Can we trust LinkedIn?

Can we trust LinkedIn?

I love LinkedIn. But I do not trust LinkedIn.

For recruiters, it’s obviously a key tool, and clearly a brilliant invention that is part of a seismic shift in the way recruitment works. I wish I had invented it.

But I believe, that for agency recruiters, LinkedIn is not your friend.

Don’t get me wrong, we need to use LinkedIn, and become better at scouring its database for the nuggets that reside therein. We also need to use it for developing client prospect lists, and be sophisticated in building our personal credibility, profile and brand, via status updates and group discussions. That much is a crystal clear, to even dumb old me.

But I do start to get uneasy when LinkedIn is accused of illegally accessing users’ personal email accounts without permission, and subsequently ‘harvesting’ email addresses, which it then uses to send multiple emails that appear to be endorsed by the LinkedIn member. In fact US members of the site have filed a class action complaint, now before the courts. (For the record, LinkedIn deny these claims vigorously.)

Sure, that makes me nervous. But what worries me much more even than this, is that it is obvious that LinkedIn does not care about staffing companies. And I do not trust LinkedIn to act in our best interest. In fact they are doing quite the opposite, right now. While LinkedIn sells its recruitment packages to agency recruiters aggressively on one hand, seducing us to partner with them and eschew other forms of sourcing, they quite blatantly sell the same service to corporates using (and I quote from their marketing literature) lines like…

“We will reduce your agency spend and reliance”

They don’t even try to hide their disdain for our industry, as witnessed by the very blatant threat in their IPO prospectus, which read;

“We believe our solutions are both more cost-effective and more efficient than…… hiring third-party search firms, to identify and screen candidates.”

But even this does not cause me sleepless nights. An enemy identified, with its plan exposed, is possible to beat.

This does though.

I can’t help think that LinkedIn, being as smart as they are, know that 90% of hires are made directly, without agency intervention. They are also fully aware, indeed part of, the trend, for corporates building recruitment strategies that bypass agency recruiters.

It’s obvious then that the real market for LinkedIn is the corporate hiring manager, not agencies at all. That is where 90% of their potential market is after all, and it’s where the market sentiment is too.

Jeff Weiner CEO of LinkedIn laid out the plan as recently as December 2012

“Our vision at LinkedIn is to digitally map every economic opportunity in the world (full-time and temporary); the skills required to obtain those opportunities; the profiles for every company in the world offering those opportunities; the professional profiles for every one of the roughly 3.3 billion people in the global workforce”

The underlining is mine. Is that not clear? They want to own vacancy and job seeker matchmaking, globally. Temporary and permanent. Do you think their plans include keeping third-party recruiters in the game? 

I think not. Recruitment agencies will be road-kill as far as LinkedIn is concerned.

Add to this the fact that LinkedIn is adding new members at the rate of 2 per second. No typo there. That’s two new members – per second!

So if you were in the LinkedIn Boardroom bunker, would it not be clear?

Use agencies as a cash cow while we build our global database, but at the same time deftly seduce corporate hirers as well. Then, when our database is so compellingly strong and filled with the cream of global talent… BAN agency recruiters from our platform altogether!

That’s right. Ban agencies altogether.

Then, what a compelling sales pitch LinkedIn would have for their corporate client base. Their real target market.

“Mr/s. Corporate client we have the largest database of talent on the planet, and no recruitment agencies are allowed to touch them.”

This last part is unashamedly a conspiracy theory. I have no hard evidence to prove that is what LinkedIn plans. No one told me this.

However it is true that I made these exact statements at a recruitment conference in Sydney recently, to an open-mouthed audience listening in horror as I painted this doomsday scenario. And an executive from LinkedIn was in the room when I said all this.

And he was the next speaker at the conference. And I hung around to hear what he would say. Thought it might be entertaining.

It was. But not in the way I thought.

This is what he said;

“I agree with 95% of what Greg Savage said. Now on with my presentation”

No denial. No explanation. No comment at all.

Makes you ponder doesn’t it?

Do you trust LinkedIn? Have your say below.

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About Greg Savage

Over a career spanning thirty years, Greg Savage has established himself as an undisputed global recruitment leader. Greg is a regular keynote speaker at staffing and recruitment conferences around the world.

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46 Responses to Can we trust LinkedIn?

