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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The Savage Truth UK Masterclass in London is on November 22nd. Join us please.

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Comment by Maureen Sharib on October 30, 2013 at 7:10am: Edward:

"The average length of stay for a social media hire was 1 year. This contributed to over $5T in turnover costs last year…" That's some POWERFUL ARGUMENT. Where'd you get those stats?

LinkedIn is its own best press; "touting" any kind of numbers they want ahead of any "truth in advertising" laws that should be applied to social media and Internet advertising in general but as there are none LinkedIn has the advantage in being out ahead of the government and its legal eagles on this on and they know it and take advantage of the situation; there's a federal judge, though, out in California (Lucy Koh) who I'm pinning my hopes on who will bring some law and order to the land and lasso LinkedIn into some form of social and legal responsibility.

Think about a world where ONE ENTITY has its nose and fingers triangulated into everybody's business! THIS is the real problem and for those of you who cotton to conspiracy theories LinkedIn could be just the vehicle to do a devil's bidding like this; if in the very sad event you start to see federal officials LOOK AWAY (or worse yet REFUSE TO LOOK AT ALL) be alarmed. BE VERY ALARMED.

Personally, I don't think it'll ever get that far.

LinkedIn is doing a fine job of undoing itself. Although most recruiters and sourcers worship dutifully at its cloven hoof the general public holds great disdain for it. I wrote an article about this recently - it's called "The End Of The LinkedIn LoveIn and you can find it here. I'll post it here on RBC in my PHONE SOURCING group when I finish this comment.

Comment by Leah Olsen on October 30, 2013 at 8:32am: I'm not usually a conspiracy theorist, Greg, but after many months of a paid LinkedIn Recruiter account (stupid decision!) with no ROI at all and crappy treatment by their customer service team (i.e. I was threatened with lawyers when I said I wasn't pleased and wanted to quit my account) I can believe everything evil about LinkedIn.

I hope if anyone out there is considering a paid account they will call me and ask me about my experience, that is all!!

Comment by Edward N. Woycenko on October 30, 2013 at 8:58am: Maureen, the statistics came from a studies done by Bersin Associates, John Sullivan and Brad Smart. The evidence is there if you look for it, unfortunately, the hype tends to cloud and mask the truth. Another issue is whether anyone really cares. You don't need LI to recruit. In my opinion, LI is a crutch for lazy recruiters and has spawned a group of people calling themselves recruiters who couldn't find their butt with both hands. Recruiting, and I use the term loosely, has become an advertising function with the hope that quality people will find you instead of the other way around.

Comment by Ari Waller on October 30, 2013 at 9:07am: What a great article. I too, have seen take this approach for years, and I have just accepted this as part of what LinkedIn would become. LI of course has a much wider reach when it comes to the so called "passive candidate" which may make this more concerning. I received an invitation to an event in Atlanta from LinkedIn to listen to a seminar on Talent Acquisition using LinkedIn. The fine print stated that they reserve the right to refuse entrance to recruiters working with agencies (paying customers who received the invitiation)!

I have also heard from several hiring managers we work with, that they themselves are reaching out to candidates on LinkedIn, but don't get a response. Then they ask us to try the same person for a fee on some occassions as well (and we have been successful). Effective recruiting still requires precise customized execution, so I think it will be a while before LI shuts down the agencies.

Comment by Maureen Sharib on October 30, 2013 at 9:32am: This is all beginning to sound way more Machiavellian than even I imagined. I looked for it Edward and as my Internet search skills aren't what those who rely on them to make a living are maybe someone else can find that study? i'd LOVE to see it.

Comment by Keith Goodwin on October 30, 2013 at 10:51am: Edward N. Woycenko - can you elaborate on your comment: "I am more concerned about the proliferation of mobile phone numbers without a directory than anything social media can do to recruiting."

Comment by Edward N. Woycenko on October 30, 2013 at 11:07am: There are multiple studies that have been done regarding social media that these statistics have been gleamed from. If you are looking for one in particular, I don't think these stats have been accumulated into one study, at least not one that I have come across. The $5T employee turnover costs in the US came from a study done by consulting firm Talentkeepers.

Keith, mobile phone numbers are rapidly replacing landlines. At least with landlines you have a telephone directory-white pages, yellow pages etc. locally and landline directories you can find on the internet. I have not been able to locate a directory for mobile phones in the US or other countries I have recruited in. I initially came across this issue several years ago while in Singapore. In my opinion, as we move forward, if you do not have some way of communicating with people you are trying to recruit, like their email address, you will have a difficult time trying to call them.

