LinkedIn…Where’s the competitive advantage?
by jamieleonard
“When everybody plays, nobody wins.” Catchy slogan that, not sure where I got it from?? But there is some truth in it. I’ve spent 10 years working with ad agencies and direct employers, and this is not target at you. This is directed at recruitment companies. An old friend once told me that if ad agencies were the coffee close, recruitment companies are the Stella close. No bullshit. No fluff. “What can you do for me and how little can I pay for it.”
Ok, lets put a few facts on the table, and if you disagree with them, stop reading or move straight to the comments section:
- Every recruiter is using LinkedIn
- Most direct recruiters are using LinkedIn (If they’re direct sourcing)
- Every recruiter is trying to make money
- Every recruiter makes money from placing a candidate that their competition or client can’t.
Agreed? Ok, we carry on.
If you agree with the above, answer me this; If every recruiter and direct recruit are using LinkedIn, where’s the competitive advantage to you using LinkedIn?
Don’t get me wrong, LinkedIn is a recruitment juggernaut. For me to sit here and say otherwise would be a show of ignorance on my part and a complete disservice to the people that read this blog. They’re going places. We get it.
But during a recent lunch with a client of mine, I posed the question, “Where is the competitive advantage?” and they had no answer. For me, LinkedIn is like Google, or email. They’re a main stay in the recruitment world and will be..well..forever. Everyone has access to it, most have the premium license or recruiter license, and most will find how to use it to the best ability. Of course they will, because there are enough Gurus to show them how. But what happens when they all understand how to use it like ninja’s? What happens next? Do they all forward the same perfect candidate to their client, which, guess what, they’re client already has because they have in-house LinkedIn ninja’s? What happens then? Who offers the best rate? That’s not a game anyone wants to play. Who’s got the best relationship with the candidate? Well as much as much of a relationship you can have with someone over InMail. That’s if they actually reply to you, because the reality is, not everyone on LinkedIn wants a job. Ok, let’s for a second believe they do and you, as a recruiter, can convince them that they need a new job. It still comes down to the fact that before you’ve had a chance to offer them the interview of a lifetime, the employer themselves have already been in-touch with them, and if they haven’t, a competitor has.
So now what?
When everybody plays, nobody wins.
I love Monster. It’s in my blood and I still believe they’re a product unparalleled. And I remember when their Glasgow team went to work on the recruitment company market and they were the biggest part of the Monster money (probably still are). And then what happened? Everyone had access and the same candidates were getting forwarded on to the same clients and what followed was that every direct employer got wind and took advantage of those candidates themselves. They went from the competitive advantage to the main stay, like LinkedIn will quickly become, and even quicker than Monster, because for the most part, they give their services away.
So where’s the competitive advantage?
It’s the small pockets of candidates that the recruiter can/will/must get to before anyone else does. Maybe that’s a community forum of Dutch speaking Accountants. Or maybe it’s www.ITClowns.com. Or maybe it’s a magazine that only distributes to SE1 Estate Agents. What ever it is, it’s a competitive advantage.
LinkedIn is a main stay, and I’m sure they’ll sort out they’re issue’s with who owns the rights to the candidates their recruiters are sourcing, which is another issue all together.
But a competitive advantage, they’re quickly unbecoming.
Jamie you have nailed it – Linked In has become what I call an Everyman product & every man & his dog in recruiterland are using it….
I agree niche communities of talented people who are pre screened,pre tested and happy to be shown job opps are a far more valuable asset than a recruiter saying they have mastered the art of Boolean search within linked in – building these communities takes time but recruiters looking at long tail & not short term land grab may find themselves a whole heap more sustainable than the current feeding frenzy on linked in.
Interestingly linked in are looking to ipo so their short term aim is a numbers game so rather than being custodial about their business model meaning they will sell recruiter licences & market referral models until the cows come home without thinking of long term brand damage.
Just a couple of thoughts!!
Lisa
Hi Jamie,
One point: being on the system doesn’t necessarily mean you can use it. I think we can all agree that recruiters have enormously variable skill sets, and that even though LinkedIn is ubiquitious in terms of it’s availability, it’s likely to be used in divergent ways, with variable degrees of competency.
Glen Cathey says this much better than I can, so rather than steal his words, I’ll just link his post:
http://www.booleanblackbelt.com/2011/01/does-linkedin-offer-recruiters-any-competitive-advantage/
It’s all about ‘leveraging informational systems on human capital data’….
Regards
Hung
The short answer to your question “Where’s the competitive advantage?” is it’s in the relationship between the candidate, the recruiter and the client.
Back in the old days (pre-1998) good recruitment consultants used to interview every candidate they put forward. They knew their clients intimately, they knew their industry intimately. By meeting the client and the candidates they would be able to make that judgment call on whether the candidate not only had the right skills / experience, but also whether they would fit culturally into the business.