  1. Cindy October 29, 2013 at 8:53 am #

    Couldn’t agree more. Linked In and it’s minions are on a path of agency destruction. Have thought so for years. I’m not so sure LI monopolizing the recruitment market will be everything they promise it to be. Nor will they ever replace what we do. Inhouse HR is so systemitized and profile specific that they miss the critical element that we bring, which is humanization of the process. Linked In users on the corporate side don’t seek to build long lasting relationships to help facilitate an individual’s career. They seek to fill a role, in one organization and drop you like a hot potato if you don’t fit that specific criteria. The valuable and savvy candidate (and company) recognizes the power of long term relationships.

    Yes, I think they compete and often fill jobs which might have gone to search and maybe they are betting on marketshare dictating the last resistors actions, but I think savvy headhunters are a long way from being obsolete – especially when I consider the amount of retained work currently on my desk.

    Linked In is a great tool, but I find myself being a bit bored and over all the excessive information lately. It’s not an efficient system to work through, is quite restrictive actually, and blatantly designed to cull the user into over priced fees. Linked In serves me well and often, but not always – and for free – they will never get a penny from me.

    So, as long as you proceed on the premise that they mean you (the agency recruiter) harm, maximize it as a tool and maintain the differential that keeps us in business – treating candidates like people, building longterm relationships and giving your clients the only thing they care about, results, you can have your LI and eat it too.

    • Sandy October 30, 2013 at 1:12 am #

      I have to agree with Cindy on this…..yes, LinkedIn could ultimately “ban” recruiting agencies from their service, but the one thing that we, as recruiters, bring to the table that LinkedIn NEVER WILL is the relationship development with both the candidate and the client. We don’t just “put people in jobs” we develop relationships with candidates and get to know not just their technical skills but also their “soft skills” and we are much more practiced at making the long lasting match between the client and the candidate.

      A good point was made that corporate HR does not take the time that we as agency recruiters do to get to know the candidate not to mention the fact that what is typically in a LinkedIn profile is not as in-depth as what is on a resume. So to say that LinkedIn could eventually become a “sole recruitment source” for a corporate hiring manager is very short-sighted on LinkedIn’s part. I don’t see hiring managers (or corporate HR) suddenly taking the time to search through a database to find potential candidates and then call them for a brief conversation and then get them in to start the interviewing process. Even with posting a job, they will still need to take the time to go through all the responses they’ve received and “weed out” those candidates that an agency would never have submitted to them in the first place.

      All in all, LinkedIn is a good tool, has grown significantly in a very short period of time, and is definitely starting to compete with other major search engines on the market, but I can’t see them becoming the “be all end all” to all hiring companies.

  2. Omar Little October 29, 2013 at 9:35 am #

    Very very interesting and finely written blog Greg and but I suspect its the recruiter in you that is making you consider the ‘worst case scenario’, I just don’t see it happening.
    So LinkedIn has the biggest database on planet, so what : every recruiter reading this blog probably has access to a database that is a) enormous B) only has about 0.1% usable ‘active’ candidates.

    LinkedIn has the bluster, marketing spend and great PR , (make no bones about it LinkedIn have spent some serious cash on this) but ultimately whoever has access to LinkedIn Recruiter – still has to spend time searching it, pick up the phone and then headhunt the candidates , get them interested enough to attend and interview and manage the offer management process.

    90% of internal recruitment teams that I know simply don’t do this and why should they – this is what you pay an external recruiter large fees to do rather than an internal recruiter who is on far more modest wages.

    Don’t get me wrong – I’m sure external agencies have lost SOME business to Linkedin, but external agencies lose business to competitors all the time and it no coincidence that the ‘rise ‘of Linkedin coincided with a rather bleak period of economic growth thus making recruitment tougher in general and any threats greatly exaggerated.

    In the late 90’s Monster was supposed to were worried about the rise of online job boards – external recruiters saw them off and I’m sure they can see LinkedIn off as well.

    • Jimmy McNulty October 29, 2013 at 10:42 am #

      +1 Omar. Access doesn’t necessarily mean results. The ability to spend time leveraging the database, and then actively headhunting and being effective, are key skills that many Corporate HRs lack or have limited time to develop. There are also many ethical sensitivities – does company 1 want personnel at company 2 to know they are actively hunting them?

      Most of the retained work that comes across our desk is from corporate HR’s who have hard to fill positions that they simply don’t have the time to invest in sourcing for. These companies have premium Linkedin accounts, and still are unable to fill the positions. We are often able to leverage Linkedin more effectively than they are and produce a result, or use traditional referral and engagement methods that find the hidden gems yet to get on the Linkedin Bandwagon.

