Let me highlight how LinkedIn is “fueling the corporate talent machine.”
LinkedIn has become the “must have” in corporate recruiting and is expanding its footprint.
With more than 161 million professional users in its network, LinkedIn is now the “must-have” tool for corporate recruiters around the world. The company’s “hiring solutions” business continues to deliver innovative products which leverage the data in the LinkedIn network for corporate and contract recruiters.
These products include:
- Highly effective job placement ads (recruiters tell me LinkedIn ads generate 2-3X the quality of candidates of other ad placements)
- Licensing LinkedIn Recruiter, the recruiter’s “secret weapon” which lets corporate HR managers and staffing professionals search, find, and source candidates
- Branded career pages – an offering that lets companies of all sizes create a highly personalized candidate portal within the LinkedIn garden of professionals
- Talent Pipeline, a new feature set within LinkedIn Recruiter which lets recruiters manage the entire process of “candidate relationship management” – a hot new application area within corporate HR.
And the company has much more to come.
The Corporate Talent Acquisition Market
Corporate recruiters are in a war for talent. Lloyds of London’s 2011 risk assessment survey points out that “Talent and Skills Shortages” are the #2 rated risk among 100 business risks today (following the risk of “losing customers.”)
Despite the high unemployment rate in most countries, companies tell us over and over that there is a paradoxical mismatch between demand and supply of skills. And great candidates are not looking for work.
And the cost of sourcing and recruiting is very high.
The average employer spends over $3500 per hire on all areas of recruiting (from our Talent Acquisition Factbook®), and the spending is much higher in executive positions. This means the entire US marketplace for talent acquisition is around $130 billion by our estimates, so LinkedIn still has a lot of whitespace to cover.
I just finished meeting with the head of corporate recruiting for Pfizer (who is on LinkedIn’s advisory council) and she reinforced that LinkedIn’s network is truly global and has become one of their primary tool for finding great candidates.
Pioneering the shift from cloud-based software to BigData applications.
LinkedIn is benefiting from something else here. The company understands that its future relies in leveraging BigData and the power of the network over the existing markets for cloud-based HR or talent acquisition software.
Raj de Datta describes the shift well in his TechCrunch article “The Rise of BigData Apps and the Fall of SaaS.” The next big thing is data. BigData.
I’m not ready to write-off enterprise software businesses by any means, but ultimately cloud-based applications do become somewhat commoditized. Now that most major applications are “in the cloud,” differentiation comes down to architecture, features, and level of integration with other cloud-based systems.
If you’re an HR manager, can you really tell a huge difference between Oracle, SAP, Taleo, SuccessFactors, Cornerstone, SumTotal, and PeopleFluent? Workday claims they are the “next big thing” – but ultimately even new products like Workday become replaceable. This year I’ve talked with at least a dozen companies who are coming up for renewal on their cloud-based software and they are very willing to switch platforms. So the future of cloud-based software is wrapping all these great applications in rich, highly-integrated data.
A great example of this is trend is Salesforce.com. We are a big user, and it always bothered me that we have to clean and maintain our own database of accounts when every other Salesforce customer is doing the same thing. Voila. Salesforce acquires Jigsaw, and now Data.com is born. You can now buy data to go along with your new CRM system.
Data, unlike software, becomes increasingly valuable as you collect more. In the enterprise Human Resources market companies are dying to get more data – data about candidates, data about workforce skills and demographics, data about salaries, and data about their own brand. Once this data is integrated with your cloud-based application, the value to a client skyrockets.
And even when you do buy your brand-new cloud-based applications for talent management, you still need to load them with data in order to make them work. Not only do you have to load all types of data about your employees, you also have to load job profiles, assessments, training modules, and dozens of other types of third party data. As HCM software companies mature, they will start building and adding their own data products to their offering.
Companies in the HR space are starting to figure this out. SHL, a leading global assessment provider recently launched its new Talent Analytics ”big data application.” This new platform gives customers access to tens of millions of assessments to compare candidates against the market and their competitors.
Data is sticky, proprietary, and ever-increasing in value.
The acquisition of Slideshare drives even greater data value – fueling both memberships and recruiting revenue.
LinkedIn also announced the acquisition of SlideShare, a great little company that has become the “YouTube” of corporate presentations. Slideshare is an addictive application that encourages you to share your best slide sets with others.Not only does Slideshare further ignite LinkedIn’s membership business by extending the data people can add to their profiles, it also brings tremendous value to the corporate recruiting segment.
Think about this: Slideshare is a vast database of knowledge and expertise, all published through Powerpoint presentations that are easy to view, download, and share. Some of the most powerful thinkers and practitioners in all industries publish their deep expertise in SlideShare, and the content is trivially easy to find and view.
Once Slideshare is fully integrated into LinkedIn, we can expect the company to link data about slides to data about people. (The company claims that there are already 9 million content uploads and we can expect that to explode.)
Every time an individual uploads one of their favorite Powerpoint decks their “profile” becomes more valuable to others. And since people can “like” and “comment” on slide sets, LinkedIn can start to see who the real experts are throughout the network.
Imagine the power of using this information to assess someone’s skills and experience. By looking at the traffic and ratings of an individual’s slides, and the relative “authority” of those who link and recommend these slides, LinkedIn can create one of the most powerful expertise-networks in the world. The company has been working away on its “skills” functionality for a few years (look at the “skills” application under the “beta” link). This will further ignite LinkedIn’s ability to characterize and understand who the real experts are.
Why is skills information so valuable? Because when recruiters search for candidates, one of the most important challenges they face is “finding the right skills.” Companies pay search firms tens of thousands of dollars to find the best highly-skilled candidate. Putting more “skills-related” information into LinkedIn creates a new measure of authority and expertise.
(Skills have become the new currency of success. While experience and raw talent still matter, our research shows that jobs are becoming more and more specialized every year, so deep skills are what makes you succeed. Read “The End of a Job as you Know It” for more details. )
Plus, of course, Slideshare dramatically increases the amount of information each LinkedIn user can upload – making the whole network far more valuable for individuals and members.
By the way, I noticed that LinkedIn recently removed several features from its free membership service (the ability to see who clicked on your profile, for example). Every time the company adds a new type of data-driven content, LinkedIn can come up with new, higher-value membership packages as well.
LinkedIn is really firing on all cylinders. Watch the company continue to grow as it “fuels the corporate talent machine.”
I would expect LinkedIn’s hiring solutions segment to continue its growth as a percentage of revenue in the coming quarters. And with little competition in the BigData market for candidates, we should see this growth accelerate as the economy picks up steam.
By Josh Bersin, Forbes Contributor
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