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Why LinkedIn Will Never Kill the Professional Recruitment Industry

Posted By Adrian Kinnersley On January 3, 2013 @ 5:02 am In Opinion | 83 Comments

How LinkedIn is eating the recruitment industry [1] 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.

[2]There is undeniably a shift in behavior with regard to LinkedIn, and it has impacted the recruitment industry — but in a different way than the article suggests. LinkedIn needs recruitment to survive. Despite views to the contrary, recruitment companies still contribute the lion’s share of its revenue. LinkedIn is undoubtedly negatively impacting parts of the recruitment market. But it’s not the third-party agencies. It’s the job boards.

You only have to look at a company like Monster [3] whose share price has tanked as impressively as LinkedIn’s has risen. Other job advertising sites such as The Ladders have had to change their pricing models [4] to allow free access in order to keep user numbers up and remain competitive.

Recruitment advertising spending decisions are now being driven by the need for platforms which allow effective interaction and the ability to target an audience of choice. LinkedIn is a much better vehicle for this than large generic job boards and is therefore competing very effectively with them — not recruitment consultancies who use LinkedIn as a tool.

Where LinkedIn has had an impact on recruitment consultancies is that it has decreased the value and uniqueness of proprietary databases. Consequently new entrants to the market and in-house resourcing teams now have access to the same candidate information as long-established recruitment firms. This has had the positive effect of preventing the proliferation of more generalist and average recruiters and enhancing the reputation of the credible specialist and niche recruiter.

Unless the psychology of a human being changes significantly in the near future, the vast majority of professionals are still going to want to interact with another person during the recruitment process, as it is still one of the most important decisions an individual has to make. A career move isn’t an impromptu purchase like an item of clothing or a downloadable tune/movie — and it isn’t a discretionary buy like a vacation or a car. A career is the basis on which someone can make all other purchases and support their family.

While a candidate’s behavior might shift so that they begin to look for opportunities on LinkedIn, and there has been a cultural shift making it acceptable to have a CV in public view, neither the recruitment process nor the ability of clients or candidates to make decisions has improved dramatically due to social networking.

The idea that recruiters can be replaced with some sort of “black box” solution grossly underestimates the impact a recruiter has in the placement of a senior professional candidate or future talent for a business. Individuals whose skill-sets are in high demand and short supply globally will have multiple options, and that professional end of the market will consequently always need third party independent market advice.

However, at the “volume end” of the market, things are different. An advertisement can be placed in a variety of media and a plentiful supply of suitable candidates respond. If you are a recruiter in a market that matches this description, your days indeed are numbered.


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URL to article: http://www.ere.net/2013/01/03/why-linkedin-will-never-kill-the-professional-recruitment-industry/

URLs in this post:

[1] How LinkedIn is eating the recruitment industry: http://www.ere.net/2012/10/24/how-linkedin-is-eating-the-recruitment-industry/

[2] Image: http://www.ere.net/wp-content/uploads/2012/12/Screen-Shot-2012-12-20-at-10.01.01-AM.png

[3] Monster: http://www.ere.net/2012/11/08/monster-to-sell-chinahr-as-it-announces-restructuring/

[4] have had to change their pricing models: http://www.ere.net/2012/11/20/now-you-can-search-theladders-for-free/

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