      • Omar Little October 29, 2013 at 11:09 am #

        EXACTLY – You come at the King , you better not miss. However from reading the rest of the comments it seems there’s quite a few, all due respect who seem to be bought into the hype. People are aware you are able to use various FREE Backdoor searches to leverage LinkedIn?

        • Chris Zaharias December 28, 2013 at 10:13 am #

          “various FREE Backdoor searches”

          What do you mean by that? Intrigued. . .

  3. Peter Cornish October 29, 2013 at 9:58 am #

    This is clearly Linkedin’s plan and it was obvious from the beginning. Once everyone are hooked, watch the costs of participation rise. However, Linkedin is only a threat to recruitment companies which don’t add any value beyond the identification of a candidate. Contingent and other recruiters who simply grab a CV and present it to a client on a “first come best dressed basis” only have a limited life in our industry anyway. Recruiters have to add value to clients through analysis, assessment, in-depth knowledge of the relevant industry and the candidate pool, experience, valuable and trusted advice, well developed processes and practices etc – i.e. provide a value-adding service that clients can’t do or don’t have the time to do themselves. Linkedin is just a big database, nothing more. It can fulfil only a minor part of the overall recruitment process.

  4. Bryce Simpson October 29, 2013 at 10:12 am #

    I agree, Greg. It’s no conspiracy as it’s just one company looking after itself as best it can. If Linkedin think that this is the best way forward, that’s the way they’ll go. They can ban agencies as such, but not individuals such as you and I who seek candidates from Linkedin.

    • Sam Holt October 29, 2013 at 7:50 pm #

      A friend of mine who works as an in-house resourcer for an investment bank in London said exactly that during the summer, that LI is being set up for corporates. So it is likely that this will happen but when? And if your client base is mostly corporates what to do about it?
      Personally I recruit accountants in little old Norfolk and supply 95% to non-corporates but do feel for the industry as a whole. I do use linkedin and have a few placements through it but don’t RELY on it, thankfully it seems.

      Can anyone find out what’s really going on at LI???

  5. Piers Rowan October 29, 2013 at 10:19 am #

    Many of the people I network with complain that they are being offered opportunities and being approached by Recruiters all the time. Some are valid approaches but most are out of region, no clue and a general waste of time.

    How long will it be before HR departments start altering employment contracts to state “You are not permitted to have your full resume and employment history posted to the Internet in a public place” to stop the endless poaching and approaches? When that happens will the dominoes fall and erode the value of LinkedIn?

    • Doug Flatimus October 29, 2013 at 2:45 pm #

      Some great points here, Piers, and a great barnstorming, cage-rattling rant from Greg.

      I think there are nubs of truth in Greg’s dystopian vision, but LinkedIn would be walking away from a lot of recruiter-driven income by banning access to recruiters. Am I recruiter? How does LinkedIn know if the word doesn’t exist in my profile?

      If I’m retained by a client, who gives me a ‘corporate licence’ to recruit on their behalf, do I then become the in-house corporate recruiter, and I’m back in?

      How could LinkedIn ‘police’ the difference?

      The longer term model for LinkedIN is that they simply could not sustain recruitment-replacement for external recruiters (as per comments above from a few commentators).

      Piers comment above that new employment contracts may include restrictions on public publishing of professional profiles (alliteration not intended) sounds feasible, but any employer is skating on thin ice when it comes to restrictions of trade law, so I doubt they’ll take that on.

      Maybe they’ll take a carrot approach instead – retention bonuses etc.?

  6. Neil October 29, 2013 at 10:22 am #

    Great article Greg, and with the usual insight backed up by facts.

    The writing is on the wall with LinkedIn as they go from strength to strength, so what are we all doing to stay relevant to the shrinking 10% (or less) market that exists? Don’t lose sight of the fact that less than 10 years ago that 10% was more like 60%.

    I believe creating and developing new business models hold the key, rather than just tinkering with modifications to the old ways. What does that look like?

    I have my ideas and are making major changes in a business with service offerings to completely new markets. This is a new business based on a different business model, where the opportunity has been clearly defined by the problem.

    LinkedIn maybe a threat, but that also presents as a great opportunity. It is up to us to remain relevant and see where the opportunities lie.

