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Recruiters and LinkedIn: Frenemies?

by Jan 16, 2013, 5:35 am ET

Mouse trapLast month, I wrote a post called “Recruiters: Your Days Are Numbered” for which I was lynched in the comments thread for disparaging the recruiting profession and forecasting its demise. Even Josh Bersin — a leading authority on HR — chimed in to describe the article as “a bit of a joke.”

One of my particularly unpopular remarks was a reference to travel agents, who were disenfranchised at the dawn of the Internet. In the 2011 ERE article, “How LinkedIn Is Eating the Recruitment Industry,” author Michael Overell concurs: “We are witnessing a massive shift in value provided by recruiters, toward online tools that are now accessible to anyone … Travel provides a useful analogy: You might still use a travel agency to book a very important trip — your honeymoon for example — but they are completely irrelevant for the majority of purchases.”

He cites LinkedIn’s 2011 S1 Statement in support of his argument: “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.”

Two weeks ago, ERE published a counterargument to Overell’s analysis — “Why LinkedIn Will Never Kill the Professional Recruitment Industry” — in which author Adrian Kinnersley proposes that, “LinkedIn is undoubtedly negatively impacting parts of the recruitment market but it’s not the third-party agencies, it’s the job boards.” He adds, “LinkedIn has decreased the value of proprietary databases … preventing the proliferation of more generalist and average recruiters and enhancing the reputation of the credible specialist and niche recruiter.”

Kinnersley’s view is short-sighted. And Overell’s words are truer today than when he first wrote them more than a year ago. Regardless of which side of the argument you’re on, it’s ludicrous to ignore the threat that LinkedIn poses.

Recruiters: To rise to the next level of your performance, you may have to make a dramatic change in reaction to new market forces. Miss that moment and you will start to decline — as a casualty of LinkedIn or otherwise.

 

photo from bigstock

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.

  • Martin Snyder

    So your merely saying that “Overell’s words are truer today than when he first wrote them more than a year ago” makes it so? Any you know, supporting arguments?

    Here is a thought experiment for you: what if LinkedIn DEVALUES electronic direct-hire efforts because of increased volume and decreased quality? (e.g. look at the trajectory of telemarketing over the years)

    In that situation, person-to-person interaction becomes more vital, which is exactly what search firms provide, and their business would show an uptick, which is what we have seen. Third-party recruiting had a record year in 2012 and 2013 looks even more promising.

    If S1 filings were gospel, Groupon would own the world!

    You want to know who owns the world? Microsoft, Google, Amazon, Samsung, and maybe Apple, if they can keep the wheels on, which is looking increasingly doubtful…..

  • Pingback: It’s About the Information |

  • http://www.ere.net/author/lior-shamir/ Lior Shamir

    @Martin – Groupon and LinkedIn have very different track records as public companies. I’m not sure what you mean by the “who owns the world” comment.

  • http://www.pjmconsulting.com.au Peter Macdonald

    Don’t know which part of Shangri-La you are living in Martin. In OZ at least (you know the country with supposedly low unemployment and handling the GFC better than other countries etc etc according to the spin doctors) 2012 was the worst year on record for 3rd party recruiters with all firms downsizing and many shutting their doors altogether.

    As I said in a recent blog, much of this has been due to the demise of 3rd party recruitment from the rise of internal recruitment and RPO’s.
    Unfortunately as senior management become more familiar with Linked-in and using job boards so their perception that they don’t need 3rd party recruiters has grown exponentially.

    Whether this perception by management has any basis in reality is completely irrelevant because as any marketing professional will tell you “perception is everything”

  • Keith Halperin

    I think we need to separate sourcing and recruiting here.
    It is increasingly easy finding people (through tools like LIR, etc.)
    To paraphrase John Sumser “Good-enough sourcing is getting better and better.” The problems are in obtaining direct contact information (relatively minor, though inconvenient) and getting candidates to listen/reply to your queries (very significant). Here’s an analogy:
    Let’s say you are a single, available, straight man looking to date, and on an overall evaluation scale, you’re an 8/10. You and 300,000 other single, straight, available guys have complete backgrounds and direct contact information on a all the supermodels in the world. You’re an 8/10, but what do you think the chances are that ANY of the supermodels would go out with you, no matter how quickly or frequently (or even pleasantly) you contacted them?

    There’s another way around this, but it isn’t pleasant and probably won’t be done:
    Instead of going after the people you want who won’t work for you because really: YOU, YOUR COMPANY, AND YOUR JOBS JUST AREN’T SPECIAL ENOUGH TO GET THE “SUPERMODELS,” you figure out who you reasonably CAN get and go after them, because they’ll do well enough to get the job done.If your company needs to be filled with “supermodel” employees to succeed, you’re in a pretty precarious situation- maybe you should try another type of business…

    Cheers,

    Keith “They’re Just Not That Into You” Halperin

  • Martin Snyder

    Peter I based my comments on figures compiled by AESC (Association of Executive Search Consultants) which forecast that 2012 would end slightly above 2011, which was roughly equal to 2008, the best year ever for the business. They suggest the industry is approx. $11B USD, but fragmented, with approx. 40% of sales for the top 50 firms. The year started slow but picked up in Q2 and Q3.

    No doubt Oz is taking a beating right now- asset bubble issues and a but of catch-up to the rest of the world’s misery for the past few years.

    Nonetheless, there is not yet any market signal of massive disintermediation due to LinkedIn, nor is that signal expected by most people who really understand the value drivers of the business. Yes, it could happen, but it seems unlikely to me….

  • 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.

    Btw – @Lior Shamir, Totally impressed by your marketing acumen to break through the communication clutter and attract attention to yourself by a Ver 2.0 of your “sensational” articles.