Employee recruiting: is this the next industry ripe for disruption?

Employee recruiting: is this the next industry ripe for disruption?

In the three years since this site was first launched, we’ve talked about a range of industries being turned upside down, mainly due to the compelling economics of technology and the Internet — from healthcare to computers to education to manufacturing. Now, there’s word that employee recruiting is also feeling the forces of disruption as of late. Mic Wright recently described the rise of disruptive sites such as Hiring Hub and WorkFu. Instead of employers (and sometimes jobseekers) paying out gobs of money to recruiting firms to line up engagements, they now can access resources from the Internet — either through online marketplaces or social network-driven matching services.For example, Hiring Hub has built a comparison site for recruitment agencies to access employers’ uploaded lists of vacancies. Hiring Hub’s network of agencies then compete to fill them, for a fee set by the employers. Hiring Hub  acts as the intermediary between employers and recruiting firms:

“There’s no haggling over fees or terms. You upload a vacancy, state what you’re prepared to pay an agency and it’s broadcast – anonymously to shield the employer from cold calls – to our network who will tender to work on the role. The employer decides which agencies they want to work with and even how many CVs each can submit.”

WorkFu, on the other hand, acts as an aggregator of potential employee information, gleaned from social network sites such as LinkedIn and Facebook. The value to hiring employers is that they don’t have to spend the time pulling together scraps of online data. as a WorkFu spokesperson put it:

“WorkFu suggests relevant talent for your job opportunity instantly, in the same way a recruiter approaches people already gainfully employed, so we identify which people you should be hiring and leave the persuading them to join you, to you.”

A recent survey of 92 corporate HR directors by Job Board Doctor finds that 75% now use social networking sites for recruiting, making this the most frequently used channel. Referrals followed at 66%.

One social networking site in particular is shaking up the entire recruiting industry — LinkedIn. (The commonly used social networking site cited in the Job Board Doctor survey.) In addition, it may be altering the resume/CV as we know as well. “The traditional recruitment market will disappear between three to five years,” Andrew Carr, sales and marketing director at Bull Information Systems, predicted in Wright’s article. “One word for why that is: LinkedIn. Recruitment firms need to change from transactional sales to value-based sales immediately they are going to fail.”

Along with the observations in Wright’s article, it’s interesting to note that recruiting firms have also lost another key edge, thanks to the Web — facilitating geographic mobility. Up until a decade ago, job hunts were often limited to local markets, and recruiters offered the advantage of access to national listings. Now, with sites such as Monster.com, as well as online newspaper classified advertising, it’s easy to identify opportunities in other cities.

Social networking is altering another aspects of careers — the post-employment experience. Employees who leave companies — either voluntarily or involuntarily — still have access to networks of co-workers, and thus, information on new developments. In the past, these contacts were severed when employment ended.  This continued bond between employers and employees also provides for greater word-of-mouth referrals, also eliminating the need for third-party recruiters.

About Joe McKendrick

Joe McKendrick is a contributing editor for SmartPlanet. He is also an independent analyst who tracks the impact of information technology on management and markets. He is the author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania.

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