    Neil (a business owner)

  7. Murray October 29, 2013 at 10:24 am #

    How long will it be until LinkedIn withdraw their Premium service completely (c. $25 per month) and only offer a ‘free and no frills’ option and a say ‘$6k per licence’? Then like Seek, regardless of value, once you are hooked and completely dependent this will go up 10% per year. Watch this space…

    • Sephora October 29, 2013 at 10:35 am #

      That’s why all good recruiters / sourcers should learn to write Boolean code. If a recruiter/sourcer relies solely upon a premium LinkedIn account then I would suggest that they shouldn’t be in the recruiting/sourcing industry.

    • Doug Flatimus October 29, 2013 at 2:46 pm #

      Very plausible, Murray.

  8. Navid October 29, 2013 at 10:24 am #

    This is a very good read Greg and I agree with most of it. I will share it on Linked in :)

    Although I don’t see Linked In capable of ever banning recruiters (every second person on linked in is selling something), I do agree that they are using dirty tricks.

    What you have not mentioned on your article is their double dipping strategy where they are now charging some candidates to have a premium profile and then charging agencies and corporates to find those profiles.

    I have roughly 26,000 connections on Linked In and I have been building my network since early 2007. I have been a paid member since around late 2008 and I have been using their so called premium services that they offer to paid members since then.

    Linked in “USED TO BE” a great source for both candidates and contacts sourcing up until roughly 3 years ago. However the size of the monster has worked against it.

    Nowadays there are major problems with sourcing on linked in:

    1) Nowadays everybody and their pooch make a profile on linked in, Most of them are sales people and entrepreneurs (you read massage therapy businesses) that are still very much irrelevant to sourcing talent per say.

    2) People have learned to exaggerate their profile, what may seem like a great candidate on linked in, suddenly becomes a below average candidate once you start seeing their resume and interviewing them. This is the main reason technology cannot replace knowledge because people will almost always hack technology to suit their needs.

    3) The nuts and bolts of their technology is actually going backwards to the degree that most recruiters nowadays use google’s search engine to search candidates on linked in. Needless to say, I have many invitation requests sitting in my inbox that I cannot access due to a technical glitch. I have reported this glitch last year and they have said to me that their technical department is looking into it.

    4) Linked in does not cater for the tit for tat strategy. Linked in doesnt produce candidates so companies have to headhunt from each other directly. If ABC headhunts two top candidates from XYZ directly, XYZ will almost always retaliate.

    I think the moral of this article is recruiters need to evolve before linked in does. We need to always be one step ahead of linked in. IMO linked in is a bubble that will eventually burst anyway.

  9. Jacqui Elliott October 29, 2013 at 10:32 am #

    Great discussion point! I certainly admire LinkedIn for their aggressive approach and tactful entry into the recruitment space. I am not at all afraid of LinkedIn or concerned about their plans. Although they may certainly take a piece of the recruitment pie, it will only be the slice the recruitment industry hands to them on a silver platter.

    In my experience, clients don’t engage recruiters just to put candidates in front of them, it is to seek the guidance and expertise of an expert and somewhat shirk the great responsibility of making a hiring decision onto someone else. There is security in using a third party and in the same way you outsource IT, payroll and the like, you know you are asking someone who has dedicated their life to that specific task to provide a quality service.

    LinkedIn may create a database of candidates, but it is only as good as the information put into it and the real work is in identifying behavioural characteristics, culture, team fit and overall role suitability – not just an ‘experience’ or ‘role title’ match. When they create the science behind this, then we should start to worry.

  10. Kevin Chappell October 29, 2013 at 10:35 am #

    Greg, I am standing on top of my roof ready to jump….NOT!!

    The reality is that every organisation everywhere can do what we do, and have been able do from the time we, as an industry/sector, were established. To compare another industry – it’s the same in real estate. Have real estate agencies disappeared? Perhaps there has been a “rationalisation”, but that sector is probably stronger now because they have had to adjust and change. There are new players with different ways of operating.

    We are no different. I have said for years now that the age of reason is upon us and our way of operation, including our charges, has to change. And it has changed, but needs to change more quickly. In the end, organisations do it themselves because it’s much cheaper, and were driven to do it because we were just too expensive for what we offered. Low value for money. Once fees have dropped and the right balance is achieved against the cost of doing it themselves, then the threat disappears.

