All the messages usually started the same way “I came across your profile and was impressed by your background”, or “Have five minutes to talk about an exciting new opportunity that just came up?” I deleted the fourth LinkedIn message I had received from a recruiter that day. I was already well versed in the art of dodging their cold calls so the recruiters now resorted to flooding my inbox with spam. I was not looking for a job at the time, but the LinkedIn messages never stopped. This TOM challenge examines in depth on how a company like the Addison Group, a Chicago based staffing and search services, has changed its business and operating model in the advent of platforms like LinkedIn. Was the technological middle man, LinkedIn fundamentally aiding or would it eventually destroy the recruitment industry?
The Addison Group was founded in 1999, the goal of the organization was to recruit the best candidates from for the best companies. They currently have 19 offices across the United States and offer services in six core industries such as IT, Finance & Accounting, Executive Search, Healthcare, HR & Administrative and Engineering Sectors 1. Prior to LinkedIn, recruiting firms like the Addison Group would have extensive private databases of candidates. Consultants would spend most of their time networking, making cold-calls, and establishing relationships with candidates to then connect them with companies that would hire them for their services. LinkedIn changed the entire recruitment industry on its head by becoming the primary sourcing mechanism for staffing firms.8 Michael Overell from Ere Media describes the impact as follows: ” Today, LinkedIn is the living, breathing database for most recruiters. Recruiters depend on LinkedIn to build, maintain, and contact a global network of potential candidates.”7
The business and operating model of the Addison Group fundamentally changed with the advent of digitization. Platforms like LinkedIn, Monster.com and even Craigslist made the sourcing of candidates easier and more cost effective.4Additionally, recruiting firms increased transparency and thus expanded the plethora of information they could gather about candidates via social media sites like Facebook and Twitter. Moreover, recruiters became fully dependent on services like LinkedIn, with a reported 93% of recruiters using the system for recruitment purposes.7 The most important business benefit to the Addison Group, however was the access to passive candidates, which represented the employment sector that was not actively looking for a job. The Addison Group could be proactive about establishing relationships early, and tapping into these candidates when they were ready to make another career jump.
From an operational standpoint, the recruiting industry now had access to data and toolkits to help enhance the job search capabilities. Recruiters could now spend most of their time on the LinkedIn recruiter tool sorting through people and developing a pipeline of candidates they could better match to.6 Additionally, this could close geographical gaps by not having to meet face to face with all their prospective clients, and in some cases, even employ video interviewing.2
The digitization and technological advances in the recruiting industry haven’t all been positive, and firms like the Addison Group risk potential disintermediation. Ere Media argues that technology has served as an equalizer thus eroding the value of traditional recruiters.7 Everybody now has access to the same information, rendering their little black book, useless. The main risk is that companies might eventually push towards having all their recruitment efforts conducted in-house. Per a study published by Bersin in 2011, progressive companies have turned more towards internal recruiting to find skilled talent.9 The other risk lies in LinkedIn potentially cannibalizing their current main source of revenue by releasing products like Talent Pipeline that compete directly against staffing agencies.
The Addison Group, and others like it will need to employ tactics to avoid becoming a distant outdated memory. The company can do this by combating the edge it has over digitization: the human element. The Addison Group should consider carving out a more niche expertise where it might be harder to find talent such as personnel in IT or skilled trades.2 Additionally, recruiting agencies could provide additional value-add opportunities to their employers by investing in proprietary technology such as True Ability, a startup that is vested in making the hiring process better and more efficient and provides new functionalities such as test and skills test, that LinkedIn currently doesn’t have. Finally, the Addison Group should find a way to differentiate its communication tactics on LinkedIn. It would behoove them to form deeper relationships with candidates, as well as convey job listings in creative and innovative ways so that everything isn’t just another “great opportunity”.
- “About the Executive Team|Addison Group.” About the Executive Team|Addison Group. Accessed November 18, 2016. http://www.addisongroup.com/about-us/about-the-ceo/
- Trewe, By Marti. “5 Ways the Digital Age Has Impacted Recruiting.” The American Genius. 2014. Accessed November 18, 2016. https://theamericangenius.com/lists/5-ways-digital-age-impacted-recruiting/.
- @thenextweb. “5 Ways Technology Has Changed Recruiting Forever.” The Next Web. 2014. Accessed November 18, 2016. http://thenextweb.com/entrepreneur/2014/04/07/5-ways-technology-changed-recruiting-forever/.
- “How Technology Is Changing the Recruiting Landscape | Monster.com.” Monster Hiring Resource Center. Accessed November 18, 2016. http://hiring.monster.com/hr/hr-best-practices/recruiting-hiring-advice/attracting-job-candidates/new-recruiting-strategies.aspx.
- @bullhorn. “Staffing and Recruiting Industry Trends | Bullhorn.” Bullhorn. 2015. Accessed November 18, 2016. http://www.bullhorn.com/blog/2015/11/2016-staffing-and-recruiting-industry-projected-changes/.
- “The Most Important LinkedIn Page You’ve Never Seen.” Wired.com. Accessed November 18, 2016. https://www.wired.com/2013/04/the-real-reason-you-should-care-about-linkedin/.
- Overell, By Michael. “How LinkedIn Is Eating the Recruitment Industry.” ERE Media. 2015. Accessed November 18, 2016. https://www.eremedia.com/ere/how-linkedin-is-eating-the-recruitment-industry/.
- @jorgensundberg. “How LinkedIn Has Changed Recruitment in the UK.” Undercover Recruiter. 2016. Accessed November 18, 2016. http://theundercoverrecruiter.com/linkedin-changed-recruitment-uk/.
- “Press Release Details.” Press Release Details. Accessed November 18, 2016. http://www.bersin.com/News/Content.aspx?id=14998.