Comment by Keith D. Halperin on October 30, 2013 at 1:02pm: @ Edward: I think I may have misunderstood something: "The $5T employee turnover costs in the US" To me, the "T" is for "tera" = 1x 10EXP 12, lik so $5T is $5x10 EXP 12, or roughly 1/3 US annual GDP. What does this imply? If U.S. annual (I'm assuming it's annual and not cumulative from the beginning of time) turnover costs are that amount, then that says that the equivalent of 100,000,000 people (nearly the entire workforce) at an annual salary of $50,000 turns over every year. This is NOT the case.. According to the BLS (http://www.bls.gov/news.release/pdf/jolts.pdf) monthly "quits" have been 2.0-2.3% for the last year or so. Let's make it 2/.08%/month, which gives an annual turnover quit rate of 25%. According to (http://www.cbsnews.com/8301-505125_162-57552899/how-much-does-it-co...), for all jobs earning less than $50,000 per year, or more than 40 percent of U.S. jobs, the average cost of replacing an employee amounts to fully 20 percent of the person's annual salary. If we put these two together, we get the cost of turnover is ~5% of the cumulative annual salary of American workers, which according to this (http://bber.unm.edu/econ/us-tpi.htm) was $13,401,868,693,000 in 2012, so 5% of this would be $650 G or $650,000,000,000. This assumes that all employees are replaced at an and at an equivalent salary to what they were making before. Thus: the figure of $5T is off by a factor of 8.

Re: the need for recruiters when a hiring manager has LI access:                                                                        As I've said elsewhere: (www.ere.net/.../recruiting-supermodels-and-a-tool-to-help-you-do-it/), a hiring manager could have complete direct contact information on all the perfect candidates in the world, and most hiring managers would STILL need a recruiter to help persuade the candidates to consider the crappy job working for the crappy hiring manager at the crappy company, since far too many hiring managers WANT far better/cheaper/etc. than they can reasonably expect to GET.

Re: cell phones inaccessibility:                                                                                                                                   I think not being able to find the phone numbers of people who won't want to talk to us is a relatively minor complication for those of us who are able to find the phone number of people who won't want to talk to us. We'll just have to find another way to reach out to people who won't want to talk to us, or maybe actually having something worthwhile for the people we’re reaching out to (SEE ARTICLE LINK ABOVE.)

That's related to MY big beef with LI:                                                                                                                   The great majority of people who list themselves as open to jobs, really aren't because it's an "opt out setting"- when you reach out to people on LI who say they're open to hearing from you about a job, MOST OF THEM AREN'T. I've said here before, I'd make any indication of interest (job, expertise, etc.) an "opt in" setting which has to be renewed every 30 days. You could still reach out to folks that hadn't opted in" but you could then expect that people who "opt In" are interested (or were in the past 30 days) in why you're reaching out (they’d REALLY be “passive”). That way, recruiters and other people wouldn't waste their time (or money) and fewer people, would be bothered unnecessarily simply because they hadn't opted out.

Cheers,

Keith

Comment by Edward N. Woycenko on October 30, 2013 at 1:26pm: Keith, the turnover costs were $5 Trillion for one year. You are only factoring in salary costs. There are many factors that contribute to this number. Check out the study and find out for yourself why this figure is $5 Trillion. The mobile phone issue is real whether people want to speak with us or not. How do you go about finding what someone's mobile number is if you don't have it, or have their email address. As far I as I know there are no directories currently available.

I haven't trusted LI since I signed up. I looked at the database they were accumulating and thought there might be an ulterior motive with all the data. I have been kicked off of groups for posting information on the group that might have relevance to both candidates and employers alike. Upon further investigation, I found out that some of the groups I was booted from were run by competitors of mine in recruiting. There is no resolution process with LI for people who have their own agenda running a group. I agree with you Keith after I conducted a massive time wasting exercise contacting people via Inmail who indicated an interest in making a career change. If LI were going to be more effective, these issues should have correctable actions. The trust issue still remains regardless of what LI does.

Comment by Keith D. Halperin on October 30, 2013 at 2:22pm: Thanks, Edward. Could you send me a link to the study? I still can't believe that something with a presumably negative impact on the Ss economy of 1/3 of annual GDP is "sitting out" there- this would imply that every time someone leaves their job (for whatever reason) there's a net cost of ~$16,000 for every American. (I wonder if there's a corresponding net asset when someone gets hired?) Maybe it isn't an actual "cost" but something analogous to the 100s of T$ worth of derivatives out there.

As long as LI can get large numbers of companies to put down hundreds of dollars each for ads and thousands of dollars for LI Recruiter licenses, and there isn't a strong competitor, nothing much will change, except probably get worse from the recruiter's perspective.

No Cheers,

Keith "Mr Optimism" Halperin.