    One thing though, as LinkedIn grows and becomes bigger and bigger, then organisations will need experts to sort through the plethora of information and qualify the truth from the lies, the good from the bad, and actually meet the people! It’s no different to how we have had to operate through the years with post then fax then email then job site response.

  11. Simon Webster October 29, 2013 at 10:38 am #

    Greg, it all certainly makes sense, indeed LinkedIn is a great tool, but not the only one. It does provide hiring managers access to people, however LinkedIn doesn’t recruit. Recruitment is still a process and a time consuming one. It is important for us recruiters to be forming long term relationships with existing candidates as well as potential candidates will be the key. The landscape for our industry is changing and will be challenging, but the candidate will be the most important asset. I personally am not worried about where LinkedIn is headed.

    Great insight into to mind on LinkedIn!

  12. Jeremy King October 29, 2013 at 10:56 am #

    LinkedIn can try, however they will never replace the Human of Human Resources – even from the recruitment function!

    Talent acquisition – the human buying function – however is ideally placed to utilise the buy/sell functions which LinkedIn is aiming to provide.

    Good luck to them.

  13. Terry Habib October 29, 2013 at 11:23 am #

    Glad to see someone has published what many of us have been thinking for some time. Forget Facebook, Seek, Monster and the like, LinkedIn will swallow them…. and us all up on their path to controlling the employment market. Very clever, but the more important question now is what to do about it. Clearly any business just offering a temp / perm service is on very borrowed time, so adding value in other employment / business related areas is the only way to survive. This is where ensuring staff have been skilled up across ‘the world of work’ is critical, as might be too late to start that now. LinkedIn might soon have a mortgage on ‘doing it cheaper’, but we still have the upper hand on doing it better.

  14. Simon Anthonisz October 29, 2013 at 12:03 pm #

    Nice insight Greg. Worrying…..maybe.

    Linkedin may have the best sourcing tools and database but sourcing is easy now days. Linkedin has proved that.

    It’s ‘selecting’ that is the skill recruitment professionals possess and the selection process that is out of control for most corporate clients.

    Quality over quantity is the new battle ground.

  15. Oliver October 29, 2013 at 1:55 pm #

    Really enjoyed the article Greg, nicely researched and thought out. My humble opinion is that the point will always remain that whilst Linkedin has a database of people/skills/information, it has always and always will be the user identifying the talent through knowledge of the client, their chosen industry and being able to ‘read between the lines’. Just like an agency with a large database. Besides, the more internal recruiters employed to fill the burgeoning amount of roles means that the average level of recruitment competency will inevitably drop. Just like an agency. So, instead of 10′s of irrelevant resumes hitting a hiring managers desk, they’ll now get Linkedin profiles. Oh, just like an agency.

  16. Alicia October 29, 2013 at 2:18 pm #

    Definitely food for thought and one to put on the radar– Being in the recruitment game I can see your concerns, but this has been the same in recruitment before – newspapers to job boards to LinkedIn. We as recruiters just need to get smarter about the way we work – we live in an evolving fast paced industry and I am sure profitable recruiters reading this will be saying to themselves – “it doesn’t matter because we are . . . . .”

  17. Daylon October 29, 2013 at 2:24 pm #

    Well, if they banned Agencies, they’d be shooting themselves in the foot, profit-wise, wouldn’t they? What’s the makeup of agencies vs. corporate users of linked in? 50/50? 80/20?

  18. Owen Bleakley October 29, 2013 at 2:26 pm #

    Don’t be scared of Linked In fellow recruiters, there are 3 letters Linked In should be very scared of R.O.I – Linked In can only provide introductions, it does not recruit, someone still needs to evaluate the responses.

    Yes I agree that Linked In has undermined the industry, however not through being a fabulous tool. By allowing internal recruitment departments to justify their existence, Linked In has afforded HR / Internal Recruitment departments the promise of reduced recruiting costs, through the use of online sourcing tools – Linked In etc.

    But guess what kiddies !! It hasn’t reduced the overall cost, but it has reduced the quality of hires !! Which is why so many business are reverting back to a hybrid function of fewer internals (for repeatable hires) and agencies (for hard to fill roles).

