LinkedIn today global recruitment company tomorrow?

It seems that the recruitment sector are a little bit concerned (to put it mildly) about the future of their industry and LinkedIn.

Coffee marketing are lucky enough to be privy to a few pieces of insider information and knowledge from a range of industries.  Recently we heard from a trustworthy source within one of the global leaders of recruitment services that conversations were being had behind closed doors. Why? Social Media of course. And who else in this sphere has made the greatest impact on recruitment… LinkedIn.

The CEO of said recruitment company has actually been said to have sat down with the executive team of LinkedIn to discuss its aspirations and future direction of both companies.  They are apparently very  concerned at the network owning the whole recruitment sector. Owning everything from temporary staffing to skilled workers and executive level headhunting, as well as the entire recruitment process.

Not so apparently. LinkedIn we have been told asserted that they wanted to “create a CV website” where people stored their business and career history, while they would leave the actual recruitment process to the recruitment industry and consultants.

We are not so sure.

What is so special about LinkedIn?

We all know that LinkedIn is a business to business social network.

Just a month after its debut as a public company and eight years after its launch  LinkedIn passed Myspace to become the No. 2 social networking site in terms of visitors, according to comScore, hitting 100 million in April 2011.

Lab42 surveyed LinkedIn users at the time and found that the audience is highly engaged on the site. 32% check the site several times a week and 35% check it daily. Lab42 also found that 42% of users update their profiles regularly and 81% belong to at least one group.


Note:  Linkedin has been notoriously bad at providing usage and demographic data for the social network. This is why a lot of the data is taken from third party sources.

When it comes to the reasons why professionals use the site, employees act differently based on their position. Top level executives use the site mainly for industry networking (22%) and promoting their businesses (20%).

Middle management professionals are more likely to use LinkedIn to keep in touch (24%) with others, as well as for industry networking (20%). Whilst entry level employees are using the site mainly for job searching (24%) and co-worker networking (23%).

Advertising on LinkedIn has been slow at gaining traction as the website appears to be slow at figuring out the right way to monetise the network. However with a business focused remit, adverts can already be targeted based on education, location, job level, industry and job title. This criteria can be focused in various sections of the website, including jobs, groups or question and answers.  As the business community figure out the best ways to use the network for their marketing needs, Linked continues to build its database of business information.  It is clear that armed with so much information that the site will become the number 1 destination for finding business contacts, whether that be a new investor or a job candidate.

Why has the recruitment industry got to worry about LinkedIn?

In short knowledge is power.  The entity that controls consumer, user and personal data in whatever field will hold the key to reaching these people. So called “Big Data” is where the money is and that is why Facebook is focusing on its data collection strategy. Data is what marketers are looking for in order to reach consumers in ever more sophisticated, targeted ways. It is also what they will also pay a handsome sum for.

LinkedIn naturally collects this data from its users and has introduced a few key features that is designed to collect the perfect range of data it needs to become the repository for all the most useful data for recruiters and job seekers alike:

  • LinkedIn members profiles are designed to look like a CV
  • People are encouraged to mark their key skills which is ideal for segmenting and search functionality to find potential candidates
  • Recommendations and endorsements are akin to personal and professional references
  • Companies have careers sections built into their pages to encourage them to use LinkedIn as a prospecting tool
  • LinkedIn adverts tie together the above to enable the creation of job adverts across the website

Of course this does not negate the fact that LinkedIn is a system.  People are still required to provide a personal element to recruitment as the data and the system is not smart enough yet to be able to pick out the ideal candidate without an form of human filtering.  This is where the recruiter comes in and adds value, which in turn makes them money.

Yet as recruitment companies rely on LinkedIn to provide the data they begin to add less value and are at risk of being held to ransom for the data they so badly need to fulfill their role in the recruitment process.

Already LinkedIn recruiter, a recruitment tool that LinkedIn licenses to the industry has begun this process of loaning the data needed by large recruitment businesses.

Is the biggest shake up yet to come?

Despite growing unemployment in the world it seems that there is a skills shortage that is causing a head ache for big businesses to fill the role required to grow and develop their operations. The Lloyds risk reports suggests that the second biggest risk for businesses is the shortage of talent and skills.

Interestingly Alistair Cox the CEO of Hays wrote a blog on the future of recruitment and asserts the same problem. Not only does he point to the skills shortage but also suggests that with the growing internationalisation of business there is a future pressure on opening up the movement of workers from around the world to ensure that talent and skilled workers are where they are needed.

This brings a massive, internationally used social network back into the picture and makes LinkedIn even more powerful and useful in the future.  It is perhaps this platform that could alter the nature of international migration and the mixing of societies from around the world.  LinkedIn can facilitate the connection of business and worker from around the planet.  Personal recruitment will not be able to provide such a global service but rely on even better data to source and filter huge numbers of candidates from all over the world.

The recruitment industry is changing and it sounds like there are rumbles of thunder ahead for traditional recruiters, unless they can ride the wave and change their business model so they can take advantage of the sea change.

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