary Sunday Curated Career Content for week of Jan 6th - Career Pivot

    [...] How LinkedIn Is Eating the Recruitment Industry – ERE.net [...]

  52. Vivek Khanna

    LinkedIn (or whoever is the then leading – flavour of the moment- technology solution) will surely replace the recruiter. But that will happen only on the day all other human jobs are replaced by automation. The recruiter will be the last to turn off the lights….. till then keep recruiting.

  53. Is LinkedIn eating recruitment? | Recruitment Technology – Software and Technology for recruitment

    [...] just read an excellent post by Michael Overall on ere.net (http://www.ere.net/2012/10/24/how-linkedin-is-eating-the-recruitment-industry/), along with some divergent opinions in the comments I thought I might offer my view of the effect [...]

  54. Albert Porsche

    LinkedIn is one of the emerging social media which is really getting its roots in every industries such that its just making its dependencies on the recruitment market. As most recruitment creeps in means the most revenue depends on the hands of the industries. Linked In is just establishing its hands due to this firm support only and obviously it is working good and will definitely go ahead to be a industrial coverage. It is the new era of recruitment with new policies involved and closing the market for the external recruiters present.

  55. Pricing Innovations – A Tale of Two Companies | MarketMix

    [...] has gained value by taking away from one of its core set of users – recruiters. According to Michael Overall of RecruitLoop, “In the good old days, the biggest perceived asset of recruiters was their [...]

  56. LinkedIn is a Recruiter’s ally, not enemy! | Govig Senior Care

    [...] “How LinkedIn is eating the recruitment industry suggested that LinkedIn, an essential tool in a recruiter’s arsenal, is actually going to devour the recruitment sector like an aggressive parasite. This is a very popular viewpoint — and an understandable one given the state of the jobs market, the focus on reducing recruitment spending, and the undeniably impressive growth of LinkedIn’s revenues and share price. [...]

  57. SPEAKER’S CORNER: Mike Palestina – Attitude is Everything Creating and Executing a Winning Career Marketing Plan | PSGCNJ Newsletter

    [...] to Michael Overell, the first place hiring managers go to find qualified candidates is to internal sources. The second [...]

  58. bill josephson

    Are most of you responders to this piece serious?

    How’s business for most of you? Plenty of quality fillable positions to work on? Companies agreeable to working with you? Fee resistance? How often do companies need your services? Billings/production up? Relatively easy to do business?

    We always have had till 2001 really two things to worry about in our business. One, competition. Two, government policies worsening the business climate/recessions.

    In 2001 we started worrying about globalization, offshore outsourcing to primarily India and China. And in the past 5 or so years it’s now technology/social media/LinkedIn.

    Advantage we always had was an ability to access passive/invisible candidates our clients couldn’t including calling into their direct competitors. Those advantages and days are on the road to ending. Technology will enable more and more professionals to become visible and allow companies greater and greater access to them requiring less need for we 3rd party recruiters.

    If you think having a book of contacts will make you special exempting yourself from the massive cost cutting underway in ever single industry, you’re a God Damn ostrich.

    One day, as happened to me, your contacts will say, “Gee, Jack/Jill, my budget got slashed for recruiting,” or “We now have a team of 10 internal recruiters to fill our openings wanting to give them a shot,” or “we’re unable to use recruiters for the forseeable future,” or “We find we’re able to find good candidates on our own,” or “Business is off, we have a hiring freeze,” or “We’re laying off.”

    You all decide what the cause is. My business has been off for years and I’ve been at this since 1980. Maybe if the economy was great and companies had too many reqs for their Talent Acquisition team to handle things would get better–but does anyone see that happening in the near term?

    Is it because of President Obama’s anti business policies? Competition? Globalization? Or Technology?

    But seriously, how are you really doing?
    And are you really confident about recruiting’s future?

  59. Peter Macdonald

    Couldn’t agree more Bill. Its a combination of all those factors but I believe technology ultimately will sound the death bell for the external recruiter. Then I believe it will be the accountants turn to be fearful for the same reason.

  60. bill josephson

    Peter, IMO everyone’s going to feel the impact of technology.
    Accountants, Healthcare, I/T, Law…..you go into a major food market and half the cashiers are gone as we can “self check-out” ourselves allowing the bar code “gun” to read the merchandise bar code. Go into a fast food drive through and the order can be taken from one person in a different location, or voice recognition automated system.

    I believe those who for some reason haven’t yet been impacted don’t see anything, technology hasn’t adversely touched them.

    When it does, they’ll be howling.

  61. Eddie Cullen

    You are incorrect in your assumptions and philosophy. LinkedIn and the Recruiting industry go hand-in-hand. Linkedin can only survive with the recruiting industry because that is where their revenue streams primarily come from at the moment. Also there are 175 million working Americans in this country and only 76 million are on LinkedIn. Not to mention the bogus profiles of inexperienced technology. When someone comes along to disperse recruiting then LinkedIn will follow suit almost immediately with an uncontrollable downward spiral. Someone will create a platform that wipes them both out simultaneously. Also they won’t be able to stop it. The funny part is its a lot closer than most people realize. I can’t wait either.

  62. Eddie Cullen

    You are incorrect in your assumptions and philosophy. LinkedIn and the Recruiting industry go hand-in-hand. Linkedin can only survive with the recruiting industry because that is where their revenue streams primarily come from at the moment. Also there are 175 million working Americans in this country and only 76 million are on LinkedIn. Not to mention the bogus profiles of inexperienced technology users. When someone comes along to disperse recruiting then LinkedIn will follow suit almost immediately with an uncontrollable downward spiral. Someone will create a platform that wipes them both out simultaneously. Also they won’t be able to stop it. The funny part is its a lot closer than most people realize. I can’t wait either.