    Linked In will FAIL, ultimately because candidates HATE IT and that is what they are trading in. They have built a platform that makes finding a new job harder for candidates. With so many users, candidates are finding it harder to stand out, they are getting bombarded with InMails from Corporate recruiters that have no idea what they do and the list could continue (perhaps my fellow readers can add some more). This is great news for Agency recruiters, because ultimately candidates will prefer to have a conversation with one person (or company) that can provide them with multiple opportunities and knows what they do… (And these are the messages that we as a recruitment fraternity need to be giving air time to)

    As soon as the Rhetoric (and massive marketing campaign) wears off, decision making exec’s will see Linked In for what it is, just another website promising a new world economy and delivering very little in terms of real results.

  19. Kiran Bhat October 29, 2013 at 5:05 pm #

    Greg,

    Good article to make us sit up and think … however, LI is just competing with likes of Monster, Seek or any other databases … LI or any other job portal is purely a Database of information … and the value addition that agencies or recruitment firms bring in … cannot be replaced by any robots …

    Atleast this article got us to think twice about our jobs … sometimes we need this small dose of fear to make us stronger & better … and many more Database (Old / New) … will always make us better & better as we progress further … but lets keep the fear on … there are competitors … who are there to take a piece from our CAKE …

  20. Jez Styles October 29, 2013 at 6:58 pm #

    Greg,

    Do you have any thoughts on ‘LinkedIn Intro?’ A good friend of mine works for a large international Tech firm and all employees have received an email this morning essentially telling them they must not set this up on any company devices as all email essentially goes through their servers which allows them to mine all info.

    Another reason not to trust LinkedIn?

    • Greg Savage October 29, 2013 at 7:18 pm #

      Hi Jez..that very interesting..I don’t have any info on that..but it sounds worrying

      • Jez Styles October 29, 2013 at 7:59 pm #

        A couple of people have referred to the LinkedIn ‘bubble’ in this thread and elsewhere. I can’t help but feel LI are inadvertently feeding that bubble with a lot of the changes over the last two years.

  21. Joanne October 29, 2013 at 7:55 pm #

    I am quite shocked by the LinkedIn speaker’s response. But as a recruiter it never helps to have all your eggs in one basket. I thoroughly enjoyed the #BIGBILLERSUMMIT and need to go analyse and strategise all the data from the different speakers.

    However, here is an interesting article on LinkedIn today:

    http://www.linkedin.com/today/post/article/20131028062534-131079-the-datafication-of-human-resources

    “Our research shows tremendous interest and investment moving into this area. More than 60% of the companies we surveyed are increasing investment and trying to build a strategic solution to collect people-related data and analyze people investments well.”

  22. Corinne Winter-Rousset October 29, 2013 at 8:48 pm #

    One perspective missing from the comments is this- one of our biggest roles in the show is as a buffer. We are the buffer between the client and a potential candidate for when the immediate news is “we regret that we will not pursue your candidacy”. When we approach a candidate for a client, it is us asking -not the client. When the client says no thanks, we deliver the message and allow that buffer zone between the two to have another conversation perhaps in the future without the humiliation of being told to your face by the client that you’re not the one. When candidates hear this from a client, it is perceived in a very different way, leaving negative feelings about that company. When we deliver the message, we allow that candidate to save face vis a vis the client they spoke to.

    I have had so many senior executives tell me the sad story of how some junior insensitive HR person contacted them through Linked In asking if they would be interested in leadership role within their group. Senior Exec being of course flattered to be called directly, likes the brand, says of course. An interview proceeds and then silence for several weeks ensues. One day he contacts the HR person for some news (remember there is no Buffer here to find out) and the person says “we’ve decided you’re not the right profile for the role and will not be pursuing”. Senior Exec then calls Faithful Recruiter and says what the hell is this kind of treatment? If they weren’t already interested, why did they call me direct in the first place? From there onwards, this powerful and respected senior exec will tell everyone who utters that brand’s name that they are unprofessional and time wasters. Down goes the employer image.

    That’s why we are the buffers…..

  23. Steve Bleakley October 30, 2013 at 6:42 am #

    I feel that the LI hype is exactly that, hype created by a massive marketing machine inside LI. I read an independent study recently where it stated that LI used to have 1 recruiter to every 14,000 users and now the figure is more like 1 to every 1,400 (these are guesstimates because I don’t have the document with me) but the point is LI is now saturated with internal and external recruiters. The document then went on to say that candidates are sick and tired of being bombarded by recruiters and as a result they are no longer updating their information and don’t respond to recruiter requests. It also said senior resources don’t even bother to use LI.

