Should Staffing Companies be Worried about LinkedIn - May's Marketing Blog

LinkedIn was founded on the premise that people could link together and network.  As it grew and morphed, it has ultimately become a staffing company, one that now has the power to disintermediate the entire staffing market.

What LinkedIn has going for it is a database of constantly updated prospects.  There is no recruiter who has a better database.  This is not a strategic competitive advantage for LinkedIn, but arguably, it could take any potential competitor a long time to build up a comparable list . 

LinkedIn, like staffing companies, sells its services with a direct sales force.  They are reaching out to corporations to sell services to help corporations recruit talent.  If you don't think that is what LinkedIn is doing, I suggest you read up about them.

This is from LinkedIn's Prospectus:

"We provide enterprises and professional organizations of all sizes with solutions designed to identify specific talent within our global network, enable their employees to be more productive and successful, build brand awareness, and market their products and services. Enterprises and professional organizations that use our solutions include large corporations, small- and medium-sized businesses, educational institutions, government agencies, non-profit organizations and other similar entities. Our current products for enterprises and professional organizations include hiring solutions, marketing solutions and premium subscriptions. Our hiring solutions are transforming the talent acquisition market by providing unique access not only to active job seekers but also to passive candidates who are not actively looking to change jobs. Our marketing solutions enable enterprises to reach a large audience of influential and affluent professionals and connect them to relevant products and services."

With a market capitalization, based on today's trading, LinkedIn is valued at $8.9 billion.  Based on market capitalization that would make LinkedIn the world's third largest staffing company behind Randstad ($19B) and Adecco ($11.5B).  So should staffing companies be afraid of LinkedIn? I would say yes, at least be very wary.

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TJB 06/04/2012 10:16 am

While clearly a source of candidates, there is the issue of "self promotion" associated with Linkedin and other social networks. While you get the semblence of a resume with Linkedin, you can not tell if any of it is true. The job of sourcing the right candidate for the right role, at the right is very difficult. Having access to an un verfied set of skills for a person who or may not be responsive is a good start. But someone has to verify the skills, assess the talent and sell the candidate the new position. Linkedin does not do any of those function nor do internal HR departments. That is why the staffing industry has $50Bln in sales worldwide.


LinkedIn is a Tool

Emily Carter 10/24/2011 03:12 pm

We believe that LinkedIn is a tool for recruiters. Aside from the Jobs section on LinkedIn, recruiters have a valuable opportunity to connect with others and network with them. Reaching out to people, developing relationships with them and providing relevant industry related news are all possible through LinkedIn. Once a recruiter or staffing firm is able to show that they are a subject matter expert to those connected to them on LinkedIn, they will be sought out in the situation that they are needed. Being available, willing to communicate and proactively making connections is how we teach staffing firms to use LinkedIn. Because of the value we have seen under these circumstances, I do not think that LinkedIn is a danger to the staffing industry. Rather, it is a tool that should be harnessed properly to leverage yourself in the industry.


Rob 05/25/2011 04:30 pm

I see LinkedIn selling their services as an alternate to companies paying perm placement and retainer fees. Contract labor should not be impacted.


Evolution

Brent Healy 05/25/2011 02:09 pm

How is this any different than when CareerBuilder and Monster became popular? They are tools for both hiring authorities and organizations, but also for recruiters and staffing professionals. LinkedIN is just another tool in both aresenals. I'd argue job boards and resume databases made staffing professionals more in demand. Why would the popularity or IPO of LinkedIN change that? LinkedIn connects hiring authorities with active and passive candidates, but it also connects these candidates with recruiters and staffing companies.

We consider LinkedIn to be a valuable tool and asset. Our recruiters that use it are the most efficient in our business.


Director of SEO and Social Media at Haley Marketing

Brad Smith 05/25/2011 02:01 pm

Hinda,

Thanks for sharing the post. I agree with you completely that staffing and recruiting firms need to understand the impact that LinkedIn could potentially have on their business. Not only would LinkedIn rank as the third largest staffing company, they own the world's largest (and most up-to-date) candidate database.

As of right now LinkedIn is available for staffing and recruiting firms to take advantage of. So while I agree they could be a huge threat, staffing professionals also need to embrace the technology and leverage it as much as possible.

Thanks!
Brad


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