This was back in the day when a 1/4 page ad in Sunday Times was £45k.
However along came the internet and over a very short space of time recruitment consultancies became very lazy. They were able to take short cuts. They didn’t need to meet the client or the candidate. They could look on the client’s website; understand what sectors they worked in. They could subscribe to Monster and download 1,000s of CVs for a few hundred pounds a month. Send enough CVs some will stick.
I would argue that most recruitment consultancies have forgotten that technology is an enabler; it is not the end game.
Thankfully employers are now waking up to the fact that most consultancies just don’t add any value. All those candidates are online and freely available. Employers don’t need to pay £4,000 for CV downloaded from a website and forwarded onto them.
Consultancies, who survive, will be the ones who go back to basics. Who meet their clients, who pick up the phone and build relationships, meet their candidates, understand what type of companies they want to work for and make that connection.
nice post – agree with analysis – disagree with conclusion. LinkedIn is a tool not an end solution – so its about how you use it, what you do with the results and how you develop your presence. LinkedIn has never placed a candidate, earnt a fee etc on its own. And to use your Monster analogy, there are clients who use Monster cleverly and make a fortune from it and as many who think its crap, a rip off etc. Now Monster is still the same site for both these groups so it has to be about how you use it and fortunately even in 2011 – most clients dont do these things very well and need our (yours, mine, Lisa, Alastair, Hung) assistance.
Loving your blog at moment by the way – really strong opinion, well argued and funny too!!
Back in the day before everyone solely used the web to find people there was generally far more thought and inventiveness that went into recruitment.People realised that yes, to get a decent quality of response you did have to spend a bit of money (not sure a 1/4 page in the ST was ever £45k Alistair but it was relatively expensive compared to today’s cheap and cheerful,accessible to all solutions like Linkedin)
If we were looking for a particular type of person, let’s say for example Aerospace Engineers, we would target the press in parts of the country where we knew those people worked. We’d be in the trade press, the national press, the regional press, maybe even on radio. We’d hold open days and, when the job boards came along we might give them a whirl too.
As Dominic himself well knows, we’d think nothing of paying £10k for a page in Computing and filling it with a bespoke creative ad aimed at attracting quality candidates who may not even be thinking of moving jobs but might just be allured by the message the employer was putting out. The passive candidate we called them. Nowadays people laugh at that phrase.
In short, you invested, but you got a return, not hundreds of irrelevant unqualified people merrily clicking the ‘apply’ button to everything that moves.
Today, whilst there are undoubtedly agencies that see beyond the simple ‘post and hope’ ethic and the Linkedin search, there are also plenty of people who don’t. Recruitment has become messy & badly defined. Where once people had to spend money to reap rewards now you can infest the web with your message across multiple jobboards and social networks for less than £100.
By and large there are very few differentiating factors between recruiters and very little guile in the way they try and find fresh, qualified, talented candidates. It may be called progress, but is it really? To me, the recruitment field has become muddier and more confusing than it ever was.
Agree with almost all of the above. It’s not so much about how smart you are at sourcing people but how adept you are as a recruiter at matching candidates to roles, and the service you provide around that. And that’s no different for an in-house or an agency recruiter. The real skill is to understand the role you are trying to fill and to effectively assess candidates against that requirement.
As someone who started in headhunting before email an the internet, I would be be mad to suggest you shouldn’t use LI – it’s an absolute godsend to recruiters. But the perception is that it has commoditised recruitment, i.e. all recruiters are the same, when patently they are not.
Good point, well made Jamie.
Recruitment, as with all businesses, has always been a very competitive industry, within the confines of the model. Employers are competing for the best/cheapest/most reliable workforce, agencies are competing with one another, and candidates compete to get their ideal job. As there are a finite number of these jobs and suitable candidates, many will win out, and many will lose. For the most part everyone finds their level and, in theory, gets what they deserve.
The recruitment agency model is in the process of changing hugely (and has always been in flux). The billing model, methods of operation, and contractual status with clients is all under scrutiny. Who knows where the cards will fall?
I can tell you this though. The individuals who operate recruitment companies, and work as recruiters at the jaggy-end, are the kind who won’t sit idly by whilst their industry is pulled from under them. Their competitive advantage is what’s between their ears.
Here’s a related post what I wrote a while ago. http://ayeright.com/2010/04/no-more-than-they-deserve/
I got my new gig at JobsToday.co.uk thanks to LinkedIn. LinkedIn also provided me with more than a few opportunities for other roles that gave me choice in my next career. In my opinion, they are miles ahead of other executive level sites which attract nothing but companies trying to charge me £500 plus to re-write my CV combined with no shortage of ambulance chasers that want to counsel/represent me for a massive consulting fee.
In my case, the headhunter was lurking in a discussion group I enjoy and jumped on me when I said something mildly interesting. He used LI to its fullest and earned his fee.