    The in-house recruitment model is being promoted by marketing firms from the likes of LI, recruitment software vendors and other that have something to sell to a newer market (in-house recruitment). Combine this (now I’m in dangerous ground) with HR directors that had seen their span of control and budgets shrinking over the last few years with the unfortunate “Group Think” approach that has gained hold since the GFC and you have lots of HR Directors implementing in-house recruitment with flimsy at best business cases. We have seen many cases where HR areas are going down the in-house recruitment model because “everyone else is” and it builds the HR team.

    We are already seeing the in-house model fail because it isn’t a well thought out strategy for the organisation; it is based on group think ie everyone else is doing it, we should too. When they actually fully cost the in-house model, including non-quantifiable benefits and then compare it to the single line entry of external recruitment they get a real shock. Things like having LI, their own ATS, creating talent pools, internal staff “catching up” with potential candidates and everything else a good external recruiter provides. Further they cant attract the breadth and depth of candidate pools, they only have one offer to “sell” to prospective candidates, their company.

    Line managers are seeing internal HR place more focus on Talent acquisition and loosing focus on Talent management and retention. One organisation we work with recently placed so much focus on finding talent and not retaining, that they lost 6 of their key staff and it is estimated the cost of loosing them was $300k+ per lost employee.

    At Connect we see the internal vs external recruitment as the normal ebb and flow of business; outsource – insource, centralise – decentralise, mass redundancies – hiring drives. All of us in business will try new options. But we already have clients coming back to us and saying wow we just didn’t realise what was involved and therefore the true costs.

    When we are chatting with CEOs our advice is “you should explore in-house recruiting. But demand a full and detailed business case and have it critically reviewed’. Finally reward the maverick that has the guts to go against Group Think.

  24. Chris Reay October 30, 2013 at 7:08 am #

    Hi Greg

    Well written, as always!

    I can’t add much to the recruitment side of the conversation (you have many cluey commentators already) but thought you might find this article interesting …

    http://www.forbes.com/sites/cherylsnappconner/2013/10/27/five-linkedin-strategies-you-havent-thought-of-before/

    Best

    Chris

  25. Anthony October 30, 2013 at 8:46 am #

    Interesting topic indeed. The summary of points discussed in the post and the comments section seem to cover:

    1. LinkedIn will build the biggest candidate database in the world therefore will render our services useless

    - People thought job boards will kill off agencies but that failed. So a client posting up a job advertisement on LinkedIn Jobs is no different than the same client posting up a seek ad.

    I know LinkedIn utilise job recommendation/suggestion engines which ‘proactively’ entice passive candidates to look at new job opportunities but that will only have a marginal effect on our revenue.

    2. LinkedIn will eventually ban Recruiters

    I think LinkedIn will simply utilise both forms of revenue… I mean why kill off all of the recruiters generating millions of revenue per year, when they could essentially pitch the same message: “we have the most candidates on our database” and “Clients advertise directly with us to cut out 3rd party agency costs”, but still sell their recruiter tailored services and make money from both sides.

    3. In-house recruiters at corporations will kill off the industry

    The feedback I hear from candidates dealing with In-house recruiters vs agency recruiters is that we’ve all fallen off the same tree. Candidates are becoming aware that by applying through a ‘job portal’, they are merely just another C.V. in the inbox and it doesn’t increase their odds nor is it more pleasurable dealing with an in house recruiter who has close to a 0% understanding on the technical scope or the technical project details.

    We all know that our industry is either candidate driven or client driven, and even if more corporations start to advertise directly on LinkedIn, for the specialist positions they still won’t receive the responses they need from a simple job advertisement (whether on Seek or LinkedIn).

    Finally, the way LinkedIn works is having 1st level connections who therefore increase the volume of candidates who appear in the search results. The problem with generalist in-house HR recruiters is that they have candidates from all backgrounds as 1st level connections, and their direct searches on LinkedIn will yield less results than a specialist recruiter who may have hundreds or thousands of direct 1st level connections.

  26. Navid October 30, 2013 at 9:06 am #

    It could be only a matter of time before Linked In introduces another money grabbing strategy such as setting up a call centre in Philippines or India and try to market to corporations that “We not only find the candidate from our database we can screen them for you too”.

    I am not worried about linked in, they seem to be purely thinking about the bottom line and this is good. One way or another they will eventually shoot themselves in the foot.

    We as an industry need to change, we must become better and improve our reputation. There is no technology out there that can compete with a reputable knowledgeable recruiter.