  63. bill josephson

    Sure, internal corporate recruitment will survive.
    I’m talking about technology making 3rd party recruiting becoming redundant and obsolete.

  64. Eddie Cullen

    I agree. Great point Bill. I think my passion for how we can change this economy prompted my response. I could not agree more that 3rd party recruiting will become redundant and obsolete.

    Internal corporate recruitment will definitely survive. I just feel 3rd party recruiting is disrupting the flow of effective productivity at work.

    I invite you to connect with me on LinkedIn and check out my passion for education and effective economic change.

    http://www.linkedin.com/profile/view?id=187998579&trk=nav_responsive_tab_profile

  65. Rob Dromgoole

    “The reports of (LinkedIn’s) death are greatly exagerated.” Mark Twain said it. @Eddie, LinkedIn has just started. Today 230-million profiles, in a few years they’ll hit a Billion. The Golden Age of LinkedIn and recruiting is only beginning. Why you’d want them to fail I don’t get. We only help one another. The more successful LI is, the more it helps enable the success of our profession.

    3rd party recruiting will always have it’s place. To think they’ll die is rediculous. Truth is most inhouse recruiters can’t cold call anyone. Until they can, 3rd party recruiting is permament.

    LinkedIn is well positioned to help depict a macroeconomic picture of what roles are open and what skills and competencies are needed to fill them. In my opinion I see a future where LinkedIn becomes the BLS data analtyics wearhouse of the working world. It’ll show the pulse of what’s happening.

  66. Eddie Cullen

    Hey Rob, you make some valid points in your argument, but it’s the typical Plato Cave’s analogy with LinkedIn and 3rd Party Recruiting. We accept what we know because we can’t see what is better.

    Now you see LinkedIn COULD have been the pulse of what’s happening, but they went too macro too quickly and the result is 60 million college kids think LinkedIn is a joke. There is no substance to the site. It’s just made for third party recruiters and making their life easier. In Jeff Weiner’s book, the Start Up of Me, he openly admits to disliking academia even though he adamantly speaks passionately about in some YouTube clips. He contradicts himself often when he speaks about the validity of education and networking with professionalism. Also there are 230 million profiles and I am taking a wild guess in saying half of those profiles have 50 connections are less.

    I would love to see the activity numbers of every user. Its just like Coursera, these new massive online courses are supposed to be great right? Well there average enrollment for a class is 50,000 people and you know what their average completion rate is? Less than 5%. Its shocking and actually humorous.

    Now Jeff Weiner saw the money, and did not develop his idea from the inside out instead he took the easy way toward the riches. He went macro first over micro. This is the wrong approach. He also never made preparations about the prospect of 3rd party recruiting actually becoming instinct. When it does, LinkedIn will go under with recruiting.

    When was the last time you read a biography or did some research about the philosophical approaches of Jeff Weiner? I would be scared if I just accepted his approaches because he doesn’t account for a lot of different varying factors.

    3rd party recruiters water down the process with cold calling, spam and template messages, and their only drive is the end goal: The Commission. They have no conceptual understanding of the actual professional skills they are recruiting for and they have the tendency to place people in the wrong positions. This in turn decreases productivity in the work place because people are ineffective in their jobs.

    Now A recruiters are usually exceptional, but when you take generation Y kids right out of college who are forced to recruit because there is not enough jobs to support their real professional desires their thoughts become clouded by the end goal: The commission. What happens? B and C recruiters destroy the workplace.

    Abraham Lincoln once said, “If I had six hours to chop down a tree, then I would use four of them to sharpen my axe.”

    Someone is sharpening their axe, and they are going to chop down LinkedIn and 3rd Party recruiting with one swoop. No one will be able to stop it because it will happen in one quick motion.

  67. Rob Dromgoole

    Start up of Me was written by LinkedIn’s FOUNDER, Reid Hoffman, not Jeff Weiner. Considering that students make up 28% of the profiles, college kids do not take LI as a joke.

    You may disagree with LI’s strategy, but they were just ranked by Forbes as America’s fastest growing technology company.

    Successful 3rd party recruiters don’t suck. They’re great at what they do. Commission works wonders because if you suck, you’ll fail. It weeds out those who can’t cut it.

    That said I don’t USE those recruiters because I don’t HAVE to. But they’ll be fine.

    By all measures LI is successful and only getting better.

  68. Eddie Cullen

    Yikes, I should of checked the author’s name before I started running my mouth. I would never question LinkedIn’s success. They have been very successful, and have promoted the thought process of social networking in the professional world. I am thankful for that.

    Now students may make up 28% of the profiles, and yes I teach and coach at Fordham University. College kids do think LinkedIn is a joke. They are also fearful to create profiles because of the judgment they will receive from professionals in the industry for awhile.

    So you are defining the success of a recruiter based on how much money they make right? You billed X amount so that makes you a great recruiter. I would love to see recruiters given commission based on how productive the candidates they place into certain roles are. Now I bet the billing numbers would look a little different.

    Recruiters are judged on quantity and not quality. Rob, what do you think would happen if recruiters were judge on candidate productivity rather than the quantity of placements?

  69. bill josephson

    I know of several companies calling directly into other companies for candidates.

    LinkedIn, through technology, will make almost everyone transparent–easy to access directly.

    The issue I have is no matter how good a 3rd party recruiter is, unless internal recruiting is too busy to track down candidates or they have too many reqs to fill rendering them overwhelmed I ultimately don’t see what role 3rd parties will provide internhls can’t making 3rd partids obsolete.

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