  27. Anton October 30, 2013 at 9:45 pm #

    Well done Greg!
    It’s pretty obvious that recruiters are the high volume early adopters and companies the high value target customer.
    Guess why a recruiter can almost do everything on LinkedIn for 79$ a month, while a company has to spend $10-20-30k a year?
    Simple, companies are the real market that they are trying to build and they do not want to devalue.
    Recruiters are the early adopters and need to be incentivised.

    In saying this I think the role of recruiters will adapt, as always happened, and even recruiters will become more efficient, therefore cheaper on a per placement basis.

  28. Mark Williams October 31, 2013 at 2:42 am #

    Great article Greg.
    My answer to your question is no…..but that is a completely different topic/conversation!

    This article however is not a question of trust, LinkedIn are simply trying to make a profit from a recruiting market that they saw as weak and vulnerable……Reid Hoffman had this vision in 2002 and their phenomenal growth ever since has proven his theory.
    Clients do not want to pay expensive fees for someone to simply search the internet for candidates. Before LinkedIn they could see no easy way to do it for themselves and LinkedIn have provided them with the solution – bingo! Up to recently they have been showing 70-80% year on year growth from their dominant talent solutions revenue stream (1 of 3 streams).

    Will LinkedIn kill the industry? …..
    …..Not a chance because recruitment is and always has been far more than just searching the internet for keywords. Sourcing candidates is only one small part of a recruiting service and there are many other ways to find people. LinkedIn will eventually rid the industry of lightweight recruitment companies (many of which are very large corporations) who base their methodology on meaningless KPI’s that encourage volume sourcing but good recruiters, who are in it for the long term and spend time getting to know their market (clients and candidates) are much more protected because they do what the internet can’t do – personally recommend people they know and trust – to people they know and trust!
    Ironically LinkedIn can be a very useful tool in developing and maintaining these relationships, its a networking tool more than a sourcing tool and that is how the vast majority of its 265 million members are using it!
    I’m not saying that LinkedIn is not a threat to good recruiters, it is still the competition but when a recruiter does their job properly it is a weaker competitor.
    My experience of LinkedIn is that they are very clear who they are aggresively competing against…..and its not high quality recruiters!

  29. Sean Durrant November 7, 2013 at 6:20 am #

    Interesting blog post (as always) but i’m not convinced.

    Most of the previous comments have pretty much summed up what my opinion would be but in particular

    Anthony October 30, 2013 at 8:46 am # Points 1 and 3 (Don’t have an opinion on point 2) and

    Kevin Chappell October 29, 2013 at 10:35 am #

    “The reality is that every organisation everywhere can do what we do, and have been able do from the time we, as an industry/sector, were established

    Anyway that’s my two penneth worth.

  30. Carl Anderson November 27, 2013 at 10:19 pm #

    Hi Greg,
    Super article, well thought out and written. I must admit I feel strongly that they are heading towards excluding recruitment or should I say agency access. They deny that aggressively citing EMEA (my geographic location) as a growth arena for them in strategy but I feel that is lip service whilst they improve upgrade and define their site as the number 1 recruitment tool moving forward.
    Carl Anderson from Purple Squirrel

  31. bill December 19, 2013 at 6:05 pm #

    Any recruiter (internal or external) can find people on LI. Its’ the art of seduction where the value lies and why my clients use me. I don’t rely on LI to find the best candidates but I do use it to check them out. I also believe LI will have competition very soon and may not be in the box seat they apper to be in for long.Useful tool, yes, the only tool, no.

  32. Tim January 31, 2014 at 4:09 pm #

    They won’t need to “ban” anything. Seen many bookstores lately? Nope, because we’re rightfully seeing the disappearance of the third party in a world where demand can go straight to supply. LinkedIn selling Recruiter products to agencies is just slowing down the inevitable and if you owned LinkedIn you would do exactly the same thing.

    • Greg Savage January 31, 2014 at 9:01 pm #

      Selling books has not even the vaguest resemblance to providing recruitment services Tim. Not even the same planet. Have you seen any books accepting a counter offer from a bookstore lately and deciding to stay on the shelf? LinkedIn has as much chance of replacing the recruitment industry as I have of playing for the Wallabies next year. You are right on one thing though. i WOULD do what LinkedIn are doing, only better. I am not criticising or judging them. I am warning the recruitment industry not to rely on LI as a sourcing channel. Thanks for reading and commenting on my blog

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